Financial Integrity:

Justice Made Progress but Further Improvements Needed

GGD-86-9: Published: Oct 31, 1985. Publicly Released: Oct 31, 1985.

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GAO reported on the Department of Justice's fiscal year (FY) 1984 progress in evaluating the adequacy of its internal controls and accounting systems under the Federal Managers' Financial Integrity Act (FMFIA).

GAO found that Justice has: (1) continued to make progress in its second-year implementation of the act; (2) initiated several long-term efforts to correct deficiencies in its accounting systems that did not conform to the Comptroller General's standards; and (3) made progress in correcting material internal control and accounting systems weaknesses reported in FY 1983 reports. Although Justice has reported that its systems of internal accounting and administrative control, taken as a whole, provide reasonable assurance that the act's objectives were met, GAO found that this assurance was not well founded because: (1) Justice has not yet corrected the accounting, automatic data processing (ADP), and internal control weaknesses which impaired the systems' abilities to provide this assurance; (2) Justice's internal control and ADP systems were not evaluated and tested in sufficient depth for it to know whether its controls were adequate; and (3) because of insufficient testing, Justice's accounting system evaluations did not show the extent to which the systems failed to conform to Comptroller General requirements. Justice reported accounting system problems such as: (1) insufficient cost, property, and accrual accounting data; (2) inadequate debt collection procedures; (3) lack of documentation; (4) late and inaccurate field reports; and (5) financial policies and accounting processes that needed improvement. Finally, Justice's ADP controls failed to ensure that only authorized users accessed the ADP systems.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Justice stated that internal control reviews are not the only way tests are conducted. The staffs conduct inspections, audits, management reviews, and evaluations. OMB guidelines are being revised to emphasize that these reviews are acceptable alternatives in accomplishing the post-vulnerability assessment phase. Guidance was issued requiring testing of controls in FMFIA evaluations.

    Recommendation: The Attorney General should ensure that sufficient in-depth testing is done of the accounting, ADP, and internal control systems in operation.

    Agency Affected: Department of Justice

  2. Status: Closed - Implemented

    Comments: The importance of field involvement is stressed in Justice's guidelines implementing FMFIA. During the 1984 through 1985 internal control cycle, approximately one-half of the 18 component organizations having a field structure involved field managers to some degree during the evaluation period. Current guidance stresses the importance of field involvement.

    Recommendation: The Attorney General should ensure that field office managers are included in evaluations of the activities for which they are responsible.

    Agency Affected: Department of Justice

 

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