Strengthening Internal Controls Would Help the Department of Justice Reduce Duplicate Payments

AFMD-85-72: Published: Aug 20, 1985. Publicly Released: Aug 20, 1985.

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Pursuant to a congressional request, GAO reviewed duplicate payments made by federal agencies at selected federal payment centers, including one within the Department of Justice's Justice Management Division.

GAO identified, through independent testing of prior payments, weaknesses in the automated and manual controls used to prevent duplicate payments. GAO found that: (1) the automated internal control feature did not identify duplicate payments; (2) payment clerks did not have access to comprehensive payment data needed to prevent duplicate payments; and (3) the payment center contributed to duplicate payments by forwarding more than one vendor invoice for the same goods and services. GAO also found that: (1) the existing automated internal control system showed that it could only detect duplicate payments if the invoice number and amount paid were identical for two or more transactions; (2) the Financial Management Information System (FMIS) routine for preventing duplicate payments currently produces a daily listing of possible duplicates, but does not automatically suspend them from the payments in process; (3) manual records were not always complete; and (4) other payment data, which would be less susceptible to change on another invoice for the same item, were available and could have been used to increase the reliability of comparison.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Controls were installed to prevent payment if the proposed payment exceeds an existing obligation by the lesser of $100 or 10 percent. Call numbers were added to the matching routine to offer more unique matching criteria. Justice's analysis of prior duplicates helped shape its proposed actions. All of the proposed changes were substantially accomplished.

    Recommendation: The Attorney General should direct the Assistant Attorney General for Administration, Justice Management Division, to improve the automated internal control feature for preventing duplicate payments, specifically: (1) the automated internal control mechanism should be revised so that it can identify possible duplicate payments in process even when there are variances, such as different invoice numbers, in the data describing or supporting the payment; (2) achieving greater control will require including additional information in the automated files, especially any data unique to payment transactions, such as call numbers under Justice's blanket purchase agreements or merchandise delivery or service completion dates; and (3) Justice should use its analysis of why duplicate payments were made to improve its controls for preventing duplicate payments.

    Agency Affected: Department of Justice

  2. Status: Closed - Not Implemented

    Comments: Only one automated matching technique removes potentially incorrect payments from payments in process schedules. If possible erroneous payments found in the second matching routine are not promptly reviewed, inaccurate payments can be issued. Justice stated that this is more efficient because of the large number of duplicate payments on daily listings. Justice does not plan any additional changes.

    Recommendation: The Attorney General should direct the Assistant Attorney General for Administration, Justice Management Division, to convert the automated internal control from a passive to an active feature, which stops or holds in suspense any identified potential duplicate payments until they are verified to be valid transactions.

    Agency Affected: Department of Justice

  3. Status: Closed - Implemented

    Comments: Payment technicians receive daily lists of all payments authorized, but not yet forwarded for payment. This offers payment clerks better opportunities for preventing duplicate payments.

    Recommendation: The Attorney General should direct the Assistant Attorney General for Administration, Justice Management Division, to provide payment clerks full access to all automated payment files.

    Agency Affected: Department of Justice

  4. Status: Closed - Not Implemented

    Comments: Justice officials plan to adopt only the first part of this recommendation. Officials contend that their upgraded controls make the last two proposals unnecessary, since they are experiencing fewer known duplicate payments.

    Recommendation: The Attorney General should direct the Assistant Attorney General for Administration, Justice Management Division, to require that staff in the FMIS payment center and offices adhere to sound administrative practices, specifically: (1) ordering offices should maintain a log of merchandise or services received and review previous entries prior to sending any receipt acknowledgment to the payment center to authorize payment to help avoid forwarding more than one supporting document for the same goods or services; (2) payment center clerks should examine each receipt acknowledgment to identify any with annotations that would indicate that another supporting document for the same goods or services may have been received previously and, before authorizing payment based on any document containing such annotations, payment clerks should research prior payment records to ensure that the same item has not been paid for already; and (3) ordering offices should carefully reconcile the payment center's listings of prior payments with their records of goods or services received to identify any duplicate payments that slipped through earlier system checks.

    Agency Affected: Department of Justice

 

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