National Archives:

A Review of Selected Management Issues

AFMD-89-39: Published: May 23, 1989. Publicly Released: May 23, 1989.

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In response to a congressional request, GAO investigated allegations that: (1) the National Archives and Records Administration (NARA) and National Archives Trust Fund Board improperly commingled appropriated funds and unrestricted Trust Fund money; (2) NARA violated federal procurement and personnel regulations; and (3) because Trust Fund personnel did not hold civil service appointments, they were not eligible to compete for remaining positions if a reduction-in-force occurred.

GAO found that: (1) NARA recorded its reproduction fees deposited into the Trust Fund in separate accounts; (2) NARA did not improperly expend the funds, because the fees were available for any appropriate Trust Fund expenditure; (3) the Trust Fund was not required to follow the Federal Acquisition Regulation when purchasing goods and services; and (4) because NARA personnel appointments were consistent with the law and regulations, all employees would compete equally for remaining positions in the event of reductions-in-force. GAO also found that: (1) the Trust Fund could not ensure that it complied with the legislative requirement that its profits not exceed the 10-percent profit margin allowed for its publications; (2) Trust Fund financial operations lacked written policies, procedures, and documentation for its accounting practices; (3) NARA and Trust Fund annual reports did not provide a Statement of Changes in Financial Position; and (4) the financial statements did not fully disclose unusual transactions and were unaudited, resulting in inaccurate and unreliable financial information for presentation to Congress.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Trust Fund Secretary has directed staff to reconcile accounts and reconciliations are now being performed routinely. Procedures describing pending reconciliations are contained in chapter 10 of the Trust Fund Manual. This chapter is complete and should be approved by December 31, 1989.

    Recommendation: In order to ensure the reliability of the Trust Fund's financial information and proper accounting, the Trust Fund Board should periodically reconcile accounts on a timely basis.

    Agency Affected: National Archives Trust Fund Board

  2. Status: Closed - Implemented

    Comments: Inventory has been counted and adjusted and will be properly shown in financial statements for FY 1989. The previously excluded inventory has been included in the financial statements.

    Recommendation: In order to ensure the reliability of the Trust Fund's financial information and proper accounting, the Trust Fund Board should comply with Title 2 and Treasury requirements by reporting inventory status in the Statement of Financial Position.

    Agency Affected: National Archives Trust Fund Board

  3. Status: Closed - Implemented

    Comments: The agency published the required statements in its fiscal year (FY) 1989 Annual Report on the National Archives Trust Fund.

    Recommendation: In order to ensure the reliability of the Trust Fund's financial information and proper accounting, the Trust Fund Board should publish all appropriate financial statements, including the Statement of Changes in Financial Position and statement disclosures, as required by Title 2 and Treasury regulations.

    Agency Affected: National Archives Trust Fund Board

  4. Status: Closed - Implemented

    Comments: A 12 chapter Trust Fund Manual satisfactorily addressing the recommendation has been published.

    Recommendation: In order to ensure the reliability of the Trust Fund's financial information and proper accounting, the Trust Fund Board should prepare and implement written financial policies and procedures for managing trust fund accounting and operations which describe how the accounting system and other financial processes operate, including the proper posting of transactions and preparation of adequate documentation.

    Agency Affected: National Archives Trust Fund Board

  5. Status: Closed - Implemented

    Comments: The fee schedule was completed and published on March 1, 1991. The Trust Fund Secretary is currently monitoring profits on Trust Fund publications.

    Recommendation: In order to ensure the reliability of the Trust Fund's financial information and proper accounting, the Trust Fund Board should direct the Trust Fund Secretary to develop a methodology to account for costs and revenues associated with sales of publications and reproductions to the public and to monitor the financial results to ensure compliance with the 10-percent profit margin and with the break-even requirements legislated by Congress.

    Agency Affected: National Archives Trust Fund Board

  6. Status: Closed - Implemented

    Comments: The contractor for the audit of the Trust Fund's fiscal year (FY) 1990 and FY 1991 financial statements did not give an opinion. Instead, the contractor issued two management reports for FY 1990 and FY 1991 that contained 31 and 9 audit recommendations, respectively, for improvements to the accounting system. While the FY 1992 financial statement audit report did not express an opinion on the results of operations or cash flows due to inadequate supporting documentation, it stated that the statement of financial condition was fairly presented in all material respects. The contractor also issued a management report with 9 recommendations for improvements in accounting practices and internal controls.

    Recommendation: To ensure the reliability of the Trust Fund's financial information and proper accounting, the Trust Fund Board should obtain an independent annual audit of the Trust Fund's financial statements.

    Agency Affected: National Archives Trust Fund Board

 

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