Improvements Needed in GSA's Second Year Implementation of the Financial Integrity Act

GGD-86-11: Published: Oct 11, 1985. Publicly Released: Oct 11, 1985.

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GAO reviewed the General Services Administration's (GSA) fiscal year (FY) 1984 progress in evaluating the adequacy of its internal controls and accounting systems under the Federal Managers' Financial Integrity Act.

GAO found that: (1) GSA has corrected 9 of the 62 deficiencies it identified in its internal control system, but because some of the deficiencies are complex, it will be years before GSA can reasonably expect to correct them; (2) only 7 of 196 GSA managers' evaluations identified any of the reported control deficiencies; and (3) almost all of the evaluations indicated low or no vulnerability to internal control problems. GAO found that, in general, managers were not properly prepared to do the evaluation work necessary to identify control weaknesses because: (1) the complex evaluation process was implemented late in the FY, leaving little time for training, doing the evaluations, and reviewing evaluation quality; and (2) the criteria to evaluate internal controls were found by many managers to be too general to assess automated systems and identify internal control weaknesses. GAO believed that the GSA managers' perception that the evaluations accomplish little contributed to unreliable evaluations. Finally, GAO found that, although GSA identified instances of material accounting system nonconformance with the Comptroller General's requirements, the evaluations were of insufficient depth and scope to provide GSA with an adequate basis for determining the extent to which the systems did not conform to the requirements because: (1) the evaluations included little testing of systems in operation; and (2) regional systems were not examined.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The GSA Internal Controls Division published guidance on ADP control considerations for use by the services and staff offices during the FY 1986 evaluation cycle.

    Recommendation: The Administrator of General Services should direct the Associate Administrator for Policy and Management Systems to work with various GSA services and staff offices to develop more explicit guidance covering automatic data processing (ADP) control evaluations to ensure that relevant general and application controls are appropriately evaluated.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: In April 1986, the GSA Internal Controls Division established a training program for conducting internal control evaluations.

    Recommendation: The Administrator of General Services should direct the Associate Administrator for Policy and Management Systems to work with various GSA services and staff offices to train managers so that they fully understand the evaluation requirements that they are expected to follow.

    Agency Affected: General Services Administration

  3. Status: Closed - Implemented

    Comments: Timing problems, caused by the late development of evaluation guidelines, were resolved. In October 1985, GSA issued an evaluation handbook establishing basic guidelines and sufficient time schedules.

    Recommendation: The Administrator of General Services should direct the Associate Administrator for Policy and Management Systems to work with various GSA services and staff offices to ensure that managers are provided increased time to perform internal control evaluations.

    Agency Affected: General Services Administration

  4. Status: Closed - Implemented

    Comments: GSA officials agreed that, to overcome evaluation shortcomings, managers need better evaluation criteria, training, and increased time to do the evaluations. The actions taken, with respect to the previous recommendations, were designed to do this. Additionally, accountability for complying with evaluation requirements was established through quarterly briefings of senior management.

    Recommendation: The Administrator of General Services should direct the Associate Administrator for Policy and Management Systems to work with various GSA services and staff offices to establish quality control checks within the evaluation process to reinforce the need for managers to comply with evaluation requirements.

    Agency Affected: General Services Administration

  5. Status: Closed - Implemented

    Comments: GSA officials continue to believe that the decentralized evaluation process adopted in FY 1985 is responsive to this recommendation and that a formal program for providing feedback from outside sources is not needed. They do not plan to revise the evaluation process. Although GAO believes that GSA action is still not responsive, GAO will not perform additional monitoring on this recommendation.

    Recommendation: The Administrator of General Services should direct the Associate Administrator for Policy and Management Systems to work with various GSA services and staff offices to provide managers feedback on the results of the evaluation process and the benefits obtained.

    Agency Affected: General Services Administration

  6. Status: Closed - Implemented

    Comments: Key aspects of the corrective actions are: (1) requiring managers to commit themselves to completion dates; (2) centralizing agency responsibility for tracking the scheduling and completion on ICR; and (3) establishing accountability through quarterly management briefings.

    Recommendation: The Administrator of General Services should direct the Associate Administrator for Policy and Management Systems to work with various GSA services and staff offices to ensure the timely completion of the internal control reviews (ICR) of identified highly vulnerable areas.

    Agency Affected: General Services Administration

  7. Status: Closed - Implemented

    Comments: GSA developed three basic review processes: (1) limited reviews; (2) detailed reviews; and (3) Office of Finance reviews. During FY 1985, detailed reviews were performed that included testing systems in operation.

    Recommendation: The Administrator of General Services should direct the Comptroller to work with various services and staff offices to ensure that evaluation schedules for testing accounting systems in operation are adhered to.

    Agency Affected: General Services Administration

  8. Status: Closed - Implemented

    Comments: The GSA Central Finance Office is responsible for performing regional reviews on a biennial basis. During FY 1985, regional reviews were conducted in four regional finance offices.

    Recommendation: The Administrator of General Services should direct the Comptroller to work with various services and staff offices to ensure that accounting system functions carried out by the regional offices are evaluated.

    Agency Affected: General Services Administration

  9. Status: Closed - Implemented

    Comments: The GSA Internal Controls Division established an agencywide program to: (1) document control objectives and techniques; and (2) pretest services' and staff offices' use of this criteria to ensure that their evaluations yield appropriate results.

    Recommendation: The Administrator of General Services should direct the Associate Administrator for Policy and Management Systems to work with various GSA services and staff offices to ensure that the evaluation criteria being developed by the services and staff offices identify appropriate control objectives and techniques as the basis for evaluating the adequacy of existing controls.

    Agency Affected: General Services Administration

  10. Status: Closed - Implemented

    Comments: GSA assesses all reviews performed.

    Recommendation: The Administrator of General Services should direct the Comptroller to work with various services and staff offices to ensure that accounting system evaluations are reviewed for quality.

    Agency Affected: General Services Administration

 

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