Department of Defense's Progress in Implementing the Federal Managers' Financial Integrity Act
NSIAD-85-147
Published: Sep 27, 1985. Publicly Released: Sep 27, 1985.
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Highlights
GAO reviewed the Department of Defense's (DOD) efforts to implement and comply with the Federal Managers' Financial Integrity Act (FMFIA), which is aimed at strengthening management controls and accounting systems.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should assign key OSD officials responsibility for certifying the adequacy of internal management controls within their functional areas. The designated officials should then consider adopting either the Army or the Air Force process for functional managers to use in determining the operational adequacy of controls within their areas of responsibility. |
Closed – Implemented
In a March 1, 1985 memo, the Deputy Secretary of Defense directed the undersecretaries of Defense and ASD to work with ASD(C) on corrective actions for material weaknesses in their functional area. A monitoring and reporting system will oversee the actions.
|
| Department of Defense | The Secretary of Defense's future annual statements on systems of internal and administrative controls should not report that the systems, taken as a whole, provide reasonable assurance that the requirements of the act have been met until such time as the revised evaluation program provides an adequate basis to make such a determination. |
Closed – Implemented
DOD believes that assurances can be provided by alternatives to FMFIA, such as agency and GAO reports, internal review organizations, and DOD/OSD guidance and instructions. It believes that this combination of factors, and not the results of the FMFIA program alone, provide reasonable assurance that adequate internal controls exist. This position is consistent with OMB reporting guidance for 1986.
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| Department of Defense | The Secretary of Defense should implement a policy directive for evaluating accounting systems' conformance with the Comptroller General's requirements. At a minimum, the directive should establish the objectives, criteria, methodology, testing and documentation requirements, and reporting deadlines for DOD components' accounting systems evaluation programs. |
Closed – Implemented
DOD issued change No. 2 to DOD 7220.9M, DOD Accounting Manual, on October 11,1985.
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| Department of Defense | Until necessary evaluations of DOD accounting systems have been performed, the Secretary of Defense should not report the systems as: (1) being in conformance with the Comptroller General's requirements; and (2) providing basic accountability over resources. |
Closed – Implemented
DOD believes that evaluations performed were adequate to provide reasonable assurance. Instructions were issued to DOD components recognizing the need to test accounting systems to ensure that they are operating as designed and are in accordance with prescribed accounting principles, standards, and related requirements.
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Topics
Accounting systemsInternal controlsMaterialityProgram evaluationReporting requirementsMilitary forcesMaterial weaknessesFederal agency accounting systemsFraud, Waste and AbuseAgency evaluations