Internal Controls: Disbursement Processing Controls Need Improvement
AIMD-00-236R
Published: Aug 07, 2000. Publicly Released: Aug 07, 2000.
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Highlights
Pursuant to a legislative requirement, GAO provided information on the Financial Management Service's (FMS) controls over safeguarding of assets and documenting disbursements and reconciliation of reports as well as the results of previously suggested improvements.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Financial Management Service | The Financial Management Service needs to establish procedures to ensure the documentation of the supervisory or independent review of paper SF 1166 Voucher and Schedule of Payments verification processing and the reconciliation of the returned check cancellations. |
Closed – Implemented
After the end of fiscal year 2000, FMS issued a combination of Field Operations Manual (FOM) guidance and memorandums from the Chief Disbursing Officer requiring documentation of the supervisory or independent review of paper SF 1166 verification processing. In addition, FMS, during unannounced visits at two of the Centers, found that the Centers had implemented the guidance. On December 20, 2000, FMS issued FOM guidance relating to the reconciliation of the return check cancellation. GAO noted, during its fiscal 2000 work, that the guidance was being implemented effectively at the three Centers GAO tested.
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| Financial Management Service | To address the disbursement internal control weaknesses, the Commissioner of the Financial Management Service should direct the Assistant Commissioner for Regional Operations to develop and implement uniform policies and procedures requiring, at a minimum, initiation of a fingerprint background check prior to the start date of new employees and prohibiting new employees from being assigned with access to negotiable assets and related records until the results of fingerprint checks are received and reviewed. |
Closed – Implemented
In December 2000, FMS issued Field Operations Manual (FOM) policies and procedures prohibiting new employees access to sensitive information before successfully passing a fingerprint investigation.
|
| Financial Management Service | To address the disbursement internal control weaknesses, the Commissioner of the Financial Management Service should direct the Assistant Commissioner for Regional Operations to develop and implement policies and procedures for periodic background investigation updates for employees who occupy positions with access to vulnerable negotiable assets or related records. |
Closed – Implemented
On November 30, 2000, FMS issued policies and procedures relating to periodic background updates for employees who occupy positions with access to vulnerable negotiable assets or related records.
|
| Financial Management Service | To address the disbursement internal control weaknesses, the Commissioner of the Financial Management Service should direct the Assistant Commissioner for Regional Operations to monitor the centers' adherence to FMS policies regarding the safeguarding of ruined and returned checks. |
Closed – Implemented
On November 16, 2000, FMS' Chief Disbursing Officer directed the Centers to fully comply with the applicable sections of the Field Operations Manual(FOM)regarding the safeguarding of ruined and returned checks. In addition, FMS conducted an unannounced visit to one of the Centers and found that the Center was in full compliance with the guidance.
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| Financial Management Service | To address the disbursement internal control weaknesses, the Commissioner of the Financial Management Service should direct the Assistant Commissioner for Regional Operations to monitor the consistent implementation of required procedures to ensure that only authorized persons sign the SF 146, Schedule of Cancelled Fedwire Item, crediting funds from cancelled Fedwires to the originating agency. |
Closed – Implemented
On October 31, 2000, FMS issued guidance, for the Centers' immediate implementation, requiring that an authorized person sign the SF 146 and that a list of authorized personnel be posted in the Fedwire area. Additionally, FMS conducted unannounced visits to the Centers and found that the Centers were adhering to the guidance.
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| Financial Management Service | Because of the recurring nature of some of the identified weaknesses, the Commissioner of the Financial Management Service should direct the Assistant Commissioner for Regional Operations to ensure that applicable guidance related to these matters be incorporated in the Field Operations Manual to ensure consistent and uniform operating procedures among all the centers. |
Closed – Implemented
FMS issued Field Operations Manual (FOM) guidance relating to (1) documentation of supervisory or independent review of SF 1166 payment verification processing, (2) reconciliation of returned check cancellations, and (3) prohibiting new employees from being assigned access to negotiable assets and related records until the results of fingerprint checks are received and reviewed.
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Topics
Accounting proceduresCheck disbursement or controlElectronic funds transferFederal agency accounting systemsFinancial management systemsFinancial recordsFinancial statement auditsInternal controlsFinancial statementsFinancial management