Financial Audit:

Federal Crop Insurance Corporation's Fiscal Year 1988 Financial Statements

AFMD-90-43: Published: Apr 18, 1990. Publicly Released: Apr 18, 1990.

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GAO examined the financial statements of the Federal Crop Insurance Corporation (FCIC) for the fiscal year ended September 30, 1988.

GAO noted that: (1) FCIC oversight of reinsured companies' loss adjustment activities slightly improved, but management needed to continue to strengthen its oversight activities; (2) FCIC officials approved criteria for evaluating the results of compliance reviews and for determining the acceptability of reinsured companies' loss adjustment performance; and (3) FCIC still lacked adequate internal controls over certain administrative expenses. GAO found that the financial statements presented fairly the FCIC financial position, the results of its operations, and its cash flows for the year then ended, in conformity with generally acceptable accounting principles applied on a consistent basis.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The corporation has implemented a new computerized fund control system known as the Control Accounting Database Inquiry System to correct the problem of reconciliations, effective July 1, 1990. The system will be testing during the fiscal year 1990 audit of FCIC.

    Recommendation: The Board of Directors, FCIC, should direct the Comptroller to develop procedures to be used by all cost centers for reconciling salary and other administrative expense vouchers sent to the National Finance Center with the monthly detailed transaction registers. The Comptroller should then ensure that such procedures are followed to verify that all vouchers are properly processed.

    Agency Affected: Department of Agriculture: Federal Crop Insurance Corp.: Board of Directors

 

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