Interior FMFIA: Interior's Implementation of the Federal Managers' Financial Integrity Act
RCED-86-25
Published: Oct 31, 1985. Publicly Released: Oct 31, 1985.
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Highlights
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.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Interior | 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. |
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.
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| Department of the Interior | 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. |
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.
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| Department of the Interior | 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. |
The two bureaus have issued internal control directives.
|
| Department of the Interior | 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. |
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.
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| Department of the Interior | 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. |
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.
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| Department of the Interior | 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. |
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.
|
| Department of the Interior | 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. |
GAO was told that the requirement is in the training manual, which is given to all performing ICR.
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| Department of the Interior | 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. |
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.
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| Department of the Interior | 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. |
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.
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| Department of the Interior | 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. |
New FMFIA guidance includes a section on testing systems.
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| Department of the Interior | 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. |
Interior stated that its new guidance evaluates the system in operation.
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| Department of the Interior | 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. |
Interior agreed and stated that OIG expanded the scope of its audits in November 1985.
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| Department of the Interior | 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. |
Interior did not address this recommendation, although it agreed with this recommendation in commenting on the draft report.
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Accounting systemsInternal controlsMaterialityProgram evaluationReporting requirementsSystems designQuality assuranceMaterial weaknessesWildlifeLand management