Internal Controls:

Areas for GSA Management to Strengthen

AFMD-89-36: Published: Apr 20, 1989. Publicly Released: Apr 20, 1989.

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GAO identified areas in which the General Services Administration (GSA) needed to improve its internal accounting controls and procedures.

GAO found that GSA: (1) did not perform the number of test counts required to ensure the accuracy of general supply inventory records; (2) did not maintain adequate supporting documentation for certain fund transactions; (3) did not always properly record financial transactions in the proper fiscal year, resulting in $2.6 million in chargebacks on Federal Buildings Fund rent billings and adjustments of $29 million to increase unrecorded General Supply Fund assets and liabilities; (4) did not always properly account for cash, equity, and income in the receipt funds; (5) did not detect errors in the computation of future lease obligations and was unable to calculate future minimum lease payments beyond 1999; (6) manual calculations to supplement the lease payment system understated future minimum lease payments from the Federal Buildings Fund by over $18 million; (7) did not use general ledger expense accounts for financial statement expense line items in its statement of revenues and expenses; (8) lack of adequate written guidance and the amount of manual processing of financial data led to inaccuracies and inconsistencies in its financial reporting and consolidation process; (9) did not adhere to established accounting procedures during 1987, resulting in adjustments of over $2 million to correct uncollectible accounts receivable and related bad-debt expense accounts and $900,000 to increase year-end accounts payable and amounts withheld from vendor invoice payments from the Federal Buildings Fund; (10) did not adequately review accounts receivable subsidiary records to detect and eliminate erroneous and outdated information, resulting in an $8.9-million reduction in the Federal Buildings Fund's net income; (11) did not adequately review construction projects to determine their status, resulting in adjustments of $50 million to reclassify completed projects and $1.7 million for depreciation expenses; (12) lacked adequate separation of duties for personnel responsible for reviewing inventory operations; and (13) lacked written guidelines for some of its routine operations.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Acting Administrator of General Services responded on June 5, 1989, with a detailed action plan to the 18 findings noted, 11 of which have been completed. The remaining 7 were completed by May 31, 1990.

    Recommendation: The Acting Administrator of General Services should direct the GSA Comptroller to develop a plan which includes a timetable for resolving the weaknesses identified.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: The Acting Administrator of General Services responded on June 5, 1989, with a detailed action plan to the 18 findings noted, 11 of which have been completed. The remaining 7 were completed by May 31, 1990.

    Recommendation: To assist the Acting Administrator in ensuring that actions to accomplish these improvements are progressing on schedule and to assist him in carrying out his responsibilities under the Financial Integrity Act, managers should continue to include in reports to the Acting Administrator under the act information on the status of efforts to correct the weaknesses identified. To the extent weaknesses are not corrected by the end of the current fiscal year, they should be considered for inclusion in the Administrator's annual report required by the act.

    Agency Affected: General Services Administration

 

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