National Transportation Safety Board: Weak Internal Control Impaired Financial Accountability

The agency has prepared an action plan including task, completion date, and responsible office, for each of the recommendations made by PwC and updates it on a regular basis. Of 107 separate action steps planned in response to the PwC recommendations, 90 were completed as of July 25, 2002.

The agency used the GAO Internal Control Management and Evaluation Tool in preparing and completing its assessment of agency internal controls for the 2001 reporting period, identifying four material weaknesses that have now been addressed, and filed the required reports in a timely manner.

The agency reviewed its financial policies and has issued or revised 48 official policies since the issuance of our report, some of which define the roles and responsibilities of individuals in payment transaction processes.

In addition to issuing 48 new or revised financial policies, many of them dealing with payment transactions and safeguarding assets, management provided training on the use of government purchase and travel cards, appropriation law, and a new financial management system. Affected staff are required to attend certain of these training sessions annually.

The agency has implemented new procedures and systems including a prepurchase review of every non-accident spending request, regardless of amount or purpose, by the Board Chairman, and an electronic procurement system with a fixed path of approvals required to process purchases over $2,500. Documentation supporting all accident-related purchases made by investigators is reviewed by an approving official in the investigator's office and by the Chief Financial Officer. Use of electronic approval systems and moving purchase approvals to senior management level has strengthened internal control to ensure agency policies are followed.

The agency issued new guidance regarding its travel policy that specifically prohibits the use of the government travel card and contract air fares for personal travel.

The agency prepared constructive cost analyses for 23 trips taken during fiscal year 1999, which we had identified as potentially having excess cost reimbursements. NTSB's analysis indicated that the government incurred an additional cost of $957 for the identified trips. Based on that result, the agency concluded that there was minimal risk of exposure to reimbursement of excess costs during subsequent periods and that further analysis and collection efforts would not be cost effective. We concur with that conclusion. The agency also reissued its travel policy, specifically limiting travel reimbursements to the cost of direct travel and prohibiting use of the government travel card for expenses not related to official government travel. They also implemented Travel Manager software to ensure that all trip requests, itineraries, and reimbursements are subjected to reviews and approvals as required by agency policy.

The agency reviewed the travelers who used annual orders and reduced the number by 17 percent from 2001 to 2002, primarily by limiting their use only to personnel who make emergency travel as part of their normal duties. The agency eliminated use of all annual travel orders for fiscal year 2004.

NTSB no longer uses annual travel orders.

Changes made to NTSB's procurement and expenditure systems for items costing $2,500 or less have improved control over these transactions. Proposed non-accident purchases are subjected to approval by a committee that includes the Chairman of the Board and the Chief Financial Officer (CFO), who has up-to-date budget information on hand to ensure funds are available for purchases that the committee approves. Accident-related expenses are subject to approval by the investigator-in-charge and are reviewed by the CFO for evidence of prepurchase approval and for funding availability. The agency has reduced the number of non-investigator purchase cards to four, which are used by procurement officials. Convenience checks are issued only to some accident investigators and agency policy limits use of the checks to accident-related expenditures only. The agency's accounting system balances are updated for each day's purchase card and convenience check transactions every workday. The agency concluded that these revised policies and procedures provide adequate compensating controls over approval of purchases and use of available funds. We concur with that conclusion.

The agency conducted a physical inventory of accountable property and recorded information about each item in an inventory control record. The agency is now completing a review of its accounting records from fiscal 1998 forward to identify capital assets acquired during that period that might not have been identified through the physical inventory and to link the cost and acquisition financial information to the accountable inventory control record.

The agency reissued its policy on property management in May 2002, including a detailed description of accountable property, the responsibilities of personnel involved directly in the stewardship of accountable property, and information about the recordation, physical inventory, and disposal of accountable property. Also, the agency's new financial management system, specifically the funds validation process, requires accurate accounting strings, including budget object classification, to be entered before a request can be processed. The cost and acquisition financial information is linked to the accountable inventory control record.

The agency corrected the guidance for 2001 cycle performance awards.

In 2004, NTSB substantially completed corrective action by implementing the use of a template, which helps estimate the aggregate annual compensation of employees. In addition, NTSB added edit checks to its payroll system in order to systematically stop payments that would violate applicable compensation regulations.

In November 2005, NTSB completed its review of payroll records for employees who received retention allowance payments during 1999, 2000, and 2001 and provided us with documentation supporting their work, which we reviewed. NTSB's review of 1999, 2000, and 2001 compensation paid identified no additional instances of employees who were paid in excess of the aggregate annual compensation limit, or who received award or bonus payments or deferrals that caused annual compensation to exceed the limit, or retention allowances that exceeded OPM guidance.

The agency has substantially completed corrective action related to our recommendation to determine and document what action is to be taken on identified instances of payments or deferred amounts that exceed amounts allowable under statute and OPM regulation. NTSB acted on the three instances of overpayment that we identified. The first of the three overpayments was identified, acted upon and corrected by NTSB prior to our review. The second overpayment was resolved by the agency reducing the employee's retention allowance, which allowed deferred bonus amounts to be paid and, in part, through use of a documented waiver for collection of an erroneous payment to employees. The third overpayment, to a person now retired from NTSB, was resolved in September 2005 by NTSB documenting its approval of an overpayment collection waiver, which was filed on behalf of the former employee by the NTSB General Counsel. NTSB did not find additional instances of overpayments during its review of 1999-2001 employee compensation. According to an agency official, NTSB now has other mechanisms in place to identify potential overpayment. It manually performs compensation estimate calculations twice a year using the agency's revised compensation testing template. Also, its new payroll system automatically monitors and reports planned compensation payments that would not comply with OPM regulations prior to processing the payment.

NTSB has implemented the Federal Personnel Payroll System (FPPS) through Department of the Interior to process their payroll. An NTSB representative told us that FPPS automatically monitors and generates debt collection documents for payments of benefit premiums on behalf of employees in LWOP status so that such payments are identified, tracked, controlled, and collected on a timely basis.

The agency halted the practice of paying advances to employees and collected all amounts identified as advances to current employees, except for a $200 amount to one employee, against whom garnishment action has been initiated.