Financial Audit:

Daniel Webster Senate Page Residence Revolving Fund's Fiscal Year 2002 Financial Statements

GAO-04-388: Published: Mar 31, 2004. Publicly Released: Mar 31, 2004.

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This report presents the results of our audit of the financial statements of the Daniel Webster Senate Page Residence Revolving Fund (the Fund) for the fiscal year ending September 30, 2002. This report also contains our opinion on the effectiveness of the Fund's related internal control as of September 30, 2002, and our evaluation of its compliance with selected provisions of laws and regulations we tested. We performed this audit at the request of the former Senate Sergeant at Arms.

We have audited the accompanying statement of financial position of the Fund as of September 30, 2002, and the related statement of revenue and expenses and changes in fund balance and statement of cash flows for the fiscal year then ended. In our audit, we found the financial statements are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles; although certain internal controls should be improved, the Fund had effective internal control over financial reporting (including safeguarding of assets); and compliance with laws and regulations; and no reportable noncompliance with selected provisions of laws and regulations we tested.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In 2004, the Office of Financial Management required that the preparation and review of journal entries be documented. Specifically, the preparers were required to document and sign each journal entry. In addition, the reviewer was required to sign the year-end closing package which includes the journal entries, supporting schedules and other closing documentation, and the draft financial statements. This action is consistent with he intent of our recommendation. Further, Office of Financial Management stated in September 2008, enhancements to the journal entry review process are under consideration and additional policies are expected during next year.

    Recommendation: In light of the internal control weaknesses identified during our audit, the Sergeant at Arms should strengthen controls over financial reporting and recording of transactions for the Daniel Webster Senate Page Residence Revolving Fund. Specifically, the Sergeant at Arms should direct Fund management to develop and implement procedures so that journal entries are properly reviewed.

    Agency Affected: Senate Sergeant at Arms

  2. Status: Closed - Implemented

    Comments: The Office of Financial Management formalized in 2004 procedures (including establishing a Year-End Closing Checklist) for determining the fiscal year-end accruals needed to convert its modified cash accounting for the Fund to full accrual accounting at fiscal year end. This action is consistent with he intent of our recommendation. Further, in July 2008, Office of Financial Management officials stated that it has reevaluated the basis of accounting for this revolving fund and plans to change to full accrual accounting beginning October 1, 2008.

    Recommendation: In light of the internal control weaknesses identified during our audit, the Sergeant at Arms should strengthen controls over financial reporting and recording of transactions for the Daniel Webster Senate Page Residence Revolving Fund. Specifically, the Sergeant at Arms should direct Fund management to improve policies and procedures to achieve the proper recording of transactions in accordance with the basis of accounting selected.

    Agency Affected: Senate Sergeant at Arms

  3. Status: Closed - Implemented

    Comments: In 2004, the Office of Financial Management evaluated which basis of accounting was most useful to the management of the Page Residence Revolving Fund and adopted the use of modified cash basis of accounting during the year with full accrual accounting to be used to prepare year-end financial statements. This action is consistent with he intent of our recommendation. In addition, Office of Financial Management officials stated that it reevaluated the basis of accounting for this revolving fund in July 2008 and plans to change to full accrual accounting beginning October 1, 2008.

    Recommendation: In light of the internal control weaknesses identified during our audit, the Sergeant at Arms should strengthen controls over financial reporting and recording of transactions for the Daniel Webster Senate Page Residence Revolving Fund. Specifically, the Sergeant at Arms should direct Fund management to evaluate whether the accrual basis is the basis of accounting that is most useful to the Fund's management or whether the modified cash basis, which is essentially what is in place during the year, is most effective and adopt the most appropriate basis for presentation of the financial statements.

    Agency Affected: Senate Sergeant at Arms

  4. Status: Closed - Implemented

    Comments: In response to findings documented in our 2004 report, the Senate Sergeant at Arms' Office of Financial Management took several actions designed to help ensure that purchase card spending limits are followed and purchase card usage is monitored. Specifically, automated limits on individual purchase cards and monthly limits on total purchase card usage were established by the Bank issuing the purchase cards. In addition, the office established a procedure to monitor annual purchase card usage by keeping track of its monthly usage.

    Recommendation: In light of the internal control weaknesses identified during our audit, the Sergeant at Arms should strengthen controls over financial reporting and recording of transactions for the Daniel Webster Senate Page Residence Revolving Fund. Specifically, the Sergeant at Arms should direct Fund management to improve controls so that purchase card spending limits are monitored and followed.

    Agency Affected: Senate Sergeant at Arms

 

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