Department of Labor Contractor-Held Property Management System

FGMSD-76-39: Published: Mar 3, 1976. Publicly Released: Mar 3, 1976.

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The Department of Labor's Contractor-Held Property Management System is designed to account for nonexpendable personal property that the Government furnishes to contractors and grantees to carry out training programs administered by the Employment and Training Administration (ETA), Department of Labor. In 1973, Labor's internal auditors found that $355,000 worth of property could not be located for which contractors were accountable. The auditors also reported that equipment valued at over $14.4 million in the contractors' custody was not recorded in the property accounting records of ETA. GAO examined the system for recording property in the custody of contractors, including the computerized processing of transactions performed by an outside firm, and evaluated the adequacy of controls over the processing of property transactions.

The GAO review showed that several control procedures included in the system's design had not been implemented. ETA ETA has no systematic way of following up to ensure that property acquired by contractors and grantees has been completely and accurately reported for inclusion in the property accounting system. The physical inventory verification requirements had not been fully implemented. Not all contractors were certifying the accuracy of their inventories nor was ETA meeting requirements to participate in physical inventories. Because the property charged to and held by many of the contractors may not have been inventoried for several years, there is no assurance that all property is properly recorded in the property accounting records maintained by ETA. No effort had been made to coordinate annual physical inventories, ETA observations of the inventories, and closeout inventories. This lack of coordination could result in duplicate inventories being taken at a contractor's site within a 1-year period.

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