Financial Audit:

Forest Service's Financial Statements for Fiscal Year 1988

AFMD-91-18: Published: Mar 18, 1991. Publicly Released: Mar 18, 1991.

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GAO examined the Forest Service's financial statements for the fiscal year ended September 30, 1988.

GAO found that: (1) the central accounting system did not integrate all separate accounting and reporting systems; (2) internal control policies and procedures within individual accounting and reporting systems failed to ensure that financial information was reliable and in compliance with prescribed accounting principles; (3) the general ledger was unable to produce accurate and timely financial reports, since the Service failed to integrate it with its accounting and reporting systems; (4) the Timber Sale Program Information Reporting System (TSPIRS) was not in accordance with generally accepted accounting principles; (5) the Service violated the Anti-Deficiency Act by overobligating the National Forest System's funds and the Job Corps account's allotment; and (6) except as noted, the financial statements presented fairly the Service's financial position, and the results of its operations, in conformity with generally accepted accounting principals applied on a consistent basis.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Information for classification of payables and receivables currently exist in the Forest Service handbook and compliance was emphasized in June and August 1991 letters to field units. Management reviews have stressed report accuracy and staff supervision and held managers accountable.

    Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to improve accounting controls in the general ledger and subsidiary systems by: (1) clarifying and correcting written procedures for classifying payables and receivables; (2) supervising field staff to ensure that their work is accurate and timely, and that agency policies and procedures are followed; and (3) reviewing external and internal reports to ensure accuracy, consistency, and compliance with federal financial reporting requirements.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: The CFO Act of 1990 requires annual financial audits of the Department of Agriculture. This, or a similar recommendation, will continue to be made each year until corrective actions are taken.

    Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to ensure that field unit staff: (1) promptly update the fixed asset subsidiary ledger system; (2) review and reconcile field unit ledgers with central accounting records; and (3) periodically inventory equipment.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: The new system under development will place all subsidiary systems into a single, integrated relational database system, which will update the general ledger automatically, thus eliminating the need for reconciliation by September 1996. A FTE position to ensure current reconciliations was obtained in December 1992. The CFO Act of 1990 requires annual audits of the Department of Agriculture. This, or a similar recommendation, will be repeated each year until corrective action is implemented.

    Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to reconcile data in the general ledger with all subsidiary systems.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: The Forest Service is developing an administrative integrated management system (AIMS) to provide a fully integrated financial system. Automated tracking of the work process is complete, fund allocation is in process, and complete system implementation is targeted for September 1996. An interim step is under way to procure software to link the general ledger to supporting systems by late 1994. The CFO Act of 1990 requires annual audits of the Department of Agriculture. This, or a similar recommendation, will be repeated each year until corrective action is implemented.

    Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to integrate all financial accounting and reporting systems with the Forest Service's general ledger so that all accounts are part of the general ledger system. This should include the capability of automatically updating all integrated systems when a transaction is processed.

    Agency Affected: Department of Agriculture

  5. Status: Closed - Implemented

    Comments: All TSPIRS modifications have been made to match costs with timber harvested, capitalize and depreciate roads, and better estimate harvestable timber inventory. Procedures to ensure cost pool balances are adjusted due to catastrophic losses were issued September 21, 1992.

    Recommendation: The Secretary of Agriculture should direct the Chief, Forest Service, to modify TSPIRS to incorporate procedures to: (1) better match costs and volume of timber harvested; (2) improve the capitalization and depreciation of the cost of roads and related structures; and (3) periodically review growth pool balances and the amortization formula to determine how realistically they account for conditions in the forests.

    Agency Affected: Department of Agriculture

 

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