Skip to Highlights
Highlights

The Department of Health, Education, and Welfare's (HEW) Federal Assistance Financing System was established to improve HEW cash management. However, it allowed premature cash withdrawals because of poor organizational aspects and serious design deficiencies. HEW advanced over $38 billion to about 14,000 nonfederal organizations through the system.

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services 1. The Secretary, HEW, should recover federal cash excesses held by recipients wherever feasible.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 2. The Secretary, HEW, should finish developing a control system that would emphasize recipients' monthly disbursement plans and that would provide for monitoring of all recipients' cash balances.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 3. The Secretary, HEW, should provide the system with adequate staff.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 4. The Secretary, HEW, should extend letters of credit to all recipients eligible to use them.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 5. The Secretary, HEW, should obtain specific congressional approval to handle loan funds through the grants accounting system.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 6. The Secretary, HEW, should make sure that the new system is used for all aspects of cash management, such as the collecting of all excess advances.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 7. The Secretary, HEW, should specify in agreements the terms and conditions of withdrawals, advise the recipients that advances will be discontinued if abuses persist, and provide for enforcing the discontinuance.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 8. The Secretary, HEW, should work with the Treasury and Office of Management and Budget to have states remove legal and administrative impediments that cause premature and excessive cash withdrawals and, when appropriate, have states use single letters of credit.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 9. The Secretary, HEW, should provide resources to ensure that the new system becomes operational as scheduled, and should monitor the redesign efforts to ensure the fastest possible completion.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 10. The Secretary, HEW, should require that the revised system have adequately detailed accounting records that will show the cash balances held by recipients and that will contain data to control cash advances by specific appropriations.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 11. The Secretary, HEW, should develop a better approach to charge amounts of advances against specific appropriations, such as an approach that would use data furnished by recipients to support payment requests.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 12. The Secretary, HEW, should require HEW internal auditors to investigate disbursements reported in excess of authorizations, and to establish how much, if any, of the money should be recovered by the government.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System, on February 6, 1984, to replace the one covered by the recommendation.
Department of Health and Human Services 13. The Secretary, HEW, should require the revised system to provide for promptly investigating and resolving excessive disbursements reported by recipients, for eliminating duplicative agency records, and for prompt reporting of Antideficiency Act violations.
Closed - Not Implemented
Problems with the system have been brought to HEW attention on several occasions since the report was issued. It implemented a new system, the Payments Management System on February 6, 1984, to replace the one covered by this recommendation and is addressing continuing efforts to improve the system under the Financial Integrity Act process.

Full Report