This report summarizes our fiscal year 2023 audit results for the Virginia Department of Transportation (Transportation) and the Department of Motor Vehicles (Motor Vehicles). Collectively, these two agencies spent $7.7 billion or 82 percent of the total expenses and collected 98 percent of revenues for the agencies under the Secretary of Transportation. Our audits of these agencies, which support our work on the Commonwealth’s Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2023, found:

• proper recording and reporting of all transactions, in all material respects, in the Commonwealth’s accounting and reporting system, each agency’s internal accounting and reporting system, and supplemental information and attachments submitted to the Department of Accounts (Accounts);

• matters involving internal control and its operation necessary to bring to management’s attention at Transportation and Motor Vehicles;

• instances of noncompliance with applicable laws and regulations or other matters at Transportation and Motor Vehicles that are required to be reported; and

• adequate corrective action with respect to prior audit findings and recommendations classified as complete in the Findings Summary included in the Appendix.

This report includes a Risk Alert applicable to Motor Vehicles that requires the action and cooperation of management at Motor Vehicles and the Virginia Information Technologies Agency (VITA). Our separate audit of VITA will provide more details on the issue noted in this alert.

In the section titled “Internal Control and Compliance Findings and Recommendations,” we have included our assessment of the conditions and causes resulting in the internal control and compliance findings identified through our audits as well as recommendations for addressing those findings. Our assessment does not remove management’s responsibility to perform a thorough assessment of the conditions and causes of the findings and develop and appropriately implement adequate corrective actions to resolve the findings as required by the Department of Accounts in Topic 10205 – Agency Response to APA Audit of the Commonwealth Accounting Policies and Procedures Manual. Those corrective actions may include additional items beyond our recommendations.