Financial Audit:

Department of Agriculture's Financial Statements for Fiscal Year 1988

AFMD-91-65: Published: Aug 13, 1991. Publicly Released: Aug 13, 1991.

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GAO examined the Department of Agriculture's (USDA) consolidated financial statements for the fiscal year (FY) ended September 30, 1988.

GAO found that except for assets and costs related to the Forest Service's timber program and the valuation of USDA fixed assets and acquired property, the USDA consolidated financial statements presented fairly the results of its 1988 operations, its cash flows, and use of budgetary resources, and financial position as of September 30, 1988 in conformity with generally accepted accounting principles (GAAP). GAO also found that: (1) the Forest Service did not develop the values for the cost of timber harvested and timber assets in accordance with GAAP, making it difficult to determine the original cost of USDA fixed assets; (2) the USDA financial management system experienced numerous internal control and accounting system deficiencies that impeded its ability to develop prompt and reliable financial statements; (3) such significant weaknesses called into question the USDA FY 1988 report on internal controls, which stated that its internal control structure, except for 14 categories identified as having internal weaknesses, provided reasonable assurance that it achieved control objectives; (4) although USDA reported that it achieved such control objectives, its 1990 Federal Managers' Financial Integrity Act report stated that its internal controls could not provide reasonable assurance that it met such objectives; and (5) USDA needs to place greater emphasis on its corrective actions.