Agriculture's Second-Year Implementation of the Federal Managers' Financial Integrity Act

RCED-86-20: Published: Oct 24, 1985. Publicly Released: Oct 24, 1985.

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GAO reviewed the Department of Agriculture's (USDA) second-year implementation of the Federal Managers' Financial Integrity Act of 1982 (FMFIA) to assess: (1) improvements in internal controls and the process used to evaluate and correct control weaknesses; (2) the status of major accounting systems and evaluations; and (3) the accuracy and completeness of the Secretary's annual report on internal controls and accounting systems.

GAO found that: (1) although USDA has been correcting known internal control problems and has been improving its system for evaluating and correcting internal control weaknesses, it needs to strengthen techniques for measuring and reducing program vulnerability and monitoring the effectiveness of corrective actions; (2) four USDA agencies have not yet implemented an internal control program consistent with Office of Management and Budget and departmental guidelines; (3) in some instances, reported corrective actions did not correct the problem or were misleading because the action only partially solved the problem; and (4) the methods used by managers to examine program risk were not yielding consistent and reliable results. GAO also found that: (1) most large systems had not been examined using evaluation techniques to test systems in operation; (2) several large systems are undergoing a redesign which will take several years to correct long-standing deficiencies; and (3) the Secretary accurately reported that complete assurance could not be given that USDA was meeting FMFIA requirements because of the large number of uncorrected internal control and accounting weaknesses.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: USDA issued a new USDA Guide for Management Control in August 1985. This document satisfies this recommendation.

    Recommendation: To improve the Department's internal controls, the Secretary of Agriculture should direct the Assistant Secretary for Administration to revise the Department's internal control directive to include requirements for: (1) following up to confirm the effectiveness of corrective actions; and (2) reporting on the status of corrective actions.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: USDA issued a new USDA Guide for Management Control in August 1985. This document satisfies this recommendation.

    Recommendation: To improve the USDA internal control program, the Secretary of Agriculture should direct the Assistant Secretary for Administration to revise the internal control guidelines to include minimum standards for: (1) field locations in the vulnerability assessments and documenting the process; (2) conducting internal control reviews and alternative approaches, including specifying the conditions under which alternatives are acceptable; and (3) using existing automatic data processing guidance.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: Action was considered complete since USDA has initiated actions to bring its accounting systems into compliance with the Comptroller General's standards and the Integrity Act requirements. The projected completion date is 1991.

    Recommendation: The Secretary of Agriculture should direct the Assistant Secretary for Administration to: (1) review major system development efforts to help ensure that efforts are successful; (2) address GAO principles, standards, and related requirements; (3) meet established time frames for completion; (4) develop minimum acceptable standards for system evaluation, and provide system reviewers with guidance on how to perform such evaluations and ensure their quality; and (5) sufficiently test accounting systems in operation to determine conformance with the Comptroller General's principles, standards, and related requirements.

    Agency Affected: Department of Agriculture

 

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