B-159797, AUG 6, 1976
Highlights
PRECIS - UNAVAILABLE ASSISTANT SECRETARY OF DEFENSE: IT IS MY PLEASURE TO APPROVE THE DESIGN OF THE DEPARTMENT OF NAVY INDUSTRIAL FUND ACCOUNTING SYSTEM FOR ORDNANCE ACTIVITIES. AS A RESULT OF PREVIOUS SYSTEM DESIGN EVALUATIONS IN WHICH WEAKNESSES IN CONTROLS WERE OBSERVED. THE APPROVAL OF THE SYSTEM DESIGN IS GRANTED ON THE ASSUMPTION THAT THE INSTRUCTION WILL BE IMPLEMENTED. THE SYSTEM DESIGN DEVIATES FROM ACCRUAL ACCOUNTING PRINCIPLES BY CHARGING TRAVEL EXPENSES AT THE TIME THE TRAVEL ORDERS ARE ISSUED. THIS APPROVAL IS GRANTED WITH THE UNDERSTANDING THAT THE REVISION BEING MADE IN THE DEPARTMENT OF DEFENSE ACCOUNTING GUIDANCE HANDBOOK. WHICH WILL REQUIRE THAT TRAVEL BE RECORDED AS EXPENSE IN THE ACCOUNTING PERIOD IN WHICH PERFORMANCE OCCURS.
B-159797, AUG 6, 1976
PRECIS - UNAVAILABLE
ASSISTANT SECRETARY OF DEFENSE:
IT IS MY PLEASURE TO APPROVE THE DESIGN OF THE DEPARTMENT OF NAVY INDUSTRIAL FUND ACCOUNTING SYSTEM FOR ORDNANCE ACTIVITIES, AS REQUESTED BY THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) ON JULY 16, 1976.
IN EVALUATING THE SYSTEM DESIGN, WE LOOKED AT THE AUTOMATIC DATA PROCESSING ASPECTS PRIMARILY TO DETERMINE THEIR ADEQUACY AS TO INTERNAL CONTROLS, AUDIT TRAILS, DATA INTEGRITY, AND CONSISTENCY WITH THE ACCOUNTING RAMIFICATIONS.
AS A RESULT OF PREVIOUS SYSTEM DESIGN EVALUATIONS IN WHICH WEAKNESSES IN CONTROLS WERE OBSERVED, THE NAVY COMPTROLLER ISSUED ON FEBRUARY 4, 1975, AN INSTRUCTION (NAVCOMPT 7000.36) SPECIFYING MINIMUM CRITERIA FOR AUTOMATED DATA PROCESSING CONTROL OF FINANCIAL MANAGEMENT SYSTEMS. THE APPROVAL OF THE SYSTEM DESIGN IS GRANTED ON THE ASSUMPTION THAT THE INSTRUCTION WILL BE IMPLEMENTED.
THE SYSTEM DESIGN DEVIATES FROM ACCRUAL ACCOUNTING PRINCIPLES BY CHARGING TRAVEL EXPENSES AT THE TIME THE TRAVEL ORDERS ARE ISSUED. THIS APPROVAL IS GRANTED WITH THE UNDERSTANDING THAT THE REVISION BEING MADE IN THE DEPARTMENT OF DEFENSE ACCOUNTING GUIDANCE HANDBOOK, WHICH WILL REQUIRE THAT TRAVEL BE RECORDED AS EXPENSE IN THE ACCOUNTING PERIOD IN WHICH PERFORMANCE OCCURS, WILL BE INCOPORATED IN THE DESIGN DOCUMENTATION AT AN EARLY DATE.
TO MAINTAIN AN APPROVED STATUS, ANY SIGNIFICANT CHANGES TO THE SYSTEM DESIGN REQUIRE APPROVAL. ANY PLANNED CHANGES TO THE DESIGN SHOULD BE DISCUSSED WITH OUR REPRESENTATIVES TO DETERMINE WHETHER OR NOT THEY ARE SIGNIFICANT.
WE ARE PLEASED TO NOTE THAT THE SYSTEM IS IN OPERATION. WE SUGGEST THAT THE DEPARTMENT OF NAVY INTERNAL AUDITORS PERIODICALLY REVIEW THE SYSTEM TO ASSURE THAT IT IS OPERATING AS DESIGNED, AND THAT THE PROVISIONS OF NAVCOMPT 7000.36 AND THE REVISION BEING MADE TO THE DEPARTMENT OF DEFENSE ACCOUNTING GUIDANCE HANDBOOK REGARDING TRAVEL ARE IMPLEMENTED. AT SOME FUTURE DATE WE WILL EXAMINE SELECTED PORTIONS OF THE SYSTEM AND ADVISE YOU AS TO WHETHER IT IS FUNCTIONING EFFECTIVELY AND IN ACCORDANCE WITH THE APPROVED DESIGN.
PLEASE EXPRESS OUR APPRECIATION TO THE NAVY STAFF FOR THEIR COOPERATION IN THE EVALUATION PROCESS. WE COMMEND THE NAVY FOR THE PROGRESS BEING MADE IN SUBMITTING ACCOUNTING SYSTEM DESIGNS FOR APPROVAL.