Interior FMFIA:

Interior's Implementation of the Federal Managers' Financial Integrity Act

RCED-86-25: Published: Oct 31, 1985. Publicly Released: Oct 31, 1985.

Additional Materials:

Contact:

Sarah P. Frazier
(202) 275-7783
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO reviewed the Department of the Interior's second-year implementation of the Federal Managers' Financial Integrity Act (FMFIA), which requires federal agencies to: (1) establish internal controls in accordance with the Comptroller General's standards for agency internal controls; (2) report to the President and Congress on whether their internal controls fully comply with FMFIA requirements and on any material internal control weaknesses they identify; and (3) report on whether their accounting systems conform to the standards prescribed by the Comptroller General.

GAO found that Interior: (1) reported that 23 of the 61 material internal control weaknesses it identified in 1983 have been corrected, but 24 of the weaknesses it was to correct during 1984 have not been corrected, including a significant weakness in the royalty management program that was first identified in 1977; (2) has established a sound program for internal control evaluations, but has not properly implemented the program; (3) did not include adequate testing in many of its internal control reviews (ICR); and (4) failed to implement effective quality assurance procedures for ICR or train individuals in performing such reviews. GAO also found that: (1) while Interior evaluated its accounting systems, it did not adequately test the systems that it reported as being in conformance with the Comptroller General's requirements; and (2) the four systems that Interior reported as nonconforming account for about 50 percent of its appropriations and almost all of its receipts.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Interior concurred with this recommendation and stated that it improved the process in 1985. On April 11, 1986, the responsible office in PBA met with the Assistant Secretary's internal control coordinators to discuss quality assurance in the bureaus and to emphasize the Department's quality assurance techniques.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to direct departmental and bureau management officials to carry out the Department's prescribed quality assurance techniques and, as necessary, initiate improved quality assurance over the program.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: The two bureaus have issued internal control directives.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to direct the Minerals Management Service and the Bureau of Indian Affairs to issue internal control directives.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: Interior stated that the bureaus are revising their inventories to include all appropriate programs, organizations, and functions. GAO was told that the revised inventories do include all appropriate organizations and that a justification has been prepared for any not included giving the rationale for excluding it.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to direct the Fish and Wildlife Service and the Bureau of Land Management to include all appropriate organizations, programs, and functions in their inventories of assessable units.

    Agency Affected: Department of the Interior

  4. Status: Closed - Not Implemented

    Comments: In September 1987, Interior stated that the sizes of the components are appropriate and provide for meaningful ICR. Interior stated that the Office of Inspector General (OIG) found these other ICR to be satisfactory, therefore, Interior is satisfied.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to direct the U.S. Geological Survey to review its inventory of assessable units to ensure that all assessable units are of an appropriate nature and size to permit meaningful and useful vulnerability assessments and ICR.

    Agency Affected: Department of the Interior

  5. Status: Closed - Not Implemented

    Comments: In September 1987, Interior stated that vulverability assessments are no longer required and its new management control evaluation, done every 5 years, accomplished these objectives.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to revise the Department's internal control directive and instructions for conducting vulnerability assessments to require the bureaus to document the basis for the conclusions and rankings reached on all vulnerability assessments.

    Agency Affected: Department of the Interior

  6. Status: Closed - Implemented

    Comments: GAO was told that the requirement is in the training manual, which is given to all performing ICR.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to revise the ICR guidelines to require that the risks associated with each event cycle be documented as part of each ICR.

    Agency Affected: Department of the Interior

  7. Status: Closed - Implemented

    Comments: Interior has not issued anything to remind the internal control coordinators of these requirements. GAO was told that the reminder was given at various meetings held with the coordinators.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to remind all bureaus of their need to comply with the Department's guidelines relative to: (1) developing corrective action plans that are complete; (2) ensuring that corrective actions are taken in a timely manner; and (3) including all internal control weaknesses in their tracking and follow-up systems.

    Agency Affected: Department of the Interior

  8. Status: Closed - Implemented

    Comments: Interior stated that it developed a training program and conducted extensive training in early 1985. However, it would not provide GAO with a listing of those trained, so GAO does not know if this recommendation has been implemented. Subsequently, it did provide summary data to GAO on the numbers of bureau staff trained in 1985 and 1986. Additional training was provided in 1987.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to provide specific training to those individuals who have been assigned the responsibility for performing ICR on how an ICR is conducted, including the importance of testing controls.

    Agency Affected: Department of the Interior

  9. Status: Closed - Not Implemented

    Comments: New FMFIA guidance includes a section on testing systems.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary, PBA, to specify for the bureaus and offices the type of testing needed when performing accounting system evaluations. This testing should include determining whether valid transactions are processed in accordance with the system design and whether the system reacts appropriately to invalid transactions.

    Agency Affected: Department of the Interior

  10. Status: Closed - Implemented

    Comments: Interior stated that its new guidance evaluates the system in operation.

    Recommendation: The Secretary of the Interior should not report the Department's accounting systems to be in conformance with the Comptroller General's requirements until they have been adequately evaluated in operation.

    Agency Affected: Department of the Interior

  11. Status: Closed - Implemented

    Comments: Interior agreed and stated that OIG expanded the scope of its audits in November 1985.

    Recommendation: The Inspector General should expand the scope of FIA audit work to include a review of the assurance statements submitted by senior management officials for the purpose of ascertaining that significant audit findings are being reported as material weaknesses in the Department's systems of internal control.

    Agency Affected: Department of the Interior

  12. Status: Closed - Not Implemented

    Comments: Interior disagreed that a directive is necessary. Officials believe that Interior's corrective action tracking system ensures that all uncorrected material weaknesses are reported. Interior gives its bureaus oral guidance concerning the need to ensure that all material weaknesses are reported.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary for Policy, Budget, and Administration (PBA) to ensure that all material weaknesses that have not been corrected are reported in the Secretary's annual report to the President and Congress.

    Agency Affected: Department of the Interior

  13. Status: Closed - Implemented

    Comments: Interior did not address this recommendation, although it agreed with this recommendation in commenting on the draft report.

    Recommendation: The Inspector General should ensure that his audit reports contain information and data to provide the users with a proper perspective as to the results of the audit and the significance of the findings being reported.

    Agency Affected: Department of the Interior

 

Explore the full database of GAO's Open Recommendations »

Sep 20, 2016

Sep 6, 2016

Aug 19, 2016

Aug 12, 2016

Jul 29, 2016

Jul 28, 2016

Jul 13, 2016

Jul 11, 2016

Jun 13, 2016

Looking for more? Browse all our products here