General Services Administration Needs To Improve Its Internal Controls To Prevent Duplicate Payments

AFMD-85-70: Published: Aug 20, 1985. Publicly Released: Aug 20, 1985.

Additional Materials:

Contact:

John F. Simonette
(202) 275-9490
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed payment procedures at the General Services Administration's (GSA) National Capital Region (NCR) finance center to determine: (1) if, and why, duplicate payments were paid for the same goods and services; and (2) NCR efforts to recover duplicate payments from vendors.

GAO found that: (1) 32 duplicate payments amounting to $1.3 million were made due to internal control weaknesses and problems in payment center operating procedures; (2) private vendors were refunding duplicate payments made through the National Electronic Accounting and Reporting (NEAR) System, but NCR officials had not attempted to identify the reason for the duplicate payments; (3) internal controls need to be upgraded; (4) the center relied on manual controls, which were not always effective; and (5) manual payments could not be accessed for computer comparisons to prevent future duplicate payments. GAO also found that: (1) the center lacked adequate physical control over documents used to justify payments; (2) some recipients of duplicate payments did not return government checks, but refunded the improper amount with their own checks on subsequent invoices; (3) fiscal year 1984 automated payment data were incomplete because numerous manual payments had not been entered in the system files; (4) GSA did not have written procedures instructing clerks to process charges for each billing period separately; (5) accounting records were incomplete; and (6) efforts to collect identified duplicate payments were not promptly pursued.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In May and November 1985 memorandums, GSA headquarters directed that certain internal controls be observed in order to avoid making duplicate payments. These memoranda, which spelled out the specific controls, were distributed to all GSA regional finance divisions.

    Recommendation: To strengthen GSA payment operations, and particularly to prevent duplicate payments, the Administrator of General Services should develop and implement written procedures which specify under what circumstances NEAR system automated controls to prevent duplicate payments may be circumvented and the level of supervisory approval required to override them.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. However, GSA issued instructions to all its remaining finance divisions regarding this issue.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to control the bypassing of automated internal control features.

    Agency Affected: General Services Administration

  3. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. However, GSA issued instructions to all its remaining finance divisions regarding this issue.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to monitor payment practices to ensure that payment clerks: (1) record separately the charges for different billing periods when processing payments for recurring services, such as utilities; and (2) perform the required research to prevent duplicate payments when using a document other than an original invoice as support for a payment. The reason that document was used and the steps taken to prevent duplicating a prior payment should be noted on that document.

    Agency Affected: General Services Administration

  4. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. However, GSA instructed all of its remaining finance centers to keep manually scheduled payments to a minimum and record them on the automated system within 10-working days.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to process payments manually, only as a last resort, and record any manually processed payments promptly in the automated files of the NEAR system.

    Agency Affected: General Services Administration

  5. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. However, GSA headquarters issued agencywide instructions on this matter to all of its remaining regional finance centers.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to summarize, analyze, and use information regarding duplicate payments that vendors return to identify and correct problems in the payment process, including weaknesses in internal controls which allow duplicate payments to occur.

    Agency Affected: General Services Administration

  6. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. However, GSA headquarters instructed its remaining regional finance centers to take actions to safeguard and ensure the availability of documents supporting payments.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to strengthen the physical controls over documents used to support payments to provide complete documentation regarding the propriety of each payment.

    Agency Affected: General Services Administration

  7. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. GSA has a project underway to review vendor identification numbers in all of its remaining regional finance centers.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to review the identification numbers for each vendor in NEAR system files and eliminate any multiple numbers for the same company.

    Agency Affected: General Services Administration

  8. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. However, GSA headquarters emphasized this requirement in a memo to all of its remaining regional finance centers.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to strengthen procedures for collecting identified duplicate payments. Among the specific required actions are pursuing amounts owed promptly, charging interest on claims outstanding at least 30 days after the date the notice is mailed to the debtor, and assessing other charges such as penalties and processing and handling fees, as appropriate, for late or defaulted repayments.

    Agency Affected: General Services Administration

  9. Status: Closed - Not Implemented

    Comments: GSA implemented an additional automated edit for recurring variable price services, such as utilities. Payments being processed for a month, which the automated records show a prior payment, will be rejected. GSA officials determined that upgrading manual controls eliminated the need for any action on the first and third segments of this recommendation.

    Recommendation: To strengthen GSA payment operations, and particularly to prevent duplicate payments, the Administrator of General Services should increase the capability of automated controls in the NEAR system so that: (1) duplicate payments processed concurrently on the automated system are detected and rejected; (2) all payments for recurring services are rejected if there has been a previous payment for the same billing period; and (3) comparisons of the unique document control numbers are accomplished in time to remove any duplicate payments from the automated system before the payment tapes are generated.

    Agency Affected: General Services Administration

  10. Status: Closed - Implemented

    Comments: GSA closed its NCR payment center in January 1986. GSA required that all of its remaining finance centers record all returned payments in the vendor payment history files.

    Recommendation: The Administrator of General Services should direct the Administrator, NCR, to record all returned payments in the vendor payment history files.

    Agency Affected: General Services Administration

 

Explore the full database of GAO's Open Recommendations »

Sep 28, 2016

Sep 27, 2016

Sep 26, 2016

Sep 23, 2016

Sep 21, 2016

Sep 7, 2016

Aug 30, 2016

Aug 11, 2016

Jul 22, 2016

Looking for more? Browse all our products here