Need To Improve Internal Controls Over Cash, Certain Inventories, and Accounts Payable
LCD-80-36: Published: Feb 20, 1980. Publicly Released: Feb 20, 1980.
- Full Report:
As part of an examination of the Government Printing Office's (GPO) financial statements, GAO tested the internal control systems for the accounting and safeguarding of cash, three inventories, and accounts payable. Inventories of paper, materials and supplies, and publications were tested through a review of policies and procedures, interviews, observation, and completed internal control questionaires. Weaknesses were identified in the internal control systems for each of the assets examined.
GAO found few written procedures for managing and controlling the assets it examined. To a large degree, the responsibilities of the personnel managing and controlling these assets were specified only in individual job descriptions. Organizational lines of responsibility were vague. There were no written procedures for handling cash receipts in the GPO mail room or in the Receipts and Disbursements Branch. Security measures appeared to be proper in the Receipts and Disbursements Branch but were somewhat lax in the mail room. Procedures for handling and controls for safeguarding paper inventories were also lax. Weaknesses were noted in the receiving and storing functions of the materials and supplies inventory. Although procedures had been prepared for the publications warehouse operation, some of these procedures were still in draft form at the time of the review. Few procedures had been written to describe the flow of information in accounts payable. Under the current system, duplicate payment of invoices was possible.
Recommendation for Executive Action
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Recommendation: To ensure that assets are properly managed and safeguarded, GAO suggests that GPO: establish written procedures describing operations in detail, system flow, and lines of responsibility for each of the functions examined; admit only authorized personnel in the GPO mail room; instruct security guards at the central warehouse to comply with GPO orders setting forth their duties; and establish procedures to ensure the recording of any destruction of publications for sale. In addition, special attention should be given to avoid processing second invoices to preclude duplicate payment.