Management Report:

Improvements Needed in American Battle Monuments Commission's Internal Controls and Accounting Procedures

GAO-10-596R: Published: Jul 23, 2010. Publicly Released: Jul 23, 2010.

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On March 1, 2010, we issued our report expressing our opinion on the American Battle Monuments Commission's (the Commission) fiscal years 2009 and 2008 financial statements and our opinion on the Commission's internal control as of September 30, 2009. We also reported on the results of our tests of the Commission's compliance with selected provisions of laws and regulations during fiscal year 2009. We reported that although certain internal controls should be improved, the Commission maintained, in all material respects, effective internal control over financial reporting as of September 30, 2009. However, we also reported on a significant deficiency in the Commission's governance structure related to vacant Commissioner positions and one instance of noncompliance with the Antideficiency Act related to a Commission contract with a commercial employment services firm to provide temporary employees. During our fiscal year 2009 audit, we also identified other internal control deficiencies that, while not material, individually or in the aggregate, to the Commission's financial statements, nevertheless warrant management's attention. The purpose of this report is to present these deficiencies, provide additional detailed information on the significant deficiency and compliance issue identified in our fiscal year 2009 audit report, provide recommendations to address these matters, and provide an update on the status of our prior year recommendations.

During our fiscal year 2009 financial statement audit, we identified a total of 18 control deficiencies in the Commission's internal controls and accounting procedures at Commission headquarters, its European Regional (ER) and Mediterranean Regional (MR) Offices, and at the Manila American Cemetery. At the Commission's headquarters, we identified the following internal control and accounting procedure deficiencies: (1) No written delegation of governance authority from Commissioners. (2) Inadequate controls to prevent Antideficiency Act violations. (3) Internal control reviews were completed, but were not fully validated. (4) Procurements did not follow required procedures. (5) Not all trust fund receipts were reported in the trial balance. (6) No support for calculating and reporting of full-time equivalent employees. (7) Documentation of personnel actions was not current. (8) Guidelines for donated services were not followed. (9) Engineering project lists had inaccuracies. At the Commission's ER Office, we identified the following internal control and accounting procedure deficiencies: (1) Imprest cash counts were not timely and reports had inaccuracies. (2) Miscellaneous receipt activity was not included in budgetary accounts. (3) Not all expenditure transactions were adequately documented. (4) Not all payroll transactions were properly processed. (5) Funds were commingled in the Commission's Aged Vendor Liability Report. (6) Not all year-end liabilities were identified for accrual. (7) Undelivered orders report was not reconciled with the general ledger. At the Commission's MR Office, we identified a control deficiency concerning the calculation of holiday pay and the processing of current pay authorizations. At the Commission's Manila American Cemetery, we identified a control deficiency regarding the lack of support for certain expenditure transactions. To assist Commission management in addressing these findings, this report contains 45 detailed recommendations. In its July 15, 2010, letter, the Commission agreed with the issues raised in our draft report.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to ensure that all imprest cash is counted at least annually in accordance with the Commission's Imprest Fund Handbook.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated it would ensure that all imprest funds are counted at least annually in accordance with the Commission's Imprest Fund Handbook. During out fiscal year 2010 audit, we observed cash counts at the North Africa and Suresnes cemeteries. We also reviewed documentation provided by the Logistics Director listing the most recent cash counts at all the Paris Office cemeteries. All dates for cash counts fell within fiscal year 2010. As a result this recommendation is closed as implemented.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to ensure that cash balances reported on the monthly FMS 1219, Statement of Accountability, reconcile to actual cash amounts on hand in accordance with the Treasury Financial Manual.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Open

    Comments: In September 2010, the Commission stated that they had implemented this recommendation. However during our fiscal year 2012 audit, we found that the 'Advances To Agents' line item remained unchanged. To fully address this recommendation, the Commission needs to write off $29,796, which relates to an imprest fund which was erroneously carried over from when PeopleSoft was implemented. Therefore, we will follow up on this open recommendation at a later date.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to write off the pre-1996 receivable amount reported on the monthly FMS 1219, Statement of Accountability as uncollectible.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Open

    Comments: In response to this recommendation, the Commission stated that they were working with the Department of the Treasury to implement this recommendation. However, the Commission has yet to write off the pre-1996 receivable amount as uncollectible. To fully address this recommendation, the Commission needs to write off $2,100 as uncollectable. Therefore, we will follow up on this open recommendation at a later date.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to process authorized pay increases timely.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated the Paris Office Human Resources Directorate would ensure that all pay increases are processed no later than one pay period after the change has been received from the approving authority. During our fiscal year 2010 audit, we found that pay increases were being processed timely. All of the sample items tested during our statistical payroll test were being paid the correct amount.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to complete the analysis of undelivered orders and make appropriate adjustments so the detail report of undelivered orders reconciles to and supports the general ledger balance.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission completed an analysis to ensure the detail report of undelivered orders reconciles to and supports the general ledger balance. During our fiscal year 2010 audit, based upon our audit procedures performed, we found that ABMC Paris Office undelivered orders as of September 30, 2010, were properly valued in the correct period in accordance with U.S. GAAP, and consistently applied.

    Recommendation: The superintendent of the Commission's Manila American Cemetery should follow established accounting procedures to provide a signature and date in voucher packages when goods and services were received.

    Agency Affected: American Battle Monuments Commission: Manila American Cemetery

    Status: Closed - Implemented

    Comments: In response to this recommedation, the Commission revised procedures to document certification by a stamp to provide signature and date on all voucher packages as evidence that goods or services were received and proper for payment. During our fiscal year 2010 audit, we found the Superintendent of the Commission's Manila American Cemetery signed and dated when goods/services were received.

    Recommendation: The Director of Personnel and Administration responsible for procurement at Commission headquarters should take action to follow the guidance issued by the Office of Management and Budget to timely resolve and report the Antideficiency Act violation regarding the contract containing a hold-harmless clause to the Congress and the President of the United States, with a copy to the Comptroller General.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: During our fiscal year 2010 audit, we found the Secretary sent a letter detailing the prior year's Antideficiency Act violation to Congress and the President, with a copy sent to the Comptroller General, on April 16, 2010. The letter contained the relevant facts, circumstances, and actions (cancellation of the contract, departure of those involved, and plan for action) taken by the Commission regarding the violation.

    Recommendation: The Director of Personnel and Administration responsible for procurement at Commission headquarters should take action to modify written contracting policy and procedures to identify and evaluate hold-harmless clauses in all future contracts for compliance with the Antideficiency Act.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's financial statements, we found that the Commission modified its written contracting policy to identify and evaluate future contracts for compliance with the Antideficiency Act. We consider the Commission's actions sufficient to substantially satisfy the intent of our recommendation and consider this recommendation closed.

    Recommendation: The Director of Personnel and Administration responsible for procurement at Commission headquarters should take action to conduct a review of existing contracts to identify any hold-harmless clauses and take necessary actions to resolve any that may violate the Antideficiency Act.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's financial statements, we found no evidence of any Antideficiency Act violations and were provided evidence demonstrating a review of existing contracts was performed by the Commission. We consider the Commission's actions sufficient to close this recommendation.

    Recommendation: The Director of Human Resources at Commission headquarters should take action to document the monthly submittal of SF 113-A reports to the Office of Personnel Management.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: During our fiscal year 2010 audit, we found the Commission submitted the quarterly submission of the SF 113-G and SF 113-A to OPM in accordance with guidance.

    Recommendation: The Director of Human Resources at Commission headquarters should take action to follow Office of Personnel Management guidance to ensure that employee payroll data, including SF-50, Notification of Personnel Action, are kept current in official personnel files.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Not Implemented

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's financial statements, we found that the Commission's actions ensured that payroll data was kept current in the official personnel files. For example, when a change (including any pay increases or changes in deductions) to a GS employee's record is made, an SF-50 is prepared and sent to GSA (a copy is filed in the corresponding personnel folder) to update the employee's file. To do so, the Administrative Officer at HQ (or the Human Resources Assistants for overseas GS payroll actions) prepares the SF-50 according to the necessary change taking place, signing the preparer line when finished. The SF-50 is then reviewed and signed by Director of HR and Administration and the Chief of Personnel Services (or Director of HR and HR Specialist for overseas GS payroll actions). Once the SF-50 is complete and signed off by all required parties, it is sent to GSA via fax. However, the Commission was unable to provide sufficient supporting documentation to support their corrective action. Therefore, we are unable to support a specific action taken by the agency. As a result, we are closing this recommendation as "Closed Not Implemented."

    Recommendation: The Directors of Human Resources and Finance at Commission headquarters should coordinate action to document acceptance and scope of voluntary services, including that services are from a non-prohibited source, in accordance with established Commission guidelines.

    Agency Affected: American Battle Monuments Commission

    Status: Closed - Implemented

    Comments: During our fiscal year 2010 audit, we found acceptance and scope of voluntary services was documented. Specifically, the Commission issued a Policy Letter subject on Acceptance of Voluntary Services at ABMC Cemeteries and other Facilities and we obtained documentation of accepted In-Kind Donation of Service during the fiscal year.

    Recommendation: The Director of Engineering at Commission headquarters should take action to follow established procedures for periodic review of projects to include coordination with regional offices and cemeteries in reviewing the completeness and accuracy of the Lookforward and Lookback Lists.

    Agency Affected: American Battle Monuments Commission: Engineering and Maintenance Director

    Status: Closed - Implemented

    Comments: During our audit of the American Battle Monuments Commission's (the Commission) fiscal year 2011 financial statements, we determined that procedures were being followed consistently and reviews of the completeness and accuracy of the Lookforward List and the Lookback List was being performed.

    Recommendation: The Finance Officer at the Commission's European Regional Office should comply with Treasury requirements in taking action to strengthen review procedures to ensure that personnel record both budgetary and proprietary accounting entries when recognizing miscellaneous receipt activity in Fund 3220.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated that monthly reviews of the trial balance will be performed by the Chief Financial Officer (CFO) to ensure that proper accounting is being performed for all funds. During our fiscal year 2010 audit, we found balancing budgetary entries made for the 3220 fund at the Paris office. In discussion with the CFO, the CFO stated that trial balances were reviewed monthly.

    Recommendation: The Finance Officer at the Commission's European Regional Office should comply with Treasury requirements in taking action to review budgetary and proprietary accounting for Fund 3220 monthly to ensure that miscellaneous receipt activity is properly recorded.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this reocmmendation, the Commission stated that monthly reviews of the trial balance will be performed by the Chief Financial Officer (CFO) to ensure that proper accounting is being performed for all funds. During our fiscal year 2010 audit, we found balancing budgetary entries made for the 3220 fund at the Paris Office. In discussion with the CFO, she stated that trial balances were reviewed monthly by her.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to follow established accounting procedures to include an Invoice Approval Sheet in every voucher package.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: During our fiscal year 2012 audit, we found that with the transition to the Oracle Federal Financial (OFF) system, the Commission no longer requires the use of the invoice approval sheet. The iProcurement system, which is part of OFF, has built-in controls that prevent payment of invoices without the appropriate approvals. During our audit, we did not find any issues with this process. The Commission's actions are sufficient in addressing the intent of this recommendation.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to follow established accounting procedures to obtain evidence of director approval for all invoices.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: During our fiscal year 2010 audit we verified that the Commission took action to follow established accounting procedures to obtain evidence of director approval for all invoices. We tested a statistical sample of credit items and all sample items tested had a Director signoff.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to follow established accounting procedures to review voucher packages for completeness before they are processed for payment.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: During our fiscal year 2012 audit, we found that with the transition to the Oracle Federal Financial (OFF) system, the Commission no longer requires the use of the invoice approval sheet to document its review of voucher packages and invoices. The iProcurement system, which is part of OFF, has built-in controls that prevent payment of invoices without the appropriate approvals. During our audit, we did not find any issues with this process. The Commission's actions are sufficient in addressing the intent of this recommendation.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to clarify existing policy for approval of time and attendance records to ensure employees do not approve their own time card.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission noted that the Paris Office only has two employees who are authorized to electronically approve timecards and each employee was instructed to approve the other's time card, and to never approve their own. During our fiscal year 2010 audit we found this to be an accurate statement. We interviewed the Paris Human Resources Officer and verified through statistical payroll testing that employees were not approving their own time and attendance records.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to routinely review the calculation of monthly foreign post allowances for accuracy and timely correct any errors.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommedation, the Commission stated that the Paris Office Human Resources Directorate would audit the foreign post allowance for all eligible employees once per fiscal quarter to ensure accuracy and any errors identified would be corrected no later than one pay period after discovery. During our fiscal year 2010 audit, we found that USGS foreign post allowance was being monitored for acuracy. Our statistical testing of 5 USGS employees revealed that all sample items allowances were correctly calculated and an interview with the Overseas Pay Assistant verified she was reviewing the foreign post allowance for errors.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to routinely monitor annual and sick leave balances, particularly for negative balances.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated that the Paris Office would instruct the Information Technology (IT) Directorate to generate an annual/sick leave balance report for all FSNs for review by Human Resources each pay period. During our fiscal year 2010 audit, we found that the Paris IT Directorate generated an annual leave/sick leave balance report for easy monitoring. This allowed the Finance office to easily identify if an employee has reached a negative leave balance and make corrections. Also, during our statistical sample testing of payroll we found no instances of a negative leave balance.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to timely review the Aged Vendor Liability Reports for proper fund classification and reconcile balances with the general ledger monthly.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated that due to the coding limitations of the current accounting system, the Aged Vendor Liability Report contains information for multiple funds. Amounts will be reconciled to the general ledger at year end and monthly, thereafter. During our fiscal year 2010 audit, we found that accounts payable materially reflected the amounts owed for goods and services purchased. The aged vendor liability detailed support agreed with the accounts payable lead schedule and, with other accruals, and tied to the general ledger. We did not identify any material amounts paid after September 30, 2010 for which goods/services were applicable to fiscal year 2010. In addition, the proposed new financial management system which will include an Aged Vendor Liability Report that ensures proper fund classification.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to ensure that invoices, undelivered orders, and payroll accounts are reviewed to identify any goods and services received and liabilities incurred before September 30 so amounts are properly accrued in accordance with closing instructions at year-end.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: In response to this recommendation, ABMC offered training that was held in June 2010 on accrual accounting. Based on our cut-off audit procedures and results in the search for unrecorded liabilities, the recorded amounts for the Paris Office accounts payable as of September 30, 2010, are materially correct and in conformity with U.S. GAAP.

    Recommendation: The Finance Officer at the Commission's European Regional Office should take action to coordinate with the Engineering Directorate a review of engineering contracts with unpaid balances to identify projects for which work has been performed and liabilities incurred before September 30 so that amounts are properly accrued in accordance with closing instructions at year-end.

    Agency Affected: American Battle Monuments Commission: European Regional Office

    Status: Closed - Implemented

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's (the Commission) financial statements, we found that the Commission had implemented a review of engineering contracts and identified projects to be included in the year end accounts payable accrual. As a result of the Commission's actions, we did not find errors in the recording of accruals for engineering projects. We consider the Commission's actions sufficient to close this recommendation.

    Recommendation: The Director of the Commission's Mediterranean Regional Office should take action to revise the existing holiday leave policy to clearly provide that employees can charge no more than 8 hours for a holiday, regardless of their work schedules.

    Agency Affected: American Battle Monuments Commission: Mediterranean Regional Office

    Status: Closed - Not Implemented

    Comments: During our audit of the American Battle Monuments Commission's (the Commission) fiscal year 2009 financial statements, we found that the Commission's Foreign Service National (FSN) employees in Tunisia, who are nationals of the host-country, were charging more than the 8-hour maximum for holiday pay/leave as prescribed by federal regulation (5 CFR 610.406). The 5 CFR 610.406 restriction of charging an 8-hour maximum for holiday pay/leave only applies to employees who are subject to Civil Service regulation, i.e., the Commission's U.S. citizens employed under Title 5. For these employees adequate protections already exist within the General Services Administration's payroll system to automatically prevent payment of more than 8 hours holiday pay for a single day. FSNs that are not U.S. citizens, may be recruited overseas and appointed to overseas positions without regard to the Civil Service Act, to include 5 CFR 610.406. The Local Compensation Plans (LCP) issued by the local U.S. Embassies are the guiding documents that the Commission has used for determining compensation for these employees. Based on our analysis of the LCPs of the 10 countries where the Commission operates, we have determined that none of the LCPs include an 8-hour holiday limitation. According to the Tunisian LCP, because this finding is related to FSNs in Tunisia, the Commission is permitted to adopt locally prevailing leave benefits for FSN employees in order to provide a competitive set of salary and benefits to recruit, retain and reward the workforce needed to operate successfully oversees. Therefore, the Commission is permitted to allow their FSNs to charge more than 8 hours for a holiday because local laws permit a regular work day longer than 8 hours (i.e. 44-hour or 48-hour workweeks). In addition, during our fiscal year 2010, 2011 and 2012 audits, we did not find instances where any employee charged an inaccurate amount of leave hours. We agreed with the Commission's assessment and no additional action is required by the Commission.

    Recommendation: The Director of the Commission's Mediterranean Regional Office should take action to notify employees of the policy clarification prohibiting charging more than 8 hours for a holiday, regardless of their work schedules.

    Agency Affected: American Battle Monuments Commission: Mediterranean Regional Office

    Status: Closed - Not Implemented

    Comments: During our audit of the American Battle Monuments Commission's (the Commission) fiscal year 2009 financial statements, we found that the Commission's Foreign Service National (FSN) employees in Tunisia, who are nationals of the host-country, were charging more than the 8-hour maximum for holiday pay/leave as prescribed by federal regulation (5 CFR 610.406). The 5 CFR 610.406 restriction of charging an 8-hour maximum for holiday pay/leave only applies to employees who are subject to Civil Service regulation, i.e., the Commission's U.S. citizens employed under Title 5. For these employees adequate protections already exist within the General Services Administration's payroll system to automatically prevent payment of more than 8 hours holiday pay for a single day. FSNs that are not U.S. citizens, may be recruited overseas and appointed to overseas positions without regard to the Civil Service Act, to include 5 CFR 610.406. The Local Compensation Plans (LCP) issued by the local U.S. Embassies are the guiding documents that the Commission has used for determining compensation for these employees. Based on our analysis of the LCPs of the 10 countries where the Commission operates, we have determined that none of the LCPs include an 8-hour holiday limitation. According to the Tunisian LCP, because this finding is related to FSNs in Tunisia, the Commission is permitted to adopt locally prevailing leave benefits for FSN employees in order to provide a competitive set of salary and benefits to recruit, retain and reward the workforce needed to operate successfully oversees. Therefore, the Commission is permitted to allow their FSNs to charge more than 8 hours for a holiday because local laws permit a regular work day longer than 8 hours (i.e. 44-hour or 48-hour workweeks). In addition, during our fiscal year 2010, 2011, and 2012 audits, we did not find instances where any employee charged an inaccurate amount of leave hours. We agreed with the Commission's assessment and no additional action is required.

    Recommendation: The Director of the Commission's Mediterranean Regional Office should take action to notify supervisors and other payroll reviewers to check that holiday hours charged by employees are correct before processing payroll.

    Agency Affected: American Battle Monuments Commission: Mediterranean Regional Office

    Status: Closed - Not Implemented

    Comments: During our audit of the American Battle Monuments Commission's (the Commission) fiscal year 2009 financial statements, we found that the Commission's Foreign Service National (FSN) employees in Tunisia, who are nationals of the host-country, were charging more than the 8-hour maximum for holiday pay/leave as prescribed by federal regulation (5 CFR 610.406). The 5 CFR 610.406 restriction of charging an 8-hour maximum for holiday pay/leave only applies to employees who are subject to Civil Service regulation, i.e., the Commission's U.S. citizens employed under Title 5. For these employees adequate protections already exist within the General Services Administration's payroll system to automatically prevent payment of more than 8 hours holiday pay for a single day. FSNs that are not U.S. citizens, may be recruited overseas and appointed to overseas positions without regard to the Civil Service Act, to include 5 CFR 610.406. The Local Compensation Plans (LCP) issued by the local U.S. Embassies are the guiding documents that the Commission has used for determining compensation for these employees. Based on our analysis of the LCPs of the 10 countries where the Commission operates, we have determined that none of the LCPs include an 8-hour holiday limitation. According to the Tunisian LCP, because this finding is related to FSNs in Tunisia, the Commission is permitted to adopt locally prevailing leave benefits for FSN employees in order to provide a competitive set of salary and benefits to recruit, retain and reward the workforce needed to operate successfully oversees. Therefore, the Commission is permitted to allow their FSNs to charge more than 8 hours for a holiday because local laws permit a regular work day longer than 8 hours (i.e. 44-hour or 48-hour workweeks). In addition, during our fiscal year 2010, 2011 and 2012 audits, we did not find instances where any employee charged an inaccurate amount of leave hours. We agree with the Commission's assessment and no additional action is required.

    Recommendation: The Director of the Commission's Mediterranean Regional Office should take action to ensure that employee payroll data, including SF-50s, are kept current in official personnel files.

    Agency Affected: American Battle Monuments Commission: Mediterranean Regional Office

    Status: Closed - Not Implemented

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's (the Commission) financial statements, we found that the Commission reorganized its operational structure and closed the Mediterranean regional office. Our audit results did not identify any instances where employee payroll data were not current and properly maintained in official personnel files. However, the Commission was unable to provide sufficient supporting documentation to support their corrective action. As a result, we are closing this recommendation as "Closed Not Implemented."

    Recommendation: The superintendent of the Commission's Manila American Cemetery should follow established accounting procedures to ensure that voucher packages include vendor identification numbers.

    Agency Affected: American Battle Monuments Commission: Manila American Cemetery

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated it would implement procedures to ensure that voucher packages include vendor identification numbers. During our fiscal year 2010 audit, we found the Superintendent of the Commission's Manila American Cemetery added a "Payment info" note on purchase orders and invoices, listing voucher number, document number, vendor ID, and Momentum vendor code, to ensure that vendor identification numbers are contained in voucher packages.

    Recommendation: The Secretary of the Commission should take action to obtain written delegation of authority and assignment of responsibilities to the Secretary or other designated officials when Commissioners are appointed.

    Agency Affected: American Battle Monuments Commission

    Status: Closed - Implemented

    Comments: During our fiscal year 2010 audit, we found that the Secretary of the Commission obtained written delegation of authority and assignment of responsibilities to the Secretary or other designated officials once the Commissioners were appointed. During the 147th Commissioners meeting of the American Battle Monuments Commission held October 27, 2010 Bill Aileo spoke regarding Governance in the absence of a Commissioner. Commissioner Merrill McPeak made a motion to delegate authority to the Secretary in the absence of the Commission. Commissioner Constance Morella seconded the motion. Motion was approved by all Commissioners present.

    Recommendation: The Director of Finance at Commission headquarters should take action to finalize management review and issue the Internal Control Handbook or equivalent for use by Commission personnel.

    Agency Affected: American Battle Monuments Commission: Finance and Accounting Director

    Status: Closed - Not Implemented

    Comments: Subsequent to the completion of the fiscal year 2012 audit, we determined that this recommendation had been superseded by more relevant recommendations outlined in the fiscal year 2012 Management Report (GAO-14-105R) addressing deficiencies related to monitoring and risk assessments. Specifically, we issued two recommendations recommending that the Commission direct the appropriate officials to take the following actions to improve its monitoring of internal control by (1) establishing and implementing written policies and procedures for planning and conducting the Commission's annual assessment of internal control over financial reporting as required by OMB A-123, and (2) establishing and implementing written policies and procedures for monitoring the activities of the external service organizations that perform significant aspects of the Commission's financial transaction processing and reporting, including implementing relevant complementary user entity controls identified by the service auditors. We believe that if the Commission follows these recommendations to monitor the effectiveness of their internal controls, the intent of this recommendation would have been met. As a result, we are closing this recommendation as "Closed Not Implemented."

    Recommendation: The Director of Finance at Commission headquarters should take action to complete validation of the evidence, conclusions, and recommendations of the contractor's internal control risk assessment of the Commission for fiscal year 2009.

    Agency Affected: American Battle Monuments Commission: Finance and Accounting Director

    Status: Closed - Implemented

    Comments: During our fiscal year 2010 audit, we found that the Commission used the findings and conclusions recommended by the contractor in fiscal year 2009 for its starting benchmark for internal control evaluation in fiscal year 2010. In the Commission's Internal Control Review Narrative, it clearly laid out the high risk areas as determined by the contractor the previous year. The Commission built its internal control review around these findings.

    Recommendation: The Director of Finance at Commission headquarters should take action to finalize the strategy for monitoring internal controls for compliance with FMFIA to include documentation of results and an audit trail in accordance with OMB Circular No. A-123, Management's Responsibility for Internal Control.

    Agency Affected: American Battle Monuments Commission: Finance and Accounting Director

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated that it is reviewing all internal control procedures and guidance as a component of the implementation of a new financial management system. The Commission will complete the review and issue new guidance in fiscal year 2011. In January 2011, the Commission completed its internal control review and wrote a guidance memo. Although the Commission is not required to follow OMB A-123, this tool provides an effective benchmark for how an internal control assessment should be conducted. The Commission's memo describes the approach to testing high risk areas and identifying areas to be tested in fiscal year 2010.

    Recommendation: The Director of Finance at Commission headquarters should take action to determine who will conduct future annual internal control risk assessments and evaluations and document the planned roles and responsibilities of Commission personnel and any contractors to execute the strategy for monitoring internal controls.

    Agency Affected: American Battle Monuments Commission: Finance and Accounting Director

    Status: Closed - Not Implemented

    Comments: Subsequent to the completion of the fiscal year 2012 audit, we determined that this recommendation had been superseded by more relevant recommendations outlined in the Fiscal Year 2012 Management Report (GAO-14-105R) addressing deficiencies related to monitoring and risk assessments. Specifically, we issued two recommendations recommending that the Commission direct the appropriate officials to take the following actions to improve its monitoring of internal control by (1) establishing and implementing written policies and procedures for planning and conducting the Commission's annual assessment of internal control over financial reporting as required by OMB A-123, and (2) establishing and implementing written policies and procedures for monitoring the activities of the external service organizations that perform significant aspects of the Commission's financial transaction processing and reporting, including implementing relevant complementary user entity controls identified by the service auditors. We believe that if the Commission follows these recommendations to monitor the effectiveness of their internal controls, the intent of this recommendation would have been met. As a result, we are closing this recommendation as "Closed Not Implemented."

    Recommendation: The Director of Personnel and Administration at Commission headquarters should follow established policies and procedures in taking action to conduct a review of contracts and purchase orders outstanding for completeness, accuracy, and proper dates.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Open

    Comments: In response to this recommendation, the Commission stated that it completed such a review review in fiscal year 2009 and made corrections as to how the Commission issues contracts and purchase orders. In addition, the Commission hired a consultant, a retired Federal Government Contracting Officer, to assist with contracting activities and to help draft and implement the Commission's policies and procedures. During our fiscal year 2010 audit, we found errors in relation to the Commission's contracts and found that Headquarter's Active Contracts List for contracts over $100,000 was not up to date. We found three out of 20 expenditures we tested that were obligated before there was a signed contract. During our fiscal year 2011 audit, we found that the Headquarter's Active Contracts List for contracts over $100,000 was not being kept up to date and reconciled to the undelivered orders account. During our fiscal year 2012 audit, we found there were no policies and procedures for processing engineering contracts. We were informed by the Commission that they were in the process of documenting policies and procedures for the entire contracting process. We also found there were no documented policies and procedures for reviewing year end open obligations and accounts payable to verify the accuracy and validity of year end balances. Additionally, there was no documented review of accounts payable or open obligations performed at year-end for all the open contracts. As a result, we found errors in year-end aged vendor liability reports and open purchase orders that no longer represented valid obligations and should have been deobligated. During our fiscal year 2014 follow-up, the Commission informed us that they plan to establish procurement-related policies and procedures to address our recommendation in the future. We will follow up on this open recommendation at a later date.

    Recommendation: The Director of Personnel and Administration at Commission headquarters should follow established policies and procedures in taking action to verify that contracts are completed and signed before funds are obligated.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Not Implemented

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's financial statements, we found that the Commission followed its established policies and procedures and verified that contracts were completed and signed before funds were obligated. We consider the Commission's actions sufficient to close this recommendation. However, ABMC was unable to provide sufficient supporting documentation to support their corrective action. Therefore, we are unable to support an accomplishment report related to the closure of this recommendation.

    Recommendation: The Director of Personnel and Administration at Commission headquarters should follow established policies and procedures in taking action to coordinate procurement activity with finance personnel to ensure accurate and compliant obligation of funding of procurements, including proper application of multiyear contract terms.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Open

    Comments: In response to this recommendation, the Commission stated that acquisition personnel would ensure coordination with finance personnel to be certain that accurate and compliant obligation of funding of procurements, including proper application of multi-year contract terms. During our fiscal year 2010 and 2011 audits, we found errors in relation to the Commission's contracts and determined improvements were still needed in the oversight of contracts. During our fiscal year 2012 audit, we found there were no policies and procedures for processing engineering contracts. We were informed by the Commission that they were in the process of documenting policies and procedures for the entire contracting process. We also found there were no documented policies and procedures for reviewing year end open obligations and accounts payable to verify the accuracy and validity of year end balances. Additionally, there was no documented review of accounts payable or open obligations performed at year-end for all the open contracts. As a result, we found errors in year-end aged vendor liability reports and open purchase orders that no longer represented valid obligations and should have been deobligated. During our fiscal year 2014 follow-up, the Commission informed us that they plan to establish procurement-related policies and procedures to address our recommendation. We will follow up on this open recommendation at a later date.

    Recommendation: The Director of Personnel and Administration at Commission headquarters should follow established policies and procedures in taking action to document compliance with requirements for Central Contractor Registration and competition or authorized exceptions.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: In response to our recommendation, the Commission took steps to address this issue. During our fiscal year 2010 audit, we found that the Commission complied with the CCR by ensuring all of their commercial contractors were registered in CCR. As a result of its actions, the Commission strengthened its control environment.

    Recommendation: The Director of Personnel and Administration at Commission headquarters should follow established policies and procedures in taking action to provide training to personnel assigned to perform procurement activities.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: In response to our recommendation, the Commission took steps to address this issue. Specifically, during our fiscal year 2010 audit, we found the Commission developed a training plan titled "Simplified Acquisition Procedures." The course description was "Simplified Acquisition Procedures is ideal for purchasing agents, contract specialists, or contracting officers who require an understanding of the simplified methods of procurement, as detailed in the Federal Acquisition Regulation (FAR) Part 13 and other related parts. It also provides a knowledge base that may support an increase of single purchases based on criteria established by individual government agencies." The training plan was designed for personnel assigned to procurement activities and several Commission personnel attended the first class listed on the training plan during the week of August 16, 2010.

    Recommendation: The Director of Finance at Commission headquarters should take action to implement a specific data repair to the accounting system to correct the underreporting of fiscal year 2009 trust fund receipts.

    Agency Affected: American Battle Monuments Commission: Finance and Accounting Director

    Status: Closed - Implemented

    Comments: The Commission took action to address this recommendation and Trust fund receipts are now correctly recorded in the accounting system. During our fiscal year 2010 audit, we found that all trust fund receipts and interest revenue agreed to the detailed GWA Account Statements and were properly reported in the consolidated trial balance.

    Recommendation: The Director of Finance at Commission headquarters should take action to enforce existing reconciliation procedures to ensure the complete and accurate recording and reporting of trust fund receipts in the accounting system.

    Agency Affected: American Battle Monuments Commission: Finance and Accounting Director

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated they will enforce existing reconciliation procedures to ensure the complete and accurate recording and reporting of trust fund receipts in the accounting system. During our fiscal year 2010 audit, we found that all trust fund receipts and interest revenue agreed to the detailed GWA Account Statements and were properly reported in the consolidated trial balance.

    Recommendation: The Director of Human Resources at Commission headquarters should take action to issue written Commission policy and procedures regarding its accounting method for calculating full time equivalent employment.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: In response to this recommendation, the Commission stated that OPM has issued guidelines for calculating full time equivalent employment in its SF-113 Summary Data Operations Manual. The Commission believes that the detailed guidance issued by OPM is adequate and does not warrant additional policy or procedures to be issued at this time. During out fiscal year 2010 audit, we reviewed OPM's guidelines and concur with the Commission's response to use OPM's guidance instead of drafting their own.

    Recommendation: The Director of Human Resources at Commission headquarters should take action to prepare and document calculations of full time equivalent employment to support the monthly SF 113-A, Report of Federal Civilian Employment.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's (the Commission) financial statements, we found that the Commission was able to provide documentation demonstrating the calculations used in its quarterly reports. We consider the Commission's actions sufficient to close this recommendation

    Recommendation: The Directors of Human Resources and Finance at Commission headquarters should coordinate action to document quantities and valuation of voluntary services to support journal entries into the general ledger.

    Agency Affected: American Battle Monuments Commission

    Status: Closed - Implemented

    Comments: In response to our recommendation, the Commission took steps to address this issue. During our fiscal year 2010 audit, we found quantities and valuation of voluntary services are being documented to support journal entries into the general ledger. Specifically, we obtained a print-out from the Commission's financial management system that showed the accepted voluntary services hours and rates used for valuation. This tied to support journal entries. As a result of its actions, we close this recommendation as implemented.

    Recommendation: The Directors of Human Resources and Finance at Commission headquarters should coordinate action to remind personnel of the existing Commission guidance for accepting funds and in-kind donations and gifts and, as necessary, conduct training.

    Agency Affected: American Battle Monuments Commission: Human Resources and Administration Director

    Status: Closed - Implemented

    Comments: In March 2011, the Commission issued a policy letter, Policy Letter 11-08, Subject: Acceptance of Voluntary Services at ABMC Cemetery's and other Facilities, defining the Commission's general restrictions and proper acceptance of volunteer services. During our fiscal year 2012 audit, we found that the Commission took appropriate action to address this recommendation through an agency-wide email of the policy reminding personnel of the existing Commission guidance for accepting funds and in-kind donations and gifts. Therefore, we consider this recommendation implemented and closed.

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