Improving Management Controls at the Federal Financing Bank

GGD-80-42: Published: Feb 28, 1980. Publicly Released: Feb 28, 1980.

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Several weaknesses in the Federal Financing Bank's internal controls need attention. The Bank's outstanding loans are growing in number and dollar value. Similarly, the time and attention necessary to properly administer the increasing number of loan transactions is straining support systems. To maintain an efficient operation, improvements are needed in internal control procedures.

The Bank's present internal controls provide reasonable assurance of reliable financial statements, but several improvements need to be made. Specifically, the Bank needs to: (1) document the accounting system; (2) update and better maintain the records and files in order to enhance Bank operations; (3) revise the accounting staff rotation policy to improve efficiency; and (4) computerize most operations which necessitates the decision of whether to use existing Treasury equipment or to have a system compatible with Treasury systems.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Trust and Revolving Funds Branch should: (1) present the computerization plans and periodic progress reports for the Board of Directors' review, approval, and oversight; (2) increase the level of effort to speed the computerization of the accounting system; (3) document the accounting system by developing an accounting manual with written policies, procedures, and methods for handling accounts and loan transactions; (4) improve the maintenance and accessibility of the records and files systems; and (5) suspend the rotation of personnel until the internal controls discussed above are strengthened. Furthermore, to avoid duplication, the Board of Directors' should forego an internal audit of the 1979 financial statements. Additionally, the Bank should improve their financial statements by adopting a statement identifying the accounting policies adopted and by combining the Statement of Changes in Retained Earnings with the Statement of Income as separate statements.

    Agency Affected:


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