Internal Controls:

Air Force Contract Payment Controls Should Be Strengthened

IMTEC-87-13: Published: Apr 2, 1987. Publicly Released: Apr 2, 1987.

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GAO assessed the Air Force's Acquisition Management Information System and its internal controls over contract administration and payment disbursement functions.

GAO found that the Air Force: (1) did not have adequate internal controls to ensure that its disbursement database was accurate; (2) did not include system reviews of general and application controls in its Financial Integrity Act reviews; (3) did not identify or correct internal control weaknesses that allowed database errors to go undetected and uncorrected; (4) lacked procedures to prevent duplicate payments; and (5) did not follow procedures intended to ensure contract document authenticity before entering contract information into the system.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: AFSC has developed an automated clearing system against the paid file to ensure that it does not pay the same voucher twice.

    Recommendation: To further help prevent duplicate payments, the Commander, AFSC, should expand controls to identify potential duplicate payments and then ensure that each is researched and reconciled before payment is actually made.

    Agency Affected: Department of Defense: Department of the Air Force: Air Force Systems Command

  2. Status: Closed - Implemented

    Comments: The Quality Assurance Group will conduct monthly reviews of randomly selected disbursement data records and validate their accuracy.

    Recommendation: To ensure the integrity of the Acquisition Management System's disbursement database, and to be consistent with the Federal Managers' Financial Integrity Act, the Commander, AFSC, should direct the Contract Management Division Commander to regularly perform data integrity reviews of the disbursement database, judging any errors found against the above-mentioned error-rate criteria.

    Agency Affected: Department of Defense: Department of the Air Force: Air Force Systems Command

  3. Status: Closed - Implemented

    Comments: The Quality Assurance Group established error-rate criteria for various data fields as part of its first quality assurance review, which was completed in July 1987.

    Recommendation: To ensure the integrity of the Acquisition Management System's disbursement database, and to be consistent with the Federal Managers' Financial Integrity Act, the Commander, AFSC, should establish official error-rate criteria against which to judge the significance of errors in the disbursement database.

    Agency Affected: Department of Defense: Department of the Air Force: Air Force Systems Command

  4. Status: Closed - Implemented

    Comments: AFSC established a quality assurance group in July 1986, and gave it responsibility for reviewing the adequacy of the contract management provision's internal controls. It completed its first review in July 1987. The controls established should reduce the risk of erroneous, duplicate, or fraudulent payments.

    Recommendation: To ensure the integrity of the Acquisition Management System's disbursement database, and to be consistent with the Federal Managers' Financial Integrity Act, the Commander, Air Force Systems Command (AFSC), should periodically review the disbursement database's general and application controls.

    Agency Affected: Department of Defense: Department of the Air Force: Air Force Systems Command

  5. Status: Closed - Implemented

    Comments: The Quality Assurance Group was established for the recommendations. It will be responsible for ensuring the authenticity of contracts.

    Recommendation: To minimize risks of fraudulent use of the disbursement database, the Commander, AFSC, should direct the Division Commander to implement internal controls that will provide periodic verification that the contracts received by the Division are authentic and valid. In addition, the Commander should require that the controls continue to provide reasonable assurance that only valid contracts are accepted and recorded.

    Agency Affected: Department of Defense: Department of the Air Force: Air Force Systems Command

 

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