Financial Audit:

Examination of IRS' Fiscal Year 1994 Financial Statements

AIMD-95-141: Published: Aug 4, 1995. Publicly Released: Aug 4, 1995.

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Pursuant to a legislative requirement, GAO examined the Internal Revenue Service's (IRS) financial statements for fiscal years (FY) 1993 and 1994.

GAO found that: (1) critical supporting information for IRS financial statements was not available; (2) the available information was generally unreliable due to ineffective internal controls; (3) IRS internal controls did not effectively safeguard assets, provide a reasonable basis for determining material compliance with laws and regulations, or ensure that there were no material misstatements in the financial statements; and (4) IRS has made progress in responding to previously identified problems and improving accounting for federal revenues.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: This recommendation was made in a prior report to IRS. The statement was made in this report to emphasize that actions had not occurred to correct the prior recommendation.

    Recommendation: The Commissioner of IRS should direct the Chief Financial Officer to implement software, hardware, and procedural changes needed to create reliable subsidiary accounts receivable and revenue records that are fully integrated with the general ledger.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Not Implemented

    Comments: This recommendation was made in a prior report to IRS. The statement was made in this report to emphasize that actions had not occurred to correct the prior recommendation.

    Recommendation: The Commissioner of IRS should direct the Chief Financial Officer to change the current federal tax deposit coupon reporting requirements to include detailed reporting for all excise taxes, FICA taxes, and employee withheld income taxes.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Not Implemented

    Comments: This recommendation was made in a prior report to IRS. The statement was made in this report to emphasize that actions had not occurred to correct the prior recommendation.

    Recommendation: The Commissioner of IRS should direct the Chief Financial Officer to implement software changes that will allow the detailed taxes reported to be separately maintained in the master file, other related revenue accounting feeder systems, and the general ledger.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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