Implementation of the Federal Managers' Financial Integrity Act:

First Year

OCG-84-3, Aug 24, 1984

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GAO summarized the results of its governmentwide review of agencies' efforts to implement the Federal Managers' Financial Integrity Act, which is aimed at strengthening internal control and accounting systems.

GAO found that the agencies made a good start in the first year in assessing their internal control and accounting systems, and have demonstrated management commitment to implementing the act. In addition, agencies are establishing a systematic process to evaluate, improve, and report on their systems, and federal managers are more aware of the need for good internal control systems and improved accounting systems. The Office of Management and Budget (OMB) provided guidance and central direction to the program. Further, most inspectors general played a major role in the program. However, the agencies' reports disclosed material internal control and accounting system problems, many of which have been long standing and the subject of prior GAO and inspector general reports. GAO found that: (1) 16 agencies reported material weaknesses in accounting and financial management systems; (2) 8 agencies reported material weaknesses in eligibility and entitlement determinations; (3) 12 agencies reported weaknesses in grant, loan, and debt collection management; (4) 14 agencies reported procurement weaknesses; (5) 13 agencies reported material weaknesses in property management; (6) 10 agencies reported weaknesses in automatic data processing (ADP); (7) 12 agencies reported weaknesses in cash management; and (8) 9 agencies reported problems in personnel and organizational management.

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 Director, OMB, should provide additional guidance to agencies to evaluate their ADP resources and systems by identifying sources of more detailed guidance.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Implemented

    Comments: The OMB Question and Answer Booklet, issued August 13, 1984, provides some additional general guidance, but there are any number of more detailed guides available that could have been identified.

    Recommendation: The Director, OMB, should provide additional guidance to agencies to evaluate their ADP resources and systems by establishing responsibility for making ADP control evaluations.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Implemented

    Comments: The only action referred to in the OMB response calls for clarification of responsibility in the area of security over automated information only.

    Recommendation: The Director, OMB, should strengthen year-end reporting by: (1) further defining what constitutes a material weakness using factors specified in this report; and (2) providing more detail for agencies to use in arriving at judgments on the seriousness of their internal control problems.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Not Implemented

    Comments: The response recognizes that determination of what constitutes a material weakness may continue to differ, but OMB only refers to guidance provided by the House Government Operations Committee to help alleviate the situation.

    Recommendation: The Director, OMB, should provide additional guidance to agencies to evaluate their ADP resources and systems by defining general and application controls and suggesting factors to be considered in evaluating them.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Implemented

    Comments: The OMB Question and Answer Booklet, issued August 13, 1984, defines ADP general and application controls, but provides little additional information or illustrative factors to be considered in evaluating them.

    Recommendation: The Director, OMB, should strengthen year-end reporting by improving sample report language provided to the agencies to disclose more clearly the basis for the overall opinion on reasonable assurance.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Not Implemented

    Comments: OMB responded that it does not believe that the language needs to be altered.