Internal Controls: Improvements Needed in a USDA Receivable System
AFMD-87-3
Published: Jun 23, 1987. Publicly Released: Jun 23, 1987.
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Highlights
GAO evaluated the Department of Agriculture's (USDA) billings and collections system (BLCO) to assess: (1) the adequacy of BLCO automated data processing controls and internal controls over processing; (2) the actions USDA took to correct BLCO weaknesses; and (3) BLCO compliance with certain legal requirements in the areas of cash and debt management.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to implement and enforce policies, procedures, and practices consistent with departmental information processing standards, Federal Information Processing Standards guidelines, and Office of Management and Budget Circular A-130, Appendix III. |
Closed – Implemented
Every effort will be made consistent with resource limitations.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to periodically review edit reject suspense listings to determine whether errors are consistently made by certain data entry clerks or inspection agency offices, so that appropriate actions can be taken to improve accuracy. |
Closed – Implemented
Software was developed in August 1987.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to make prompt contacts with inspection agencies about bills returned by the post office to ensure that correct addresses are obtained and entered into the system. |
Closed – Implemented
Written procedures were fully implemented.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrators, AMS, APHIS, FGIS, and FSIS, to: (1) implement procedures for submitting inspection documents to NFC that will ensure prompt billing for inspection services rendered; and (2) emphasize to its personnel the importance of accurately completing BLCO transaction documents and submitting current account maintenance information, such as applicant addresses. |
Closed – Implemented
Various agency actions were taken.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrators, AMS and FGIS, to redesign their inspection forms to conform with the BLCO external procedures manual requesting the standardized placement of key billing data. |
Closed – Not Implemented
The data supporting this recommendation was developed in 1986. Because of the passage of time and changes made in the interim by USDA, GAO can no longer support this recommendation without substantial additional audit work. This recommendation should be dropped.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, and the Administrators, AMS, APHIS, FGIS, and FSIS, to coordinate revision of the wording on BLCO notifications to delinquent applicants so that each notice becomes stronger. |
Closed – Implemented
An August 6, 1987, letter caused revisions to wording.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Administrator, APHIS, to develop and implement regulations that will allow the termination of inspection services to delinquent customers. |
Closed – Implemented
Debt management regulations were drafted and sent to the USDA Office of the General Counsel. They will be implemented by the end of fiscal year (FY) 1988.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to work with the Department of the Treasury in monitoring lockbox bank performance and periodically assessing the actual cost-effectiveness of lockbox operations until Treasury guidelines are published. |
Closed – Implemented
The Office of Financial Management (OFM) and Treasury will jointly review this during FY 1988.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to ensure system testing, certification reviews, and completion of all related reports before placing new or modified systems into operation. |
Closed – Implemented
NFC agreed with this recommendation, within existing resource constraints.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to permit access to operational system data to only those individuals who have a specific need, and for whom there is written justification and authorization. |
Closed – Implemented
New procedures were issued in February 1987.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to establish procedures to monitor the actions of BLCO and other users that have been granted time sharing option access in order to use the FOCUS report software package. |
Closed – Implemented
Personnel will be added to the security staff in FY 1988.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to require key verification of data elements that are critical to the accuracy of billing and recording inspection services. |
Closed – Implemented
One element is currently being added. Five more are expected with equipment upgrade.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to modify data entry terminal programs so that BLCO data can be entered in the same sequence as shown on transaction source documents to facilitate accuracy and production. |
Closed – Implemented
Elements are expected with new equipment in FY 1988.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to date stamp collection envelopes received in the NFC mailroom and control collections received at the point at which collection envelopes are opened. |
Closed – Implemented
NFC assigned duty to one person.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, to ensure that monthly reconciliations are performed and needed adjustments are made promptly to bring the general ledger and BLCO subsidiary accounts into agreement. |
Closed – Implemented
Current reconciliations are being performed timely.
|
| Department of Agriculture | The Secretary of Agriculture should direct the Director, NFC, and the Administrators, AMS, APHIS, FGIS, and FSIS, to coordinate in developing joint referral criteria, including time frames, for delinquent BLCO account referrals to the NFC claims units and to private collection agencies. |
Closed – Implemented
OFM began implementation in April 1986. Joint criteria for all agencies will be implemented by December 1987.
|
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Topics
Billing proceduresComputer securitySoftware documentationSoftware verification and validationDebt collectionFederal agency accounting systemsSystems managementData errorsDatabasesData entry