Public Debt:

Management Actions Needed to Ensure More Accurate Accounting

GGD-90-54: Published: May 31, 1990. Publicly Released: May 31, 1990.

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GAO reviewed the Bureau of the Public Debt's internal control and accounting control systems, focusing on whether they: (1) enabled the Bureau to accurately account for the public debt and related interest; and (2) conformed to the Comptroller General's standards, as the law required.

GAO found that: (1) inadequate oversight of operations by Bureau management has resulted in long-standing internal control and accounting system weaknesses; (2) the systems do not conform to Comptroller General standards; (3) the weaknesses led to billions of dollars of differences in the records accounting for the outstanding public debt and related interest; (4) the differences were due to untimely reconciliations; (5) Bureau management plans to implement a replacement accounting system in fiscal year 1991; (6) the new system could strengthen internal controls and enable the Bureau to more accurately account for and report the outstanding public debt and interest; and (7) management must better monitor operations to ensure that transactions are accurately and timely recorded, and that errors are corrected promptly.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: As of June 30, 1990, the Bureau reported it reconciled its previously unreconciled accounts. Its recommendations for disposing of the differences affecting public debt principal and interest that could not be resolved during the reconciliation effort were approved by Treasury officials in January 1991, and adjusting entries were made increasing interest expense by about $832 million.

    Recommendation: To ensure that the Public Debt Accounting and Reporting System (PARS) improves accounting for the public debt and related interest, the Secretary of the Treasury should direct the Commissioner, Bureau of the Public Debt, to complete the current account reconciliation project prior to the implementation of PARS, including developing a strategy for offsetting, writing off, or otherwise adjusting the numerous differences, some unreconcilable, in the Bureau's accounts. This strategy should be coordinated with Treasury and Office of Management and Budget officials because of its potential to alter the reported outstanding balance of public debt and interest expense.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: With the implementation of the PARS system, action on this recommendation has been completed.

    Recommendation: To ensure that the Public Debt Accounting and Recording System (PARS) improves accounting for the public debt and related interest, the Secretary of the Treasury should direct the Commissioner, Bureau of the Public Debt, to increase managerial oversight and emphasis over internal and fiscal agent operations to ensure that the systems of internal and accounting control are adequate and maintain accurate data. To do this, Bureau management must ensure that: (1) fiscal agents furnish source documents in a timely manner; (2) fiscal agents and Bureau personnel make timely corrections of source document and other accounting errors; (3) actions are taken to identify and correct internal control weaknesses that cause out-of-balance conditions; (4) timely and thorough reconciliations are made and account balances are verified; and (5) the information it needs to effectively monitor internal and fiscal agent operations is built into PARS before its implementation.

    Agency Affected: Department of the Treasury

  3. Status: Closed - Implemented

    Comments: Action on this recommendation was completed when the PARS system was implemented in October 1992.

    Recommendation: The Secretary of the Treasury should monitor Bureau of the Public Debt's management efforts to develop and implement the replacement accounting system, PARS, and take other necessary actions to more accurately account for the public debt of the United States and for related interest.

    Agency Affected: Department of the Treasury

 

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