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Highlights

GAO discussed: (1) financial statement audits at the Internal Revenue Service (IRS) and the Customs Service; and (2) the need for full implementation of Chief Financial Officers (CFO) Act provisions. GAO noted that: (1) IRS and Customs audits have revealed serious financial management problems, such as inaccurate accounts receivable estimates, unreliable property records, and inadequate controls, documentation, and security; (2) the pilot financial statement audit program has pinpointed specific problems in financial management throughout the government and provides guidance for establishing financial accountability and control; (3) IRS and Customs are working to improve fundamental financial management problems; (4) the existing IRS and Customs financial systems are not designed to provide meaningful and reliable financial information, but both agencies are modernizing their accounting systems and procedures; (5) full implementation of the CFO act requires sustained oversight by the President, Congress, and agency heads and the appointment of fully qualified CFO; and (6) the financial statement audit program should be expanded governmentwide.

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