Internal Controls: System Problems Affecting GSA's Financial Reporting - GAO Report
|Date:||Feb. 4, 1988|
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Electronic data processing
Federal agency accounting systems
Inventory control systems
GSA National Electronic Accounting and Reporting System
GAO evaluated the General Services Administration's (GSA) system of internal accounting controls to identify ways for improving them and other GSA financial management practices.
GAO found that GSA: (1) corrected three of four material internal accounting control weaknesses reported to Congress in 1985; and (2) has initiated corrections for the fourth material weakness and a new material weakness identified in 1986. GAO also found that other uncorrected problems within GSA management included: (1) infrequent assets inventories; (2) inadequate internal controls for its automatic data processing systems, billing processes, and credit card usage; (3) lack of supporting documentation for funds transactions; (4) errors in its consolidated financial statements; (5) improper recording of its financial transactions; and (6) improper application of accounting principles. In addition, GAO found that GSA: (1) automated systems contained many inefficiencies; and (2) used the moving-average cost method for valuing its general supply inventory. GSA agreed with most of these findings, but believed that: (1) its inventory practices were sufficient; (2) the financial transaction discrepancies identified did not materially affect the relevant financial statements; (3) it had achieved adequate control over its automated system operations; (4) its moving-average cost method was preferable to the use of standard costs; and (5) it had already implemented controls over its credit card system.