Weaknesses in the Food and Drug Administration's Financial Management System
FGMSD-77-76: Published: Nov 8, 1977. Publicly Released: Nov 8, 1977.
- Full Report:
A questionnaire survey was conducted to evaluate the procedures and controls applicable to revenue and expenditure transactions at the Food and Drug Administration's Office of Administration, Division of Financial Management, and at 18 agency accounting stations. The questionnaire covered the system of internal controls over collections, disbursements, imprest funds, and obligations and was designed to identify potential problem areas.
FDA's Division of Financial Management and its accounting stations did not have good internal control of their collections and did not deposit collections promptly. In many instances, they did not properly record collections in control registers upon receipt. Some accounting stations did not safeguard collections before they were transmitted to headquarters for deposit. The Division of Financial Management and the agency accounting stations, in some instances, had not established adequate accounting or physical control of imprest funds. FDA is authorized to bill firms for the cost of removing hazardous substances from the marketplace. The Division of Financial Management, however, did not record amounts it billed private firms as accounts receivable. Some accounting stations did not review and analyze employee travel advances. The Division of Financial Management and agency accounting stations, in some instances, did not provide adequate support for disbursements and periodical review of unliquidated obligations. At four accounting stations, the basis for and the method of computing estimated monthly obligations were not explained in the supporting documents to help managers and independent reviewers insure that the amounts of the obligations were reasonable.