Financial Audit:

Examination of EPA's Financial Statements for Fiscal Year 1987

AFMD-89-24: Published: Feb 9, 1989. Publicly Released: Feb 9, 1989.

Additional Materials:

Contact:

Robert W. Gramling
(202) 275-9406
contact@gao.gov

 

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

GAO examined the Environmental Protection Agency's (EPA) consolidated financial statements for the year ended September 30, 1987, and the related consolidated statements of revenues and expenses and of changes in financial position and reconciliation to budget for the year then ended.

GAO found that EPA: (1) did not routinely reconcile its general ledger balances to external sources or subsidiary records; (2) used property management systems and records which lacked the necessary information for proper accounting, reconciliation, and internal controls; (3) did not include the material weakness in its internal control system over property in its 1987 Federal Managers' Financial Integrity Act (FMFIA) report; and (4) recorded inaccurate cost and property data in Superfund property records and did not properly maintain records. GAO also found that: (1) it could not determine whether EPA properly recorded assets, liabilities, equity, revenues, and expenses at the beginning of fiscal year (FY) 1987, since that was the first year EPA began preparing consolidated statements in accordance with generally accepted accounting principles; (2) it could not perform auditing procedures necessary to determine the aggregate net book value of land, buildings, and equipment, due to numerous property accounting problems; and (3) except as noted, the financial statements presented fairly the EPA financial position as of September 30, 1987.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: EPA initiated procedures to reconcile cash differences with Treasury on a monthly basis and to analyze the general ledger to identify differences with subsidy records.

    Recommendation: To ensure that all agency assets and liabilities are properly accounted for and reported, the Administrator, EPA, should direct agency staff to regularly reconcile general ledger balances with available subsidiary records, program office records, and external sources, and promptly investigate and resolve any discrepancies.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: This recommendation was superseded by the latest report, AFMD-90-20.

    Recommendation: To ensure that all agency assets and liabilities are properly accounted for and reported, the Administrator, EPA, should direct agency staff to ensure that the accounting system provides accurate and reliable financial and management records needed to account for and control property assets.

    Agency Affected: Environmental Protection Agency

  3. Status: Closed - Implemented

    Comments: EPA declined to reconcile the difference between FMS and the Property Control System that existed as of September 30, 1988. However, EPA agreed that a conflict exists between EPA directives and Region 2 General Counsel opinion on the requirement for custodial officers to sign. Custodial officers are still responsible for property if they refuse to sign for it.

    Recommendation: To ensure that all agency assets and liabilities are properly accounted for and reported, the Administrator, EPA, should direct agency staff to address all property-related findings and recommendations reported by the Superfund auditor in its FY 1987 audit report dated September 21, 1988.

    Agency Affected: Environmental Protection Agency

  4. Status: Closed - Implemented

    Comments: EPA raised both problems in its FY 1988 FMFIA report.

    Recommendation: To ensure that all agency assets and liabilities are properly accounted for and reported, the Administrator, EPA, should direct agency staff to report the property and reconciliation internal control problems, if applicable, in the agency's FY 1988 FMFIA report.

    Agency Affected: Environmental Protection Agency

 

Explore the full database of GAO's Open Recommendations »

Sep 20, 2016

Sep 6, 2016

Aug 19, 2016

Aug 12, 2016

Jul 29, 2016

Jul 28, 2016

Jul 13, 2016

Jul 11, 2016

Jun 13, 2016

Looking for more? Browse all our products here