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Highlights

In connection with fulfilling our requirement to audit the financial statements of the U.S. government, we audited and reported on the Schedules of Federal Debt Managed by the Bureau of the Public Debt (BPD) for the fiscal years ended September 30, 2003 and 2002. As part of these audits, we performed a review of the general and application computer controls over key financial systems maintained and operated by the Federal Reserve Banks (FRB) on behalf of the Department of the Treasury's BPD. Many of the FRBs perform fiscal agent services on behalf of the U.S. government, including BPD. The debt-related services primarily consist of issuing, servicing, and redeeming Treasury securities and processing secondary market securities transfers. In fiscal year 2003, the FRBs issued about $4.1 trillion in federal debt securities to the public, redeemed about $3.8 trillion of debt held by the public, and processed about $125 billion in interest payments on debt held by the public. FRBs maintain and operate key financial applications on behalf of BPD and an array of financial and information systems to process and reconcile monies disbursed and collected on behalf of BPD.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Federal Reserve System The Director of the Division of Reserve Bank Operations and Payment Systems should assign responsibility and accountability for addressing the five recommendations to cognizant FRB officials.
Closed - Implemented
In connection with its ongoing requirement to audit the U.S. government's financial statements, GAO reviewed the status of actions taken to address the information technology control recommendations it made in a related "Limited Official Use" report. As detailed in separate accomplishment reports, GAO found that Federal Reserve Bank management had taken steps to implement the recommendations related to the Bureau of the Public Debt systems.

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