Financial Audit:

Examination of GSA's Financial Statements for Fiscal Years 1987 and 1986

AFMD-89-17: Published: Nov 21, 1988. Publicly Released: Nov 21, 1988.

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GAO presented the results of its examinations of the General Services Administration's (GSA) consolidated financial statements for the fiscal years ended September 30, 1987 and 1986, and the related consolidated statements of revenues and expenses, of changes in financial position, and of reconciliation to budget reports for the fiscal years then ended.

GAO found that: (1) as a result of inaccurate information contained in two automated accounting systems, GSA vehicle inventory records were overstated by $40 million as of September 30, 1987; (2) GSA did not accurately account for motor vehicle sales; (3) GSA did not periodically verify the accuracy of its inventory records through physical counts of vehicles and subsequent reconciliation of inventory records; and (4) GSA implemented an enhancement to the Agency Contracts Register Nationwide (ACORN) system without adequate testing. GAO also found that: (1) GSA complied with the regulations for the transactions tested that could have materially affected its consolidated financial statements; and (2) the consolidated financial statements presented fairly the GSA financial position as of September 30, 1987 and 1986, except as noted, and the results of its operations, the changes in its financial position, and the reconciliation to budget reports for the fiscal years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On September 30, 1987, GSA had 5,700 vehicles at a net book value of $12.4 million that had been sold still on its books. GSA took steps to reconcile the FMS Tires Systems in fiscal year (FY) 1988. The GAO September 30, 1988, audit discussed only 288 vehicles at a net book value of $1.2 million.

    Recommendation: The Acting Administrator of General Services should direct GSA staff to establish procedures to periodically verify the accuracy of inventory records for motor vehicles by physical count and reconcile them to reflect actual quantities on hand.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: GSA had expedited the processing of vehicle disposal information during FY 1988 so that at yearend only 288 vehicles at a net book value of $1.2 million remained on the books that required audit adjustment.

    Recommendation: The Acting Administrator of General Services should direct GSA staff to expedite the processing of vehicle sales information so that timely adjustments are made to inventory records to account for vehicle disposals.

    Agency Affected: General Services Administration

  3. Status: Closed - Implemented

    Comments: In FY 1988, GSA corrected the unbilled accounts receivable and related revenue accounts by performing timely reconciliations and monitoring the ACORN subsystem. GSA is considering scrapping ACORN and replacing it with a new, more reliable system.

    Recommendation: The Acting Administrator of General Services should direct GSA staff to thoroughly test the ACORN subsystem and make the required programming changes to ensure that the subsystem processes and produces reliable financial information.

    Agency Affected: General Services Administration

  4. Status: Closed - Implemented

    Comments: In FY 1988, GSA corrected the unbilled accounts receivable and related revenue accounts by performing timely reconciliations and monitoring the ACORN subsystem. GSA is considering scrapping ACORN and replacing it with a new, more reliable system.

    Recommendation: The Acting Administrator of General Services should direct GSA staff to conduct a detailed review of billing activities relating to automatic data processing contracts and task orders and make the necessary adjustments to correct unbilled accounts receivable and the related revenue accounts.

    Agency Affected: General Services Administration

 

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