Congressional Award Foundation:

Management Action Needed to Establish Control Requirements and Related Procedures

AIMD-99-224R: Published: Jul 15, 1999. Publicly Released: Jul 15, 1999.

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Robert W. Gramling
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Pursuant to a legislative requirement, GAO reviewed the Congressional Award Foundation's fiscal year (FY) 1998 financial statements, focusing on: (1) the Foundation's need to establish and document control requirements and appropriate procedures in certain internal control areas identified during prior audits; and (2) internal control matters identified during GAO's FY 1998 audit.

GAO noted that: (1) in conducting its FY 1998 audit, GAO found that the Foundation had made progress in strengthening internal controls related to accounts receivable, restricted contributions, and facsimile invoices--three of five areas of control weaknesses identified during GAO's FY 1997 audit; (2) during FY 1998, the Foundation strengthened accounts receivable and contribution-related controls by establishing separate subsidiary databases which enabled the Foundation to more effectively: (a) monitor overdue accounts receivable and assess their collectability; and (b) track restricted contributions and circumstances associated with their release; (3) with respect to processing of facsimile invoices, the Foundation began reviewing vendor files and invoice payment lists in an effort to identify potentially duplicate invoices prior to payment; (4) however, the Foundation had not yet established and documented control requirements and related procedures for Foundation staff to follow in processing accounts receivable and facsimile invoices and in monitoring the status of restricted contributions; (5) likewise, GAO found that management had not yet progressed in establishing control requirements and related procedures with respect to the other two areas of internal control weakness identified during the FY 1997 audit--documenting and approving accounting adjustments and following up on bank reconciliations; and (6) without established and documented control requirements and related procedures, the Foundation faces the continuing risk that the processing of transactions and preparation of financial reports may not be consistently followed, monitored, and controlled.

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