Navy's Progress in Implementing the Federal Managers' Financial Integrity Act

NSIAD-85-150: Published: Sep 27, 1985. Publicly Released: Sep 27, 1985.

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GAO reviewed the Navy's efforts to implement and comply with the Federal Managers' Financial Integrity Act, focusing on: (1) the Navy's progress in implementing its program for evaluating internal controls; (2) whether actions taken by the Navy under the act are improving internal controls and accounting systems; and (3) the adequacy of the Navy's basis for determining that its accounting systems meet the act's requirements and conform with the Comptroller General's requirements for accounting systems.

GAO found that the Navy made progress during 1984 in developing its internal controls evaluation program and in reviewing its accounting systems for compliance with the act. The Navy identified a number of material weaknesses for which corrective actions were underway or planned, at both departmental and local levels. However, GAO found that: (1) while the Navy has implemented a number of corrective actions, Navy managers do not routinely test corrective actions to determine their effectiveness; and (2) the Navy has not yet fully implemented its internal controls evaluation program or established a tracking system to ensure that identified material weaknesses are corrected. In addition, GAO found that: (1) most of the Navy's accounting systems do not conform with the Comptroller General's requirements; (2) the Navy did not adequately evaluate and test the systems it reported as being in conformance with the requirements; and (3) the Navy's efforts to bring its accounting systems into compliance could be delayed by schedule slippages for corrective actions, inadequate coordination of internal control reviews, and the lack of an adequate tracking system to monitor accounting system deficiencies and related corrective actions.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Navy stated that its integrated system will provide reasonable assurance.

    Recommendation: The Secretary of the Navy's future annual statements on systems of internal accounting 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.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: The Navy reemphasized the need for testing to ensure effectiveness of corrective actions.

    Recommendation: The Secretary of the Navy should not report the Navy's accounting systems to be in conformance with the Comptroller General's requirements until they have been adequately evaluated and tested in operation.

    Agency Affected: Department of Defense: Department of the Navy

  3. Status: Closed - Implemented

    Comments: The Navy revised its Strategic Financial Management Master Plan on August 1985. It will identify all improvement efforts and summarize milestones for individual projects.

    Recommendation: The Navy should fully coordinate all work performed under provisions of the act, at both the field and headquarters levels, to better identify accounting internal control weaknesses and needed corrections to specific accounting systems.

    Agency Affected: Department of Defense: Department of the Navy

  4. Status: Closed - Implemented

    Comments: The Navy reemphasized the requirement that all commands and activities must have tracking and followup systems.

    Recommendation: The Navy should implement an effective tracking and follow-up system to monitor planned accounting systems corrective actions on an ongoing basis.

    Agency Affected: Department of Defense: Department of the Navy

 

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