Financial Audit:

Food and Nutrition Service's Financial Statements for Fiscal Years 1988 and 1987

AFMD-91-3: Published: Dec 21, 1990. Publicly Released: Dec 21, 1990.

Additional Materials:


Jeffrey C. Steinhoff
(202) 275-9454


Office of Public Affairs
(202) 512-4800

GAO examined the Food and Nutrition Service's (FNS): (1) financial statements for the fiscal years ended September 30, 1988 and 1987; (2) internal control system; and (3) compliance with laws and regulations.

GAO found that: (1) FNS did not adequately monitor states' control of food coupons; (2) the FNS financial reporting process failed to produce reliable results; (3) FNS year-end reports to the Department of the Treasury were inaccurate; (4) FNS did not adjust its accounting records for the value of food coupons returned to inventory; and (5) the statements of financial position as of September 30, 1988 and 1987 and the related statements of operations and changes in funds with the Treasury for the year ended September 30, 1988, presented fairly the FNS financial position in conformity with generally accepted accounting principles.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On November 29, 1991, FNS issued additional guidance on coupon inventory controls through a technical assistance package for states to improve their oversight and controls. States are implementing the guidance and FNS has provided GAO with Florida, Massachusetts, and North Dakota review packages as examples.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to: (1) enforce FNS oversight of state controls over food coupons, including inventory audit procedures, recordkeeping, and reporting to FNS; and (2) develop the policies and procedures necessary to ensure the consistent monitoring of state agency controls.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: FNS engaged a contractor to conduct a needs determination and based upon the contractor's February 1991 report, FNS instituted a training program for accounting personnel and hired five accountants.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to ensure that FNS staff are skilled in applying generally accepted accounting principles and in preparing financial reports to Treasury and the Office of Management and Budget (OMB). A needs determination should be conducted to ascertain how many staff with accounting skills are needed, and a sufficient number should be engaged and properly trained to ensure the reliable accounting and financial reporting of FNS transactions.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: Effective September 30, 1991, FNS has developed procedures for preparing financial reports, recording adjustments, calculating bad debt allowances, and determining the food stamp redemption liability. The effectiveness of these procedures is being examined by USDA IG as part of its 1991 audit of FNS.

    Recommendation: The Secretary of Agriculture should direct the Administrator, FNS, to ensure that financial statements and reports are prepared using required accounting policies, procedures, and methodologies.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: FNS has followed OMB guidelines and has included applicable weaknesses in its 1990 annual FMFIA report, dated October 2, 1990.

    Recommendation: FNS should follow the guidelines OMB established for its Federal Managers' Financial Integrity Act reporting in its July 5, 1990, memorandum, including OMB Circulars A-123 and A-127, and carefully consider the significance of nonconformance when arriving at an overall statement of compliance.

    Agency Affected: Department of Agriculture: Office of the Secretary: Food, Nutrition and Consumer Services: Food and Nutrition Service


Explore the full database of GAO's Open Recommendations »

Jul 18, 2018

Jul 17, 2018

Jul 16, 2018

Jun 28, 2018

May 31, 2018

May 24, 2018

May 10, 2018

Apr 17, 2018

Apr 5, 2018

Looking for more? Browse all our products here