Improvements Needed in the Management of Federal Prison Industries' Factories

GGD-80-67: Published: Jun 9, 1980. Publicly Released: Jun 9, 1980.

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GAO conducted an examination of the fiscal year 1979 financial statements of the Federal Prison Industries, Inc. (FPI).

FPI needs to improve the management of its factories. Problems exist in pricing products, determining manufacturing costs, purchasing materials, maintaining inventories, collecting accounts receivable, authorizing and reimbursing travel, and internal reporting of financial information. These problems affect the efficiency of FPI operations and its net profit. They have often occurred because staff at FPI factories did not follow established policies and procedures. In some cases, however, policies and procedures need to be clarified and strengthened. A number of these problems are also attributable, in large part, to inexperienced personnel.

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