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I
FINANCIA'l -111--
I I
UNITED STATES GOVERNMENT GENERAL ACCOUNTING OFFICE
Memorandum March 1, 1979
TO
FROM
Program Planning Committee Heads of Divisions and Off ices Regional Managers .'.-~
1
,
~1.: ,tniL;; r1. )t Lr::&i Executive Secretary, PPC - , ames ~~~art1n
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SUEJECT: PPC Session on Accounting and Financial Reporting Program Plan (PPC-79-14, 1/31/79)
A summary description of the subject session and decisions reached as a result of it follows:
PURPOSE
To assess the progress of GAO's efforts in the Accounting and Financial Reporting issue area, and to obtain PPC guidance on FGMSD's proposed revised plan.
CONCLUSIONS REACHED/ ACTIONS TAKFN OR PLANNED
1. Approval of Program Plan and Lines-of-effort. The revised program plan and the following priority linesof-effort were approved:
--Are Executive Agency Accounting System Designs Adequate and in Conformity with the Comptroller General's Principles, Standards, and Related Requirements?
--Do Government Corporation and Agency Financial Statements Present Fairly the Results of Operations, Financial Position, and Changes in Financial Position?
--Are Pricing, Pilling, and Collection Systems Adequate to Insure that Amounts Owed the Federal Government are Fully and Promotlv Collected?
--Do the Svstems Provide Maximun Assurance that Agencies Do Not Over-Obligate and/or Overexpend Their Appropriations?
--Do Agencv Accbunting Systems Provide for Sound Cash Management?
--Do Agency Accounting Systems Provide for Adequate Financial Accounting and Control Procedures for Investment in Personal Property?
--Are Agency Internal Controls Over Receipts and Disbursements Adequate (Account Settlement Responsibility}?
--Are Present Financial Reporting Systems Adequate to Disclose the Results of Government Operations and to Provide Us~ful Information to Agency Managers?
--Are Accounting Systems Implemented and Operating Consistent with the Designs Approved by GAO?
--Do Agency Payroll Systems Ensure that Employees are Paid Accurately and Promptly and Prevent Unauthorized Payments?
--Does Securities and Exchange Commission Accounting and Financial Regulation for Publicly Held Companies Provide Adequate Disclosure for Investors and Promote Eff icient Capital Markets?
2. Fin-ancial Management in Government. The PPC concluded that the state of financial management in the Federal Government is not very encouraging. Although some progress has been made, many accounting systems--particularly those in HEW and DOD--are not yet approvable and are not likely to be so before 1980--GAO's original goal for approving the designs of all executive agency accounting systems. At the same time, daily disclosures of wastes and frauds continue to provide evidence of the costly results of poor accounting controls and other financial management practices. Ways must be found to motivate high level Federal manaqers to seek improvements by highlighting the benefits of sound financial management. To this end, the following actions will be considered or taken:
--The Comptroller General will consider means of obtaining presidential action to encourage the development and approval of acceptable accounting systems in those agencies operating with unapproved systems.
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--FGMSD will continue, through its reports and other publications, to "tell the story" regarding the need for improved f inan~ial management in Government. To highlight the major issues and problems, FGMSD will consider repackaging its Accounting and Financial Reporting program plan for external distribution.
3. Conceptual Framework for GAO's Accounting Standards.
The FGMSD program plan for this issue area cites the need for a conceptual framework for GAO's accounting principles and standards. The conceptual framework will identify the underlying rationale for the standards and principles adopted by GAO, relate these reasons to specific objectives, and in general provide a better understanding of accounting in the public sector. FGMSD estimates that the project will take one-to-two staff years. The Comptroller General suggested that FGMSD consider obtaining outside assistance--perhaps an academician on sabbatical.
4. Accounting Principles and Standards for Government Corporations. Although GAO regularly audits government corporations, the Comptroller General has not issued accounting principles and standards specifically for government corporations. GAO has been using the Financial Accounting Standards Board (FASB) standards applicable to commercial corporations, modifying them as necessary to accomodate the differences in public corporations. While this approach assures that generally accepted accounting principles are used, the PPC believes it would be more appropriate for the Comptroller General to issue standards which reflect the public nature of government corporations. (Such standards woula also apply to government entities with revolving funds.) For the Comptroller General to issue these standards, new legislation will be required. Based on PPC guidance, FGMSD will draft accounting orinciples and standards for government corporations, using FASB standards as the starting point. To gain support for this effort, FGMSD should involve.the government corporations in the development of these standards, and should educate the corporations to the merits of specific ~AO standards as oppose<l to the FASB standards. After this front-end work is complete, authorizing legislation will be drafted.
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The prooosed legislation would be separate frorn the "GAO Bill", to avoid encumbering that bill.
5. Coordination with Other OiviEions. Certain portions of the FGMSD plan for Accounting and.Financial Reporting closely relate to areas pursued in other issue areas. For example, work on full cost recovery and congressionally-mandated reporting requirements needs to be coordinated with PAD, which is addressing some aspects ·of these questions under its own issue areas. A particularly close relationship exists between Accounting and Financial Reporting and the Fraud Task Force/Internal Auditing issue area. Also FGMSD's work in reviewing the accounting systems for accounts receivables closely ties. into some Claims Division efforts. In these and other areas, coordination is needed to prevent duplication, and assure that maximum use is made of GAO audit work and resources.
6. Collection of Debts. A recent Treasury directive mandates that Federal agencies charge interest on overdue debts when a contract or formal agreement exists. Although this represents an improvement in Federal debt collection efforts, it may not go far enough. For example, if the debt is an unpaid loan, the contracted interest rate is presumed to remain in effect. This provides little incentive to repay loans carrying exceptionally low interest rates. Furthermore, more direction may be needed to recoup mistaken payments or overpayments. GAO will continue to focus on Federal debt collection efforts. If warranted, GAO will consider drafting legislation to force action by agencies.
7. Resources. Recent legislation has placed new work demands 9n this issue area. For example, the Comptroller General has acquired new responsibilities regarding Federal Government pension plans and the Corporation for Public Broadcasting. If GAO's supplemental appropriations request is funded, additional staff years will be provided this issue area. Otherwise, the new requirements must be satisfied within existing resource constraints.
cc: Issue Area Coordinators
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ornptroller General of the United States
CHAPTER
1
2
3
4
5
6
7
8
9
10
CONTENTS
Director's Statement
Issue Area Statement
Are Executive Agency Accounting System Designs Adequate and in Conformity with the Comptroller General's Principles, Standards, and Related Requirements?
Do Government Corporation and Agency Financial Statements Present Fairly the Results of Operations, Financial Position, and Changes in Financial Position?
Are Pricing, Billing, ~nd Collection Systems Adequate to Insure that Amounts Owed the Federal Government are Fully and Promptly Collected?
Do the Systems Provide Maximum Assurance that Agencies Do Not OverObligate and/or Overexpend Their Appropriations?
Do Agency Accounting Systems Provide for Sound Cash Management?
Do Agency Accounting Systems Provide for Adequate Financial Accounting and Control Procedures for Investment in Personal Property?
Are Agency Internal Controls Over Receipts and Disbursements Adequate (Account Settlement Responsibility}?
Are Present Financial Reporting Systems Adequate to Disclose the Results of Government Operations and to Provide Useful Information to Agency Managers?
PAGE
l
6
16
19
20
24
27
31
34
39
CHAPTER
11
12
13
14
Appendix
I
Are Accounting Systems Implemented and Operating Consistent with the Designs Approved by GAO
Do Agency Payroll Systems Ensure that Employees are Paid Accurately and Promptly and Prevent Unauthorized Payments?
Does Securities and Exchange Commission Accounting and Financial Regulation for Publicly held Companies Provide Adequate Disclosure for Investors and Promote Efficient Capital Markets?
Significant Lines of Effort (nonpriori ty)
Accountability Model
PAGE
47
49
51
54
60
CHAPTER 1
DIRECTOR'S STATEMENT
Much additional work is needed or required in this issue area:
1. We need to prepare a conceptual framework for our accounting principles and standards for Federal agencies. In developing the framework, we would take into consideration present and future work of the Financial Accounting Standards Board in the nonprofit area, both governmental and nongovernmental.
2. We need to revise our accounting principles and standards to clarify and update them as well as to make any changes necessary to confo~m them to the conceptual framework.
3. Increased emphasis needs to be given to our work with the Treasury Department on consolidated financial statements for the Federal Government. We should get all, or most, of the remaining problems resolved this fiscal year by· working closely and intensely with Mr. Staats' seven subcommittees.
4. We should give consideration to the preparation and issuance of accounting principles and standards for government corporations. This may require seeking legislative authority.
5. The Congress recently enacted legislation which puts new requirements on the Comptroller General regarding Federal Government Pension Plans. There must be an annual report submitted on each plan to the Congress and to the Comptroller General. The President is required to consult with the Comptroller General on the format and content of the report. If requested by either House or Congress, or any committee thereof, the GAO shall review the financial and actuarial statements and report to the Congress thereon. In addition, the Comptroller General shall perform such audits of Federal Government pension plans as he deems appropriate. It is expected that FPCD will perform the reviews and audits with actuarial and other assistance as required from 'FGMSD. In addition, we will work with OMB and/or Treasury on the format and contents of the statements. FPCD is estimating 3 staff years and we are estimating one-half staff year for fiscal year 1979. The workload will be much heavier in fiscal year 1980.
Messrs. Pin's and Heller's memorandum of November 7, 1978, makes no allocation to FPCD in this issue area for 1979. This point needs resolution.
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6. The Public Telecommunications Financing Act of 1978 places three additional requirements on FGMS:
a. Evaluation and approval by the Comptroller General of valuation standards to be developed by the Corporation for Public Broadcasting for the personal services of volunteers to be included in determining the level of non-Federal financial support of public broadcasting stations.
b. Within 1 year after the signing of the Act the Corporation, in consultation with the Comptroller General, and as appropriate with others, shall develop accounting principles to be used by all public telecommunications entities receiving Government funds under the Act, and as appropriate with others shall develop accounting principles to be used by all public telecommunications entities receiving Government funds under the Act.
c. Public telecommunications entities receiving Government funds under the Act are to have annual audits by independent certified public accountants in accordance with auditing standards developed by the Corporation, in consultation with the Comptroller General.
We are estimating 2 staff years will be needed for this this issue area in FGMSD for fiscal year 1979 This was not contemplated at the time our allocation was made for this fiscal year. The source of these 2 additional staff years needed to be determined.
Accounting System Approvals and Problems
The need for improved financial management and more adequate accounting controls has been amply demonstrated by the events of the past year. At the same time that revelations of fraud and abuse have been making headlines, fewer agencies qualified their accounting systems for approval (only 7) than in any year since 1972.
The biggest slow down in the approval of accounting systems occurred in the Department of Defense. Instead of approving approximately 20 systems, as contemplated at
·the beginning of the year, only 4 of the systems submitted for our evaluation were approvable. We hit two major problems which were common to systems in all three Services as well as in Defense agencies:
lo Lack of accounting control over property both real and personal, and both expendable and nonexpendable.
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2. Lack of accounts in which to accumulate the costs of operations, and the use of obligations, cash or accrued expenditures in lieu of costs.
HEW has the next largest number of unapproved systems and did not qualify a single system for approval in 1978. A year ago now we were optimistic about HEW, but since the transfer of the Assistant Secretary for Management and Budget to the Department of Energy, there has been a lack of leadership in HEW in the financial management area.
On the favorable side, the Commission on Financial Oversight of the District of Columbia has made greater and faster progress than we had anticipated. We have had eight staff members working on the D. c. assignment most of whom had previously been assigned to Defense systems. The ongoing work will result in several approvals for the D. c. Government in 1979.
Progress in Accounting Systems in Operation
We issued 44 reports from July 1, 1977, to October 31, 1978, as a result of our work in this area. Identifiable savings reported in accomplishment reports for fiscal year 1978 amounted to $282,538,000. We are continuing to review selected financial statement items on a multiagency basis and sending to all departments and agencies copies of our reports to the Congress. The results have been most productive. Congressional hearings on our accounts receivable report were held on December 18, 1978. We are also continuing to review individual agency accounting systems and financial management issues.
We need to do more work in this area, particularly with respect to accounting for personal property, systems of control over receipts and disbursement, including civil and military payroll systems, and evaluation of implemented approved systems. In 1978 we were assigned additional responsibilities largely from FOD (military pay and Treasurer's accounts) which, together with the cut in staff years, has left our coverage of the 326 accounting systems and related areas of responsibilities very thin.
Status of Financial Audits
Eight of the auditing divisions issued reports or had on-going work in 1978. Some audits are still being performed on an annual basis but encouragement is given to audit only every 3rd year where possible. As lead division in this issue area, we are reviewing these reports in draft form to make sure they conform with appropriate accounting principles.
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About midway through fiscal year 1978, the number of staff years allocated to the Accounting and Financial Reporting issue area was increased from 226 to 23g with several adjustments between divisions. Budgeted and actual staff years by division for fiscal year 1978 and allocated for fiscal year 1979 are as follows:
FISCAL YEAR 1978
DIVISION BUDGET ACTUAL
CEDD 16 15
FPCD 2
FOD 9 11
GGD 21 25
HRD 7 8
ID 13 5
LCD l
Other Divisions 66 67
FGMSD 172 156
Total 238 223*
*This shortfall resulted from our inability to get sufficient staff from Regional Offices.
FY 1979
BUDGET
11
28
4
12
4
59
150
209
The work in this issue area is the result of statutory requirements or Congressional requestse
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ACCOUNTING AND FINANCIAL REPORTING . CURRENT VS. PROPOSED PRIORITY LINES OF EFFORT"
STAFF RESOURCES SPENT AND ESTIMATES
CURRENT LINES OF EFFORT
2801: Are Executive Agency Accounting System Designs Adequate and in Conformity with the Comptroller General's Principles, Standards, and Related Requirements?
2802: Do Government Corporation and Agency Financial Statements Present Fairly the Results of Ooerations, Financial Position, and Changes in Financial Position?
2803: Are Pricing, Billing, and Collection Systems Adequate to Insure that Amounts Owed the Federal Government are Fully and Promptly Collected?
2804: Do the Systems Provide Maximum Assurance that Agencies do not Overooligate and/or Overexpend Their Appropriations?
2805: Do Agency Accounting Systems Provide for Sound Cash Management?
2806: Do Agency Accounting Systems Provide for Adequate Financial Accounting and Control Procedures for Investment in Personal Property?
2810: Are Agency Internal Controls Over Receipts and Disbursements Adequate (Account Settlement Responsibility)?
2811: Are Present Financial Reporting Systems Adequate to Disclose the Results of Government Operations and to Provide Useful Information to Agency Managers?
00: Other Issue Area Work
Total
ACTUAL STAFF YEARS
FY 1978
54
46
19
10
15
14
46
PROPOSED LINES OF EFFORT
No change.
No change.
No change.
No change.
No change.
No change.
No change.
No change.
Are Accounting Systems Implemented and Operating Consistent with the Design Approved by GAO?
Do Agency Payroll Syste11s Ensure that Employees are Paid Accurately and Promptly and Prevent Unauthorized Payments?
Does Securities and Exc1ange Commission Accounting a1d Financial Regulation for Publicly Held Companies Provide Adequate Disclosure for Investors and Promote Efficient Capital Markets?
Other Issue Area Work
Total
5
PLANNED STAFF YEARS
FY1979 FY1980
54
44
12
10
17
30
11
__ a
209
62
44
12
10
17
30
11
__ a
217
CHAPTER 2
ISSUE AREA STATEMENT
OBJECTIVES
The major objectives we plan to accomplish in the Accounting and Financial Reporting issue area are:
--The approval of the (1) accounting principles and standards and (2) designs of .all executive agency accounting systems.
--The periodic review of accounting systems in operation, or aspects thereof, to determine (1) whether they are functioning as approved and (2) whether they can be further improved.
--The audit of the financial statements of government corporations to determine and disclose (1) their present financial condition and (2) the results of their operations.
These objectives are all mandated by legislation. They are of a continuing nature--they will never ever be finally accomplished.
Accounting systems are the foundations for all financial management decisions. They provide the financial information that is essential to the management, control, and use of the Government's resources. Interest in governmental accounting and reporting has become an area of heightened national concern.
The current trend is toward more and better financial reporting. The growing demand for Government services accompanied by an emerging insistence on greater Government accountability is putting more and more pressure on Government managers to do a better job. As a result, attention is being focused on improvements in accounting systems and financial management. To illustrate:
--The need to increase productivity and otherwise assist in reducing our rate of inflation makes the need for improved financial management a high prioritye
--The reaction of voters to high taxes and excessive governmental spending emphasizes the need for economy and efficiency.
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Recent disclosures of fraud and abuse on the part of Government employees highlights the necessity for tight financial controls.
--The controversy over private vs. public ownership will continue to focus attention on the operation of Government corporations. This increasing interest will require better and more meaningful reporting on both the financial and operational aspects of these corporations.
--The major thrust in Federal financial reporting is towards the preparation of Government-wide consolidated financial statements on an accrual basis.
BOUNDARIES AND SCOPE
Accounting and Financial Reporting is concerned with the accounting for, and control of, assets, liabilities, revenues and expenditures, and the preparation and use of financial reports to meet internal management as well.as external needs including those of the Congress.
From the standpoint of the responsibilities and work of the GAO, the issue area involves:
--Prescribing the accounting principles, standards, and related requirements to be observed by executive agencies.
--Cooperating with executive agencies in the development of their accounting systems
--Approving executive agency accounting systems principles and standards and designs when appropriate.
--Audits of financial statements to the extent necessary to express an opinion as to the fairness with which the agencies financial statements present financial condition, changes in financial condition, and results of operations.
--Reviewing accounting systems to see how well they are working, whether they can or should be improved further, and whether they remain in conformity with prescribed principles and standards.
It also includes management aspects of accounting as provided for in the Budget and Accounting Procedures Act of 1950
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such as, whether accounting systems provide for:
--Full disclosure of the results of financial operations,
--Adequate financial information needed in the management of operations and the formulation and execution of the budget, and
--Executive control over income, expenditures, funds, property, and other assets.
RELATIONSHIPS WITH OTHER ISSUE AREAS
Because accounting and financial reporting are functions of all departments and agencies and the cost of programs or operations related to other issue areas is frequently information needed in performing program results and economy and efficiency reviews, the interrelationship with other issue areas is readily apparent. ·In many cases, when the prime objective is the review of an accounting system, a secondary issue will more than likely be involved.
The relationship of this issue area with the internal audit issue area is particularly close. In approving an accounting system design, we require that the agency have an effective internal audit program. We also suggest in our approval letters that the agency head have the accounting system reviewed from time to time by his internal audit organization to make sure it is functioning properly and in accordance with the approved design. We will not approve an.accounting system that does not have adequate internal controls to safeguard cash, property and other resources from fraud and abuse.
Since most Government accounting systems are computerized, this issue area has a close relationship to other issue areas involving A.D.Pe Good coordination has existed.
Public Law 84-863 of August 1, 1956, requires that agency accounting systems have adequate monetary property accounting records. Our accounting principles and standards deal with both expendable and nohexpendable property·. Hence there is a relationship of this issue area with issue areas dealing primarily with property and procurement.
With payrolling a part of this issue area, there is a close relationship with the issue area involving the management of Federal personnel. We have coordinated or worked closely with FPCD on several projects.
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When accounting and financial reporting deficiencies are identified during reviews in other issue areas, our auditors are expected and encouraged to expand their reviews to include the accounting systems coverage. Staff availability and budget allocations, of course, will need to be considered in these cases as well as coordinating the effort with the Financial and General Management Studies Division.
MAJOR PROBLEMS OR ISSUES
One of our major problems is to convince agencies of the need to qualify their accounting systems for approval by the Comptroller General.
Another problem is the infrequency with which we can check to see if approved systems are operating properly.
We lack a conceptual framework on which to base revisions to our accounting principles and standards for executive agencies. There are no. prescribed accounting principles and standards for Government corporations.
Increased emphasis needs to be given to working with Mr. Staats' seven subcommittees on consolidated financial statements for the Federal Government.
LONG RANGE OUTLOOK
Certain assignments performed under this issue area will be completed. Consolidated financial statements on the accrual basis will become a reality in a few years. A conceptual framework for Federal accounting principles and standards will be prepared. Other finite assignments will be accomplished.
But most of the work under this issue area is of a continuing nature based on statutes and must be performed as long as the government exists. Progress can and will be made. But next year's audit must be performed and last year's accounting system must be improved. Deficit spending must be curtailed in order that inflation can be controlled. Tighter controls mu~t be installed to reduce the incidence of fraud and abuse. The search to find ways to get the greatest benefit for the least expenditure is a never ending one.
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MAJOR LEGISLATION IMPACTING ON THE ISSUE AREA
Audits of accountable officers' accounts
The Act of May 19, 1947 (31 u.s.c. 82i) requires GAO to settle the accounts of accountable officers within 3 years from the date of the account. The settlement of accounts has been a function of GAO since its establishment in 1921 (31 u.s.C.71).
As a legal matter, 31 U.S.C. 82i and the other statutes governing GAO's settlement responsibilities require only that GAO insure effective control over, and accountability for, expenditure and revenue transactions.
In a decision of January 19, 1977 (B-161457), the Comptroller General indicated that neither accountable officers' accounts nor related financial management systems need be audited every 3 years. The type and frequency of audits necessary to insure effctive control and accountability can be determined after consideration is given to the effectiveness of accounting organizations and systems, internal audit and control, and related administrative practices of the agencies.
Accounting and Auditing Act of 1950
The Accounting and Auditing Act of 1950 establishes the following accounting responsibilites for the General Accounting Office:
1. Prescribing the accounting principles, standards, and related requirements to be observed by each executive agency.
2. Cooperating with executive agencies in the development of their accounting systems.
3. Approving executive agency accounting systems when deemed adequate and in conformity with the prescribed principles, standards, and · related requirements.
4. From time to time reviewing the accounting systems of the executive agencies in operation.
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Federal Property and Administrative Services Act of 1949
Section 202(b) of this act (40 u.s.c. 486(b)) requires each executive agency to maintain adequate inventory controls and accountability systems for the property under its control. Section 205(b) of the same act (40 u.s.c. 486(b)) gives the Comptroller General the responsibility for prescribing principles and standards of accounting for property and, among other things, directs the Comptoller General to report the Congress any failure to comply with such principles to and standards or to adequately account for property.
The Anti-Deficiency Act
This act, among other things, prohibits the making of obligations or expenditures in excess of apportionnments or administrative subdivisions of appropriations and impos~s the requirement that agencies report such occurrences to the President and t~e Congress.
Section 1311 of Supplemental Appropriation Act, 1955
This section (31 u.s.c. 200) prescribes criteria as to what constitutes an obligation for accounting and reporting purposes in the Federal Government.
The General Accounting Office has the responsibility for examining into whether the agencies are complying with the requirements of law that no amount shall be recorded or included in a report to the Congress or its committees as an obligation unless it meets the criteria set forth in section 13ll(a).
Government Corporation Control Act
In 1945, the Government Corporation Control Act established for the first time systematic congressional control and audit authority over Government corporations. The act provided that the ~udits were to be made in accordance with "principles and procedures applicable to corporate cbmmercial transactions." ·
The statutory requirement for audit of wholly-owned Government corporations is contained in 31 u.s.c. 850; the requirement to audit mixed-ownership Government corporations is established in 31 u.s.c. 857. The General Accounting Office is required to audit the activities of wholly-owned and mixed ownership Government corporations at least once every 3 years.
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The General Accounting Office is requtred to audit a number of government operations in addition to Government corporations. Some of these are subject to audit under the Government Corporation Act; others are audited in accordance with specific statutory requirements.
PRIORITY LINES OF EFFORT
Our overall purp'ose is to foster the development, implementation, and use of agency financial systems that give manager and operating personnel th~ information needed to (1) efficiently, effectively, and economically control public funds and resources and (2) use these funds and resources in ways ~hat the most product is produced at the least practicable cost. We used the following criteria in selecting our priority lines of effort to best achieve this goal.
--Statutory requirements to evaluate and approve designs of agency accounting systems and to render opinions on Government Corporation and agency financial statements.
--Since the statutory requirement to review from time to time the accounting systems of executive agencies leaves some flexibility the following criteria were used to select priority lines of effort in this area.
--The amount of Government funds and assets that selected agency accounting systems control and report to managers and operating personnel so they can effectively control, conserve and protect the resources.
--Indications, of major systems problems in such areas as:
--recovering the full cost of goods and services sold,
--paying employees the proper salaries,
--controlling and reporting appropriated funds, obligations, and payments, and
--controlling and reporting receipts and disbursements.
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--Areas of specific Congressional and Presidential interest in improving Federal financial management such as cash management.
--Areas of the private sector of the economy on which Federal regulations and methods of accounting have a significant impact like SEC's impact on private capital markets.
--Past experience which shows many systems do not produce useful financial information for use in the decisionmaking process.
--Indications that many agencies do not actually implement systems in accordance with the designs approved by GAO.
The following priority lines of effort have been approved:
Accounting and Financial Reporting
--Are Executive Agency Accounting System Designs Adequate and in Conformity with the Comptroller General's Principles, Standards, and Related Requirements?
--Do Government Corporation and Agency Financial Statements Present Fairly the Results of Operations, Financial Position, and Changes in Financial Position?
--Are Pricing, Billing, and Collection Systems Adequate to Insure that Amounts Owed the Federal Government are Fully and Promptly Collected?
--Do the Systems Provide Maximum Assurance that Agencies Do Not Overobligate and/or Overexpend Their Appropriations?
--Do Agency Accounting Systems Provide For Sound Cash Management?
--Do Agency Accounting Systems Provide for Adequate Financial Accounting and Control Procedures for Investment in Personal Property?
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FGMSD 2800
2801
2802
2803
2804
2805
2806
--Are Agency Internal Controls Over Receipts and Disbursements Adequate (Account Settlement Responsibility)?
- --Are Present Financial Reporting Systems Adequate to Disclose the Results of Government Operations and to Provide Useful Information to Agency Managers?
2810
2811
In addition, the following lines of .effort are recommended for priority status:
--Are Accounting Systems Implemented and Operating Consistent with the Design Approved by GAO?
--Do Agency Payroll Systems Ensure that Employees are Paid Accurately and Promptly and Prevent Unauthorized Payments?
--Does Securities and Exchange Commission Accounting and Financial Regulation for Publicly Held Companies Provide Adequate Disclosure for Investors and Promote Efficient Capital Markets?
NON-PRIORITY LINES OF EFFORT
--Are Agency Accounting and Financial Management Offices Organized to Maintain and Operate Effective Accounting Systems and are These Offices Staffed with Qualified People?
--Are too Many Financial Constraints Placed on Federal Managers to Operate Efficiently?
--What Changes to Procedures Should be Made Government-wide to Ensure Economical and Effective Utilization of Funds at Fiscal Year End?
--Are Agencies Adequately Planning Financial Management Systems?
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2812
2813
2814
2852
2853
2854
2855
--What Changes Should be Made to Legislation and/or Regulations to Simplify Accounting Requirements?
--Can Improvement be Made to Accounting Systems to Make Them operate More Efficiently in Processing Transactions and Generating Reports?
--Are the Accounting Principles and · Standards Prescribed by the Comptroller General Current and Complete, and are They Properly Interpreted and Applied by the Departments and Agencies?
--Are Reporting Requirements of Federally Chartered Corporations Adequately Met?
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2856
2857
2858
2859
CHAPTER 3
ARE EXECUTIVE AGENCY ACCOUNTING SYSTEM DESIGNS ADEQUATE AND IN CONFORMITY WITH THE
COMPTROLLER GENERAL'S PRINCIPLES, STANDARDS, AND RELATED REQUIREMENTS?
OBJECTIVES
The primary objective of this priority line of effort is to have the designs of all executive·agency accounting systems qualify for approval by the end of 1980.
PROGRESS AND PROBLEMS
During fiscal year 1978 we approved the designs of seven accounting systems but the percentage of approvals remained the same at 60 percent. It now appears that several departments and agencies will not have qualified their systems for approval by the end of 1980. While we have been hopeful that our goal could be met, unless Defense & HEW, particularly, act more promptly than they have in the past, there may be as many as 50 accounting systems remaining unapproved.
Of the 131 systems unapproved as of September 30, 1978, 70 percent are in Defense and HEW. More than one-half of the funds in the Federal Budget are accounted for by the unapproved systems in these two departments. These departments failed to design their accounting systems in accordance with the 1950 Act, as amended, and do not feel that the benefits they would now receive would justify the expense of redesigning their systems to comply with statutory requirements.
The Comptroller General had a luncheon meeting with Defense officials on November 27, 1978. Hopefully they will now design systems sufficiently adequate for our approval. On December 14, 1978, the Comptroller General wrote to the Secretary of Interior suggesting a similar luncheon meeting with officials of the Interior Department.
One of the best ways to prevent fraud and abuse from occurring is to remove the temptation in the original instance by having an approvable accounting system with tight controls. As the result of a lack of accounting control over property, the Department of Defense has no way of knowing how much property it may be losing because of theft, etc.
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As a commentator recently wrote:
"The amount of waste in any orga~ization, public or private, is usually in direct proportion to the efficiency of its accounting procedures. If the bookkeepers run a tight ship, carelessness is discouraged and the honest man is encouraged to stay that way. Poor management and sloppy accounting are open invitations to waste and corruption."
The approval of an accounting system cannot prevent fraud but the operation of an accounting system in accordance with that approval can do much to deter·.fraud.
WORK PLANNED
During the next 18 months we will be evaluating the designs of approximately 80 accounting systems. We have commenced the evaluation of over 50 systems. We anticipate about 30 more being submitted. The evaluation of all of these systems will not be completed during the period.
In addition, we will be giving consultative service on approximately 25 systems which are under development or are being redesigned.
-The revision of Titles 6 and 7 of the GAO Manual will be completed during this period, and Title 2 will be updated as necessary.
In the case of the D. C. Government, we will not only be evaluating the systems now being designed by contractors but we will be monitoring the implementation of the approved systems.
17
Civil departments and agencies:
Agriculture Commerce Energy Health, Education,
and Welfare Housing and Urban
Development Interior Justice Labor State Transportation Treasury Executive Off ice of
the President Independent agencies
Total
Percent
Department of Defense: Air Force Army Navy (including Marine
Corps) Defense agencies
Total
Percent
District of Columbia government
Total
Percent
STATUS OF ACCOUNTING SYSTEMS
Principles and standards
Approved Unapproved
17 8 5
31
l 13 13
2 8 8
19
4 56
185
98
34 22
60 21
137
100
1
3'23
99
1
1
1
3
2
3
1
Designs ~pproved Unapproved
11 7 4
6
l 9
10 2 5 7
18
4 44
128
68
23 10
27 7
67
49
195
60
7 1 2
25
4 3
3 1 l
13
60
32
11 12
33 14
70
51
1
131
40
Subject to
approval
a/18 - 8
6
31
1 13 13
2 8 8
19
4 ·57
188
100
34 22
60 21
137
100
.ell
326
100
a/Number of systems will be reduced to six when planned consolidations have been made.
£/Actual number of accounting systems not yet determined.
18
OBJECTIVE
CHAPTER 4
DO GOVERNMENT CORPORATION AND AGENCY FINANCIAL STATEMENTS PRESENT FAIRLY THE
RESULTS OF OPERATIONS, FINANCIAL POSITION AND CHANGE IN FINANCIAL POSITION?
To determine whether the financial· statements of government corporations and agencies adequately reflect the status of operations and funds and to report to the corporations and/or the Congress any irregularities or deficiencies.
STATUS
During the period July 1, 1977, to October 31, 1978, eight divisions issued 40 reports of Government corporations and agency financial statements. A total of 46 staff years was spent as compared with 56 planned staff years. Twenty ongoing assignments are listed in the Accountability section following the reports issued. Drafts of reports are reviewed by FGMS as lead division for this issue area.
PROBLEM
The Off ice of the General Counsel is drafting language for the Comptroller General's consideration which would give him authority to prescribe accounting principles and standards for government corporations. If such legislation is not secured, consideration should be given to revising the opinion statements in Chapter 16 of the Report Manual which refer, in the case of government corporations, to "principles and standards prescribed by the Comptroller General of the United States."
WORK PLANNED
In addition to completing the 20 ongoing assignments, it is expected that approximately 35 additional audits· will be commenced during the 18 month period. Most of the audits of Congressional activities are on an annual basis. We are encouraging the audit of government corporations only once every three years. The frequency of audit is often not determined until the current audit is completed.
19
CHAPTER 5
ARE PRICING, BILLING AND COLLECTION SYSTEMS ADEQUATE TO INSURE THAT AMOUNTS OWED THE
FEDERAL GOVERNMENT ARE FULLY AND PROMPTLY COLLECTED?
The primary objectives of this line of effort are to determine whether (1) agency accounting systems provide the necessary cost data to help insure that the Federal Government receives all amounts it is entitled to, and (2) OMB should provide better guidance to agencies on cost computations and charges made for goods sold and services provided to persons and organizations outside t~e Federal Government.
This area was selected as a priority line of effort because of the phenomenal growth of foreign military sales (back orders total $46e5 billion) and the increased emphasis on recovering user charges for various goods and services (back orders total $46.5 billion) and the increased emphasis on recovering user charges for various goods and services provided by the Federal Government.
Our reviews of foreign military sales have identified (1) hundreds of millions of dollars of unrecovered costs, (2) accounting errors and inconsistencies amounting to several billion dollars, and (3) overall weaknesses in. financial management. Our other work relating to pricing, billing and collecting systems also points out the need to continue work in this line of effort.
Defense and other government officials have expressed their concern over inadequate accounting and billing systems for goods and services sold outside the government. A high ranking Defense official recently assumed the role of a "whistleblower," and, in an article appearing in the July 24, 1978 issue of BUSINESS WEEK, he charges that there has been a serious breakdown in financial management of the foreign military sales program to the extent that Defense may have lost track of up to $30 billion in custome~s orders and that Defense has no assurance foreign governments are being properly billed for their purchases. There is little doubt that foreign military sales continues to be Defense's number one financial management problem.
PAST GAO EMPHASIS
During the past year, our reviews have continued to point out the inadequacy of pricing, billing, and collecting
20
systems Government-wide. This line of effort continues to be a high payoff area. Since 1976, our work has resulted in savings to the Government of about $300 million and in many improvements to financial management.
In April 1978, we reported that foreign governments were subsidized by as much as $107 million for selected sales because the governments were not charged for the use of Government-owned plant and equipment. The House Armed Services Committee is concerned about the nonrecovery of these costs and we are currently performing a follow-up review at its request. The House Appropriations Committee is also concerned and in its report on the Defense Department's fiscal year 1979 appropriation request the Committee indicated that if it has reason to believe that the asset use costs are not being recovered wheh Defense's 1980 budget is addressed, reductions will be made in Defense's direct programs.
Similar pricing and .cost recovery problems were identified during our other reviews of foreign military sales. We reported that:
--The full cost of administering the foreign military sales program was not being charged foreign governments as required by law and that Defense did not have an adequate system for accounting and reporting the actual number of personnel involved in the program and their cost.
--An estimated $69 million in costs were not charged foreign governments on selected sales of equipment and spare parts.
--Foreign governments were undercharged tens of millions of dollars because pricing requirements specified in Defense pricing instructions and intended by law were deliberately not followed.
We accomplished other important work under this line of effort during the past year. We reviewed the Army commissary accounting system and found that losses of $9.5 million had not been charged to customers as required. In our review of the Federal· payroll allotment program, we reported that the Government was not recovering any of the $5.6 million spent annually to process allotments for military personnel and for allotments for civilians working overseas.
21
CURRENT GAO EMPHASIS
The specific problems to be resolved by our current work are:
1. The inconsistent policies that prevail in recovering costs for goods and services sold, outside the Government.
2. The lack of good cost accounting systems in determining the cost of goods and services sold.
3. The nonrecovery of costs which should be recovered.
Our strategy in addressing these problems is to disclose through briefings and reports to the Congress the large sums of money that have been and will be lost because of inconsistent pricing policies and lack of good cost accounting. Through Congressional pressure and through our own contacts with OMB and agency officials we expect improvement in this area. The following summarizes our present efforts.
Three reviews in process, which are congressional requests, cover facets of pricing·, billing and collecting for foreign military sales. We have been asked to review the allegations by a high ranking Defense official (discussed earlier) that Defense has lost financial control of the foreign sales and on the recovery of normal inventory losses.
With the success we have had in the foreign sales area, we have begun a survey of accounting systems used by Federal agencies in computing charges for the sale of goods and services to entities outside the Government (commonly called user charges). OMB Circular No. A-25 provides instructions regarding accounting, billing and reporting of user charges. This circular has not been substantially revised since 1959. The objectives of the survey will be to determine (1) the adequacy of A-25, (2) if agency accounting systems help to insure that the Government receives all amounts it is entitled to, and (3) the usefulness of accounting reports and management information generated by the system. We will also identify specific user charges for review. ·
We are reviewing the collection systems for debts owed the Government by individuals and corporations. The balance· of debts owed the Government, which is presently $84 billion, has been increasing each year. We are also reviewing the Department of the Interior accounting system for the collection of oil and gas royalties.
22
FUTURE GAO EMPHASIS
Our effort in fiscal year 1979 will for the most part, concentrate on the considerable amount of work tha is now in process. Our survey on the adequacy of OMB Circular No. A-25 most likely will disclose additional deficiencies in accounting systems resulting in agencies failing to recover the full cost of goods and services from the public. As part of this survey, we plan to select a few major cost systems that are used for computing high dollar user charges.
We also plan to begin a survey of the accounting systems used for recovering Government inspections costs at contractor plants where the items inspected are to be sold commercially.
23
CHAPTER 6
DO THE SYSTEMS PROVIDE MAXIMUM ASSURANCE THAT AGENCIES DO NOT OVEROBLIGATE
AND/OR OVEREXPEND THEIR APPROPRIATIONS?
Section 9, Article I, of the Constitution reads in part
"* * * No money shall be drawn from the Treasury but in consequence of appropriations made by law; and a regular statement and account of the receipts and expenditures of all public money shall be published from time to time * * *."
To help guard against expenditures and obligations in excess of appropriations, the Anti-Deficiency Act was made law in the early part of this century. The act provides in part, that:
"No officer or employee of the United States shall make or authorize an expenditure from or create or authorize an obligation under any appropriation or fund in excess of the amount available therein * * *."
Under the Budget and Accounting Procedures Act of 1950, the head of each agency is responsible for establishing and maintaining systems to effectively control and account for funds and other assets for which the agency is responsible:
Our objective in this line of effort is to review agencies' accounting systems to determine the.adequacy of administrative control of funds at all levels to prevent incurrence of obligations or expenditures of funds in excess of what has been authorized.
This area was selected as a priority line of effort because of the continuing problems agencies are having in establishing adequate systems for administrative con~rol.
PAST AND CURRENT GAO EMPHASIS
The specific problem in this area is that many agency heads are not giving sufficient emphasis to establishing effective systems to control and account for funds and as
24
a result several agencies have overobligated their appropriations. We have reported serious breakdowns in the financial management systems of several departments and agencies including the Bureau of Indian Affairs of the Department of the Interior, the Department of the Army, and the Department of the Air Force. Most of the problems have been a result of accounting systems which are not producing information which is sufficiently accurate or timely to provide effective use and control of funds.
For example:
1. We reported on actions of the Bureau of Indian Affairs to reduce funds for Indian programs by about $7.6 million in fiscal years 1977 and 1978 ·rather than reduce its administrative costs as directed _by congressional committees. Also, certain conditions were identified which enable the Bureau to avoid reductions by congressional committees.
2. In 1976, we reported that due to an overall breakdown in the financial controls over its procurement accounts, and particula~ly the foreign military sales customer order program, the Army had overobligations totaling more than $225 million. Subsequently, we reported that $33 million of unsupported accounting adjustments improperly increased fund resources to an appropriation after the Army had determined that fund resource transfers authorized by the Congress were not sufficient to bring the account out of a deficit status. Since then, the Army has tried .to restore integrity to its financial management systems and has made progress in identifying actions needed to improve its accounting and reporting systems.
3. In November 1977, we reported that because the Air Force used improper accounting procedures for several years, it did not know the status of 18 procurement appropriations from fiscal years 1971 through 1976. The Air Force, therefore, could not determine whether obligations or expenditures were more than available fund resources in these accounts. Also, we reported that improper entries, totaling $7.5 million in 1976, were recorded to avoid revealing an overobligation in one procurement accoupt. Subsequently, the Air Force corrected some of the improper accounting procedures and reversed the improper entries.
We recently completed a review { FGMSD-79.-2, November 15, 1978) of the Navy's financial management problems in administering the foreign military sales program. We found that although the Navy used thousands of staff days to determine why the cash balance of the foreign military sales trust fund account does not agree with detailed military sales
25
case accounting records, differences in cash balances between the two sets of records remained unreconciled and totaled $554 million, as of June 1, 1978.
Our strategy in improving administrative control government-wide is to demonstrate in reports to the Congress why it is important for Agency heads to improve their accounting systems.
FUTURE GAO EMPHASIS
Various reviews in the past 2 years have confirmed that problems exist in the agencies' administrative control over funds. Lack of effective procedures to· periodically reconcile the status of appropriations, unsupported or improper accounting entries and other problems identify this area as one needing continued attention by our Office. We intend to continue our work in this area.
During the next year our objective will be to concentrate on the procedures used for yearend closings of accounting records and preparation of annual reports to certify the status of appropriations to OMB, Treasury, and the Congress. As a result of President Carter's recognition of the importance of public accountability OMB has required all departments and major agencies to update their fund control regulationse We plan an assignment in which our objective will be to test whether effective action is taken at DOD and major civil agencies to be selected.
26
CHAPTER 7
DO AGENCY ACCOUNTING SYSTEMS PROVIDE FOR SOUND CASH MANAGEMENT
This line of effort addresses Federal agencies' efforts to ensure that their accounting systems include adequate controls for sound cash management practices. It primarily deals with accounting procedures that can result in substantial reduction of the interest on the Public debt which will amount to more than $49 billion, o~ about 9 percent of the fiscal year 1979 Federal budget.
Federal agencies recognize that the accounting systems should include appropriate controls for ensuring sound cash management practices. The Department of Treasury has taken the lead in this area and has established regulations emphasizing the economics in controls that (1) require organizations getting Federal assistance to operate with minimum cash balances, (2) provide for prompt collections and deposits of amounts owed to the Federal Government, and (3) include safeguards against premature fund disbursements by Federal agencies. ·
We designated this a priority line of effort because of expressed congressional and Presidential interest in this and related areas and because our experience shows that there is continued need for many agencies to improve their cash management practices.
President Carter has placed a high priority in getting Federal agencies to improve their cash management practices. In 1977, he asked his reorganization staff to identify Federal cash management problems and recommend actions that could produce immediate improvements. Among other things, the staff was asked to identify incentives that would encourage Federal managers to consider cash management implications in their decisions.
The President's reorganization staff established a specific task force to look into the cash management. area. The task force has worked closely with our Financial and General Management Studies Division in developing recommendations to improve Federal agencies' cash management practices and has made extensive use of the Division's past reports in this line of effort. The close-working relationship has resulted in the Treasury Department taking more prompt and aggressive action to bring about improvements in Federal agencies' management practices. In an April
27
1978 report, the task force noted the significance of Treasury's action and said that the action$ taken since February 1977 should reduce interest cost on the public debt by more than $250 million in the next 2 fiscal years.
The task force's report stressed the need for continued efforts to improve Federal agencies' cash management and accounting practices. A major impediment to continued improvements is still a lack of financial incentives for the agencies to make changes that sometimes can be expensive. They must bear the costs of any improvements and any resulting benefits accrue directly to the Treasury Department which administers the public debt and budgets for related will continue making decisions in their cash management and accounting practices without adequate consideration of the impact of cash flow to and from the.Treasury.
This line of effort relates to many reviews undertaken by FGMS and other GAO Divisions. For such reviews, the GAO auditors should answer the following questions which emphasize the deficient cash management conditions in most Federal agencies.
--Do Federal agencies make aggressive efforts to collect accounts receivable?
--Are Federal cash receipts deposited in the Treasury in a timely manner?
--Do Federal agencies prematurely disburse cash to avoid having to return unused money to the Treasury--particularly under Federal grant programs?
--Does the letter-of-credit system include adequate monitoring by Federal agencies to identify and preclude premature drawdowns and maintenance of excessive cash balances by recipients of Federal assistance?
--What incentives can be established to prompt Federal managers to consider implications of cash management in their decisions?
PAST AND CURRENT GAO EMPHASIS
Under this line of effort, our objective has been to identify opportunities for Federal agencies to save the Government significant amounts of money by improving their cash management procedures and related aspects of their accounting systems. Our past efforts have shown how to save
28
millions of dollars by correcting a variety of cash management problems that are either discussed in_ past GAO reports or are being developed in current GAO revi~ws.
In the last 3 years, FGMS has issued reports deal-ing with cash management activities of several Federal agencies including the Department of Defense, the Department of Energy, and the Farmers Home Administration, as well as two Government-wide.reports. Additionally, other GAO divisions have issued reports discussing selected aspects of agency cash management that were developed during work under other lines of effort.
All the GAO reports emphasize that· weak cash management practices persist in most Federal agencies. The reports attribute this condition to a number of weaknesses and point out that Federal agencies' efforts are inadequate or ineffective to identify and correct cash management problems. The reports also point out the need for agency personnel to be educated in proper cash management controls and techniques, such as using cash-balance analyses that commercial banks provide to their customers and other available banking services that will expedite collection and control of disbursements.
The past reports have also mentioned that some State statutes or administrative requirements have hindered Federal agencies' efforts to effectively manage cash resources. For example, because of statutes or other requirements, some States require funds to be deposited in their ·Treasury before checks are written. This precludes using modern effective cash management techniques prevailing for years in private enterprise. States are reluctant to eliminate the impediments and much work will be necessary to educate and convince their key officials of the economic advantages in changing operations to permit modern management approaches, changes that would benefit both them and the Federal Government.
FGMS has several reviews in process in which attempts are being made to show State and Federal managers the economic advantages of sound cash management techniques. These reviews utilize the traditional approach to iqentifying accounting system improvements that can save large amounts of money and include activities of the Departments of Labor, Housing and Urban Development, and Defense. Other GAO divisions also have program-type reviews in process that consider various aspects of cash management at several different Federal agencies. For example, GGD is considering cash management techniques in its current study of the District of Columbia's municipal bond program.
29
FUTURE GAO EMPHASIS
GAO has made significant progress in promoting improvements in the cash management area but its efforts have been devoted primarily to a few Federal agencies. Many major Federal agencies must still be reviewed, and high on our priority list for future reviews are those agencies' systems controlling large collections and disbursements of money. Our future reviews will continue the strategy of identifying ways Federal agencies can save money by improving cash management practices. We plan to undertake at least three reviews each fiscal year that are' primarily devoted to this line of effort. The Federal agencies selected for review will be those controlling large amounts of Federal money and will be agencies whose cash management systems have not been rece~tly evaluated by GAO. Included in our plans for the current year are reviews of (1) Department of Treasury's system to control collections of over $20 billion annually in special excise, State, and gift taxes, (2) Department of Defense's agency-wide plan to improve its cash management, and (3) selected domestic agencies' systems for disbursing and monitoring Federal funds provided to States.
The planned reviews will continue to check on agency progress to improve cash management procedures and ensure that adequate controls exist to promote sound cash management practices. Our review objectives will be to emphasize the advantages of Federal agencies developing procedures that will permit organizations receiving Federal assistance to operate with little or no federal cash balances. Efforts will also be made to get States to revise legal or administrative impediments to management approaches, such as lettersof-credit procedures to advance cash, that will permit organizations to operate with minimum Federal cash balances and help reduce the interest on the public debt by millions of dollars.
30
CHAPTER 8
DO AGENCY ACCOUNTING SYSTEMS PROVIDE FOR ADEQUATE FINANCIAL ACCOUNTING AND CONTROL PROCEDURES
FOR INVESTMENT IN PERSONAL· PROPERTY?
Our objective in this line of effort is to ascertain if agency accounting systems provide for adequate financial accounting and control procedures over all personal property for which the agency is responsible. In reviewing this area, the specific problems or questions we will address are as follows:
1. Are agency financial property records adequate and are acquisitions and withdrawals properly accounted for?
2. Are controls sufficient to identify losses warranting investigations and are they made promptly and ef fectively?
3. Are records of Government equipment and material furnished to contractors adequate to assure material is properly accounted for, not held longer than needed, and redistributed when appropriate.
4. Are dollars amounts shown in the records represented by property on hand and are inventories taken at regular intervals, and are differences investigated?
5. Are financial reports on the acquisition, disposition, and status of property and inventories adequate, and used by management?
GOVERNMENT'S INVESTMENT IN PERSONAL PROPERTY
This area was selected as a priority line of effort because the Federal Government's investment in personal property is substantial and accounting for it appears to be inadequate or nonexist~nt. Personal property includ~s equipment materials, parts and supplies; in short, all property except land and buildings. At September 30, 1976, the Government's total investment in personal property as reported in financial statements was $240 billion. Of the $240 billion Defense accounted for almost $204 billion, or 85 percent. The value of Defense personal property had risen to about $214 billion at September 30, 1977. Weapons and military equipment in use account for about 65 percent of the dollar value of personal property.
31
PERTINENT LEGISLATION
Congress has recognized the need for accurate property accounting and full disclosure. The more important congressional enactments relating specifically to property accounting include:
--National Security Act of 1947, as amended,
--Federal Property and Administrative Services Act of 1949,
--Budget and Accounting Procedures Act of 1950, and
--Public Law 863, 84th Congress, August 1, 1956e
In general, these laws require that (1) agencies maintain adequate inventory control and accounting systems for property acquired and under their control, and (2) the Comptroller General report to the Congress any failure to adequately account for property.
PAST AND CURRENT GAO EMPHASIS
During fiscal year 1978, we were unable to carry out our property because of congressional request work and emphasis in other areas. In addition, regional offices could not provide staff when needed. The designation of this effort as priority 2 work contributed to the delay in staffing.
The work that was performed, however, has shown several weaknesses in Defense's accounting for personal property. For example,
--Defense lacks accounting control over property that meets GAO's principles and standards.
--There appears to be a lack of adequate accounting for Government-furnished equipment and material in the hands of contractors ..
--A substantial amount of supplies issued to operating units are not accounted for.
--There is a lack of consistency in methods used to value personal property. ·
32
It is important that we spend more time reviewing personal property accounting systems. One of our major reasons for withholding approval of 10 Defense systems is that serious deficiencies exist in the systems' designs for property accounting. The Services have taken the position that to change their systems to satisfy GAO requirements would not be cost effective. Our audits of property accounting systems in operation will be designed to demonstrate the adverse affects of not having adequate systems and thus plans for reviews of systems of accounting for personal may help convince Defense officials tha~ improvements should be made.
PLANNED ASSIGNMENTS
We are just completing an overall survey of accounting for personal property in the Department of Defense which amounts to over $200 billion. Based on the results of this survey we have formulated a detailed plan for audit areas.
Also, we will do some followup work on our 1976 report to the Congress which described major deficiencies in NASA's property accounting system. We will also start a survey of accounting control over personal property in selected civil agencies. The agencies we plan to cover in the survey are Agriculture, Commerce, HEW, Interior, DOT, GSA and V.A.
In the first three follow-on assignments we will cover:
1. Government furnished material 2. Government plant equipment 3. Supply consumables.
In performing the audits we will address the five questions appearing on page 31.
33
CHAPTER 9
ARE AGENCY INTERNAL CONTROLS OVER RECEIPTS AND DISBURSEMENTS ADEQUATE? (ACCOUNT SETTLEMENT RESPONSIBILITY)
A recent GAO report said the Federal Government is probably losing several billion annually through fraudu-lent activities. This condition strongly suggests that widespread problems exist with Federal agencies' internal controls over receipt and expenditure transactions. This line of effort deals with the adequacy of such internal controls and covers our efforts to meet account settlement responsibilities assigned to GAO by law.
This line of effort relates to almost one trillion dollars in Federal receipts and expenditures for fiscal year 1979, about $440 billion in receipts and $500 billion in expenditures. We have again given this line of effort a priority designation because of the significance of total receipts and disbursement transactions along with our legal responsibilities for auditing such transactions. This work will also disclose how vulnerable agency systems are to fraud and abuse.
As specified in the Accounting and Auditing Act of 1950, heads of Federal agencies are responsible for effective control over and accountability for all these funds as well as property and other assets in the agency. They have designated about 4,800 individuals to help control their agencies' disbursements. The individuals are referred to as certifying officers in civil agencies and disbursing officers in defense agencies. By law, they are responsible for the legality, propriety, and correctness of payments made in carrying out Federal programs.
This line of effort basically addresses the adequacy of Federal agency accounting systems and controls to prevent fraudulent or otherwise improper receipt and disbursement of money. Our past efforts showed most Federal agencies are striving to develop accounting systems .that can minimize the possibility of fraudulent or improper acts. Most systems, however, still lack internal controls that are basic to effective control over receipt and expenditure transactions. For example, many systems still provide for one or two employees to have complete control over financial transactionso Sometimes, these conditions have gone unnoticed because agencies' internal audit groups have not periodically audited the agencies' financial
34
management systems. FGMS is concerned about the continued lack of emphasis on reviews of agencies' internal controls, e?pecially in light of increasing reports of monetary losses and the recent fraud disclosures at GSA and other agencies.
FGMS believes effective internal controls provide management with reasonable assurances that receipts and disbursements of Federal funds are handled properly and work as a deterrent against fraudulent or irregular acts. We believe that many of the agencies' reported financial problems, such as an employee's embezzlement of $850,000 of Urban Mass Transportation Administration's funds, are related to ineffective control systems. Also, more frequent audit coverage of the systems may have identified the weaknesses before losses occurred.
Because of the need to provide greater coverage with limited resources, we asked our General Counsel about the extent of work required to meet GAO's account settlement responsibility. On January 19, 1977, our General Counsel said that it was no longer necessary to examine financial management systems of each agency every three years. More specifically, the decision said:
"* * *there is no legal requirement that each financial management system be examined within a 3-year or other period, as long as the information coming to our attention--whether through selective audits of financial management systems, general audits of Federal activities, or otherwise--presents an effective basis for concluding that the financial transactions of the Government are legal, proper, or correct."
As a result of this decision, we developed a new audit approach that enables us to review financial management systems quicker and with a minimum of resources. The approach utilizes a questionnaire to develop basic information on internal controls over receipts and expenditures in accounting systems and to identify system weaknesses in a relatively short time.
In addition to our traditional responsibilities under the 1950 Act, we are now required by Public Law 95-570, enacted on November 2, 1978, tq examine certain unvouchered expenditures of the President and Vice President and report any expenses not expended for the extended purpose. We are currently developing plans to carry out this new responsibility.
35
PAST AND CURRENT GAO EMPHASIS
Past and current GAO work on this line of effort has resulted in significant improvement in internal controls over Federal agencies' receipts and expenditures. For example, one report we issued resulted in the Coast Guard starting action to identify and collect overdue amounts of accounts receivable totaling over $5 million. Our past work primarily related to the Governments' civil agencies but we expanded our efforts to include Defense agencies at the direction of GAO's Program Planning Committee.
Our past strategy on this line of effort has been to make use of the questionnaires to identify control weaknesses in Federal agencies. The questionnaires have proven to be a successful approach and during fiscal year 1978, we used them to evaluate internal controls at three civilian agencies--the Drug Enforcement Administration, Food and Drug Administration, and the Department of Housing and Urban Development. Work at these agencies highlighted the need for major improvements in internal controls over receipts and expenditures. It also revealed the rieed for substantially better controls over agencies' fund obligations. Agencies' improvements to financial management systems will not only result in better control over funds but.also will improve the timliness of deposits of collections. Earlier deposits in the Treasury improves the Federal cash flow, thus ultimately decreasing Federal borrowings.
In last year's Program Planning Committee session on Accounting and Financial Reporting, we were asked to test the questionnaire at Defense agencies. We also were asked to prepare a paper describing our approach to satisfy the long-standing legislative mandate for the audit and settlement of accounts. We plan to submit this paper after we have tested the questionnaire at the Defense agencies currently under review. This will provide us an opportunity to include the results of our tests in our report to the Committee.
Currently, we have the following on-going assignments in which we are using the questionnaire audit approach.
1. Department of State
2. Employment Training Administration
3. Environmental Protection Agency
36
4. Health Services Administration
5. Army European Command
6. Military Airlift Command
7. Navy's Pacific Fleet
Results of our work to date on these assignments indicate that major improvements are needed in each of these agencies.
Recently FGMS also evaluated the effect of automated financial management systems on the role of certifying and disbursing officers. The supporting documents that these officers had available to verify the legality, propriety, and correctness with manual systems are usually not available with automated systems. These officers are usually handed a reel of magnetic tape and told, for example, that the tape represents the payroll for the agency. There is no way for accountability officers to physically verify the transactions. Because of the increasing use of computers by Government agencies to operate their financial management systems, GAO pointed out in a report to the Congress that there is a need to revise the approval being used to verify transactions in computerized payment systems in order to conform to modern technology (FGMS-76-82, November 7, 1977).
FUTURE GAO EMPHASIS
Better internal controls can, and generally do, result in more efficient, effective, and economical agency operations. They also can help to guard against monetary losses resulting from fraudulent or other irregular activities. Because of this and because of our legal responsibilities to settle accounts of Federal agencies' financial management systems, FGMS plans to continue its work in this important area to bring about improvements in agencies' systems of internal controls.
FGMS plans to continue to evaluate using the questionnaire approach to evaluate the adequacy of Federal agencies' internal controls over receipts and disbursements. We plan to review.agencies that disburse or receive large amounts of money from the public and emphasis will be placed on selected agencies with known control problems or with the types of receipt and disbursement transactions that are more susceptible to fraudulent activities. While we believe more agencies should be covered each year this is the maximum number of agencies that we can program with available resources. Until
37
we obtain the level of resources necessary to reduce the audit cycle to a more desirable level, aud~tors in all divisions should be alert to inadequate controls over receipts and expenditures when reviewing agency programs. These cases should be brought to our attention so we can assist other divisions, where necessary, in effecting improving internal controls.
The selection of agencies to be audited will continue to be based on several factors, including the type and extent of audit work ongoing or planned in an agency.
As part of the selection process, we coordinate with the FGMS Federal Audit Standards Group's scorekeeping system to determine the extent to which agencies under consideration receive internal audit coverage in the financial area. Only those agencies where internal audit coverage of the financial area is considered inadequate are selected for application of the questionnaire.
Internal controls are scheduled to be evaluated at several large ag~ncies such as the Internal Revenue Service, Federal Aviation Administration, Army Japan and Korean Commands, and the Air Force in Europe. These agencies' financial management systems are highly decentralized. Based on our experience, generally the more decentralized the financial management system, the greater the possibility that adequate internal controls do not exist.
One major review in this line of effort ~hich has been delayed for sometime is the review of u. s. Treasury's Central Accounting System, which includes the certification of the Treasurer's balance. This has been delayed because of the inability of the Washington Regional Office to provide staff. The responsibility for this audit was transferred to FGMSD from FOO by the Program Planning Committee. We plan to start the survey of this activity in fiscal year 1979 using FGMSD staff in the Systems in Operations Group.
38
CHAPTER 10
ARE PRESENT FINANCIAL REPORTING SYSTEMS ADEQUATE TO DISCLOSE THE RESULTS OF GOVERNMENT
OPERATIONS AND PROVIDE USEFUL INFORMATION TO AGENCY MANAGERS?
Agency accounting systems should produce and provide managers the financial information they need to (1) fully disclose the financial results of operations, (2) effectively control public funds and other resources to achieve work goals at the least practicable cost.
Our work objectives under this line of effort are to:
1. Contribute to the development of financial statements that will give the President, the Congress, and the general public a full and understandable picture of where the Government is financially.
2. Identify and develop solutions for common problems with agency accounting systems that prevent these systems from giving managers the information they need to effectively control resources and make sound operating decisions.
We made this work a priority line of effort because our past experience has shown that many agency accounting systems do not give managers the information needed to do their jobs. Our work strategy under the priority line of effort includes:
--Working with the Secretary of the Treasury's advisory committee to develop Government-wide consolidated financial statements.
--Reviewing on a Government-wide basis agency m~nagers' and operating personnels' use of the information provided by their accounting systems to (1) identify the kinds of information accounting systems should deliver but do not deliver, (2) identify common systems' problems causing these shortfalls in information, and (3) develop suggestions, on a Government-wide basis, for improving the usefulness and completeness of financial informaprovided to managers and operating personnel.
39
DEVELOPMENT OF GOVERNMENT-WIDE CONSOLIDATED FINANCIAL STATEMENTS
Yearly, the Federal Government produces thousands of financial reports. Only the few reports prepared by Treasury and the Office of Management and Budget attempt to show the overall financial condition of the Government. These reports do not give the public an understandable picture of Government's financial condition and results of operations because they deal primarily with cash balances, the public debt; and cash and budget surplus or deficit for the current fiscal year.
This shortfall in Federal financial reporting has been recognized, and the Treasury Department has a project underway to develop consolidated financial statements for the Federal Government on the accrual accounting basise These statement will show·all assets, liabilities, revenues and expenditures on a consolidated basis. The objective of the statements are to inform the:
--President and his financial advisors on the state of the nation's financial health so they can be better informed on the budget recommendations they make to Congress.
--Congress of the financial position of the nation so it can more intelligently legislate to meet the country's needs.
--Taxpayers where the country stands financially, particularly its liabilities, so they can bring such influence as they choose to bear on the legislative and executive branches.
The Secretary of the Treasury has asked the Comptroller General to serve as Chairman of an advisory committee formed to study major conceptual problems relating to the development and preparation of a reliable set of consolidated f inancial statements. These problems areas includes:
--defining the objectives of the statements,
--designing the formats of the statements,
--recording pension fund liabilities,
--reporting contingencies and commitments,
40
--valuing assets and recording depreciation,
--accruing tax receivables, and
--accounting for inflation.
In connection with GAO's participation on the advisory committee on consolidated financial statements for the · Government, we initiated another approach to reviewing accounting systems in operations which will enable us to examine the adequacy of financial reporting on a broad scale and, therefore, contribute to the Government's effort to produce reliable consolidated statements. This approach consists of selecting major financial statement line items--e .g., cash, property, receiv~bles, etc.,--and performing multiagency reviews of accounting system segments that control and account for these items. Our past, current, and future work under this approach is discussed in detail in the next section of this chapter.
Past and Current .GAO Emphasis
An external advisory committee has defined the objectives of Federal Consolidated Financial Statements, and various task groups are studying problem areas identified by that committee. During fiscal year 1979, many of the groups plan to present conclusions and recommendations to the interagency advisory committee. To date, prototype statements for fiscal year 1975, 1976, and 1977 have been issued. Two new task groups are expected to be formed--loan guarantees and insurance--in 1979.
Future GAO Emphasis
In the future, the interagency advisory committee will review the conclusions and recommendations presented by the task groups. The committee will decide whether more study is needed or whether sufficient information is available to produced informative consolidated financial statements.
USE OF FINANCIAL INFORMATION BY AGENCY MANAGERS
Agency accounting systems should produce information to help the manager:
--Plan and control agency operations.
--Decide on the best ways to use resources to achieve goals.
41
--Keep within appropriations and othe~ legal requirements.
--Safeguard agency resources.
--Evaluate accomplishments.
Our reviews of accounting systems, as well as other GAO reviews, show that the production and use of accounting data is an area which needs constant attention by both GAO and internal audit staffs. Many of our findings show that agency accounting systems are not providing Federal managers with the information they need, and some agency managers do not effectively use the accounting information they get. These weaknesses have resulted in violations of the Anti-Deficiency Act, loss of control over agency assets, and misleading reports on the financial results of agency operations.
This line of effort is closely related to our other priority lines of effort. In all of our reviews of systems in operation, we look into the adequacy of financial reporting when this work discloses (1) deficiencies in financial reports or (2) the failure of managers to use these reports in controlling resources and making program or operating decisions. In doing this, we consider financial reporting from the point of view of the specific aspect of the agency accounting operation being reviewed; e.g., asset control, costing, billing, collecting, etc.
Under this line of effort, our major thrust is to examine the adequacy and use of financial information on a broader and more concentrated basis. Our work will highlight the common system design problems that cause shortfalls in meeting managers' information needs and what can be done to make systems more responsive to managers' information needs.
area. We are using two main approaches in addressing this
--The first approach consists of selecting major financial statement line items such as cash, accounts receivable, loans receivable, property, accounts payable, revenues, etc., and reviewing on a multi-agency basis those pertinent parts of the accounting system that control, account for, and generate financial reports and analyses for these
42
items. In addition to keying on financial reporting, much of this work contributes to other priority efforts, such as adequacy of ~illing and collection efforts, timeliness of cash deposits, etc.
--The second approach involves looking at the techniques agencies use and the common problems they have encountered in designing, implementing, and using accounting systems to help their managers control resources and make sound operating decisions.
Past and Current GAO Emphasis
One review is complete and 2 reviews are underway under our first approach of reviewing accounting systems of major financial statement items.
Based on work at 12 agencies and other related GAO reviews we reported (FGMSD 78-61, Oct. 20, 1978), to the Congress that the Government needs to do a better job of collecting the $15 billion in accounts receivable owed by the public. The report was distributed Governmentwide. We identified the following accounting system and control weaknesses.
1. Inaccuracies of about $1.5 billion in accounting. for and reporting of accounts receivable.
2. A lack of prompt, aggressive collection action.
3. Low or no interest charges beihg imposed on delinquent accounts.
4. Inadequate or nonexistent provisions for uncollectible accounts.
We also said in this report that Federal managers need to make special efforts to strengthen financial management generally.
We are reviewing the loan accounting systems at the Law Enforcement Administration (continuing education lo~n to law enforcement personnel) and Veterans Administration (mortgage loans). We also surveyed the Bureau of Reclamation's loan system but did not convert that assginment to a review since the system appeared to be operating effectively.
Our review of LEAA's $300 million loan program is disclosing problems in the accounting system and program administration, including inaccurate accounts of loan recipients;
43
inadequate processing of loan collections; inadequate ADP system; and disbursements to nonqualifying recipients.
Our work at VA is showing the need for (1) better financial reporting of acquired properties and property sales, (2) improvements in managing loan collections, and (3) improvements improvements in establishing and servicing loans.
Under our second approach of looking at the techniques agencies use and the common problems they have encountered in their accounting systems efforts, we have considerable work underway, including:
--development of a booklet to give.Federal managers guidance in the effective use of financial information. The discussions and case studies in the booklet are drawn from our own work with agency accounting systems and from the experiences of agencies and consulting firms that help agencies design, operate, and use accounting systems in the management process. We believe this constructive booklet will be a very effective way for GAO to encourage (a) the effective use of financial information by managers and (b) the development and improvement of accounting systems that will provide managers with useful information. We have obtained comments on the draft from public accounting firms and professional organizations.
The booklet is in final processing.
--Review of the kinds of financial information and analyses produced by automated agency accounting system to determine (a) the extent to which these systems produce information and analyses that managers do not need and cannot use, (b) the common system design and control weaknesses that cause the unneeded and unusable information and analyses, (c) ways to correct the design and control weakness and improve the information given to managers, and (d) the amount of wasted ADP resources used to produce the unneeded and unusable financial information and analyses. This is a multi-agency review. The report will be distributed Governmentwide and will ask each agency to review its automated reports for need and usefulness. Work is currently underway at several military and civilian agencies. Results to date show that the agencies included in the review have serious problems with usefulness and need of the financial information and analyses produced by their automated accounting systems. Also, we will draw from oth~r GAO work to help
44
paint a Government-wide picture of the problems. This job will result in a signific~nt report to the Congress and will include Government-wide suggestions for improvin~ the usefulness and reliability of financial reports and analyses produced by automated agency accounting systems.
--Reviews of individual agency financial information systems. One such review is focused on the Defense Contract Administration Service's contract payment accounting system. This review has surfaced problems in classifying and reporting procurement costs, controlling appropriated funds, and·controlling and accounting for adjustments and corrections to the Service's accounting data. In another review, we reported to the Senate Committees on Armed Services and Appropriations that Defense had·not developed reliable systems to estimate the personnel required to administer the Foreign Military Sales Program nor had it included the full cost of employee benefits in calculating the costs of these personnel. As a result, Defense had no real basis for determining if all administrative costs of the program were being ·recovered.
Future GAO Emphasis
We will continue to look into the quality and use made of information coming out of agency accounting systems. Also, we encourage other GAO divisions to consider the adequacy of financial reporting in their program results and efficiency/ economy work. In this regard, we believe our forthcoming booklet on managerial use of financial information will be of interest and help to the other GAO divisions as well as to program and financial managers throughout the Government
We believe our approach of making Government-wide/multiagency reviews of major operating statement items has been an effective way of using our limited staff resources. We plan to expand this approach in the future. We plan to do additional work in the loans receivable area since our current efforts as well as past GAO work shows this to be an a~ea with good payback. Specifically, during the next 12 to 18 months, we plan to review loan systems at the Health Resources Administration and the Farmers Home Administration. At the completion of this work we will report either to the Congress or to the agencies on those specific reviews. Also, at the completion of this work, we exp~ct to have a good basis for developing an overall report to the Congress similar to the accounts receivable report issued recently and on which
45
hearings were held on December 18, 1978. In addition to our work in the loan accounting area, we w~ll be able to draw from work done by other GAO divisions or groups which showed financial management deficiencies in agencies such as SBA, EDA, and AID.
Also, under this approach we hope to complete reviews of a major liability item (probably accounts payable to the public) and revenue and expense items. In addition we will consider the feasibility of reviewing the accounting for advances to the public. We have not previously scheduled a review of that area because of other ongoing work in related areas such as letter-of-credit, grant closeouts, and the like. However, during fiscal year 1979, we will look at what work has been done or is in process and make a judgment as to whether further efforts in the area would be worthwhile.
We will continue to make selected reviews of the techniques used and problems encountered by agencies in developing and implementing accounting systems to serve managers' information needs. One such effort that we believe has considerable merit is to look at how well agencies are building sophisticated controls into their automated systems to enhance the reliability of financial information. Some of the better, more sophisticated controls include integrated test facilities, automatic selection of audit sample transactions and a single database of information common to more than one accounting/administrative function. With these types of controls, managers can have greater assurance that the information they get from their automated accounting systems and use to support day-to-day operating decisions is current, complete, and accurate.
46
CHAPTER 11
ARE ACCOUNTING SYSTEMS IMPLEMENTED AND OPERATING CONSISTENT WITH THE
DESIGN APPROVED BY GAO?--A PROPOSED NEW PRIORITY LINE OF EFFORT
The Accounting and Auditing Act of 1950 requires the Comptroller General to approve executive agency accounting systems when they are found to be adequate and in conformity with GAO's prescribed principles, standards, and related requirements. Our approval effort is aimed at helping assure that agency systems give managers and operating personnel the information they need to do their jobs.
GAO has committed significant resources toward this approval effort, which is granted in two stages, i.e., principles and standards are reviewed in the first stage, and the detailed design is reviewed in the second stage. The approval of designs sterns from GAO's evaluation of systems documentation. The evaluation for approval does not concern itself with the system as it actually works in practice.
For this reason, it is important that we have a continuing program to determine whether the systems have been implemented as approved and to help assure that resources spent by GAO and the agencies in the design and approval process actually result in better agency accounting.
There is a close relationship between this and our other lines of effort. However, reviews under this line of effort are designed to answer our main question: was the system actually implemented in accordance with the GAO approved design. As such, these reviews will generally require less than 200 staff days. If this work identifies major problems with the implemented system, such as inadequate controls over property, we would consider making separate detailed reviews of those problems under our other priority line of effort. To ensure that implemented systems are operating as described in the approved designs, the GAO letter approving each system suggests that the agency's internal aud~tors periodically review the system in operation.
We have kept track of internal audit reviews of approved accounting systems in operation at the Department of Defense. At September 30, 1978, GAO had approved 67 of 137 system designs. Of these 67, Defense internal audit agencies have reviewed 50.
47
Civil departments and agencies had 18S accounting systems at September 30, 1978, and GAO had approved the systems designs of 128. Information is not available as to the reviews made of these systems by agency internal audit departments.
We have selected this area as a priority line of effort to help ensure that the GAO approval process is meaningful and effective. We think it is necessary to make sure that approved systems are implemented and are operating in accordance with the approved designs.
To date, our experience with these types of reviews has shown them to be worthwhile and productive. For example, we reviewed the Navy industrial fund accounting system at the Naval Air Test Center, Patuxent River, Maryland, and found that the system in operation was not consistent with the approved design. The Navy was improperly transferring costs between customer orders. These transfers caused (1) distortion of costs of products and services, and (2) unauthorized and illegal reprogramming actions between appropriations. Our efforts resulted in the Navy implementing controls to help prevent improper cost transfers in all 14 Navy industrial fund activties.
In another review, we again found that the system in operation was not in conformance with the approved system design. At two naval shipyards, operational deficiencies caused significant distortions of amounts included in · general ledger account balances and financial statements.
During Fiscal Year 1979, we plan to review two civil and two defense approved systems. The two civil systems will be selected from the Department of Justice and Transportation. Our targets in Defense are the Air Force's base engineering system and the Defense Logistics Agency standard automated materiel accounting system.
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CHAPTER 12
DO AGENCY PAYROLL SYSTEMS ENSURE THAT EMPLOYEES ARE PAID ACCURATELY AND PROMPTLY AND PREVENT UNAUTHORIZED
PAYMENTS?--A PROPOSED NEW PRIORITY LINE OF EFFORT
Our objective in this new line of effort is to determine whether payroll systems in the Federal Government include procedures adequate to ensure that civilian and military employees are paid accurately and on time and that the sys-tems contain controls necessary to prevent unauthorized payments.
The Federal Government will spend an estimated $53.7 billion for civilian employee salaries and over $26.8 billion for military salaries during fiscal year 1979. Because of the large sums involved it is important that the Federal officials make sure that they have efficient and effective payroll systems.
Most salaries within the Federal Government are now paid through automated payroll systems. In recent years, much emphasis has been placed on standardization and consolidation of payroll systems so that now, one system operated at a single location, or a standard system operated at several locations, is used to pay many employees. For example, the Air Force and Army each use a single standardized payroll system to pay practically all assigned civilian employees.
Although important improvements have been made in salary payment systems, our recent efforts have disclosed serious implementation problems in several systems. For example:
1. Our ongoing survey of the civilian payroll system in the Military District of Washington indicates that the system is beset with implementation and operational problems. Four payroll fraud cases have been discovered in the past year and errors in pay calculation are common (as of July 15, 1978, the Secretary of the Army was overpaid in the amount of $7,700).
2. Our recent survey of the Navy's central military pay system (JUMPS) has shown that more than half of the pay calculations provided to disbursing officers by the mechanized system were in error and had to be changed at Navy paying stations~
49
Serious deficiencies in Federal pay systems were also disclosed in a recent congressional hearing. Overtime abuse and lack of accounting information to control overtime were problems cited in the hearing.
We believe that a priority line of effort covering Federal pay systems is warranted because of the large sums involved and the problems disclosed by our work and in congressional hearings.
PLANNED ASSIGNMENTS
During fiscal year 1979, we plan to cover individual military payroll systems in the services in more depth, and review one of the Navy's automated civilian payroll systems.
We also plan to audit civilian payroll systems at the Veterans Administration and the Department of Agriculture.
A detailed audit plan is now being prepared for reviews of military payroll systems. In this fiscal year we have initiated assignments covering:
1. Separation military pay (Defense-wide)
2. Navy's Joint Uniform Military Payroll System
3. Marine Corps' Joint Uniform Military Payroll System.
so
CHAPTER 13
DOES SECURITIES AND EXCHANGE COMMISSION ACCOUNTING AND FINANCIAL REGULATION FOR PUBLICLY HELD
COMPANIES PROVIDE ADEQUATE DISCLOSURE FOR INVESTORS AND PROMOTE EFFICIENT CAPITAL MARKETS?
A PROPOSED NEW PRIORITY LINE OF EFFORT
The creation of the Securities and Exchange Commission is a congressional response to the numerous abuses which existed in the capital markets and which contributed to the onset of the 1930's economic depression~ The Commission administers the following acts:
Securities Act of 1933 Securities Exchange Act of 1934 Public Utility Holding Company Act of 1935 Trust Indenture Act of 1939 Investment Company Act of 1940 Investment Advisers Act of 1940
The Commission's surveillance of the accounting, auditing, and financial reporting of publicly held companies is essential to achieving the objectives of the securities laws administered by the Commission. Commission regulation is inteded to (1) assure that "public" companies provide adequate financial disclosure to investors and (2) make and enforce the rules of the securities markets.
In 1977, 7 billion shares of stock at $187 billion were traded. Decisions to buy or sell securities rest upon confidence in the accuracy of financial data. Two recent instances in which financial standards for public companies were changed by recent legislation administered by the Commission are (1) accounting practices for oil and gas producers under Section 503 of the Energy Policy and Conservation Act and (2) the requirements for accurate accounting and adequate control systems under the Foreign Corrupt Practices Act.
The three Subcommittees most di~ectly concerned'with Commission affairs are (1) the Subcommittee on Oversight and Investigations, (2) the Subcommittee on Consumer Protection and Finance--both of the House Committee on Interstate and Foreign Commerce--and (3) the Subcommittee on Securities of the Senate Committee on Banking, Housing, and Urban Affairs. The oversight committees have broad interests in Commission programs. We have met with staff
51
members of these subcommittees and have considered subcommittees' views and priorities in developing our plans for future work.
We are proposing that reviews of the Commission's accounting and other regulation activities be designated as a priority line of effort. This regulation affects the economic decisionmaking of most of the country's largest businesses, their measurement of profit, and their operational reporting to the public. Our objective in this line of effort is to examine whether Commission regulation provides investors with adequate accounting and financial information and promotes efficiency in the capital markets. In carrying out our assignments we will consider whether the Commission is using regulatory means intended to stimulate a competitive regulatory climate and minimize the regulatory burden borne by parties falling within the Commissions' jurisdiction.
Our recent reporting dealt with the Commission 8 s regulation of public utility holding companies (FGMSD-78-7, Jan. 4, 1978) and its oversight of the National Association of Securities Dealers (FGMSD-78-65, Oct. 5, 1978). We are currently reviewing private placement financing, administration of the Foreign Corrupt Practices Act, oversight of the creation of the national market system, Commission contract procurement practices, and surveillance of accounting, auditing, and financial reporting of publicly held companies.
We completed a general survey of Commission activities in July 1978. The survey report set forth 17 areas meriting more detailed review, excluding areas then already under review. The 17 areas, as a very minimum, would take 26 staff years to complete. Currently, we are allotted 3 FGMS staff members and 3 field staff years to perform Commission reviews in fiscal year 1979.
To the extent that resources are available we will in the next 18 months start six reviews to address the following questions.
--How well do the Commission's regulatory policies formulated in the 1930's for financial disclosure by foreign companies deal with the nation's contemporary needs for investor protection and efficient capital formation?
52
--To what extent has the creation of the Municipal Securities Rulemaking Board (created in 1975) improved financial disclosure in municipal securities sales?
--Would a change from regulation by the Commission to self-regulation by the investment company industry encourage the development of more efficient and economical management of mutual funds?
--How well are the policies and procedures of the Commission coordinated with those of the bank regulatory agencies?
--Does the Commission's policy of primarily hiring attorneys enable it to adequately identify and resolve accounting problems?
--Regarding the criticisms that the Commission's ·policing of the markets are inefficient, uneven, violative of due process--are these criticisms justified and do they call for changes in the Commission's enforcement policies?
We recommend that the 6 staff years currently allocated to Commission reviews be transferred from non-issue area work to the Accounting and Financial Reporting issue area.
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CHAPTER 14
SIGNIFICANT LINES OF EFFORT (NON-PRIORITY)
The following lines of effort are classified as non-priority:
ARE REPORTING REQUIREMENTS OF FEDERALLY CHARTERED CORPORATIONS ADEQUATELY MET?
In 1959 the Chairman, House Judiciary Committee, asked, and GAO agreed to review audit reports submitted to the Committee by federally chartered corporations. GAO has been doing this ever since then, currently requiring about onehalf staff year to review 55 reports.
Public Law 88-504, August 30, 1964, as amended, sets forth the reporting requirements for federally chartered corporations--patriotic, civic improvement, charitable, and educational organizations, such as the American Legion, Boy Scouts of America, and Board of Fundamental Education, that were chartered by the Congress in separate legislation. It requires them to be audited annually in accordance with generally accepted auditing standards by certified public accountants or independent licensed public accountants.
When requested by the Committee, FGMSD examines the audited reports which are sent to the Comptroller General individually by the Committee Chairman as received. The reviews of the reports are generally restricted to desk reviews with the use of a check list of matters to be examined. Letter reports on the reviews are sent to the Committee Chairman generally signed by the Deputy Comptroller General.
No major problems have been encountered in this work in the past few years. Since this work annually involves only one-half staff year, we have not classified it as priority work and have no problem· staying up-to-date.
ARE AGENCY ACCOUNTING AND FINANCIAL MANAGEMENT OFFICES ORGANIZED TO MAINTAIN AND OPERATE EFFECTIVE ACCOUNTING SYSTEMS AND ARE THESE OFFICES STAFFED WITH QUALIFIED PEOPLE?
To be useful to managers, accounting information must be timely, sufficient, relevant, and accurate. If quality accounting information is to be produced, the agency's
54
accounting and/or financial management off ice must be organized properly and be staffed with qualified personnel.
The objectives of this line of effort include determining whether:
--Agency accounting and/or financial management off ices are organized to effectively and accurately process data.
--Chief financial executives have the required professional training to manage the accounting function.
--Agency personnel policies and practices are adequate to recruit and retain qualified accountants and financial management experts.
--Agency training programs for accounting/ financial management personnel are adequate.
Our work under some priority lines of effort has touched upon this area. For example:
--In our review of Geological Survey's oil and gas royalty collection system (2803), we plan to report that a consolidated royalty accounting off ice under a single manager is needed to help solve longstanding accounting, billing, and collection problems involving over $1 billion in royalty revenues.
--In our report on HEW's centralized payroll system (FGMSD-77-51, September 22, 1977), we recommended that the Department develop a mandatory training program for timekeepers.
--In our survey of DOD's policies and procedures used for designing and implementing accounting systems (2811), we will consider whether DOD personnel receive adequate training before assuming comptrollership functions.
ARE TOO MANY FINANCIAL CONSTRAINTS PLACED ON FEDERAL MANAGERS TO OPERATE EFFICIENTLY?
Past reviews of military industrial funds show that operations are being conducted· at higher costs than they should be because managers are prevented from (1) adjusting workforces commensurate with changes in demand for products because of personnel ceilings and constraints on reductions
55
of personnel, and (2) obtaining new and improved equipment because the equipment is financed out of appropriated funds rather than the industrial fund working capital.
To the extent that time and resources are available we will determine whether other agencies' operations are not being carried out at the lowest cost practicable because financial constraints are placed on agency managers similar to the constraints on managers of military industrial funds.
WHAT CHANGES TO PROCEDURES SHOULD BE MADE GOVERNMENT-WIDE TO ENSURE ECONOMICAL AND EFFECTIVE UTILIZATION OF FUNDS AT FISCAL YEAR END?
In the last month of the fiscal year, agencies often find they have unspent funds which would have to be returned to the Treasury if not obligated by year-end. As a result, in many agencies spending is considerably increased in the last month of the fiscal year. There is a question as to whether all the purchases made at this time are necessary. Agencies are reluctant to return funds to the Treasury and may be spending merely to avoid returning unspent funds.
No work was performed in this area in the past 16 months, but we intend to do so in the next 2 years, if time and resources permit. Under this line of effort, we would look at the need for legislative changes which would allow more flexibility in returning unobligated funds, possible additional OMB controls over year-end expenditures, effectiveness of agency control procedures over spending, and ways to improve financial information so that better estimates of funds use can be made.
ARE AGENCIES ADEQUATELY PLANNING FINANCIAL MANAGEMENT SYSTEMS?
The effectiveness of financial management systems depends to a great extent on adequate planning during the design, development, implementation, and operation of the system. Inadequate planning is a major cause of many system problems. Planning for financial management systems should be continuous through the life of the system from original perception of need through operation and eventual replacement. If too little effort is devoted to planning, essential details and factors may be overlooked, leading to costly changes in the design and development phases, delayed implementation, or poor system performance.
56
Here, we would look at such areas as qverall agency financial planning, policy, and guidance, involvement of users in establishing financial system requirements, development of system design, plans for phasing in the system, and the monitoring of system performance to ensure it continues to meet changing requirements.
We have two efforts underway under priority lines of effort that address some of these concerns.
--In our draft booklet entitled, "Managers. Your Accounting System Can Do A Lot For You" (2811), we discuss key questions managers should ask in evaluating the usefulness of and need for accounting systems output to help them run their programs. The answers to these questions will help agencies better plan for and develop effective systems.
--In our survey of DOD's policies and procedures used for designing and implementing accounting systems, (2811), we are addressing the adequacy of DOD's planning for systems development and implementation.
WHAT CHANGES SHOULD BE MADE TO LEGISLATION AND/OR REGULATIONS TO SIMPLIFY ACCOUNTING REQUIREMENTS?
Many accounting systems have been complicated by the need to accumulate data necessary to meet external reporting requirements. These external reports are often of no value to the originating agency and many of these reports may no longer be of value externally. Our emphasis in this area would be to evaluate whether existing statutes, regulations, and other requirements should be revised to eliminate
--unnecessary, duplicative, or extraneous reports required by higher management levels including the Congress,
--the current complex (possibly archaic) account structure used for receipts and disbursements.
We have not done any work in this area in the past 16 months. However, we hope to address this area during the next 2 years if resources are available. Also, we will continue to be alert in our priority work for opportunities to simplify accounting requirements.
57
CAN IMPROVEMENT BE MADE TO ACCOUNTING SYSTEMS TO MAKE THEM OPERATE MORE EFFICIENTLY IN PROCESSING TRANSACTIONS AND GENERATING REPORTS?
The cost to run computer-based accounting systems can be a significant part of total system costs. The Federal Government has invested heavily in computers including those that support accounting systems. The basic thrust of our work under this line of effort would be to determine (1) what financial services the Government is getting for its data processing dollars, and (2) whether the computerbased accounting systems can be improved or streamlined to operate more efficiently.
Several efforts under priority line of effort address these questions. For example:
--We reported to the Congress that under HUD's mortgage insurance programs, the Department and the mortgagees must spend a lot of time and money to correct premium billing errors made by HUD's automated accounting and billing system. (FGMSD-77-33, Sept. 8, 1977) (see 2803).
--In our multi-agency review of the production of unusable financial information (2811), we are also addressing the question of efficiency. In one agency, for example, 2 parallel accounting
. systems--one computer-based and one manual--are being run simultaneously for no apparent reason.
ARE THE ACCOUNTING PRINCIPLES AND STANDARDS PRESCRIBED BY THE COMPTROLLER GENERAL CURRENT AND COMPLETE, AND ARE THEY PROPERLY INTERPRETED AND APPLIED BY THE DEPARTMENTS AND AGENCIES?
Six statements of accounting principles and standards were approved by the Comptroller General during the fiscal year, two of them reapprovals, leaving only three accounting systems without approved principles and standards.
However, 55 accounting systems were approved prior to 1970 and undoubtedly are not current and complete as to principles and standards.
Most of the 131 unapproved accounting systems as of September 30, 1978, were not in compliance with the principles and standards pertaining thereto. Either the agencies had
58
not interpreted the principles and standards correctly or had not properly applied them to their accounting system designs. ·
59
ACCOUNTABILITY MODEL
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ts.
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
--
-----~--
---
·---
--·-
~---------
~EE rg~ ~ !_
~ :
~~vi:l__Q~eartrnents
Dep
art
men
t o
f A
gri
cu
ltu
re:
Ru
ral
Ele
ctr
ific
ati
on
A
dm
inis
trati
on
D
ep
art
men
t o
f C
om
mer
ce
(P.
& S
.)
Dep
art
men
t o
f In
terio
r:
Nati
on
al
Park
S
erv
ice
(P,
& S
.)
PRO
GR
AM
PL
AN
A
PPR
OV
AL
D
ATE
--
---------------
. -----
PE
RIO
D
CO
VE
RE
D:
10
/77
to
1
0/7
8
PLA
NN
ED
S
TA
FF
Y
EA
RS
-( E
ST
):·
-----5
5-----
AC
TU
AL
S
TA
FF
Y
EA
RS
: 5
4
PRO
GR
AM
MIN
G
f:ff v
1 s-I
ON
--
FGM
SD
°' N
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
Ind
ep
en
den
t A
gen
cie
s
Sm
all_
B
usi
ness
A
dm
inis
trati
on
: S
ure
ty
Bon
d G
uara
nte
e
Pro
gra
m
Nati
on
al
Tra
nsp
ort
ati
on
S
afe
ty
Bo
ard
(P
. &
S.)
A
CT
ION
C
on
sum
er
Pro
du
ct
Safe
ty
Co
mm
issi
on
(P
. &
S.)
C
om
mo
dit
y
Fu
ture
s
Tra
din
g .
Co
mm
issi
on
(P
. &
S.)
F
ed
era
l E
lecti
on
s
Co
mm
issi
on
(P
. &
S.)
Mil
itary
d
ep
art
men
ts
Dep
art
men
t o
f th
e
Air
F
orc
e:
Reta
il
Sto
ck
F
un
d
Dir
ect
Rep
ort
ing
D
ep
art
men
t o
f th
e
Arm
y:
Head
qu
art
ers
M
ate
riel
Dev
elo
pm
en
t an
d
Read
iness
C
omm
and
(DA
RC
OM
) F
un
ds
Dis
trib
tuio
n
Pro
cu
rem
en
t A
pp
rop
riati
on
s
Pro
gra
m
an
d
Fu
nd
C
on
tro
l C
om
mu
nic
ati
on
s C
omm
and
Fu
nd
s D
istr
ibu
tio
n
PRO
GR
AM
MIN
G
DIV
IS IO
N __
_
FGM
SD
FGM
SD
.,
()"\
w
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S -~----------------
D.
c. G
ov
ern
men
t A
gri
cu
ltu
re
Ju
sti
ce
AC
CO
UN
TA
BIL
ITY
M
OD
EL
Healt
h,
Ed
ucati
on
, an
d
Welf
are
S
tate
In
teri
or
Air
F
orc
e
Arm
y N
avy
D
efe
nse
A
gen
cie
s
IMPA
CT
ST
AT
EM
EN
T
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
Ou
r ex
peri
en
ce
has
sho
wn
th
at
tho
se
ag
en
cie
s
wh
ich
d
ev
ote
th
e
tim
e
and
effo
rt
req
uir
ed
to
d
esig
n
an
d
imp
lem
en
t a
go
od
ap
pro
vab
le
syst
em
g
en
era
lly
h
av
e
few
er
pro
ble
ms
and
are
ab
le
to
man
age
their
o
pera
tio
ns
mo
re effic
ien
tly
an
d
eco
no
mic
all
y.
It
is
seld
om
w
e h
av
e
to
rep
ort
a
majo
r p
rob
lem
wit
h
an
ap
pro
ved
sy
stem
.
WH
AT
IS
LE
FT
TO
B
E D
ON
E?
-------·------------
As
of
Octo
ber
31
, 1
97
8,
there
w
ere
1
31
u
nap
pro
ved
sy
ste
ms.
We
an
ticip
ate
th
at
ag
en
cie
s w
ill
qu
ali
fy
ab
ou
t 1
7
syst
em
d
esig
ns
for
ap
pro
val
this
fis
cal
year.
It
there
fore
se
em
s u
nli
kely
th
at
the
ag
en
cie
s w
ill
sub
mit
th
e
rem
ain
ing
sy
stem
s in
ti
me
for
us
to
meet
ou
r 1
98
0
go
al
of
hav
ing
each
co
mp
lete
d
syst
em
ap
pro
ved
at
least
on
ce.
Of
the
un
ap
pro
ved
sy
stem
s,
mo
re
than
70
p
erc
en
t are
in
D
efe
nse
an
d
HEW
.
0\ ~
AC
CO
UN
TA
BIL
ITY
M
OD
EL
----------------
ISS
UE
A
REA
LE
AD
D
IVIS
ION
Acco
un
tin
g
and
F
inan
cia
l R
ep
ort
ing
TIT
LE
O
F P
RIO
RIT
Y
FGM
SD
LIN
E--
OF
EF
FO
RT
:---
Do
G
ov
ern
men
t C
orp
ora
tio
n
----
----
-an
d
Ag
ency
F
inan
e ial
Sta
tem
en
ts
Pre
sen
t F
air
ly th
e
Resu
lts o
f O
per
ati
on
s,
Fin
an
cia
l P
osit
ion
, an
d
Ch
an
ges
in
Fin
an
cia
l P
osit
ion
?
-2
80
2
OB
JEC
TIV
ES
A
ND
PL
AN
NED
A
CC
OM
PLIS
HM
EN
TS
OF
--P
LO
E :-
-To d
ete
rmin
e-w
heth
er-
the
fin
an
cia
l ~~--Statements
of
Go
vern
men
t co
rpo
rati
on
s
and
ag
en
cie
s
ad
eq
uate
ly refle
ct
the sta
tus o
f o
pera
tio
ns
and
fu
nd
s,
and
to
re
po
rt
to
the
corpora~ion
an
d/o
r th
e
Co
ng
ress
an
y
irreg
ula
rit
ies o
r d
efi
cie
ncie
s.
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
--E
XA
MIN
AT
ION
O
F TH
E F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
FHA
IN
SUR
AN
CE
O
PER
AT
ION
S FO
R
THE
15-M
ON
TH
P
ER
IOD
EN
DED
SE
PTE
MB
ER
3
0,
19
76
(C
ED
-78
-95
, 4
-28
-78
)
--A
UD
IT
OF
CO
MM
OD
ITY
C
RE
DIT
C
OR
POR
AT
ION
FO
R
FIS
CA
L
YEA
R
19
77
(C
ED
-78
-91
, 4
-14
-78
)
PRO
GR
AM
MIN
G
DN
isr6
N
CED
CED
PRO
GR
AM
PL
AN
A
PPR
OV
AL
D
ATE
PE
RIO
D
CO
VE
RE
D:
7/7
7
to
10
/78
PL
AN
NE
D
ST
AF
F
YEA
RS
--(E
ST
) : --
--56
____
__ -
-
AC
TUA
L S
TA
FF
Y
EA
RS:
4
6
----------··
---
---
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HED
OB
JEC
TlvE
S O
F -L
fNE
.:oF
=E
FF
OR
T
Ex
amin
ed
FH
A's
fi
nan
cia
l sta
tem
en
ts
an
d
rep
ort
ed
th
at
an
o
pfn
ion
co
uld
n
ot
be
ex
pre
ssed
fo
r fi
scal.
year
19
76
.
Th
is
rep
ort
sta
ted
th
at,
b
ecau
se
of
the
un
iqu
en
ess
an
d
sco
pe o
f th
e
Co
mm
od
ity
C
red
it C
orp
ora
tio
n's
o
per
ati
on
s,
it
was
n
ot
pra
cti
cab
le
for
us
to
perf
orm
all
ex
am
inati
on
an
d
veri
fi
cati
on
ste
ps
necessary
to
re
ach
~n
ov
era
ll
op
inio
n
on
th
e
accu
racy
an
d
REM
AR
KS
Rep
ort
is
su
ed
to
th
e
Co
nq
ress
.
Th
e G
ov
ern
men
t C
orp
ora
ati
on
C
on
tro
l A
ct
. re
qu
ires
~-\
0\
Ul
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
--U
.S.
CA
PIT
OL
H
IST
OR
ICA
L
SO
CIE
TY
, 1
-31
-77
(G
GD
-78
-2
7,
1-9
-78
)
--H
OU
SE
M
INO
RIT
Y
PR
INT
ING
C
LE
RK
, FY
1
97
7
(GG
D-7
8-8
9,
8-9
-78
)
--S
EN
AT
E
RE
CO
RD
ING
S
TU
DIO
R
EV
OL
VIN
G
FUN
D,
FY
3-3
1-7
8
(GG
D-7
8-8
6,
8-3
-78
)
--S
ER
GE
AN
T
AT
AR
MS,
6
-30
-77
(G
GD
-78
-40
, 2
-22
-78
)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
--~------~~---------
PRO
GR
AM
MIN
G
DIV
ISIO
N
GG
D
GG
D
GG
D
GG
D
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
fNif
-OF
-EF
FO
RT
fair
ness
of
the C
orp
ora
tio
n's
fi
nan
cia
l sta
tem
en
ts at
Sep
tem
ber
30
, 1
97
7.
Ho
wev
er,
the C
orp
ora
tio
n's
acco
un
tin
g
meth
od
s p
rov
ided
a
sati
s
facto
ry
reco
rd o
f it
s
fin
an
cia
l tr
an
s
acti
on
s
and
it
s
fin
an
cia
l re
po
rtin
g
syst
em
w
as
ad
eq
uate
to
su
pp
ly
the
Co
rpo
rati
on
's
man
agem
ent
wit
h
info
rm
ati
on
fo
r co
nd
ucti
ng
it
s affair
s.
Ex
amin
ed S
ocie
ty's
re
co
rds
and
fi
nan
cia
l sta
tem
en
ts.
Ex
pre
ssed
o
ur
op
inio
n
on
th
e
fair
ness
of
the
sta
tem
en
ts.
Ex
amin
ed
Pri
nti
ng
C
lerk
's
reco
rds
and
fi
nan
cia
l sta
tem
en
ts.
Ex
pre
ssed
o
ur
op
inio
n
on
th
e
fair
ness
of
the
sta
tem
en
ts.
Ex
amin
ed S
tud
io's
re
co
rds
and
fi
nan
cia
l sta
tem
en
ts,
and
ex
pre
ssed
o
ur
op
iniq
n
on
th
e
fair
ness
of
the
sta
tem
en
ts.
Ex
amin
ed
fin
an
cia
l tr
an
sacti
on
s,
pre
pare
d
fin
an
cia
l sta
tem
en
ts,
and
ex
pre
ssed
o
ur
op
inio
n
on
th
e
fair
ness
of
the
sta
tem
en
ts.
REM
AR
KS
us
to
mak
e a
fin
an
cia
l au
dit
o
f th
e
Com
mo
dit
y C
red
it
at
least
ev
ery
3
years
. T
he
last
au
dit
co
vere
d
fiscal
year
19
74
o
pera
tio
ns.
Pu
bli
c
Law
-R
ep
ort
is
su
ed
to
th
e
Co
ng
ress
Pu
bli
c
Law
-R
ep
ort
is
su
ed
to
th
e
Co
ng
ress
.
Req
uest-
R
ep
ort
i.
ss·u
ed
to S
erg
ean
t at
Arm
s,
Sen
ate
Pu
bli
c
Law
-R
ep
ort
is
su
ed
to
th
e
Sp
eak
er
and
S
erg
ean
t at
Arm
s o
f th
e
Ho
use
°' "'
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
--H
OU
SE
R
EST
AU
RA
NT
R
EV
OL
VIN
G
FUN
O
(GG
0-7
8-6
5,
6-9
-78
)
--H
OU
SE
O
Ff I
CE
S
UP
PL
Y
SE
RV
ICE
, 1
97
7
(GG
D-7
8-3
3,
2-2
2-7
3)
--H
OU
SE
O
FF
ICE
E
QU
IPM
EN
T
SE
RV
ICE
, 1
97
7
(GG
D-7
8-4
, 2
-21
-78
)
--H
OU
SE
B
EA
UT
Y
SH
OP
, 1
97
7
(GG
D-7
8-6
4,
5-2
4-7
8)
~~~QQ~'!:ABI~IT~~OD~L
PRO
GR
AM
MIN
G
DIV
ISIO
N
GG
D
GG
D
GG
D
GG
D
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OJB
EC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
---------
Ex
amin
ed R
esta
ura
nt'
s fi
nan
cia
l re
co
rds
an
d
pre
pare
d
sta
tem
en
ts.
Ex
pre
ssed
o
ur
op
inio
n
on
th
e fa
irn
ess
of
the
sta
tem
en
ts.
Rec
om
men
ded
ch
an
ges
to
imp
rov
e in
tern
al
co
ntr
ols
.
Ex
amin
ed S
erv
ice's
fi
nan
cia
l re
co
rds
an
d
pre
pare
d
fin
an
cia
l sta
tem
en
ts.
Do
cum
ente
d
imp
rov
em
en
ts
in
inv
en
tory
co
ntr
ols
an
d
ex
pre
ssed
o
ur
op
inio
n
on
fa
irn
ess
of
the sta
tem
en
ts.
Rev
iew
ed
E
qu
ipm
en
t S
erv
ice acti
vit
ies
an
d
pre
pare
d sta
tem
en
ts
on
o
pera
tin
g
co
sts
an
d
eq
uip
men
t acco
un
tab
ilit
y.
Ex
amin
ed
Sh
op
0s
fin
an
cia
l re
co
rds,
pre
pare
d sta
tem
en
ts,
an
d
ex
pre
ssed
o
ur
op
inio
n
on
th
e fa
irn
ess o
f th
e
sta
tem
en
ts.
REM
AR
KS
Req
uest-
R
ep
ort
is
su
ed
to
C
hair
man
, C
om
mit
tee
on
H
ou
se
Ad
min
istr
ati
on
Req
uest-
R
ep
ort
is
su
ed
to
C
lerk
o
f th
e
Ho
use
Req
uest-
R
ep
ort
is
su
ed
to
C
lerk
o
f th
e
Ho
use
Req
uest-
R
ep
ort
is
su
ed
to
C
hair
pers
on
, S
ele
ct
'·
· C
om
mit
tee
on
th
e
Beau
ty
Sh
op
~
.....,J
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
--H
OU
SE
R
EC
OR
DIN
G
ST
UD
IO
RE
VO
LV
ING
FU
ND
, FY
3
-31
-78
(G
GD
-78
-90
, 8
-8-7
8)
--S
EN
AT
E
RE
STA
UR
AN
TS
RE
VO
LV
ING
FU
ND
, FY
1
97
7
(GG
D-7
8-6
8,
5-3
1-7
8)
--A
UD
IT
OF
JOH
N
F.
KEN
NED
Y
CE
NT
ER
FO
R
TH
E
PER
FOR
MIN
G
AR
TS
(GG
D-7
8-1
5,
12
-20
-77
)
--F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
BU
REA
U
OF
EN
GR
AV
ING
A
ND
P
RIN
TIN
G
FUN
D
(GG
D-7
8-6
7,
7-5
-78
)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
GG
D
GG
D
GG
D
GG
D
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Ex
amin
ed S
tud
io's
re
co
rds
an
d
fin
an
cia
l sta
tem
en
ts
an
d
ex
pre
ssed
o
ur
op
inio
n
on
th
e fa
irn
ess
of
the sta
tem
en
ts.
Ex
amin
ed
Resta
ura
nt'
s fi
nan
cia
l re
co
rds,
pre
pare
d
sta
tem
en
ts,
an
d
ex
pre
ssed
o
ur
op
inio
n
on
th
e
fair
ness
of
the sta
tem
en
ts.
Ex
am
ined
th
e acco
un
ts o
f th
e
Ken
ned
y
Cen
ter
for
the
Perf
orm
ing
A
rts,
ex
pre
ssed
o
ur
op
inio
n
on
th
e co
nti
nu
ing
ab
ilit
y o
f th
e
Cen
ter
to
pay
it
s
sh
are
o
f fu
ture
o
pera
tin
g co
sts
an
d
wh
eth
er
the
co
st
sh
ari
ng
fo
rmu
la
betw
een
th
e
Nati
on
al
Park
S
erv
ice
an
d
the
Cen
ter
fair
ly
an
d
accu
rate
ly refle
cts
th
e
use
o
f th
e b
uil
din
g.
Ex
am
ined
th
e
Bu
reau
o
f E
ng
rav
ing
an
d
Pri
nti
ng
F
un
ds
reco
rds
an
d
f ln
an
cia
l sta
tem
en
ts.
Ex
pre
ssed
o
ur
op
inio
n
on
th
e
fair
ness
of
the
sta
tem
en
ts.
REM
AR
KS
Req
uest-
R
ep
ort
is
su
ed
to
C
lerk
o
f th
e
Ho
use
Pu
bli
c
Law
-R
ep
ort
is
su
ed
to
A
rch
itect
of
the
Cap
ito
l
Pu
bli
c
Law
9
4-1
19
-R
ep
ort
is
su
ed
to
th
e
Co
ng
ress
Act
of
Au
gu
st
4,
19
50
, en
u.
s. c
. 1
81
) -
Rep
ort
:i
ssu
ed
to
th
e
Co
ng
ress
°' 00
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
--M
AJO
RIT
Y
PR
INT
ING
C
LE
RK
, FY
8
-31
-77
(G
GD
-78
-88
, 8
-9-7
8)
--H
OU
SE
F
INA
NC
E
OF
FIC
E,
lS~MONTH
PE
RIO
D
EN
DE
D
9-3
0-7
7
(GG
D-7
8-9
4,
8-1
4-7
8)
--U
.S.
CA
PIT
OL
H
IST
OR
ICA
L
SO
CIE
TY
--1
97
8
(GG
D-7
9-2
, 1
2-5
-78
)
--S
ER
GE
AN
T
AT
A
RM
S,
YEA
R
EN
DIN
G
6-3
0-7
8
(GG
D-7
9-1
, 1
0-1
8-7
8)
--H
OU
SE
O
FF
ICE
E
QU
IPM
EN
T
SE
RV
ICE
--1
97
8
(GG
D-7
9-3
, 1
1-2
8-7
8)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
GG
D
GG
D
GG
D
GG
D
GG
D
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Ex
am
ined
P
rin
tin
g C
lerk
's
reco
rds
an
d
fin
an
cia
l sta
tem
en
ts.
Ex
pre
ssed
o
ur
op
inio
n
on
th
e fa
irn
ess o
f th
e
sta
tem
en
ts.
Ex
am
ined
F
inan
ce O
ffic
e re
co
rds,
rev
iew
ed
fi
nan
cia
l tr
an
sacti
on
s,
an
d
pre
pare
d fi
nan
cia
l sta
tem
en
ts.
Ex
pre
ssed
o
ur
op
inio
n
on
th
e fa
irn
ess
of
the sta
tem
en
ts.
Ex
am
ined
S
ocie
ty's
re
co
rds
an
d
fin
an
cia
l sta
tem
en
ts.
Ex
pre
ssed
o
ur
op
inio
n
on
th
e fa
irn
ess
of
the
sta
tem
en
ts.
Ex
amin
ed
fin
an
cia
l tr
an
sacti
on
s,
pre
p
are
d fi
nan
cia
l sta
tem
en
ts,
an
d
ex
pre
ssed
o
ur
op
inio
n
on
th
e fa
irn
ess
of
the
sta
tem
en
to
Rev
iew
ed
E
qu
ipm
en
t S
erv
ice acti
vit
ies
an
d ~repared
sta
tem
en
ts
on
o
pera
tin
g
co
sts
an
d
eq
uip
men
t acco
un
tab
ilit
y.
REM
AR
KS
Pu
bli
c
Law
-R
ep
ort
is
su
ed
to
th
e
Co
ng
ress
Req
uest-
R
ep
ort
is
su
ed
to
C
lerk
o
f th
e
Ho
use
Pu
bli
c
Law
-R
ep
ort
is
su
ed
to
th
e
Co
ng
ress
Pu
bli
c
Law
-R
ep
ort
is
su
ed
to
th
e
Sp
eak
er
an
d
Serg
ean
t at
. A
rms
of
the
Ho
use
Req
uest-
R
ep
ort
is
su
ed
to
C
lerk
o
f th
e
Ho
use
°' \0
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
PRO
GR
AM
MIN
G
DIV
ISIO
N
--A
UD
IT
OF
FIN
AN
CIA
L
ST
AT
E-
FOO
M
EN
TS
-DIS
AB
LE
D
AM
ERIC
AN
V
ET
ER
AN
S--
1976
--R
EV
IEW
O
F F
INA
NC
IAL
S
TA
TE
-FO
O
MEN
TS
OF
ST
. LA
WR
ENC
E SE
AW
AY
D
EVEL
OPM
ENT
CO
RPO
RA
TIO
N
FOR
C
ALE
ND
AR
Y
EAR
1
91
6
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
FO
O
STA
TE
ME
NT
S O
F ST
UD
EN
T
LOA
N
FUN
D,
FIS
CA
L
YEA
R
19
76
-~EXAMINATION
OF
FIN
AN
CIA
L
STA
TE
ME
NT
S O
F FE
DE
RA
L
PR
ISO
N
IND
US
TR
IES
, IN
C.,
FO
R
FIS
CA
L
YEA
R
19
76
FOO
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
·
FOO
ST
AT
EM
EN
TS
GO
VER
NM
ENT
PR
INT
ING
O
FF
ICE
-
FIS
CA
L
OF
FIC
E
19
76
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
FO
O
STA
TE
ME
NT
S O
F FE
DE
RA
L
HO
ME
LOA
N
BA
NK
B
OA
RD
A
ND
R
EL
AT
ED
A
GE
NC
IES
FOR
T
HE
Y
EAR
EN
DED
D
ECEM
BER
3
1,
19
76
--S
UP
ER
VIS
ION
O
F B
AN
KS
BY
TH
E
FOO
FE
DE
RA
L
DE
PO
SIT
IN
SUR
AN
CE
C
OR
POR
AT
ION
C~N
BE
MO
RE
EF
FIC
IEN
T
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
-J
a
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
R
EPO
RT
S O
R
OTH
ER
OU
TPU
T
PRO
GR
AM
MIN
G
DIV
ISIO
N
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
FO
O
STA
TE
ME
NT
S O
F N
AT
ION
AL
C
RE
DIT
U
NIO
N
AD
MIN
IST
RA
TIO
N
FOR
T
RA
NS
ITIO
N
QU
AR
TER
A
ND
F
ISC
AL
Y
EAR
1
97
7
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
FO
D
STA
TE
ME
NT
S O
F FE
DE
RA
L
PRIS
ON
IN
DU
ST
RIE
S,
INC
.,
FOR
TH
E T
RA
NS
ITIO
N
QU
AR
TER
EN
DED
SE
PTE
MB
ER
--E
XA
MIN
AT
ION
O
F IN
TE
R
AM
ERIC
AN
FO
UN
DA
TIO
N
ST
AT
E
MEN
TS
FOR
TH
E 15
-MO
NT
H
PE
RIO
D
END
ED
9-3
0-7
6
(ID
-77
-43
, 8
-12
-77
)
ID
--E
XA
MIN
AT
ION
O
F F
ISC
AL
Y
EAR
S ID
7
5
& 7
6
STA
TE
ME
NT
S O
F O
VE
RSE
AS
PRIV
AT
E
INV
EST
ME
NT
C
OR
POR
A-
TIO
N
(ID
-77
-24
, 9
-7-7
7)
--O
PIN
ION
O
N
EX
IMB
AN
K'S
FY
ID
1
97
7
STA
TE
ME
NT
S (I
D-7
8-9
, 1
-3-7
8)
--O
PIN
ION
O
N
OV
ER
SEA
S PR
IVA
TE
ID
IN
VE
STM
EN
T
CO
RPO
RA
TIO
N
FY
19
77
(I
D-7
8-1
2,
1-1
6-7
8)
--E
XA
MIN
AT
ION
O
F E
XIM
BA
NK
'S
ID
STA
TE
ME
NT
S FO
H
FY
19
77
(I
D-7
8-3
4,
5-3
-78
)
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
R
EMA
RK
S
Pu
bli
c
Law
Pu
bli
c
Law
Pu
bli
c
Law
Pu
bli
c
Law
Pu
bli
c
Law
........
.........
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
R
EPO
RT
S O
R
OTH
ER
OU
TPU
T
--O
PIN
ION
O
N
FIN
AN
CIA
L
ST
AT
E
ME
NT
S,
BO
AR
D
OF
DIR
EC
TO
RS
, G
OR
GA
S M
EMO
RIA
L IN
ST
ITU
TE
(ID~78-38,
5-1
1-7
8)
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
OV
ER
SEA
S PR
IVA
TE
IN
VE
STM
EN
T
CO
RPO
R
AT
ION
FO
R
YEA
R
END
ED
9-3
0-7
7
(ID
-78
-36
, 6
-7-7
8)
PRO
GR
AM
MIN
G
DIV
ISIO
N
ID
ID
--L
ET
TE
R
RE
POR
T
TO
BO
AR
D
OF
ID
DIR
EC
TO
RS
, G
OR
GA
S M
EMO
RIA
L 7
-24
-78
(M
AN
AG
EMEN
T L
ET
TE
R)
--L
ET
TE
R
RE
POR
T
TO
FIN
AN
CIA
L
VIC
E
PR
ES
IDE
NT
, PA
NA
MA
C
AN
AL
CO
MPA
NY
, 8
-22
-78
(M
AN
AG
EMEN
T L
ET
TE
R)
ID
--U
SE
O
F EX
CH
AN
GE
ST
AB
ILIZ
AT
ION
ID
FU
ND
R
ESO
UR
CE
S--A
RR
AN
GE
ME
NT
W
ITH
T
RE
ASU
RY
PR
OV
IDE
S A
CC
ESS
TO
IN
FOR
MA
TIO
N
(ID
-77
-42
, 9
-28
-77
)
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
ID
ST
AT
EM
EN
TS
OF
TH
E
PAN
AM
A
CA
NA
L C
O.
AN
D
ZON
E G
OV
ERN
MEN
T FO
R
FYT
1
97
6,
TQ
AN
D
FY
19
77
(I
D-7
8-6
1,
11
-30
-78
)
--A
LA
SK
A
POW
ER
AD
MIN
IST
RA
TIO
N--
EMO
F
INA
NC
IAL
M
AN
AG
EMEN
T A
ND
PR
OG
RA
M
OPE
RA
TIO
NS
(EM
D-7
8-1
, 1
2-2
0-7
7)
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Th
is re
po
rt
was
G
AO
's fir
st
au
dit
o
f th
e
Ala
ska
Po
wer
A
dm
inis
trati
on
's
po
wer
o
pera
tio
ns.
It
co
nclu
ded
th
at
the
fin
an
cia
l sta
tem
en
ts fair
ly
pre
sen
ted
th
e
.
REM
AR
KS
-----·
Pu
bli
c
Law
Pu
bli
c
Law
Pu
bli
c
Law
Rep
ort
to
th
e
Co
ng
ress
.........
N
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
STU
DE
NT
LO
AN
FU
ND
, F
ISC
AL
Y
EAR
1
97
7
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S
HR
D
AC
CO
MPL
ISH
ED
O
BJE
CT
IVE
S
OF
LIN
E-O
F-E
FF
OR
T
fin
an
cia
l p
osit
ion
o
f th
e
Ala
ska
Fed
era
l P
ow
er
Pro
gra
m at
Jun
e
30
, 1
97
5,
and
Ju
ne
30
, 1
97
6;
the
fin
an
cia
l re
su
lts
of
its
po
wer
op
era
tio
ns:
and
th
e
ch
an
ges
in p
osit
ion
fo
r th
e y
ears
th
en
en
ded
in
co
nfo
rmit
y w
ith
acco
un
tin
g
pri
ncip
les
an
d
sta
nd
ard
s p
rescri
bed
b
y
the
Co
mp
tro
ller
Gen
era
l o
f th
e
Un
ited
S
tate
s.
Th
e le
tter re
po
rt
to
the S
ecre
tary
o
f H
EW
sum
mari
zed
o
ur
co
nti
nu
ing
co
ncern
o
ver
the
inab
ilit
y o
f O
E's
acco
un
tin
g
an
d
co
mp
ute
r sy
stem
to
p
rov
ide accu
rate
in
form
ati
on
n
eed
ed
fo
r o
pera
tin
g
the
pro
gra
m
an
d
pre
pari
ng
fi
nan
cia
l sta
tem
en
ts.
Th
e tt
bu
se
Co
mm
itte
e
on
E
du
cati
on
an
d
Lab
or,
S
ub
co
mm
itte
e
on
P
ost
seco
nd
ary
E
du
cati
on
: H
ou
se
Co
mm
itte
e
on
G
ov
ern
m
en
t O
pera
ti
on
s,
Su
b
co
mm
itte
e
on
In
ter
go
vern
men
tal
Rela
tio
ns
an
d
Hum
an
Reso
urc
es,
h
av
e
ex
pre
s
sed
co
ncern
o
ver
OE
's
inab
ilit
y
to
dev
elo
p
a d
ata
sy
stem
th
at
wil
l
_,
w
RE
VIS
ION
S
-PA
GE
92
(R
ev
ised
)
MA
JOR
ON-~OlNG
ASS
IGN
ME
NT
S
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
OIV
IStb
N
HOW
'AN
D
TO
WH
AT
EXTE
N'l"
H
AS
TH
IS
WOR
K R
EMA
RK
S A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F LINe~OF'
EFF
OR
T
pro
vid
e
accu
rate
in
form
ati
on
o
n
the
GSL
p
rog
ram
. S
taff
m
em
bers
o
f th
ese
sub
co
mm
itte
es
hav
e
said
th
at
this
re
po
rt p
ro
vid
es
a g
oo
d
ov
er
vie
w o
f th
e
co
nti
nu
ing
p
rob
lem
. 'l
'he
Secre
ta
ry,
HEW
, ag
reed
w
ith
th
e
co
nte
nt
of
the
rep
ort
an
d
was
co
n
cern
ed
o
ver
the o
pera
ti
on
o
f th
e
GSL
p
rog
ram
. A
task
fo
rce
wil
l b
e set
up
to
lo
ok
in
to
the
pro
ble
ms.
........ ~
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
--R
EV
IEW
O
F F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
TH
E
NA
TIO
NA
L
FLO
OD
IN
SUR
AN
CE
PR
OG
RA
M
-F
ISC
AL
Y
EAR
1
97
7
--E
XA
MIN
AT
ION
O
F T
HE
F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
FHA
IN
SUR
AN
CE
O
PER
AT
ION
S FO
R
FIS
CA
L
YEA
R
19
78
--IN
TE
RIM
E
XA
MIN
AT
ION
O
F T
HE
G
OV
ERN
MEN
T N
AT
ION
AL
M
OR
TGA
GE
AS
SO
CIA
TIO
N
FIS
CA
L
YEA
R
19
78
F
INA
NC
IAL
D
ATA
--A
UD
IT
OF
FED
ER
AL
C
RO
P IN
SUR
AN
CE
C
OR
POR
AT
ION
, A
CC
OU
NTS
A
ND
F
INA
NC
IAL
ST
AT
EM
EN
TS,
F
ISC
AL
Y
EAR
1
97
8
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
CE
D
CE
D
CE
D
CED
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Ex
am
inati
on
o
f th
e
Flo
od
In
su
ran
ce
Pro
gra
m's
fi
nan
cia
l sta
tem
en
ts.
Th
is
wil
l b
e
the la
st
au
dit
in
vo
lvin
g
the
Nati
on
al
Flo
od
In
su
ror'
s A
sso
cia
tio
n
(a m
ajo
r co
ntr
acto
r u
nd
er
the
pro
gra
m).
F
utu
re au
dit
s w
ill
inv
olv
e E
lectr
on
ic
Data
S
yst
em
s C
orp
. th
at
rep
laced
th
e
NF
IA.
Ex
am
inati
on
s o
f F
HA
's fi
nan
cia
l sta
te
men
ts
in o
rder
to ex
pre
ss
an
o
pin
ion
o
n
the fa
irn
ess
of
pre
sen
tati
on
.
Ex
am
inati
on
o
f G
NM
A
fin
an
cia
l d
ata
fo
r FY
1
97
8.
Sin
ce
we
do
n
ot
pla
n to
is
su
e
a re
po
rt
for
FY
19
78
, th
is
is
on
ly
inte
rim
w
ork
.
Th
e G
ov
ern
men
t C
orp
ora
tio
n C
on
tro
l A
ct
req
uir
es
us
to m
ake
a fi
nan
cia
l au
dit
o
f th
e
Fed
era
l C
rop
In
su
ran
ce
Co
rpo
ra
tio
n at
least
ev
ery
3
years
.·
Th
e o
bje
c
tiv
e o
f th
is au
dit
is
to
ascert
ain
w
heth
er
the C
orp
ora
tio
n's
acco
un
tin
g
po
licie
s,
pro
ced
ure
s re
su
lt
in
a g
en
era
lly
sati
sfa
cto
ry fi
nan
cia
l re
co
rd
of
its
insu
ran
ce o
pera
tio
ns
for
fis
cal
year
19
78
so
th
at
we
may
re
nd
er
an
o
pin
ion
o
n
the
year
en
d
fin
an
cia
l p
osit
ion
o
f th
e co
rpo
rati
on
an
d
the
resu
lts o
f it
s
cro
p
insu
ran
ce
pro
gra
m.
REM
AR
KS
Co
ng
res
sio
nal
rep
ort
p
lan
ned
Co
ng
res
sio
nal
rep
ort
p
lan
ned
No
rep
ort
p
lan
ned
In
19
77
w
e is
su
ed
a
rep
ort
to
th
e
Co
ng
ress
, "T
he
Fed
era
l C
rop
In
·s·u
ran
ce
Pro
gra
m
Can
B
e M
ade
Mo
re
Ef f
ec-
t iv
e,
11
wh
ere
in
w
e co
m
men
ted
o
n
the
Co
rpo
ra
tio
n's
u
nd
er
wri
tin
g p
oli
cie
s
an
d
pra
cti
ces.
-.)
U1
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
O
N-G
OIN
G
AS
SIG
NM
EN
TS
PR
OG
RA
MM
1NG
DWisro~-
--F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
GG
D
TH
E
.f:t,E
DER
AL
HO
ME
LOA
N
BA
NK
B
OA
RD
FO
R
YE
AR
S E
ND
ED
1
2-3
1-7
7
AN
D
12
-31
-78
--A
UD
IT
OF
T
HE
O
FF
ICE
O
F T
HE
A
TT
EN
DIN
G
PH
YS
ICIA
N
RE
VO
LV
ING
F
UN
D--
FIS
CA
L
YE
AR
1
97
8
GG
D
--R
EV
IEW
O
F M
AJO
RIT
Y
GG
D
PR
INT
ING
C
LE
RK
-FY
1
97
8
--R
EV
IEW
O
F M
INO
RIT
Y
GG
D
PR
INT
ING
C
LE
RK
-FY
1
97
8
--F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
FE
DE
RA
L
PR
ISO
N
IND
US
T
RIE
S,
INC
.,
FOR
3
YE
AR
S E
ND
ED
9
-30
-78
GG
D
--R
EV
IEW
O
F
HO
USE
S
TA
TIO
N-
GG
D
ERY
R
EV
OL
VIN
G
FU
ND
-19
78
""::>
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
.WO
RI<
. A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F LINE-OF~~FFORT
Ou
r w
ork
o
n th
is
assig
nm
en
t co
nsis
ts o
f re
vie
win
g
fin
an
cia
l tr
an
sacti
on
s,
pre
p
ari
ng
fi
nan
cia
l sta
tem
en
ts,
an
d
ex
pre
ssin
g
ou
r o
pin
ion
o
n
the
fair
ness
of
the fi
nan
cia
l sta
tem
en
ts.
Wh
en
warr
an
ted
, w
e re
com
men
d
ch
an
ges to
im
pro
ve fin
an
cia
l m
an
ag
em
en
t acti
vit
ies.
Ou
r w
ork
o
n
this
assig
nm
en
t co~sists
of
rev
iew
ing
fi
nan
cia
l tr
an
sacti
on
s,
pre
pari
ng
fi
nan
cia
l sta
tem
en
ts,
an
d
ex
pre
ssin
g o
ur
op
inio
n
on
th
e
fair
ness
of
the
sta
tem
en
ts.
Whe
n w
arr
an
ted
, w
e re
com
men
d
ch
an
ges
to
imp
rov
e
fin
an
cia
l m
an
ag
em
en
t acti
vit
ies.
REM
AR
KS
------
Pu
bli
c
Law
s:
1.
Fed
era
l H
ome
Ban
k
Act,
2
. G
ov
ern
m
en
t C
orp
ora
ti
on
C
on
tro
l A
ct,
an
d
3.
Em
erg
en
cy
H
ome
Fin
an
ce
Act
Pu
bli
c
Law
(3
1
u.s
.c.
84
1)
-.J
0\
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
' O
N-G
OIN
G
ASS
IGN
ME
NT
S ----
PRO
GR
AM
MIN
G
DIV
ISIO
N
--R
EV
IEW
O
P H
OU
SE
OF
RE
PR
E-
GG
D
SE
NT
AT
IVE
S
RE
STA
UR
AN
T
RE
VO
LV
ING
F
UN
D-F
ISC
AL
Y
EAR
1
97
8
--R
EV
IEW
O
F H
OU
SE
FIN
AN
CE
G
GD
O
FF
ICE
-FIS
CA
L
YEA
R
19
78
--R
EV
IEW
O
F U
NIT
ED
S
TA
TE
S
GG
D
SEN
A'rE
RES~1
1AURAN'1·s
RE
VO
LV
ING
FU
ND
, F
ISC
AL
Y
EAR
1
97
8
--E
XA
MIN
AT
ION
O
F F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
TH
E
PE
NS
ION
B
EN
EF
IT
GU
AR
AN
TY
CO
RPO
RA
TIO
N
1 f;
HR
D
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F LIN~~OF-EFFORT
---
·
Ou
r w
ork
d
isclo
sed
sig
nif
ican
t A
DP
inte
rnal
co
ntr
ol
pro
ble
ms
an
d
fin
an
cia
l acco
un
tin
g d
efi
cie
ncie
s.
PBG
C
too
k
acti
on
to
im
pro
ve
inte
rnal
co
ntr
ol
ov
er
AD
P o
pera
tio
ns
and
cash
re
ceip
ts,
an
d
pla
ns
to ex
pen
d
an
in
ad
eq
uate
ly sta
ffed
in
tern
al
au
dit
g
rou
p.
Becau
se,
in p
art,
o
f fi
nan
cia
l acco
un
tin
g
pro
ble
ms,
w
e are
d
iscla
imin
g
an
o
pin
ion
o
n
PB
GC
's
pu
b
lish
ed
fis
cal
year
19
77
fi
nan
cia
l sta
te
men
t.
To
av
oid
fu
ture
d
iscla
imers
, PB
GC
h
as
ag
reed
to
w
ork
in
co
nsu
ltati
on
w
ith
G
AO
an
d
a la
rge
CPA
fi
rm
to
(1)
mo
re
full
y
inte
gra
te it
s acco
un
tin
g
an
d
man
agem
ent
info
rmati
on
sy
ste
ms;
(2)
imp
rov
e it
s d
ata
co
llecti
on
sy
stem
s;
(3)
syst
em
ize it
s p
oli
cie
s,
pro
ced
ure
s,
and
p
racti
ces fo
r esti
mati
ng
p
en
sio
n
ben
e
fit
li
ab
ilit
ies;
and
(4
) co
rrect
seri
ou
s
pro
ble
ms
in it
s
pre
miu
m b
illi
ng
an
d
co
llecti
on
sy
stem
.
REM
AR
KS
-.J
-.J
MA
JOR
O
N-G
OlN
G
ASS
IGN
ME
NT
S
--R
EV
IEW
O
P FY
1
97
7
PIN
AN
C
IAL
ST
AT
EM
EN
TS
OF'
TH
E
INT
ER
-AM
ER
ICA
N
FOU
ND
AT
ION
(C
OD
E
48
69
1)
--E
XA
MIN
AT
ION
O
F FY
· 1
97
8
FIN
AN
CIA
L
STA
TE
ME
NT
S O
F T
HE
E
XP
OR
T-I
MP
OR
T
BA
NK
(C
OD
E
48
69
3)
~-EXAMINATION
OF
FY
19
78
F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
TH
E
OV
ER
SEA
S P
RIV
AT
E
INV
EST
ME
NT
C
OR
POR
AT
ION
(C
OD
E
48
69
4)
--E
XA
MIN
AT
ION
O
F T
HE
F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
TH
E
PAN
AM
A
CA
NA
L C
O.
FOR
F
ISC
AL
Y
EAR
1
97
8
(CO
DE
4
86
96
)
--A
UD
IT
OF
THE
GO
VER
NM
ENT
PR
INT
ING
O
FF
ICE
'S
FIS
CA
L
YEA
RS
19
77
A
ND
1
97
8
FIN
AN
CIA
L
STA
TE
ME
NT
S
--R
EV
IEW
U~
CIV
IL.S
ER
VIC
E
CO
MM
ISSI
GN
R
EV
OL
VIN
G
FUN
D
AC
'fIV
I'rI
ES
I•'
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
ID
ID
ID
ID
LCD
FPC
D
HOW
A
ND
TO
WH
A'l~
E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
lEC
TIV
ES
O
F LINE-b~-EFFORT
Th
is
ass
ign
men
t d
irectl
y rela
tes
to
an
d
wil
l p
rov
ide
max
imum
sati
sfacti
on
o
f th
e p
rio
rit
y li
ne o
f effo
rt
ob
jecti
ves
becau
se
we
wil
l d
ete
rmin
e w
heth
er
the
GP
O's
F
inan
cia
l S
tate
men
ts
ad
eq
uate
ly
refle
ct
the sta
tus o
f it
s o
pera
tio
ns
an
d
fun
ds.
REM
AR
KS
'fer
m i
na te
d-
w ill
be
com
b
ined
w
ith
FY
7
8
and
re
po
rt
on
b
oth
y
ears
Pu
bli
c
Law
Pu
bli
c
Law
Pu
bli
c
Law
Sch
ed
ule
d
Rep
ort
Is
su
e
Date
is
"
· A
ug
ust
1
97
9
Pu
bli
c
Law
-.J
CX>
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MAJOR~ON-GOING
ASS
IGN
ME
NT
S PR
OG
RA
MM
ING
n!vrsr~
HOW
A
ND
T
O.W
HA
T
EX
TE
NT
H
AS
TH
lS 'W
ORK
A
CC
OM
Ptl
SH
Eb
OB
JEC
TIV
ES
O
F'L
INE
-OF
-EF
FO
RT
IMPA
CT
A
SSE
SSM
EN
T
Th
e fi
nan
cia
l sta
tem
en
t re
vie
ws
perf
orm
ed
b
y
ID
hav
e
en
co
ura
ged
th
e
co
nti
nu
ou
s u
se o
f so
un
d
an
d
cu
rren
t acco
un
tin
g p
rin
cip
les
and
p
racti
ces.
Th
ese
re
vie
ws
hav
e
lead
to
m
any
ad
dit
ion
al
man
agem
ent
rev
iew
s w
hic
h
hav
e
resu
lted
in
im
pro
vem
en
ts
base
d
on
acti
on
ta
ken
o
n
ou
r re
co
mm
en
dati
on
so
Fo
r ex
am
ple
, E
xim
ban
k
ch
an
ged
it
s
met
ho
d o
f acq
uir
ing
m
on
ey
to
co
nfo
rm w
ith
th
e
term
s o
f lo
an
s
(red
ucti
on
in
in
terest
ex
pen
ses);
esta
bli
sh
ed
a
Ste
eri
ng
C
om
mit
tee
for
AD
P;
and
eli
min
ate
d
ab
ou
t 70
co
mm
erc
ial
ban
k acco
un
ts
for
co
llecti
on
o
f lo
an
re
ceip
ts
(pay
men
ts
now
m
ade
to
Fed
era
l R
ese
rve
Ban
ks
or
the T
reasu
ry).
WH
AT
IS
LE
FT
TO
B
E DON~?
(See
no
te
belo
w.)
Fu
ture
ass
ign
men
ts w
ill
be
dir
ecte
d
to
wh
eth
er
Go
vern
men
t co
rpo
rati
on
an
d
ag
en
cy
fi
nan
cia
l sta
tem
en
ts
pre
sen
t fair
ly
the re
su
lts o
f o
pera
tio
ns,
fin
an
cia
l p
osit
ion
, an
d
ch
an
ges
in fi
nan
cia
l p
osit
ion
. A
ssig
nm
en
ts
wil
l in
clu
de
the
foll
ow
ing
:
--R
ev
iew
o
f F
ed
era
l H
ou
sin
g
Au
tho
rity
FY
1
97
9
Fin
an
cia
l S
tate
men
ts
(CE
D).
--R
ev
iew
o
f G
ov
ern
men
t N
ati
on
al
Mo
rtg
ag
e
Asso
cia
tio
n
FY
19
79
F
inan
cia
l S
tate
men
ts
(CE
D).
--R
ev
iew
o
f R
ura
l T
ele
ph
on
e
Ban
k
Fin
an
cia
l S
tate
men
ts
(CE
D).
NO
TE
: C
ED
was
th
e
on
ly d
ivis
ion
w
hic
h
sub
mit
ted
d
ata
in
an
swei
to th
is q
uesti
on
.
REM
AR
KS
-.J
\0
AC
CO
UN
TA
BIL
ITY
M
OD
EL
ISS
UE
A
REA
Acco
un
tin
g
and
P
inan
cia
l R
ep
ort
ing
LEA
D
DIV
lSlO
N
FGM
SD
PRO
GR
AM
PL
AN
.APP
RO
VA
L
DA
TE
PE
RIO
D
CO
VE
RE
D:
7/1
/77
-
10
/31
/78
PLA
NN
ED
S
TA
FF
Y
EAR
S (E
ST
) : ~-· _· -
-·-·
~~=~
-=~~
·==·
= =
TIT
LE
O
F P
RIO
RIT
Y
AC
TUA
L S
TA
FF
Y
EA
RS
: 1
9.
LIN
E
OF
EF
PO
RT
: A
re p
ricin
g,
Bil
lin
g
an
d
-C
oll
ecti
on
S
yst
em
s A
deq
uate
to
In
su
re
that
Am
ou
nts
O
wed
th
e
Fed
era
l G
ov
ern
men
t are
F
ull
y
and
P
rom
ptl
y C
oll
ecte
d
-2
80
3
OB
JEC
TIV
E(S
) A
ND
PL
AN
NE
D
AC
CO
OM
PLIS
HM
EN
TS
OF
PLO
E
AS
GIV
EN
IN
T
HE
PR
OG
RA
M
PL
AN
:
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
LAR
GE
SAV
ING
S P
OS
SIB
LE
IN
M
OR
TGA
GE
INSU
RA
NC
E
PRE
MIU
M
PAY
MEN
T SY
STE
M,
FG
MS
D-7
7-1
2,
Au
gu
st
24
, 1
97
7
/ 9
'
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
S
OB
JEC
TIV
ES
A
ND
PL
AN
NE
D
AC
CO
MPL
ISH
ME
NT
S:
To
d
ete
rmin
e w
heth
er:
1
. A
gen
cy acco
un
tin
g
syst
em
s h
elp
in
su
re
that
the
Fed
era
l G
ov
ern
men
t re
ceiv
es
all
am
ou
nts
it is
en
titl
ed
to
, an
d
2.
OM
B sh
ou
ld
pro
vid
e b
ett
er
gu
id-
an
ce
to ag
en
cie
s
on
co
st
co
mp
uta
ti
on
s
an
d
ch
arg
es
mad
e fo
r g
oo
ds
so
ld
and
serv
ices
pro
vid
ed
to
p
ers
on
s
and
o
rgan
izati
on
s o
uts
ide
the
Fed
era
l G
ov
ern
men
t.
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
GA
O
reco
mm
end
ed sev
era
l w
ays
to
sav
e
mo
ney
b
y
ch
an
gin
g
pro
ced
ure
s
in
the
Dep
art
men
t o
f D
efe
nse
p
rog
ram
o
f p
ay
ing
it
s
em
plo
yees'
m
ort
gate
in
su
ran
ce
pre
miu
ms
to
the
Dep
art
men
t o
f Ho~sing
an
d
Urb
an
Dev
elo
pm
en
t.
In
1 y
ear
to
pay
$
2.6
m
illi
on
in
p
rem
ium
s,
the ad
min
istr
ati
ve co
st
to
the
two
ag
en
cie
s
was
$
70
0,0
00
. H
UD
, w
ith
th
e
assis
tan
ce o
f th
e
Dep
art
men
t o
f D
efe
nse
is
co
nsid
eri
ng
co
rrecti
ve acti
on
n
eed
ed
.
REM
AR
KS
CD
0
MA
JOR
R
EPO
RT
S 'O
R
OT
HE
R
OU
TPU
T
---·
·--
MIL
LIO
NS
O
F D
OL
LA
RS
IN
DE
LIN
Q
UEN
T M
OR
TGA
GE
INSU
RA
NC
E
PRE
MIU
MS
SHO
UL
D
BE
CO
LL
EC
TE
D
BY
THE
DEP
AR
TMEN
T O
F H
OU
SIN
G
AN
D
UR
BA
N
DE
VE
LO
PME
NT
F
GM
SD
-77
-33
, S
ep
tem
ber
8,
19
77
LE
TT
ER
R
EPO
RT
TO
C
ON
GR
ESSM
AN
B
ILL
G
RA
DIS
ON
, F
GM
SD
-78
-58
, S
ep
t.
20
, 1
97
8
REC
OV
ERY
O
F N
OR
MA
L IN
VE
NT
OR
Y
STO
CK
L
OS
SE
S
FRO
M
FOR
EIG
N
GO
VER
NM
ENTS
BY
T
HE
D
EPA
RT
ME
NT
O
F D
EF
EN
SE
, F
GM
SD
-77
-43
, S
ep
tem
ber
8,
19
77
AC
CO
UN
TA
BIL
ITY
M
bDEL
PRO
GR
AM
MIN
G
DIV
ISIO
N.
l',GM
S
FGM
S
FGM
S
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S' T
HIS
'WO
RK
AC
CO
MPL
ISH
ED
O
BJE
C1I
VE
S
OF
LINE=°OF~EFFbRT
Th
e re
po
rt d
isclo
ses
that
in
a 1
4
mo
nth
p
eri
od
en
ded
M
arch
1
97
7,
an
av
era
ge o
f $
38
m
illi
on
p
er
mo
nth
in
m
ort
gag
e
insu
ran
ce
pre
miu
ms
were
p
ast
du
e
to
the
Dep
art
men
t o
f H
ou
sin
g
and
U
rban
D
ev
elo
pm
en
t.
By
ch
an
gin
g it
s
pre
miu
m co
llecti
on
cy
cle
th
e
ag
en
cy
co
uld
sa
ve
the
Go
vern
men
t $
16
.5 m
illi
on
in
in
terest
co
st.
H
UD
h
as
en
co
ura
ged
p
ay
men
t o
f p
rem
ium
s o
n d
ue d
ate
s
bu
t d
isag
reed
w
ith
ch
an
gin
g
the
co
llecti
on
cy
cle
.
Th
is le
tter re
po
rted
o
n th
e ste
ps
tak
en
b
y
the
U.S
. C
ust
om
s S
erv
ice
to accele
rate
d
ep
osit
s o
f cu
sto
m
du
ty
pay
men
ts
in
U.S
. T
reasu
ry.
Th
e D
ep
art
men
t o
f D
efe
nse
w
as
no
t re
co
veri
ng
fr
om
fo
reig
n govern~ents
mil
lio
ns o
f d
oll
ars
o
f co
sts
in
cu
rred
in
th
e
sale
o
f se
co
nd
ary
it
em
s fr
om
D
efe
nse
in
ven
tori
es.
GA
O
rep
ort
ed
th
at
the A
ir
Po
ree
alo
ne
was
n
ot
reco
veri
ng
ab
ou
t ·$
30
m
illi
on
o
Sen
ato
r P
erc
y h
as
req
ueste
d
req
ueste
d
us
to
mak
e a
foll
ow
-on
re
vie
w to
d
ete
rmin
e acti
on
ta
ken
.
REM
AR
KS
00
.....
.
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
WE
AK
NE
SSE
S IN
T
HE
B
ILL
ING
A
ND
C
OL
LE
CT
ING
SY
STE
M
FOR
FO
RE
IGN
M
ILIT
AR
Y
SA
LE
S,
FG
MS
D-7
7-4
6,
Sep
tem
ber
16
, 1
97
7
INA
DE
QU
AT
E
MET
HO
DS
USE
D
TO
AC
CO
UN
T FO
R
AN
D
REC
OV
ER
PE
RS
ON
N
EL
C
OST
S O
F T
HE
fO
RE
IGN
M
ILIT
AR
Y
SAL
ES
PRO
GR
AM
F
GM
SD
-77
-22
, O
cto
ber
21
, 1
97
7
,,,..
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DN
Ysf
ON
-
FGM
S
FGM
S
HOW
A
ND
T
O'W
HA
T
EX
TE
NT
H
AS
TH
IS
WO
RK
AC
CO
MPL
ISH
Eb
OB
JEC
TIV
ES
O
F LINE-OF~EFFORT
Th
e D
ep
art
men
t o
f D
efe
nse
cen
tra
lized
it
s acco
un
tin
g,
bil
lin
g
an
d
co
llecti
ng
fu
ncti
on
s
for
fore
ign
m
ilit
ary
sale
s.
Th
e A
ir
Fo
rce
syst
em
w
as.
use
d
as
a m
od
el
for
the
cen
trali
zed
sy
stem
. W
e p
oin
ted
o
ut
weak
ness
es
in
the
Air
F
orc
e
syst
em
an
d cert
ain
p
rob
lem
s in
th
e
Arm
y an
d
Nav
y th
at
co
uld
ad
vers
ely
aff
ect
the cen
trali
zed
sy
stem
. D
efe
nse
h
as
pro
mis
ed
to
ta
ke co
rrec
tiv
e acti
on
.
Th
e D
ep
art
men
t o
f D
efe
nse
d
id
no
t h
av
e ·
an
ad
eq
uate
sy
stem
fo
r acco
un
tin
g
an
d
rep
ort
ing
th
e actu
al
nu
mb
er
of
pers
on
nel
inv
olv
ed
w
ith
th
e
fore
ign
m
ilit
ary
sale
s
pro
gra
m fo
r u
se
in d
ete
rmin
ing
p
ers
on
nel
co
sts
. T
here
fore
, o
ne-t
ime stu
die
s
hav
e
to
be
mad
e w
hen
co
ng
ressio
nal
or
Defe
nse
D
ep
art
men
t o
ffic
ials
re
q
uir
e
fore
ign
m
ilit
ary
sale
s
pers
on
nel
sta
tisti
cs.
Defe
nse
h
as
pro
mis
ed
to
in
sta
ll
a n
ew
syst
em
.
REM
AR
KS
Req
uest
ed
B
y Jo
hn
S
ten
nis
OJ
N
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
TH
E
DEP
AR
TMEN
T O
F D
EF
EN
SE
'S
CO
NT
INU
ED
F
AIL
UR
E
'l'O
CH
AR
GE
FOR
U
SIN
G
GO
VER
NM
ENT
OW
NED
PL
AN
T
AN
D
EQ
UIP
ME
NT
FO
R
FOR
EIG
N
MIL
ITA
RY
SA
LE
S C
OST
S M
ILL
ION
S,
· F
GM
SD
-77
-20
, A
pri
l 1
1,
19
78
NEE
D
TO
IMPR
OV
E
SE
RV
ICIN
G
OF
DIR
EC
T
LOA
NS
UN
DER
TH
E B
US
IN
ES
S
DEV
ELO
PMEN
T A
SS
IST
AN
CE
PR
OG
RA
M,
FG
MS
D-7
8-3
4,
May
1
5,
19
78
AC
CO
UN
TA
BIL
ITY
M
OD
BL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
S
fGM
S
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S A
CC
OM
PLIS
HE
b. b
BJE
CT
IVE
S OF'tI~E~OF
EFF
OR
T
Th
e D
ep
art
men
t o
f D
efe
nse
, d
esp
ite
nu
mer
ou
s re
po
rts
by
G
AO
an
d
the m
ili
tary
serv
ice au
dit
ag
en
cie
s,
gen
era
lly
h
as
no
t ch
arg
ed
fo
reig
n
go
vern
men
ts fo
r th
e
use
o
f U
.S.
pla
nt
and
eq
uip
men
t fo
r fo
reig
n m
ilit
ary
sale
s.
As
a resu
lt,
the
Un
ited
S
tate
s
has
lost
as
mu
ch
as
$1
07
m
illi
on
o
n
tho
se
fore
ign
m
ilit
ary
sale
s
GA
O
rev
iew
ed
. G
AO
h
as
bro
ug
ht
this
p
rob
lem
to
th
e S
ecre
tary
of
Defe
nse's
att
en
tio
n
on
fo
ur
occasio
ns
sin
ce
19
70
0
Wh
ile
som
e p
rog
ress
in acco
un
tin
g
syst
em
s h
as
been
m
ad
e,
no
tab
ly
by
th
e
Arm
y,
sp
ecia
l effo
rts
are
n
eed
ed
to
co
rrect
the
pro
ble
m.
Th
e H
ou
se
Arm
ed
Serv
ices
Co
mm
it-
tee
has
req
ueste
d
that
we
rev
iew
th
e ex
ten
t o
f D
efe
nse's
co
rrecti
ve
acti
on
.
Th
is re
po
rt p
oin
ts o
ut
that
the
Eco
no
mic
D
ev
elo
pm
en
t A
dm
inis
trati
on
co
uld
in
cre
ase assu
ran
ce th
at
bu
si
ness
lo
an
s w
ill
pro
vid
e la
sti
ng
b
en
efi
ts
an
d
the
Go
vern
men
t's
fin
an
cia
l in
vest
men
t w
ill
be
reco
vere
d
by
im
pro
vin
g it
s lo
an
serv
icin
g
and
m
anag
emen
t assis
tan
ce
to b
orr
ow
ers
. ED
A
has
tak
en
co
rrecti
ve acti
on
ap
pli
cab
le
to
$9
0 m
illi
on
in
lo
an
s.
00
w
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
REPOR~s·oR'OTHER
OU
TPU
T
ARM
Y
CO
MM
ISSA
RY
A
CC
OU
NT
ING
FO
R
GA
INS
AN
D
LO
SS
ES
N
EE
DS
IMPR
OV
E
ME
NT
, F
GM
SD
-78
-43
; Ju
ly 1
7,
19
78
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
S
IMPO
RT
D
UT
IES
A
ND
T
AX
ES
: IM
PRO
VE
D
FGM
S C
OL
LE
CT
ION
, A
CC
OU
NT
ING
A
ND
C
ASH
M
AN
AG
EMEN
T N
EE
DE
D,
FG
MS
D-7
8-5
0,
Au
gu
st
25
, 1
97
8
TH
E
DE
PAR
TM
EN
T
OF
DE
FEN
SE
CO
NT
INU
ES
TO
IMPR
OPE
RL
Y
SU
B
SID
IZE
FO
RE
IGN
M
ILIT
AR
Y
SA
LE
S,
FG
MS
D-7
8-5
1,
Au
gu
st
25
, 1
97
8
,--·
~ ... /
FGM
S
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S A
CC
OM
PLIS
HE
D OBJECTIV~S
bl•'
LIN
E-O
F-E
FF
OR
'l' --
Th
e A
rmy
Sto
ck
F
un
d
ab
sorb
ed
$
9.5
m
illi
on
in
co
mm
issa
ry lo
sses
fro
m
fro
m u
nid
en
tifi
ab
le cau
ses
fro
m
Ju
ly
19
74
th
rou
gh
S
ep
tem
ber
19
76
. T
he
ag
en
cy
acco
un
tin
g
syst
em
sh
ou
ld
hav
e
pro
vid
ed
fo
r th
ese
losses
to
be co
llecte
d
in fu
ll
fro
m
the
Co
mm
issa
ry cu
sto
mers
. T
he
Arm
y h
as
tak
en
co
rrecti
ve acti
on
.
Th
is re
po
rt d
isclo
sed
th
at
the
U.S
. C
ust
om
s S
erv
ice
all
ow
ed
d
efe
rrals
in
co
llecti
ng
im
po
rt d
uti
es
and
alc
oh
ol
tax
es.
If
the
ag
en
cy
h
ad
tak
en
o
ur
reco
mm
end
ed co
rrecti
ve
acti
on
in
1
97
6,
$9
.6 m
illi
on
in
G
ov
ern
men
t's
inte
rest
ex
pen
se
may
h
av
e
been
av
oid
ed
. D
ue
to co
rrec
tiv
e acti
on
b
y
cu
sto
ms,
th
e
Go
v
ern
men
t's in
terest
ex
pen
se
on
th
e
Pu
bli
c
Deb
t co
uld
b
e
red
uced
by
sas
mu
ch
as
$9
.6 m
illi
on
an
nu
all
y •
•
Th
e D
ep
art
men
t o
f D
efe
nse
is
m
akin
g
larg
e su
bsid
ies--
in
the m
illi
on
s-
in
the fo
reig
n m
ilit
ary
sale
s
pro
gra
m,
a p
racti
ce
wh
ich
th
e
Co
ng
ress
w
an
ts it to
av
oid
. G
AO
00
.i:
i.
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
CO
ST
WA
IVE
RS
UN
DER
T
HE
FO
RE
IGN
M
ILIT
AR
Y
SAL
ES
PRO
GR
AM
: M
ORE
A
TT
EN
TIO
N
AN
D
CO
NTR
OL
NE
ED
ED
, F
GM
SD
-78
-48
A,
Sep
tem
ber
26
, 1
97
8
,,-
AC
CO
UN
TA
BIL
ILT
Y
MO
DEL
PRO
GR
AM
MlN
G
DIV
ISIO
N
FGM
S
HOW
~ND
TO
'WH
AT
E
XT
EN
T ~AS
TH
IS
WO
RK
AC
CO
MPL
ISH
ED
O
BJE
CT
IVE
S
OF
LIN
E-O
F-E
FF
OR
esti
mate
d th
at,
b
ecau
se o
f w
eak
n
esses
in p
ricin
g p
oli
cie
s
and
p
racti
ces,
$6
9 m
illi
on
d
irect
and
in
dir
ect
co
sts
fo
r sele
cte
d
sale
s cases
had
n
ot
been
ch
arg
ed
to
fo
reig
n
go
vern
men
ts.
Defe
nse
ag
reed
th
at
imp
rov
em
en
ts are
n
eed
ed
.
Th
e C
on
gre
ss,
in p
assin
g
the In
ter
nati
on
al
Secu
rity
A
ssis
tan
ce
an
d
Arm
s E
xp
ort
C
on
tro
l A
ct
of
Jun
e
30
, 1
97
6,
sp
ecif
ied
th
e
cir
cu
msta
nces
in
wh
ich
th
e
Dep
art
men
t o
f D
efe
nse
co
uld
w
aiv
e cert
ain
co
sts
. O
ve
the
nex
t 1
5 m
on
ths,
th
e
Dep
art
men
t au
tho
rized
o
r co
nsid
ere
d co
st
waiv
ers
o
f ab
ou
t $
50
0 m
illi
on
. T
he
Co
ng
ress
h
as
no
t b
een
in
form
ed
o
f th
e
am
ou
nt'
s b
ein
g
waiv
ed
an
d
the
sp
ecif
ic
reaso
ns
for
gra
nti
ng
w
aiv
ers
. F
urt
her,
G
AO
fo
un
d
that
Defe
nse
an
d
mil
itary
serv
ice o
ffic
ials
were
in
ten
tio
nall
y u
nd
erp
ricin
g
fore
ign
g
ov
ern
men
ts m
illi
on
s o
f d
oll
ars
. T
he
acti
on
s
were
n
ot
in
acco
rdan
ce
wit
h
pri
cin
g
req
uir
em
en
ts sp
ecif
ied
in
D
efe
nse
re
gu
lati
on
s
an
d
inte
nd
ed
b
y
law
. D
efe
nse
ag
reed
to
re
po
rt
info
rmati
on
o
n w
aiv
ers
to
th
e
Co
ng
ress
if
it
req
ueste
d
Defe
nse
to
d
o
so
.
REM
AR
KS
CX>
Ul
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
RE
VIE
W
OF
ER
DA
'S
RE
IMB
UR
SAB
LE
A
GR
EEM
ENT
WIT
H
EPA
FO
R
OF
FS
ITE
R
AD
IOL
OG
ICA
L
SAFE
TY
PR
OG
RA
M
~ ..
AC
CO
UN
TA
BIL
ITY
M
OO
EL
PRO
GA
AM
MIN
G
DIV
ISIO
N
EMD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
ACCOM~LISHED OBJ~CTiV~S
tiF
L
INE
-OF
-EF
FO
RT
were
g
ran
ted
, re
gard
less o
f n
eed
. F
urt
her,
in
m
any
in
sta
nces,
the
co
st
of
rep
air
ing
u
nserv
iceab
le
eq
uip
men
t w
hen
ad
ded
to
th
e re
turn
cred
it g
iven
th
e
fore
ign
g
ov
ern
men
t,
ex
ceed
ed
th
e cu
rren
t in
ven
tory
pri
ce o
f th
e
eq
uip
men
t.
Alt
ho
ug
h
GA
O
bro
ug
ht
the d
efi
cie
n
cie
s
in co
ntr
ols
an
d
pro
ced
ure
s
to A
ir
Fo
rce o
ffic
ials
' att
en
tio
n
on
sev
era
l o
ccasio
ns,
the A
ir
Fo
rce
id
no
t fu
lly
im
ple
men
t an
im
pro
ved
sy
stem
u
nti
l O
cto
ber
1,
19
78
. G
AO
esti
mate
d
that
the
new
im
pro
ved
sy
stem
, if
eff
ecti
vely
im
ple
men
ted
, w
ill
sav
e
the
U.S
. G
ov
ern
men
t as
mu
ch
as
$2
8 m
illi
on
an
nu
all
y.
REM
AR
KS
00
0
\
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
TH
E
AD
EQU
AC
Y
OF
AC
CO
UN
TIN
G
SYST
EM
S U
SED
IN
C
OM
PUT
ING
C
HA
RG
ES
FOR
T
HE
SA
LE
O
F G
OO
DS
AN
D
SE
RV
ICE
S
OU
TS
IDE
T
HE
G
OV
ERN
MEN
T
RE
VIE
W
Of
DE
FEN
SE
PRO
CE
DU
RE
S FO
R
CH
AR
GIN
G
FOR
EIG
N
GO
VE
RN
M
ENTS
FO
R
NO
RM
AL
INV
EN
TO
RY
O
PER
AT
ING
L
OS
SE
S
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MlN
G
DIV
ISIO
N
FGM
SD
FGM
SD
HO
W'A
ND
TO
W
HA
T E
XT
EN
T
HA
S
TH
IS
WO
RK
REM
AR
KS
AC
CO
MPL
ISH
ED
O
BJE
CT
IVE
S
OF
LIN
E-O
F-E
FF
OR
T
Th
e o
bje
cti
ves o
f th
is
wo
rk w
ill
be
to d
ete
rmin
e
(1)
the
ad
eq
uacy
o
f O
MB
Cir
cu
lar
A-2
5
reg
ard
ing
acco
un
tin
g
syst
em
s n
eed
ed
to
su
pp
ort
sale
s
to
en
titi
es o
uts
ide
the
Go
vern
men
t in
clu
din
g
pri
cin
g
an
d b
illi
ng
sy
stem
s,
(2)
if
ag
en
cy
acco
un
tin
g
syst
em
s h
elp
to
in
su
re
that
the
Go
vern
men
t re
ceiv
es all
am
ou
nts
it
is en
titl
ed
to
, an
d
(3)
the
usefu
lness o
f acco
un
tin
g
rep
ort
s
and
m
anag
emen
t in
form
ati
on
g
en
era
ted
b
y
the cir
cu
lar.
Th
e o
bje
cti
ves o
f th
e
wo
rk w
ill
be
to d
ete
rmin
e
(1)
if
Defe
nse
is
p
rop
erl
y ch
arg
ing
fo
reig
n
go
vern
m
en
ts
for
inv
en
tory
lo
sses
on
n
on
sto
ck
fu
nd
sale
s,
(2)
the
natu
re
an
d
ex
ten
t o
f in
ven
tory
lo
sses,
an
d
(3)
wh
eth
er
the
Arm
s E
xp
ort
C
on
tro
l A
ct
sho
uld
b
e fu
rth
er
amen
ded
to
re
qu
ire
reco
veri
ng
in
ven
tory
lo
sses
on
all
n
on
-sto
ck
fu
nd
sale
s·
to
fore
ign
g
ov
ern
men
ts.
(See
FGMSD-77~43;
Sep
tem
ber
8,
19
77
.)
Req
uest
ed
b
y S
en
ato
r C
harl
es
H.
Perc
y
00
-.
J
MA
JOR
'ON
-GO
ING
A
8SIG
NM
EN
TS
------
RE
VIE
W
Of DE~ENSE
SYST
EM
FO
R
AC
CO
UN
TIN
G
AN
D
BIL
LIN
G
FOR
T
HE
U
SE
OF
GO
VE
RN
ME
NT
O
WN
ED
PLA
NT
A
ND
E
QU
IPM
EN
T
ON
FO
RE
IGN
M
ILIT
AR
Y
SAL
ES
DE
LIN
QU
EN
T
NO
N-T
AX
A
MO
UN
TS
DU
E SH
OU
LD
BE
CO
LL
EC
TE
D
BY
RE
DU
CIN
G
FED
ER
AL
TA
X
RE
FUN
DS
TO
DE
BT
OR
S
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
o
p·
LIN
E-O
F-E
FF
OR
T
Th
e H
ou
se
Arm
ed
Serv
ices
Co
mm
itte
e
is
co
ncern
ed
ab
ou
t th
e m
att
ers
d
iscu
ssed
in
o
ur
Ap
ril
11
, 1
97
8,
rep
ort
o
n
Defe
nse's
C
on
tin
ued
F
ail
ure
to
C
harg
e
Fo
r U
sin
g
Go
ver
nm
ent-
Ow
ned
P
lan
t an
d
Eq
uip
men
t fo
r F
ore
ign
M
ilit
ary
S
ale
s
(FG
MS
D-7
7-2
0).
T
he
Co
mm
itte
e
ask
ed
G
AO
to
re
vie
w
the li
sti
ng
p
rov
ided
b
y
Defe
nse
o
f co
ntr
acts
w
ith
fo
reig
n
go
vern
men
ts
for
wh
ich
th
e co
st
of
usi
ng
G
ov
ern
men
t-o
wn
ed
assets
w
as
assessed
. T
he
ob
jecti
ves o
f th
e
wo
rk
wil
l b
e
to
(1)
dete
rmin
e
on
a
sam
pli
ng
b
asis
w
heth
er
Defe
nse
h
as
been
ch
arg
ing
fo
reig
n
go
vern
men
ts
for
usi
ng
G
ov
ern
men
t-o
wn
ed
assets
o
n sale
s
sin
ce
Octo
ber
1,
19
76
, an
d
(2)
assess
cu
rren
t effo
rts
to
in
su
re
that
all
su
ch
ch
arg
es are
b
ein
g
inclu
ded
in
th
e co
ntr
acts
.
Th
is
wo
rk w
ill
sho
w th
at
the co
llec
tio
n
syst
em
sh
ou
ld
be
imp
rov
ed
to
assu
re th
at
am
ou
nts
o
wed
th
e
Fed
era
l G
ov
ern
men
t are
fu
lly
an
d
pro
mp
tly
co
llecte
d.
Ou
r re
po
rt,
wh
ich
h
as
been
sen
t to
C
om
mis
sio
ner,
IR
S,
for
com
men
t,
pro
po
ses
a m
ajo
r ch
an
ge
to
the ex
isti
ng
co
llecti
on
sy
stem
.
REM
AR
KS
Req
uest
ed
b
y
Arm
ed
Serv
ices
Inv
esti
ga
tio
n
Su
b
co
mm
itte
e,
Ho
use
C
om
mit
tee
on
A
rmed
S
erv
ices
00
0
0
MA
JOR
O
N-G
OIN
G
ASS
1GN
ME
NT
S
OIL
A
ND
G
AS
RO
YA
LTY
C
OL
LE
CT
ION
S--
SE
RIO
US
F
INA
NC
IAL
M
AN
AG
EMEN
T PR
OB
LE
MS
NE
ED
C
ON
GR
ESS
ION
AL
A
TT
EN
TIO
N
RE
VIE
W
OP
HU
D'S
A
CC
OU
NT
ING
SY
STE
M
FOH
H
OM
E M
OR
TGA
GE
AC
QU
IRE
D
AFT
ER
D
EFA
UL
TS
BY
H
OM
EOW
NER
S
RE
VIE
W
OF
AC
CO
UN
TIN
G
SYST
EM
FO
R
HU
D
HE
LD
H
OM
E
MO
RTG
AG
ES
SUR
VE
Y
OF
U
NC
OL
LE
CT
IBIL
ITY
O
F E
DU
CA
TIO
NA
L
AS
SIS
TA
NC
E
OV
ER
PAY
ME
NT
S T
ER
MIN
AT
ED
BY
V
A
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
PGM
SD
FGM
SD
FGM
SD
HR
D
HOW
A
ND
TO
W
HA
T.E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PL
ISH
ED
.OB
lEC
TIV
ES
O
F LIN~-OF-EFFORT
Th
is
wo
rk w
ill
sho
w th
at
the ag
en
cy
's
acco
un
tin
g
syst
em
d
oes
no
t in
su
re th
at
the
Fed
era
l G
ov
ern
men
t re
ceiv
es all
ro
yalt
y
mo
ney
to
w
hic
h it is
en
titl
ed
. T
he
rep
ort
, w
hic
h
is cu
rren
tly
b
ein
g
dra
fted
, w
ill
pro
po
se
sev
era
l alt
er
nati
ve co
urs
es o
f acti
on
to
th
e
Co
ng
ress
e
In
rev
iew
ing
H
UD
's
loan
acco
un
tin
g
syst
em
fo
r co
llecti
ng
an
d d
isb
urs
ing
lo
an
fu
nd
s,
we
fou
nd
th
at
in fis
cal
year
19
77
o
ver
$2
m
illi
on
o
r ab
ou
t 5
3
perc
en
t o
f th
e
rep
ay
men
t am
ou
nt
du
e
was
n
ot
co
llecte
d.
We
hav
e
fou
nd
sig
nif
ican
t p
rob
lem
s in
H
UD
's
acco
un
tin
g
syst
em
w
ith
re
gard
to
:
--co
ntr
oll
ing
receip
ts,
--co
llecti
ng
o
verd
ue acco
un
ts,
an
d
--serv
icin
g lo
an
s.
Th
is .
wo
rk w
ill
sho
w
the feasib
ilit
y
usi
ng
p
riv
ate
secto
r co
llecti
on
m
eth
od
s to
re
co
ver
ov
erp
ay
men
ts
pre
v
iou
sly
w
ritt
en
o
ff
by
th
e
vete
ran
s
Ad
min
istr
ati
on
.
REM
AR
KS
CX> ~
AL
L
OT
HE
R
WO
RK
'( co
rnp
os
i te
)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
HOW
A
ND
TO
W
HA
T'
EX
TE
NT
H
AS
TH
IS
WO
RK
KC
CO
MPL
ISH
ED
OAJ~CTIV~~
OF
LIN
E-O
F-E
FF
OR
T
OV
ER
AL
L
ASS
ESS
ME
NT
O
F LINE-OF~EFFORT
IMPA
CT
Th
is p
rio
rit
y li
ne-o
f-effo
rt
is o
ur
big
gest
pay
off
are
a.
As
a resu
lt o
f o
ur
wo
rk,
the
Go
vern
men
t can
ex
pect
to
co
llect
or
oth
erw
ise
sav
e
hu
nd
red
s o
f m
illi
on
s o
f d
oll
ars
in
fu
ture
y
ears
d
ue
to
imp
rov
ed
acco
un
tin
g
pro
ced
ure
s
for
pri
cin
g,
bil
lin
g,
an
d co
llecti
ng
eit
her
imp
lem
en
ted
o
r p
lan
ned
b
y
Defe
nse
an
d civ
il
ag
en
cie
s.
Ou
r fi
nd
ing
s
hav
e
spark
ed
a
lot
of
inte
rest
in
Co
ng
ress
, p
art
icu
larl
y
in
the
ap
pro
pri
ati
on
s
co
mm
itte
es,
an
d
there
is
a
str
on
g p
ossib
ilit
y th
at
the
Ho
use
G
ov
ern
men
t O
pera
tio
ns
Co
mm
itte
e,
Su
bco
mm
itte
e
on
L
eg
isla
tio
n
an
d
Nati
on
al
Secu
rity
, w
ill
co
nd
uct
heari
ng
s
reg
ard
ing
p
ricin
g o
f fo
reig
n m
ilit
ary
sale
s.
WH
AT
IS
LE
FT
TO
B
E D
ON
E
Rev
iew
s o
f ag
en
cie
s'
acco
un
tin
g
syst
em
s h
av
e d
isclo
sed
th
at
they
are
n
ot
ad
eq
uate
to
re
co
ver
all
am
ou
nts
d
ue
the
Fed
era
l G
ov
ern
men
t.
Th
ese
re
vie
ws
hav
e
ind
icate
d
that
these
weak
ness
es
co
st
the
Un
ited
S
tate
s m
illi
on
s o
f d
oll
ars
an
nu
all
y.
We
wil
l co
nti
nu
e o
ur
effo
rts
in
th
is
are
a
to
insu
re all
co
sts
d
ue
the
Fed
era
l G
ov
ern
men
t are
re
co
vere
d.
Th
e ex
ten
t o
f th
e
wo
rk w
ill
dep
en
d
on
th
e
nu
mb
er
of
cases
inv
olv
ing
in
ad
eq
uate
re
co
veri
es d
isclo
sed
in
o
ur
su
rvey
s.
REM
AR
KS
~
0
AC
CO
UN
TA
BIL
ITY
M
OD
EL
--------
ISS
UE
A
REA
LE
AD
D
IVIS
ION
-----·--
Acco
un
tin
g
an
d
Fin
an
cia
l FG
MSD
R
ep
ort
ing
TIT
LE
O
F P
RIO
RIT
Y
LIN
E<
5f'
EF
FO
RT
:--D
o
the
Sy
stem
s P
rov
ide
Max
imum
A
ssu
ran
ce
that
Ag
en
cie
s d
o
no
t O
vero
bli
gate
an
d/o
r O
vere
xp
en
d
Th
eir
A
pp
rop
riati
on
s?
-2
80
4
OB
JEC
TIV
E(S
) A
ND
PL
AN
NE
D
AC
CO
MPL
ISH
ME
NT
S
PRO
GR
AM
PL
AN
A
PPR
OV
AL
D
A'l'E
PE
RIO
D
CO
VE
RB
D:
7/1
/77
to
1
0/3
1/7
8
PLA
NN
ED
S
TA
FF
Y
EAR
S (E
ST
) :
9
AC
TUA
L S
TA
FF
Y
EA
RS:
1
0
OF
PL
OE
: T
o d
ete
rmin
e
wh
eth
er-
ag
en
cy
acco
un
tin
g
syst
em
s p
rov
ide
for
ad
eq
uate
ad
min
istr
ati
ve co
ntr
ol
of
fun
ds
at
all
le
vels
to
p
rev
en
t in
cu
rren
ce o
f o
bli
gati
on
s
or
ex
pen
dit
ure
s o
f fu
nd
s in
ex
cess o
f w
hat
has
been
au
tho
rized
.
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
LO
SS
OF
AC
CO
UN
TIN
G
INT
EG
RIT
Y
IN
AIR
FO
RC
E
PRO
CU
!{B
MEN
'l' A
PP
RO
PR
IAT
ION
S,
(FG
MS
D-7
7-8
1,
11
-1-7
7)
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
HOW
A
ND
'1
'0
WH
AT
EX
'rEN
T
HA
S T
H1S
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F LINE-OF~EFFORT
. --
Th
is re
po
rt d
iscu
ssed
th
e
need
to
co
rrect
imp
rop
er
acco
un
tin
g p
roced
ure
s
use
d
for
the A
ir
Fo
rce's
p
rocu
rem
en
t ap
pro
pri
a
tio
ns,
wh
ich
p
reclu
ded
th
e A
ir
Fo
rce
fro
m
dete
rmin
ing
w
heth
er
ob
lfg
ati
on
s
or
ex
pen
dit
ure
s
ex
ceed
ed
fu
nd
re
so
urc
es
av
ail
ab
le
in
18
p
rocu
rem
en
t acco
un
ts.
Als
o,
GA
O
iden
tifi
ed
im
pro
per
en
trie
s,
tota
lin
g
$7
.5 m
illi
on
, re
co
rded
to
av
oid
re
veali
ng
an
o
vero
bli
gati
on
in
o
ne
acco
un
t.
Th
e A
ir
Fo
rce
has
pro
mis
ed
to
ta
ke co
rrecti
ve ac~ion.
REM
AR
KS
Req
uest
ed
b
y
the
Ho
use
A
pp
rop
ria
tio
ns
Co
mm
itte
e
"'" ........
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
TH
E
PAY
RO
LL
A
LL
OT
ME
NT
PR
OG
RA
M
NE
ED
S A
SE
CO
ND
L
OO
K,
FG
MS
D-7
8-5
2,
Sep
tem
ber
29
, 1
97
8
RE
VIE
H
OF
MIL
ITA
RY
D
EPA
RT
ME
N'l'
S'
PRO
GR
AM
S FO
R
RE
PA
IR
AN
D
RE
PL
AC
E
MEN
T O
F E
QU
IPM
EN
T
PRE
VIO
USL
Y
SOL
D
TO
FOR
EIG
N
GO
VE
RN
ME
NT
S,
FG
MS
D-7
8-6
0,
Sep
tem
ber
29
, 1
97
8
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
S
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Th
is re
po
rt
sho
wed
th
at
the
Go
vern
m
en
t w
as
no
t re
co
veri
ng
fr
om
fi
nan
cia
l in
sti
tuti
on
s,
the fu
ll
co
sts
o
f p
rocessin
g p
ay
roll
all
ot
men
ts o
f U
.S.
civ
ilia
ns as
inte
nd
ed
b
y ~aw.
Th
ese
co
sts
w
ere
n
ot
full
y
reco
vere
d
becau
se
the ra
tes
were
o
utd
ate
d.
Als
o,
fin
an
cia
l in
sti
tu
tio
ns
were
n
ot
ch
arg
ed
fo
r th
e p
ro
cessin
g o
f all
otm
en
ts
for
mil
itary
p
ers
on
nel
an
d
ov
ers
eas civ
ilia
n
em
plo
yees.
A
s a
resu
lt,
the
Go
vern
m
en
t d
oes
no
t re
co
ver
an
y p
ort
ion
o
f th
e
$5
.6 m
illi
on
sp
en
t an
nu
all
y
to p
rocess all
otm
en
ts
for
mil
itary
p
ers
on
nel
an
d civ
ilia
ns
wo
rkin
g
ov
ers
eas
an
d
reco
vers
o
nly
ab
ou
t h
alf
o
f th
e
$2
.6 m
illi
on
in
co
sts
in
cu
rred
to
p
rocess all
otm
en
ts
of
U.S
. civ
ilia
ns
wo
rkin
q
in th
e
Un
ited
S
tate
s.
Th
is re
po
rt
pro
po
sed
th
at
the
Co
ng
ress
co
nsid
er
wh
eth
er
the
pre
sen
t all
otm
en
t p
rog
ram
is
m
eeti
ng
it
s ex
pecta
tio
ns.
Th
e A
ir F
orc
e's
m
anag
emen
t an
d
co
ntr
ol
of
the
pro
gra
m fo
r th
e
retu
rn o
f u
nserv
iceab
le
eq
uip
men
t b
y
f o
reiq
n g
ov
ern
men
ts
was
n
ot
eff
ecti
ve.
Air
F
orc
e re
gu
lati
on
s
req
uir
ed
th
at
there
b
e
a sp
ecif
ic
need
fo
r th
e
retu
rned
u
nserv
ice
ab
le eq
uip
men
t,
ho
wev
er,
cre
dit
s
'° N
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
IMPR
OPE
R
AU
GM
EN
TA
TIO
N
OF
TH
E
FIS
CA
L
YEA
R
19
72
O
TH
ER
P
RO
C
UR
EM
EN
T,
ARM
Y
AP
PR
OP
RIA
TIO
N
AC
CO
UN
T (FGMSD-77-80~
9-2
8-7
7)
ARM
Y
EFF
OR
TS
TO
RE
STO
RE
IN
TE
GR
ITY
TO
IT
S
FIN
AN
CIA
L
MA
NA
GEM
ENT
SYST
EN
S (F
GM
SD
-7
8-2
8,
4-2
7-7
8)
MO
RE EP~ECTIVE
CO
NT
RO
LS
OV
ER
BU
REA
U
OF
"IN
DIA
N
AF
FA
IRS
A
DM
INIS
TR
AT
IVE
C
OST
S A
RE
NEE
DED
(F
GM
SD
-78
-17
, 2
-15
-78
)
·-:>.
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
F'G
MSD
HOW
A
ND
TO
W
HA
T E
X'rE
NT
H
AS
TH
IS
WO
RK
AC
CO
MPL
ISH
ED
o
aJE
CT
IVE
S
OF
LINE~oF=BFFORT
----
---
GA
O
rep
ort
ed
th
at
un
sup
po
rted
acco
un
tin
g
ad
justm
en
ts
to
the
fis
cal
year
19
72
O
ther
Pro
cu
rem
en
t,
Arm
y acco
un
t,
wh
ich
im
pro
perl
y
incre
ased
fu
nd
re
so
urc
e
by
$
33
m
illi
on
, sh
ou
ld
be
rev
ers
ed
. T
he
en
trie
s
were
re
co
rded
afte
r th
e
Arm
y d
ete
rmin
ed
th
at
fun
d
reso
urc
e
tran
sfe
rs au
tho
rized
b
y
the
Co
ng
ress
w
ere
n
ot
su
ffic
ien
t to
b
rin
g
the
acco
un
t o
ut
of
a d
efic
it sta
tus.
Th
is re
po
rt d
iscu
ssed
th
e seri
ou
s
bre
ak
do
wn
in
fi
nan
cia
l co
ntr
ol
ov
er
Arm
y p
rocu
rem
en
t ap
pro
pri
ati
on
s,
wh
ich
le
d
to v
iola
tio
ns o
f th
e
An
ti
Det
icie
ncy
A
ct
tota
lin
g
mo
re
than
~225
mil
lio
no
T
he
rep
ort
sh
ow
ed
acti
on
s
tak
en
b
y th
e
Arm
y to
im
pro
ve
its
fin
an
cia
l m
anag
emen
t an
d
po
inte
d
ou
t th
e
need
fo
r th
e
Arm
y to
d
ev
elo
p
a sta
nd
ard
p
rocu
rem
en
t ap
pro
pri
ati
on
acco
un
tin
g
syst
em
fo
r u
se
by
all
le
vels
o
f m
an
ag
em
en
t.
Th
e A
rmy
said
it
wo
uld
d
esig
n
an
d
imp
lem
en
t a
sta
nd
ard
sy
stem
.
Th
is re
po
rt d
iscu
sses
how
th
e
Bu
reau
o
f In
dia
n A
ffair
s
red
uced
fu
nd
s fo
r In
dia
n
pro
gra
ms
by
ab
ou
t $
7.6
m
illi
on
in
fis
cal
years
1
97
7
and
1
97
8
rath
er
than
re
du
cin
g it
s ad
min
istr
ati
ve co
sts
as
dir
ecte
d
by
co
ng
ressio
nal
co
mm
it
tees.
As
a resu
lt o
f th
e re
po
rt,
the
Bu
reau
sta
rted
co
rrecti
ng
seri
ou
s
weak
ness
es
in it
s fi
nan
cia
l m
an
ag
e-
men
t sy
stem
.
REM
AR
KS
Req
uest
ed
b
y
the
Ho
use
A
pp
rop
ria
tio
ns
Co
mm
itte
e
Req
uest
ed
b
y
the
Ho
use
A
pp
rop
ria
tio
ns
Co
mm
itte
e
Req
uest
ed
b
y
the
Ch
air
man
, S
en
ate
S
ub
co
mm
itte
e,
Dep
art
men
t o
f In
teri
or
and
R
ela
ted
A
gen
cie
s
\.0
w
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
W
OF
TH
E
NA
VY
'S
FOR
EIG
N
MIL
ITA
RY
S
AL
ES
T
RU
ST
FUN
D
RE
CO
NC
ILIA
TIO
N
MO
NI'1
'0R
'1
'HE
S'l'A
'1'U
S O
F N
AV
Y
INV
ES
TIG
AT
ION
O
F P
OS
SIB
LE
A
NT
I-D
EF
ICIE
NC
Y
AC
T
VIO
L
AT
ION
S
AT
BA
Y
ST
. L
OU
IS
MIS
SIS
SIP
PI
RE
VIE
W
OF
EDA
LO
AN
S A
ND
G
UA
RA
NT
EE
S A
ND
O
TH
ER
G
OV
ERN
MEN
T C
OM
MIT
MEN
TS
TO
SE
AT
RA
IN
SH
IPB
UIL
DIN
G
CO
RPO
RA
TIO
N
9J
AC
CO
UN
TA
BIL
ITL
Y
MO
DEL
PRO
GR
AM
MIN
G
DIV
ISIO
N
·-
FGM
SD
LCD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Th
is
rev
iew
sh
ow
ed
that
the
Dep
art
men
t o
f D
efe
nse
d
id
no
t k
no
w th
e co
rrect
cash
b
ala
nce
bein
g
held
in
tr
ust
for
co
un
trie
s
inv
olv
ed
in
th
e
Nav
y's
fo
reig
n m
ilit
ary
sale
s
pro
gra
m.
Th
is
is
desp
ite
the
Nav
y's
h
av
ing
sp
en
t th
ou
sa
nd
s o
f sta
ff d
ay
s sin
ce earl
y
19
77
to
d
ete
rmin
e
why
th
e tr
ust
fun
d
acco
un
t d
oes
no
t ag
ree
wit
h d
eta
iled
m
ilit
ary
sale
s case acco
un
tin
g
reco
rds.
Un
reco
ncil
ed
d
iffe
ren
ces
in
cash
b
ala
nces
betw
een
th
e
two
sets
o
f re
co
rds
tota
led
$
55
4 m
illi
on
as
of
Jun
e 1
, 1
97
8.
(FG
MS
D-7
9-2
, 1
1-1
5-7
8)
Th
is
rev
iew
is
to
m
on
ito
r th
e
Nav
y's
in
vesti
gati
on
o
f O
pera
tio
n
an
d
Main
te
nan
ce
fun
ds
use
d
for
co
nstr
ucti
on
o
f b
uil
din
g
in v
iola
tio
n o
f th
e
law
.
We
fou
nd
th
at
co
ng
ressio
nal
co
ntr
ol
ov
er
the
loan
g
uara
nte
e
pro
gra
m
need
s to
b
e str
en
gth
en
ed
b
ecau
se
th·e
E
con
om
ic
Dev
elo
pm
en
t A
dm
inis
trati
on
d
oes
no
t h
av
e
en
ou
gh
re
serv
e
fun
ds
to
rep
ay
le
nd
ers
fo
r lo
an
s o
uts
tan
din
g
in
the
ev
en
t o
f a
larg
e d
efa
ult
.
REM
AR
KS
Req
uest
ed
b
y
the
Ho
use
A
pp
rop
ria
tio
ns
Co
mm
itte
e
Req
uest
ed
b
y
Sen
ato
r W
illi
am
P
rox
mir
e
Req
uest
o
f R
an
kin
g
Min
ori
ty
Mem
ber
, H
ou
se
Co
mm
itte
e, o
n
Pu
bli
c
Wo
rks,
S
ub
co
mm
itte
e
on
In
vesti
g
ati
on
an
d
Rev
iew
~
.i:.
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
W
OF
CO
RPS
O
F E
NG
INE
ER
S A
CC
OU
NT
ING
FO
R
AD
MIN
IST
RA
TIV
E
EX
PEN
SES
OT
HE
R
WO
RK
(co
mp
osi
te)
PRO
GR
AM
MIN
G
DIV
ISIO
N
1''G
MSD
OV
ER
AL
L
ASS
ESS
ME
NT
O
F'
LIN
E-O
F-E
FF
OR
T IMPAC'l~
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
OHK
AC
CO
MPL
ISH
BD
O
BJE
CT
IVE
S-6
F'L
JNE
-0F
-EF
FO
RT
In th
is effo
rt
we
fou
nd
th
at
the
Co
rps'
h
ead
qu
art
ers
o
ffic
e
ch
arg
ed
re
gio
nal
dis
tric
ts
an
d p
roje
cts
fo
r ad
min
istr
ati
ve co
sts
at
least
$1
17
m
illi
on
. T
his
p
racti
ce
neg
ate
s
co
ng
ressio
nal
co
ntr
ol.
All
w
ork
co
mp
lete
d
in th
is li
ne-o
f-effo
rt
was
g
en
era
ted
b
y
req
uests
fr
om
ch
air
men
o
f co
ng
ressio
nal
co
mm
itte
es.
In
ev
ery
in
sta
nce,
we
gav
e
valu
ao
le assis
tan
ce
to
the
co
mm
itte
es,
an
d
the
ag
en
cie
s
we
au
dit
ed
h
av
e
pla
nn
ed
to
im
pro
ve
their
fu
nd
co
ntr
ol
syst
em
s as
a resu
lt o
f o
ur
wo
rk.
WH
AT
IS
LE
FT
TO
B
E D
ON
E?
Rev
iew
s h
av
e
been
m
ade
of
sev
era
l acco
un
tin
g
syst
em
s fo
r th
e
eff
ecti
ven
ess
of
their
ad
min
istr
ati
ve co
ntr
ol
ov
er
fun
ds.
H
ow
ever
, m
any
sy
stem
s in
m
ajo
r d
ep
art
men
ts
an
d
ag
en
cie
s
hav
e
no
t y
et
been
ev
alu
ate
d
for
the eff
ecti
ven
ess o
f th
eir
fu
nd
co
ntr
ol
syst
em
s.
FGM
SD
and
o
ther
GA
O
div
isio
ns
wil
l co
nti
nu
e
to
be ale
rt
for
defi
cie
ncie
s
in
syst
em
s re
sp
on
sib
le to
r ad
min
istr
ati
ve co
ntr
ol
ov
er
fun
ds,
u
nsu
pp
ort
ed
o
r im
pro
per
ad
justm
en
ts,
an
d p
ote
nti
al
vio
lati
on
s o
f th
~ A
nti
-Defi
cie
ncy
A
ct.
·
REM
AH
KS
Req
uest
o
f P
ub
lic
Wo
rks
Su
b
co
mm
itte
e,
Ho
use
A
pp
ro
pri
ati
on
s
Co
mm
itte
e
\L
Ul
AC
CO
UN
TA
BIL
ITY
M
OD
EL
ISS
UE
A
REA
LE
AD
D
IVIS
ION
-------
Acco
un
tin
g
and
F
inan
cia
l FG
MSD
R
ep
ort
ing
TIT
LE
O
F P
RIO
RIT
Y
LIN
E
OF
EF
FO
RT
: D
o A
gen
cy
Acco
un
tin
g
---
Sy
stem
s P
rov
ide
for
So
un
d
Cas
h
Man
agem
ent?
-
28
05
OB
JEC
TIV
E('
S)
AN
b PL
AN
NED
A
CC
OM
PLIS
HM
EN
TS
PRO
GR
AM
PL~N'
APP
RO
VA
L
DA
TE
PER
IOD
C
OV
ER
ED
: 7
/77
to
1
0/1
8
PLA
NN
ED
S'r
Al''
l''
YEA
RS
(ES
T) :---2
0--
AC
TUA
L S
TA
FF
Y
EA
RS:
1
5
OF
PL
OE
: T
o d
ete
rmin
e if
F
ed
era
l ag
en
cy
acco
un
tin
g
syst
em
s in
clu
de
ap
pro
pri
ate
co
ntr
ols
to
in
su
re
that
(1)
Fed
era
l cash
b
ala
nces
main
tain
ed
o
uts
ide
the T
reasu
ry are
m
inim
ized
, (2
) fu
nd
s o
wed
th
e
Fed
era
l G
ov
ern
men
t are
co
llecte
d
and
d
ep
osit
ed
p
rom
ptl
y,
and
(3
) fu
nd
s o
wed
b
y
the
Go
vern
men
t are
n
ot
dis
bu
rsed
p
rem
atu
rely
.
MA
JOR
R
EPO
RT
S O
R
OTH
ER
OU
TPU
T
THE
PED
ER
AL
G
OV
ER
NM
EN
T'S
B
ILL
PA
YM
ENT
PER
FOR
MA
NC
E IS
G
OO
D
Burr
SHO
ULD
B
E B
ET
TE
R
( FG
MSD
-7
8-1
6,
2-2
4-7
8)
CA
SH MANAGEMENT-~OLICY
AN
D
PRO
CE
DU
RE
S N
EED
IM
PRO
VEM
ENT
(PG
MS
D-7
8-2
0,
3-1
7-7
8)
PRO
GR
AM
MIN
G
Drv
ISf6
N--
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
X'l'
EN
'r H
AS
TH
IS
WO
RK
AC
CO
MPt
ISA
ED
O
BJE
CT
IVE
S
OF LINE-OF~EFFORT
Th
e re
po
rt said
th
at
30
p
erc
en
t o
f th
e
Go
vern
men
t's
bil
ls w
ere
p
aid
la
te
resu
ltin
g
in lo
ss o
f cash
d
isco
un
ts
and
cau
sin
g
som
e co
ntr
acto
rs
to sto
p d
oin
g
bu
sin
ess w
ith
th
e
Go
vern
men
t.
In ad
di
tio
n,
man
y b
ills
w
ere
p
aid
earl
y
resu
ltin
g
in
un
necess
ary
in
terest
co
sts
to
th
e
Go
vern
men
t.
Th
e re
po
rt
str
essed
th
e
imp
ort
an
ce o
f p
ay
ing
b
ills
o
n
tim
e
an
d
po
inte
d o
ut
that
imp
rov
e
men
ts w
ill
req
uir
e
ch
an
ges
in
Fed
era
l p
rocu
rem
en
t p
oli
cy
an
d
ag
en
cy
p
ay
men
t p
roced
ure
s.
Th
is re
po
rt m
en
tio
ned
th
at
DO
D
co
uld
sa
ve
ab
ou
t $
3.2
m
illi
on
in
an
nu
al
inte
rest
co
sts
if
o
vers
eas
fin
an
ce
REM
AR
KS
\D
m
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
tPU
T
FAR
MER
S H
OM
E A
DM
INIS
'fR
A'r
ION
' S
SYST
EM
FO
R
DE
PO
SIT
ING
C
OU
NTY
O
FF
ICE
C
OL
LE
CT
ION
S
IN
TH
E
FED
ER
AL
R
ESE
RV
E
BA
NK
(F
GM
SD
-78
-32
, 4
-18
-78
)
LE
TT
ER
R
EPO
RT
TO
T
HE
E
XE
CU
TIV
E
SEC
RE
TA
RY
C
OST
A
CC
OU
NT
ING
ST
AN
DA
RD
S B
OA
RD
(f
GM
SD
-78
-37
, 5
-18
-78
)
LE
TT
ER
R
EPO
RT
TO
T
HE
C
ON
TR
OL
LE
R,
DEP
AR
TMEN
T O
F EN
ERG
Y
(fG
MS
D-7
8-5
3,
8-3
-78
)
l...~
AC
CO
UN
TA
BIL
ITY
M
OO
EL
PRO
GR
AM
MlN
G
DIV
ISIO
N
FGM
SD
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T EX
TEN
1 l1 H
AS
'TH
IS
WO
RK
ACCOMPLISH~D
OB
JEC
TIV
ES
O
F L
INE
.:OF
='E
FF
OR
T
off
ices re
turn
ed
an
e~timated
$5
0
mil
lio
n o
f ex
cess
bala
nces
to
the
Tre
asu
ry.
Ex
cess
b
ala
nces o
ccu
rred
b
ecau
se
DO
D's
g
uid
eli
nes
for
co
mp
uti
ng
cash
re
qu
irem
en
ts
were
u
ncle
ar
or
no
t fo
llo
wed
an
d
becau
se
DO
D
org
an
izati
on
s
hav
e
no
in
cen
tiv
e
to m
ain
tain
m
inim
um
b
ala
nces.
Defe
nse
h
as
pro
mis
ed
to
ta
ke co
rrecti
ve acti
on
.
As
a resu
lt o
f G
AO
's stu
dy
, th
e
Farm
ers
H
ome
Ad
min
istr
ati
on
re
du
ced
th
e
tim
e
to d
ep
osit
co
llecti
on
s
on
lo
an
s
in
Fed
era
l R
ese
rve
Ban
ks.
In
terest
co
st
sav
ing
s
to
the
Go
vern
men
t are
esti
mate
d at
$1
.5 m
illi
on
fo
r FY
1
97
8
and
$
2.5
m
illi
on
fo
r su
bse
qu
en
t y
ears
.
Th
e re
po
rt
sho
wed
th
e
eco
no
mic
ad
van
ta
ges o
f D
OD
u
sin
g le
tters-o
f-cred
it
to
pay
co
ntr
acts
o
n
wh
ich
th
e
Go
vern
m
ent
ad
van
ced
fu
nd
s o
r m
ade
pro
gre
ss
pay
men
ts.
Mo
reo
ver,
it
-sh
ow
ed
a
mo
dif
ied
fo
rm o
f le
tters-o
f-cred
it,
the
ch
eck
s-p
aid
te
ch
niq
ue,
wo
uld
all
ow
a
mo
re
pre
cis
e d
ecis
ion
o
n
the
lev
el
of
Go
vern
men
t's
an
d co
ntr
acto
rs'
inv
est
men
t in
w
ork
ing
cap
ital.
Th
e re
po
rt
no
ted
o
pp
ort
un
itie
s
to
imp
rov
e
DO
E1s
ch
eck
s-p
aid
le
tter-o
f
cred
it
syst
em
fo
r d
eli
veri
ng
F
ed
era
l fu
nd
s to
G
ov
ern
men
t co
ntr
acto
rs.
~he
REM
AR
KS
\.D
-.
.J
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
PRO
GR
AM
MIN
G
DIV
ISIO
N
RE
VIE
W
OF
BU
DG
ETA
RY
A
ND
C
ASH
H
RD
FLO
W
PRO
BL
EM
S A
T M
ON
TGO
MER
Y
CO
UN
TY
CO
MM
UN
ITY
A
CT
ION
A
GEN
CY
How·
AN
D
TO 'W
HA
T E
XT
EN
'l1 H
AS
TH
IS
WO
RK
REM
AR
KS
AC
CO
MPL
ISH
ED
O
BJE
CT
IVE
S
or·
LIN
E-6
F-E
FF
OR
'r
su
gg
este
d
imp
rov
em
en
ts
wo
uld
re
du
ce
ex
cess
bala
nces
held
b
y co
ntr
acto
rs
by
at
least
$1
.8 m
illi
on
. A
cti
on
w
as
tak
en
b
y
the
Dep
art
men
t o
f E
nerg
y
to
red
uce ex
cess
bala
nces.
\0
CX>
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
W
OF
TH
E
CA
SH
MA
NA
GEM
ENT
OF
TH
E
UN
EMPL
OY
MEN
T T
RU
ST
FUN
D
RE
VIE
W
OF
TH
E
CA
SH
MA
NA
GEM
ENT
OF
NA
TIO
NA
L
DIR
EC
T
STU
DE
NT
LO
AN
PR
OG
RA
M
FUN
DS
BY
PA
RT
IC
IPA
TIN
G
CO
LL
EG
ES
AN
D
UN
IVE
RS
ITIE
S
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
RE
VIE
W
OF
HE
W'S
fI
NA
NC
IAL
FG
MSD
A
CC
OU
NT
ING
SY
STE
M
USE
D
TO
MA
NA
GE
CA
SH
RE
SOU
RC
ES
AD
VA
NC
ED
TO
GR
AN
TE
ES
AN
D
CO
NT
RA
CT
OR
S
·RE
VIE
W
OF
PO
TE
NT
IAL
IN
TE
RE
ST
FG
MSD
SA
VIN
GS
TO
TH
E
TR
EA
SUR
Y
BY
USI
NG
M
ORE
E
fFE
CT
IVE
C
ASH
M
AN
AG
EMEN
T M
ETH
OD
S TO
PA
Y
GO
VER
NM
ENT
CON~RACTORS
WIT
H
CO
ST
TY
PE
CO
N'l'R
A.C
'fS
,·7
.~
· r'
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
-oiY
LIN
E-O
F-E
FF
OR
T
Th
is
rev
iew
h
as
sho
wn
F
ed
era
l an
d
Sta
te
Go
vern
men
ts
to
be
losin
g
an
esti
mate
d
$4
.l m
illi
on
in
an
nu
al
inte
rest
inco
me
becau
se S
tate
s
use
in
eff
ecti
ve
cash
m
anag
emen
t te
ch
niq
ues
in h
an
dli
ng
u
nem
plo
ym
ent
tax
es.
Th
e co
nd
itio
n
persis
ts
becau
se
Lab
or
is in
eff
ecti
ve
in m
on
ito
rin
g
an
d
gu
idin
g
Sta
te
cash
m
anag
emen
t p
erf
orm
an
ce.
Th
is
rev
iew
h
as
dem
on
stra
ted
th
e
op
po
rtu
nit
y
for
inte
rest
co
st
or
the
pu
bli
c d
eb
t to
b
e
red
uced
b
y ab
ou
t $
4 m
illi
on
an
nu
all
y if
sch
oo
ls p
ar
ticip
ati
ng
in
th
e
ND
SL
pro
gra
m
retu
rned
ex
cess
Fed
era
l cash
. S
uch
sch
oo
ls
were
h
old
ing
ab
ou
t $
63
m
illi
on
in
F
ed
era
l fu
nd
s th
at
were
ex
cess
to
their
n
eed
s.
Th
is
rev
iew
h
as
iden
tifi
ed
ab
ou
t $
8.3
m
illi
on
in
F
ed
era
l intere~t
ex
pen
se
that
co
uld
h
av
e
been
av
oid
ed
inn
l97
6
if
HE
W's
co
mp
ute
rized
cash
ad
van
ce
syst
em
h
ad
no
t all
ow
ed
F
ed
era
l assis
ta
nce re
cip
ien
ts
to
ho
ld
ex
cess
cash
b
ala
nces.
Th
is
rev
iew
h
as
iden
tifi
ed
sev
era
l m
ajo
r D
efe
nse
co
ntr
acto
rs g
ett
ing
la
rge co
st
pay
men
ts
un
der
co
st
reim
b
urs
ab
le co
ntr
acts
fa
r in
ad
van
ce
of
need
s.
By
usi
ng
b
ett
er
tech
niq
ues
to
tim
e
reim
bu
rsab
le
pay
men
ts
to
such
REM
AR
KS
"" \0
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
WE
AK
NE
SSE
S P
ER
SIS
T
IN
DE
FEN
SE
OV
ER
SEA
S C
ASH
M
AN
AG
EMEN
T PR
OG
RA
M
APP
RO
VA
L
OF
AC
CO
UN
TIN
G
SY
ST
EM
S--
D.C
. GOV~RNMENT
ST
AF
F
STU
DY
O
F D
.C.'
S
MU
NIC
IPA
L
BO
ND
PR
OG
RA
M
>">.
.;.
AC
CO
UN
TA
BIL
ITY
M
OD
EL
---
.
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
GG
D
HO
W
AN
D '
TO
'W
HA
T E
XT
EN
'f H
AS
''!
'HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F Lt~E-OF-EFFORT
co
ntr
acto
rs,
Defe
nse
can
sl
ow
fu
nd
w
ith
dra
wals
fr
om
th
e
U.S
. T
reasu
ry,
there
by
sa
vin
g sev
era
l m
illi
on
d
oll
ars
an
nu
all
y
in in
terest
co
st
on
th
e p
ub
lic d
eb
t.
Th
is
rev
iew
fo
llo
ws
up
o
n
a p
rev
iou
s
rep
ort
d
iscu
ssin
g
imp
rov
em
en
ts
need
ed
in
th
e
way
D
OD
o
pera
tes it
s o
vers
eas
cash
m
anag
emen
t p
rog
ram
. T
he
rev
iew
h
as
dem
on
stra
ted
th
at
mo
re
eco
no
mic
al
and
effic
ien
t w
ays
are
av
ail
ab
le
to
pro
vid
e d
oll
ars
to
m
ilit
ary
in
sta
lla
tio
ns
an
d
ban
ks
an
d
that
bett
er
pro
gra
m
mo
nit
ori
ng
an
d
cash
co
ntr
ols
w
ou
ld
red
uce
ex
cess
cash
b
y m
illi
on
s o
f d
oll
ars
. P
rop
er
imp
rov
em
en
ts
co
uld
p
erm
it
an
an
nu
al
red
ucti
on
o
f ab
ou
t $
1 m
illi
on
o
f in
terest
co
st
on
th
e
Pu
bli
c
Deb
t.
Th
e C
om
ptr
oll
er
Gen
era
l is
re
qu
ired
b
y
law
to
re
vie
w
and
ap
pro
ve
the d
esig
n
of
the D
istr
ict
of
Co
lum
bia
.' s
acco
un
tin
g
syst
em
s.
Acco
rdin
gly
, th
e
div
isio
n is
re
vis
ing
th
e d
esig
ns
of
the D
istr
ict'
s
cash
m
anag
emen
t sy
stem
an
d w
ill
mo
nit
or
its
imp
lem
en
tati
on
.
REM
AR
KS
.......
0 0
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
O
N-G
OlN
G'A
SS
IGN
ME
NT
S
PHO
GR
AM
MIN
G
DIV
ISIO
N
OV
ER
AL
L
ASS
ESS
ME
NT
O
V LINE-OF~EFFORT
IMPA
CT
HOW
A
ND
TO
W
HA
T.E
XT
EN
T
HA
S T
HIS
W
OH
K
REM
AR
KS
AC
CO
MPL
ISH
ED
OBJE~~jij~~
bF
LIN
E-O
F-E
FF
OR
T
---
·
Ou
r w
ork
in
th
e
cash
m
anag
emen
t are
a
has
resu
lted
in
o
ver
$8
bil
lio
n
of
cash
b
ein
g
mad
e av
ail
ab
le
to
the
Tre
asu
ry so
on
er,
w
hic
h
can
su
bsta
n
tiall
y
red
uce
pu
bli
c d
eb
t b
orr
ow
ing
s.
Becau
se o
f th
e
sig
nif
ican
ce o
f o
ur
wo
rk's
im
pact
on
th
e
fin
an
cia
l m
anag
emen
t o
f th
e
Un
ited
S
tate
s,
we
pla
n
to
co
nti
nu
e o
ur
effo
rts
u
nd
er
this
li
ne-o
f-effo
rt.
WH
AT
IS
LE
FT
~O'BE
DO
NE?
Wh
ile
wo
rk
has
been
d
on
e
in th
is li
ne-o
f-effo
rt
at
sev
era
l ag
en
cie
s,
man
y
ag
en
cie
s still
hav
e
no
t b
een
lo
ok
ed
at.
H
igh
o
n
the p
rio
rit
y list
are
th
ose
ag
en
cie
s co
ntr
oll
ing
la
rge
am
ou
nts
o
f fu
nd
co
llecti
on
s
and
d
isb
urs
em
en
ts
inclu
din
g
the
Dep
art
men
ts o
f E
nerg
y,
Tre
asu
ry,
and
D
efe
nse
.
GA
O's
co
nti
nu
ed
effo
rt
in
the
cash
m
anag
emen
t are
a w
ill
be
necessary
b
ecau
se
(1)
little
fin
an
cia
l in
cen
tiv
e ex
ists
fo
r ag
en
cie
s
to p
racti
ce
sou
nd
cash
m
an
ag
em
en
t,
(2)
cash
m
anag
emen
t is
a
rela
tiv
ely
ne
w are
a
of
co
ncern
to
th
e
Fed
era
l G
ov
ern
men
t an
d
ag
en
cie
s are
u
nex
peri
en
ced
in
it
s
tech
niq
ues,
and
(3
) T
reasu
ry is
re
lucta
nt
to
ass
um
e
the
role
o
f m
on
ito
rin
g
ag
en
cy
p
racti
ces.
Ou
r fu
ture
re
vie
w o
bje
cti
ves w
ill
em
ph
asi
ze
the
need
fo
r F
ed
era
l ag
en
cie
s
to d
ev
elo
p p
roced
ure
s
that
wil
l p
erm
it g
ran
tee
an
d o
ther
org
an
iz
ati
on
s
to o
pera
te
wit
h little o
r n
o
Fed
era
l cash
b
ala
nces.
Th
ey w
ill
als
o d
em
on
stra
te
the
eco
no
mic
ad
van
tag
es
of
Sta
te
Go
vern
men
ts li
fti
ng
le
gal
an
d
ad
min
istr
ati
ve b
arr
iers
so
o
ther
Fed
era
l cash
b
ala
nces
can
b
e
min
imiz
ed
. W
e ex
pect
a ste
p-b
y-s
tep
ap
pro
ach
in
g
ett
ing
im
pro
vem
en
ts
ad
op
ted
th
at
wil
l ev
en
tuall
y p
erm
it re
cip
ien
ts o
f la
rge
am
ou
nts
o
f F
ed
era
l assis
tan
ce
to o
pera
te w
ith
ou
t an
y
Fed
era
l cash
b
ala
nce,
red
ucin
g
the
inte
rest
co
st
on
th
e
pu
bli
c
deb
t b
y m
illi
on
s o
f d
oll
ars
.
.......
0 ...--
AC
CO
UN
TA
BIL
ITY
M
OD
EL
ISS
UE
A
REA
LE
AD
D
IVIS
ION
PR
OG
RA
M
PLA
N
APP
RO
VA
L
DA
TE
Acco
un
tin
g
an
d
Fin
an
cia
l FG
MSD
R
ep
ort
ing
P
ER
IOD
C
OV
ER
ED
: 7
/1/7
7
-9
/30
/78
PL
AN
NED
S
TA
FF
Y
EAR
S (E
ST
): -~-------
TIT
LE
O
F P
RIO
RIT
Y
LIN
E
OF
EF
FO
RT
: D
o A
gen
cy
Acco
un
tin
g
Sy
stem
s P
rov
ide
for
Ad
eq
uate
F
inan
cia
l A
cco
un
tin
g
in C
on
tro
l P
roced
ure
s fo
r In
vest
men
t in
P
ers
on
al
Pro
pert
y?
-2
80
6
OB
JEC
TIV
E(S
) A
ND
PL
AN
NED
A
CC
OM
PLIS
HM
EN
TS
AC
TU
AL
.ST
AF
F.Y
EA
RS
:
OF'PLOE:~aluate
the
pro
pert
y
acco
un
tin
g
syst
em
s in
D
efe
nse
an
d C
ivil
ag
en
cie
s
and
o
bta
in
an
o
verv
iew
o
f th
e
am
ou
nts
an
d lo
cati
on
s o
f p
ers
on
al
pro
pert
y
man
aged
b
y
Fed
era
l ag
en
cie
s.
Sp
ecif
ic are
as
of
co
ncern
w
ill
inclu
de
wh
eth
er
(1)
pro
pert
y
reco
rds
main
tain
ed
are
ad
eq
uate
an
d co
rrect,
(2
) co
ntr
ols
are
su
ffic
ien
t to
id
en
tify
lo
sses,
(3)
am
ou
nts
sh
ow
uin
th
e
reco
rds
are
re
pre
sen
ted
b
y
ph
ysic
al
pro
pert
y,
(4)
ph
ysic
al
inv
en
tori
es are
take~
at
reg
ula
r in
terv
als
, an
d
(5)
fin
an
cia
l re
po
rts are
ad
eq
uate
an
d
use
d
by
m
an
ag
em
en
t.
l
MA
JOR
R
EPO
RT
S O
R
OTH
ER
OU
TPU
'r ---------
----·---·----
PRO
GR
AM
MIN
G
-------
DIV
ISIO
N
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
.IN
E-O
F-E
FF
OR
T
NO
NE
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
SUR
VEY
O
F T
HE
A
DEQ
UA
CY
O
F T
HE
D
EFE
NSE
A
GE
NC
IES
FIN
AN
CIA
L
AC
CO
UN
TIN
G
SYST
EM
S FO
R
PER
SON
AL
PROPER~Y
(903
81)
FGM
SD
-..----------
Majo
r o
vera
ll d
efi
cie
ncie
s
in
the
Defe
nse
ag
en
cie
s'
acco
un
tin
g
syst
em
s h
av
e
been
id
en
tifi
ed
su
ch
as
a (1
) la
ck
o
f m
on
eta
ry co
ntr
ol
ov
er
Go
ver
nm
ent
pro
pert
y,
inclu
din
g
pro
pert
y
in
the
han
ds
of
pri
vate
co
ntr
acto
rs;
REM
AR
KS
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
Q:!:
!!__
~ __ V!OR~_J_9ompo~ i
te)
PRO
GR
AM
MIN
G
DIV
ISIO
N
OV
ER
AL
L
ASS
ESS
ME
NT
O
F IM
PAC
T
OF
OU
R
WO
RK
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
--O
F
LIN
E-O
F -E
FF
OR
T
--
---
-------
(2)
su
pp
ly
item
s are
ex
pen
sed
w
hen
p
aid
fo
r b
y m
ilit
ary
u
nit
s,
such
as d
ivi
sio
ns,
air
win
gs,
an
d
mo
st sh
ips
rath
er
than
carr
ied
in
an
in
ven
tory
acco
un
t u
nti
l co
nsu
mm
ed,
an
d
(3)
lack
o
f u
ni
form
ity
am
on
g
the
Defe
nse
ag
en
cie
s
in
the p
rep
ara
tio
n o
f th
e
an
nu
al
pro
pert
y
rep
ort
as
req
uir
ed
b
y le
gis
lati
on
.
Sin
ce
we
hav
e
use
d le
ss
than
1
sta
ff y
ear
in fis
cal
year
19
78
fo
r th
is
lin
e-o
f-effo
rt
an
d
no
re
po
rts
hav
e
been
is
su
ed
, th
e
imp
act
~
of
ou
r w
ork
h
as
been
n
eg
lib
le.
C> "->
WH
AT
IS
LE
FT
TO
B
E D
ON
E?
Sch
ed
ule
an
d
perf
orm
d
eta
iled
re
vie
ws
in sele
cte
d civ
il
ag
en
cie
s
an
d
the
Dep
art
men
t o
f D
efe
nse
to
ascert
ain
th
e ex
ten
t an
d
deg
ree o
f th
e
defi
cie
ncie
s
no
ted
in
th
e
cu
rren
t su
rvey
an
d
rep
ort
th
ese d
efi
cie
ncie
s
ap
pli
cab
le
to
the
man
ag
em
en
t o
f p
ers
on
al
pro
pert
y to
th
e
Co
ng
ress
as
req
uir
ed
b
y le
gis
lati
on
.
REM
AR
KS
......
0 w
AC
CO
UN
TA
BIL
ITY
M
OD
EL
ISS
UE
A
REA
LE
AD
D
IVIS
ION
Acco
un
tin
g
an
d
Fin
an
cia
l FG
MSD
R
ep
ort
ing
Tit
LE
O
F P
RIO
RIT
Y
LIN
E
OF
EF
FO
RT
: A
re
Ag
ency
In
tern
al
Co
ntr
ols
O
ver
R
eceip
ts
and
D
isb
urs
em
en
ts
Ad
eq
uate
?
(Acco
un
t S
ett
lem
en
t R
esp
on
sib
ilit
y)?
-
28
10
OB
JEC
TIV
ES
A
ND
PL
AN
NED
A
CC
OM
PLIS
HM
EN
TS
PRO
GR
AM
PL
AN
A
PPR
OV
AL
D
ATE
PE
RIO
D
CO
VE
RE
D:
7/1
/77
-
10
/31
/78
PL
AN
NED
S
TA
FF
Y
EAR
S (E
ST
):
__
:r!_
____
_ _
AC
TUA
L S
TA
FF
Y
EA
RS:
1
4
OF
PL
OE
: T
o d
ete
rmin
e w
heth
er
ag
en
cfe
s h
av
e eff
ecti
ve co
ntr
ol
---~~over
and
acco
un
tab
ilit
y
for
rev
en
ue
and
ex
pen
dit
ure
tr
an
sacti
on
s.
MA
JOR
R
EPO
RT
S O
R
OTH
ER
OU
TPU
T
WE
AK
NE
SSE
S IN
T
HE
D
RUG
EN
FOR
CEM
ENT
AD
MIN
IST
RA
TIO
N'S
F
INA
NC
IAL
M
AN
AG
EMEN
T SY
STE
M
(FG
MS
D-7
7-7
4,
12
-27
-77
)
WE
AK
NE
SSE
S IN
T
HE
D
EPA
RTM
ENT
OF
HO
USI
NG
A
ND
U
RB
AN
D
EV
EL
OP
ME
NT
'S
FIN
AN
CIA
L
MA
NA
GEM
ENT
SYST
EM
(F
GM
SD
-77
-75
, 1
2-2
8-7
7)
WE
AK
NE
SSE
S IN
~HE
FOO
D
AN
D
DRU
G
AD
MIN
IST
RA
TIO
N'S
F
INA
NC
IAL
M
AN
AG
EMEN
T SY
STEM
(F
GM
SD
-77
-76
, 1
1-8
-77
)
PRO
GR
AM
MIN
G
DIV
ISIO
N--
FGM
SD
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T EX
TEN
'J.1
HA
S •r
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-0-E
FF
OR
T
Th
e D
rug
E
nfo
rcem
en
t A
dm
inis
trati
on
's
co
ntr
ols
o
ver
rev
en
ue
an
d
ex
pen
dit
ure
tr
an
sacti
on
s
were
fo
un
d
to
be
inad
eq
uate
. A
fter
ou
r re
po
rt
was
is
su
ed
, th
e
Ag
ency
to
ok
ste
ps
to
imp
rov
e co
ntr
ols
.
Th
e D
ep
art
men
t's
co
ntr
ols
o
ver
co
llec
tio
ns,
imp
rest
fu
nd
s,
trav
el
ad
van
ces,
d
isb
urs
em
en
ts,
and
o
bli
gati
on
s
need
ed
im
pro
vem
en
t.
Bas
ed
on
o
ur
wo
rk,
the
Dep
art
men
t h
as
tak
en
co
rrecti
ve acti
on
s
to
imp
rov
e
these co
ntr
ols
.
Th
e F
oo
d
and
D
rug
A
dm
inis
trati
on
h
ad
sev
era
l w
eak
ness
es
in it
s co
ntr
ols
o
ver
its
fin
an
cia
l m
anag
emen
t sy
stem
. T
he
Ad
min
istr
ati
on
h
as
tak
en
ste
ps
to
imp
rov
e co
ntr
ols
as
a resu
lt o
f o
ur
rep
ort
.
REM
AR
KS
......
0 .&;.
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
---------
NE
ED
T
O
APP
LY
A
DE
QU
AT
E
CO
NT
RO
L
OV
ER
T
HE
C
EN
TR
AL
IZE
D
PAY
RO
LL
S
YS
TE
M,
HEW
(F
GM
SD
-77
-51
, 9
-22
-77
)
SET
TL
EM
EN
T
OF
AC
CO
UN
TS,
L
IBR
AR
Y
OF
CO
NG
RE
SS
(GG
D-7
8-8
, 1
1-3
-77
)
SET
TL
EM
EN
T
OF
AC
CO
UN
TS,
A
RC
HIT
EC
T
OF
TH
E
CA
PIT
OL
(G
GD
-78
-95
, 8
-2-7
8)
RE
VIE
W
OF
TH
E
NA
TIO
NA
L
GA
LL
ER
Y
OF
AR
TS
' U
SE
OF
PR
IVA
TE
A
ND
FE
DE
RA
L
FUN
DS
(GG
D-7
8-2
6,
12
-22
-77
)
AU
DIT
O
F F
OR
D-C
AR
TE
R
PR
ES
IDE
NT
IAL
T
RA
NS
ITIO
N
EX
PE
ND
ITU
RE
S
(GG
D-7
8-3
6,
12
-23
-77
)
RE
VIE
W
OF
CIR
CU
MST
AN
CE
S W
HIC
H
PE
RM
ITT
ED
M
ISU
SE
O
F FE
DE
RA
L
fUN
DS
BY
AN
U
RB
AN
M
ASS
T
RA
NSP
OR
TIO
N
AD
MIN
IST
RA
TIO
N
EM
PLO
YE
E
(CE
D-7
8-7
8,
3-1
0-7
8)
A.C
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
oivr
sior
r---
---·-
·---
FGM
SD
GG
D
GG
D
GG
D
GG
D
CE
D
------·-
-·-
--
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
:cco
MP
LIS
HE
DO
BJE
CT
IVE
S--
OF
--L
INE
-=-o
F-E
FF
OR
T
---------------
---------------
REM
AR
KS
Th
is re
po
rt d
isclo
sed
m
any
in
tern
al
co
ntr
ol
weak
ness
es
in
a $
2.2
b
illi
on
p
ay
roll
sy
stem
th
at
may
p
rev
en
t ti
mely
an
d
accu
rate
p
ay
men
ts
to
em
plo
yees.
A
s a
resu
lt o
f o
ur
rep
ort
, H
EW
mad
e a
nu
mb
er o
f sy
stem
im
pro
vem
en
ts.
Th
is
was
a
rev
iew
o
f th
e
pay
men
ts
mad
e in
o
rder
to sett
le
the
acco
un
ts o
f th
e
Lib
rary
o
f C
on
gre
ss.
Th
is
was
a
rev
iew
o
f th
e
pay
men
ts
mad
e in
o
rder
for
GA
O
to sett
le
the
acco
un
ts
of
the A
rch
itect
of
the C
ap
ito
l.
Th
is re
po
rt d
iscu
sses
the N
ati
on
al
Gall
ery
o
f A
rts'
po
licy
an
d
pra
cti
ces
for
usin
g
Fed
era
l an
d p
riv
ate
fu
nd
s fo
r ex
pen
dit
ure
s.
Th
is re
po
rt d
escri
bes
ho
w
Fed
era
l ex
pen
dit
ure
s
were
m
ade
du
rin
g
the
tran
sit
ion
fr
om
th
e
Fo
rd
to
the C
art
er
Ad
min
istr
ati
on
. It d
iscu
sses
pro
ble
ms
en
co
un
tere
d re
su
ltin
g
fro
m
inad
eq
uate
fi
nan
cia
l co
ntr
ols
.
Th
is
was
a
rep
ort
re
sp
on
din
g
to
a co
n
gre
ssio
nal
req
uest
co
ncern
ing
ho
w
fun
ds
co
uld
b
e
em
bezzle
d
fro
m
the
Fed
era
l G
ov
ern
men
t.
It p
oin
ted
o
ut
that
the
em
bezzle
men
t w
as
the resu
lt o
f th
e la
ck
o
f sev
era
l sig
nif
ican
t in
tern
al
co
ntr
ols
o
ver
ex
pen
dit
ure
s.
.......
0 Ul
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
LE
TT
ER
R
EPO
RT
TO
C
ON
GR
ESSM
AN
B
EN
JAM
IN
RO
SEN
TH
AL
O
N
TH
E
RE
IMB
UR
SEM
EN
T
SYST
EM
U
SED
FO
R
HO
ME
HEA
LTH
S
ER
VIC
ES
IN
N
EW
YO
RK
C
ITY
(H
RD
-78
-8,
10
-17
-77
)
USE
O
F EX
CH
AN
GE
ST
AB
ILIZ
AT
ION
FU
ND
R
ESO
UR
CE
S--A
RR
AN
GE
ME
NT
W
ITH
T
RE
ASU
RY
P
RO
VID
ES
A
CC
ESS
TO
IN
FOR
MA
TIO
N
(ID
-77
-42
, 9
-25
-77
)
EX
AM
INA
TIO
N
OF
TH
E
AC
CO
UN
T O
F TH
E U
.S.
TR
EA
SUR
Y ~OR
fIS
CA
L
YEA
RS
END
ED
JUN
E
30
, 1
97
4
AN
D
19
75
(F
OD
-77
-12
, 3
-8-7
8)
LE
TT
ER
R
EPO
RT
O
N
TH
E
RE
SUL
TS
OF
GA
O'S
E
XA
MIN
AT
ION
O
F T
HE
A
CC
OU
NT
Of ~HE
U.S
. T
RE
ASU
RY
fO
R
FIS
CA
L
YEA
RS
19
76
A
ND
1Y
77
(5-7
8)
NEW
M
ETH
OD
S N
EED
ED
FOR
C
HE
CK
ING
PA
YM
ENTS
M
AD
E BY
C
OM
PUTE
RS
(FG
MS
D-7
6-8
2,
11
-7-7
7)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
isw
N--
HR
D
ID
FOO
FOD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Th
is re
po
rt p
resen
ted
resu
lts o
f G
AO
's
au
dit
o
f th
e
syst
em
u
sed
to
re
imb
urs
e
cla
iman
ts fo
r th
e co
sts
o
f in
-ho
me care
. In
ad
eq
uate
co
ntr
ols
o
ver
ex
pen
dit
ure
s
was
o
ne o
f th
e
reaso
ns
for
cla
iman
ts
no
t b
ein
g
reim
bu
rsed
in
a
tim
ely
m
an
ner.
Th
is re
po
rt d
iscu
ssed
th
e resu
lts
of
an
au
dit
o
f fi
scal
year
19
75
ad
min
istr
a
tiv
e
ex
pen
ses
use
d
in o
pera
tin
g
the
fun
d.
Th
e p
urp
ose
o
f th
e au
dit
w
as
to
dete
rmin
e w
heth
er
these
ex
pen
ses
were
p
rop
erl
y acco
un
ted
fo
r an
d co
ntr
oll
ed
.
Th
is re
po
rt p
resen
ted
G
AO
's
op
inio
n
on
th
e sta
tus o
f th
e
acco
un
t o
f th
e
U.S
. T
reasu
ry,
as w
ell
as
the resu
lts
of
ou
r ex
am
inati
on
o
f tr
an
sacti
on
s
in
the
acco
un
t.
Th
is re
po
rt
pre
sen
ted
th
e resu
lts
of
GA
O's
ex
am
inati
on
o
f th
e
acco
un
t o
f th
e
U.S
. fo
r fis
cal
years
1
97
6
an
d
19
77
. G
AO
als
o
furn
ish
ed
an
o
pin
ion
o
n
the
sta
tus o
f th
e
acco
un
t.
Th
e ag
e o
f th
e
co
mp
ute
r call
s
for
a ch
an
ge
in
the
ap
pro
ach
to
d
ete
rmin
ing
w
heth
er
pay
men
ts
are
accu
rate
an
d
leg
al.
W
hil
e
the v
eri
ficati
on
o
f tr
an
sacti
on
s,
perf
orm
ed
b
y cert
ify
ing
an
d d
isb
urs
ing
o
ffic
ers fo
r th
e
past
20
0
years
, is
a
valu
ab
le
fun
cti
on
, th
e
REM
AR
KS
t-'
0 CJ\
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
AC
CO
UN
TA
BIL
ITY
M
bbE
L
PRO
GR
AM
MIN
G
DIV
ISIO
N--
HOW
A
ND
'l'
b W
HA
'l1 . E
XT
EN
T
DO
ES
TH
IS
WO
RK
AC
CO
MPL
ISH
OBJECTIV~S
bF
L
INE
-OF
-EF
FO
RT
meth
od
s em
plo
yed
n
eed
to
b
e re
vis
ed
to
d
eal
wit
h
au
tom
ate
d
pay
men
t sy
stem
s.
In th
is re
po
rt
we
reco
mm
end
th
at
the
Dir
ecto
r,
Off
ice o
f M
anag
emen
t an
d
Bu
dg
et,
d
irect
Fed
era
l ag
en
cie
s
to
rev
iew
an
nu
all
y w
heth
er
each
au
tom
ate
d
pay
men
t sy
stem
an
d it
s re
late
d
co
n
tro
ls are
o
pera
tin
g eff
ecti
vely
an
d
can
b
e re
lied
o
n
to
co
mp
ute
p
ay
men
ts
that
are
accu
rate
an
d le
gal.
OM
B sen
t a
lett
er to
th
e
head
s o
f d
ep
art
men
ts
an
d
ag
en
cie
s call
ing
att
en
tio
n to
o
ur
rep
ort
an
d str
essin
g
the
need
fo
r th
em
to
bec
om
e acq
uain
ted
w
ith
th
eir
au
tom
ate
d
pay
men
ts
syst
em
s an
d
to
ass
um
e g
reate
r re
sp
on
sib
ilit
y
for
assu
rin
g
the
accu
racy
o
f p
ay
men
ts
by
co
mp
ute
r.
Als
o,
the ~PMIP
is
· stu
dy
ing
th
e en
tire
co
ncep
t o
f certi
fy
ing
/dis
bu
rsin
g o
ffic
ers
to d
ete
rmin
e
wh
eth
er
leg
isla
tiv
e o
r o
ther
ch
an
ges
are
w
arr
an
ted
.
REM
AR
KS
I-'
0 ...._
)
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
W
OF
AG
ENC
Y
AC
CO
UN
TIN
G
ST
AT
ION
A
SS
IGN
ME
NT
S:
EMPL
OY
MEN
T T
RA
ININ
G
AD
M! N
I s·r
RA
TIO
N
EN
VIR
ON
ME
NT
AL
P
RO
TE
CT
ION
A
GEN
CY
HE
AL
TH
S
ER
VIC
ES
A
DM
IN I
ST
RA
'rI O
N
ARM
Y
EU
RO
PEA
N
COM
MA
ND
MIL
ITA
RY
A
IRL
IFT
CO
MM
AN
D
NA
VY
P
AC
IFIC
F
LE
ET
CO
MM
AN
D
DE
PAR
TM
EN
T
OF
STA
TE
FED
ER
AL
C
OM
PLIA
NC
E
WIT
H
"n
... Y A
ME
RIC
A"
AC
T
SUR
VE
Y
OF
U.S
. T
RE
AS
UR
Y'S
C
EN
TR
AL
F
INA
NC
IAL
"RE
PO
RT
ING
SY
STE
M
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
FGM
SD
FGM
SD
FGM
SD
FGM
SD
FGM
SD
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
' W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F LINE-OF=~FFORT
Resu
lts
to d
ate
sh
ow
th
at
these
ag
en
cie
s
lack
sig
nif
ican
t in
tern
al
co
ntr
ols
th
at
co
uld
ad
vers
ely
affect
the
sou
nd
ness
o
f th
eir
fi
nan
cia
l m
an
ag
em
en
t sy
ste
ms.
Ag
en
cie
s are
p
roh
ibit
ed
fr
om
sp
en
din
g
ap
pro
pri
ate
d
fun
ds
on
fo
reig
n
flag
carrie
rs
wh
en
Am
eri
can
fl
ag
carrie
rs
are
av
ail
ab
le.
Du
rin
g
ou
r w
ork
w
e ch
eck
th
e
ad
eq
uacy
o
f co
ntr
ols
to
en
su
re th
at
ille
gal
ex
pen
dit
ure
s
are
n
ot
mad
e.
31
u.s
.c.
72
re
qu
ires
GA
O
to
ex
am
ine
the
acco
un
ts
of
the
U.S
. T
reasu
ry.
Th
is
wo
rk w
ill
help
u
s to
m
eet
ou
r
REM
AR
KS
I-'
0 ro
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
bN
-GO
ING
A
SSIG
NM
EN
TS
SET
TL
EM
EN
T
OF
AC
CO
UN
TS,
SE
CR
ET
AR
Y
OF
TH
E
SEN
AT
E
PRO
GR
AM
MIN
G
nrvf
sro_
N_
GG
D
OV
ERA
LL
ASS
ESS
ME
NT
O
F L
INE
-OF
-EF
FO
RT
IM
PAC
T
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
HK
S A
CC
OM
PLIS
HE
D
OB
JEC
fiV
ES
O
F L
INE
-OF
-EF
FO
RT
acco
un
t sett
lem
en
t re
sp
on
sib
ilit
y
becau
se
we
wil
l h
av
e
an
o
pp
ort
un
ity
to
als
o ev
alu
ate
T
reasu
ry1
s in
tern
al
co
ntr
ol
ov
er
their
fi
nan
cia
l m
an
ag
e
men
t sy
stem
. W
RO
was
u
nab
le
to sta
ff
this
w
ork
d
uri
ng
fi
scal
year
19
78
. T
his
is
a
new
re
sp
on
sib
ilit
y fo
r FG
MSD
.
Th
is
wo
rk is
a
rev
iew
o
f th
e
pay
men
ts
mad
e b
y
the S
ecre
tary
of
the
Sen
ate
in
o
rder
to esta
bli
sh
acco
un
tab
ilit
y
for
these ex
pen
dit
ure
s
an
d
to en
su
re
that
they
w
ere
le
gal,
p
rop
er,
an
d
co
rrect.
T
his
w
ork
is
b
ein
g
do
ne
to
sett
le th
e
acco
un
ts o
f th
e S
ecre
tary
o
f th
e S
en
ate
.
Th
e w
ork
d
on
e
du
rin
g
the la
st
year
has
resu
lted
in
sig
nif
ican
t im
pro
vem
en
ts
in
inte
rnal
co
ntr
ols
o
f ag
en
cy
fi
nan
cia
l m
anag
emen
t sy
stem
s.
Ou
r w
ork
als
o
has
assis
ted
th
e
head
s o
f d
ep
art
men
ts
and
ag
en
cie
s
to b
ett
er
dis
ch
arg
e th
eir
re
sp
on
sib
ilit
ies
un
der
31
u.s
.c.
66
a w
hic
h re
qu
ires
them
to
p
rov
ide etf
ecti
ve co
ntr
ol
an
d acco
un
tab
ilit
y fo
r all
fu
nd
s.
We
beli
ev
e
the
lack
o
f b
asic
in
tern
al
acco
un
tin
g
co
ntr
ols
, o
f th
e
typ
es
we
hav
e
been
re
po
rtin
g,
are
o
ne o
f th
e
cau
ses o
f th
e
bil
lio
ns o
f d
oll
ars
b
ein
g lo
st
an
nu
all
y as
rep
ort
ed
b
y
the
Co
mp
tro
ller
Gen
era
l in
th
e
rep
ort
en
titl
ed
, h
Fed
era
l A
gen
cie
s C
an
and
S
ho
uld
D
o M
ore
to
C
om
bat
F
rau
d
in
Go
ver
men
t P
rog
ram
s."
J '"~
I
. '
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
WH
AT
IS
LE
FT
TO
B
E D
ON
E?
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Wh
ile g
reat
str
ides
hav
e
been
m
ade
in d
ev
elo
pin
g
an
eff
ecti
ve
ap
pro
ach
fo
r ev
alu
ati
ng
th
e
ad
eq
uacy
o
f in
tern
al
co
ntr
ols
o
ver
receip
ts
an
d
ex
pen
dit
ure
s,
mu
ch
need
s to
b
e
do
ne
in ev
alu
ati
ng
each
ag
en
cy
's
syst
em
. B
ecau
se o
f th
e li
mit
ed
re
so
urc
es av
ail
ab
le,
we
pla
n
to ev
alu
ate
th
e
ad
eq
uacy
o
f in
tern
al
co
ntr
ols
in
six
o
r se
ven
ag
en
cie
s
an
nu
all
y.
At
this
rate
, h
ow
ev
er,
it w
ill
tak
e
us
ab
ou
t 28
y
ears
to
co
mp
lete
th
e au
dit
cy
cle
. U
nti
l ad
dit
ion
al
reso
urc
es
are
m
ade
av
ail
ab
le,
au
dit
ors
in
all
d
ivis
ion
s
sho
uld
b
e
ale
rt
to
inad
eq
uate
co
ntr
ols
o
ver
receip
ts
an
d
dis
bu
rsem
en
ts
wh
en
rev
iew
ing
ag
en
cy
p
rog
ram
s.
Wh
ere
necessary
, th
ese cases
sho
uld
b
e
bro
ug
ht
to
ou
r att
en
tio
n
so
we
can
assis
t au
dit
ors
in
eff
ecti
ng
im
pro
vem
en
ts
in
these co
ntr
ols
.
Inte
rnal
co
ntr
ols
are
sc
hed
ule
d
to
be ev
alu
ate
d at
sev
era
l t-
' la
rge
ag
en
cie
s
nex
t y
ear,
su
ch
as
the
Inte
rnal
Rev
en
ue S
erv
ice,
~
Fed
era
l A
via
tio
n
Ag
en
cy
, A
rmy
Jap
an
an
d
Ko
rean
C
om
man
ds,
an
d
the
Air
F
orc
e
in
Eu
rop
e.
Th
ese
ag
en
cie
s•
fin
an
cia
l m
an
ag
em
en
t sy
stem
s are
h
igh
ly d
ecen
trali
zed
, w
hic
h
incre
ases
the p
ote
nti
al
for
inad
eq
uate
in
tern
al
co
ntr
ols
.
q
REM
AR
KS
~ ~
0
AC
CO
UN
TA
BIL
ITY
M
OD
EL
ISS
UE
A
REA
LE
AD
D
IVIS
ION
PR
OG
RA
M
PLA
N
APP
RO
VA
L
DA
TE
Acco
un
tin
g
an
d
Fin
an
cia
l FG
MSD
P
ER
IOD
C
OV
ER
ED
: 1
0/1
/77
~ '
9/3
0/7
8
Rep
ort
ing
PL
AN
NE
D
S'l'
Ar'F
Y
EA
RS
(ES
T):
_
2_
7 _
__
_ _
TIT
LE
O
F'
PR
IOR
ITY
A
CTU
AL
ST
AF
F
YE
AR
S:
46
L
INE
-OF
E
FF
OR
T:
Are
P
resen
t F
inan
cia
l R
ep
ort
ing
---
Sy
stem
s A
deq
uate
to
D
isclo
se
the
Resu
lts
of
Go
vern
men
t O
pera
tio
ns
an
d
to
Pro
vid
e
Use
ful
Info
rmati
on
to
A
gen
cy
M
an
ag
ers
(D
-1)
-2
81
1
OB
JEC
TIV
Ef S
) A
ND
PL
AN
NE
D
AC
CO
MPL
ISH
ME
NT
S O
FI>
Eo
E:-
r::-
Dev
elo
p fi
nan
cia
l sta
tem
en
ts th
at
wil
l g
ive
the p
ub
lic
a fu
ll
an
d
un
ders
tan
dab
le p
ictu
re
wh
ere
th
e
Go
vern
men
t is
fi
nan
cia
lly
. 2
. E
valu
ate
th
e ab
ilit
y o
f in
div
idu
al
acco
un
tin
g
syst
em
s to
g
en
era
te accu
rate
an
d
tim
ely
fi
nan
cia
l in
form
ati
on
th
at
ag
en
cy
m
an
ag
ers
at
all
le
vels
can
u
se
to effecti
vely
co
ntr
ol
reso
urc
es
an
d
mak
e so
un
d o
pera
tin
g d
ecis
ion
s.
MA
JOR
REPOR~S
OR
O
TH
ER
O
UT
PUT
PR
OG
RA
MM
ING
i3
f vfS
IO_N
__
HO
W
AN
D
TO
WH
AT
EX
TE
NT
H
AS
TH
IS
WO
RK
REM
AR
KS
TH
E
GO
VER
NM
ENT
NE
ED
S TO
D
O
A
BE
TT
ER
JO
B
OP
CO
LL
eCT
ING
A
MO
UN
TS
OW
ED
BY
TH
E
PU
BL
IC
(FG
MS
D-7
8-6
1,
10
-20
-78
)
1 If)
FGM
SD
AC
CO
MPL
ISH
ED
O
BJE
CT
IVE
S
OF
LINB~5F"EFFORT
Th
is m
ult
iag
en
cy
re
vie
w
sho
wed
th
at
ag
en
cy
acco
un
tin
g
syst
em
s d
id
no
t g
en
era
te accu
rate
fi
nan
cia
l in
form
ati
on
fo
r u
se
by
all
le
vels
o
f ag
en
cy
p
ro
gra
m
man
ag
ers
o
Err
ors
o
f ab
ou
t $
1.5
b
illi
on
in
acco
un
tin
g
for
an
d
rep
ort
ing
acco
un
ts re
ceiv
ab
le
were
d
isco
vere
d
in o
ur
rev
iew
s at
12
ag
en
cie
s.
Th
is
rep
ort
sh
ow
s th
at
sig
nif
ican
t p
rob
lem
s w
ou
ld
be
en
co
un
tere
d
in p
rep
ari
ng
G
ov
ern
men
t-w
ide
co
nso
lid
ate
d
fin
an
cia
l sta
tem
en
ts.
Th
e re
po
rt
was
d
istr
ibu
ted
to
all
d
ep
art
men
ts
an
d
ag
en
cie
s
wit
h
the
su
gg
esti
on
th
at
they
re
vie
w th
eir
.......
.......
.......
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
---
RE
POR
T
TO
NA
SA
ON
IT
S
SJS
TE
M
OF
AC
CO
UN
TIN
G
FOR
A
CC
OU
NTS
R
EC
EIV
AB
LE
(F
GM
SD
-77
-89
, 1
0-2
1-7
7)
RE
POR
T
TO
DEP
AR
TMEN
T O
F IN
TE
RIO
R
ON
IT
S
SYST
EM
O
F A
CC
OU
NT
ING
FO
R
AC
CO
UN
TS
RE
CE
IVA
BL
E
(FG
MS
D-7
7-6
6,
2-3
-78
)
UN
IFO
RM
A
CC
OU
NT
ING
A
ND
W
OR
K
LOA
D
MEA
SUR
EMEN
T SY
STE
MS
NE
ED
ED
FO
R
DEP
AR
TMEN
T O
F D
EFE
NSE
M
ED
ICA
L
FA
CIL
ITIE
S
(FG
MS
D-7
7-8
, 1
-17
-78
)
~CCOUt!~?\BILITL_~Q_DEL
PRO
GR
AM
MIN
G
DIV
ISIO
N
------
FGM
SD
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
AC
"CO
MPL
fSH
ED-o
BJ E
cTiV
ES
OF
LIN
E:...o
F-=-
EF FO
RT
syst
em
s o
f co
ntr
ol
an
d co
llecti
on
o
f acco
un
ts re
ceiv
ab
le,
thu
s
hav
ing
a
Go
vern
men
t-w
ide
imp
act.
NA
SA
's
inte
rnal
acco
un
tin
g
pro
ced
ure
s d
id
no
t assu
re th
at
acco
un
ts re
ceiv
ab
le
were
accu
rate
ly re
co
rded
an
d
rep
ort
ed
. N
ASA
said
it
was
re
vis
ing
it
s p
ro
ced
ure
s
to
imp
rov
e
the
accu
racy
o
f re
po
rted
re
ceiv
ab
les.
Th
is re
po
rt d
escri
bed
' th
e
need
fo
r (1
) m
ore
accu
rate
re
co
rdin
g
an
d
rep
ort
ing
o
f acco
un
ts
receiv
ab
le,
an
d
(2)
bett
er
foll
ow
-up
o
f d
eli
nq
uen
t acco
un
ts.
In
terio
r
ag
reed
an
d
said
co
rrecti
ve acti
on
w
ou
ld
be
tak
en
.
Th
e D
ep
art
men
t o
f D
efe
nse
d
id
no
t h
av
e
un
ifo
rm p
roced
ure
s
for
pre
pari
ng
b
ud
get
esti
mate
s,
acco
un
tin
g
for
and
re
po
rtin
g
op
era
tin
g co
sts
, an
d
measu
rin
g
the
wo
rklo
ad
o
f m
ed
ical
facil
itie
s.
As
a resu
lt,
Defe
nse
co
uld
n
ot
co
mp
are
o
r ev
alu
ate
th
e ef fe
c
tiv
en
ess o
f th
e m
ilit
ary
serv
ices'
med
ical
dep
art
men
ts.
Base
d
on
re
co
m
men
dati
on
s in
th
is re
po
rt,
Defe
nse
sta
rted
acti
on
s
to d
ev
elo
p
un
ifo
rm
acco
un
tin
g
syst
em
s an
d
to
use
th
e d
ata
p
rod
uced
to
an
aly
ze
and
all
ocate
m
ed
ical
reso
urc
es,
etc
.
REM
AR
KS
------
r r N
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
MO
RE
DIR
EC
TIO
N
NE
ED
ED
T
O
ES
TA
BL
ISH
A
U
NIF
OR
M
DE
POT
M
AIN
TE
NA
NC
E
AC
CO
UN
TIN
G
SYST
EM
(F
GM
SD
-78
-35
, 5
-22
-78
)
INA
DE
QU
AT
E
MET
HO
DS
ST
ILL
U
SED
T
O
AC
CO
UN
T FO
R
AN
D
RE
CO
VE
R
PER
SON
NE
L
CO
ST
S
OF
TH
E
FO
RE
IGN
M
ILIT
AR
Y
SA
LE
S
PRO
GR
AM
(F
GM
SD
-78
-47
u
7-2
5-7
8)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
-------
-----·-
-
PRO
GR
AM
MIN
G
DIV
ISIO
N--
-------
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PL
ISH
ED
-OB
JEC
TIV
ES
-OF
-LIN
E-O
F=
EF
FO
RT
----
----·-----------·--·--
----
--
Rep
ort
ed
effo
rts
o
ver
the
past
15
y
ears
to
esta
bli
sh
a
un
ifo
rm d
ep
ot
main
ten
an
ce
acco
un
tin
g
syst
em
h
av
e
been
u
nsu
ccessfu
l.
Th
is re
po
rt p
oin
ts
ou
t th
at
pro
ble
ms
of
a lo
ng
sta
nd
ing
n
atu
re co
nti
nu
e
to
thw
art
effecti
ve
imp
lem
en
tati
on
o
f u
nif
orm
co
st
acco
un
tin
g w
ith
in all
th
e m
ilit
ary
serv
ices.
Defe
nse
D
ep
art
men
t o
ffi
cia
ls ad
vis
ed
u
s th
at
a fo
cal
po
int
to o
vers
ee
imp
lem
en
tati
on
o
f th
e
un
ifo
rm
syst
em
h
as
been
esta
bli
sh
ed
an
d th
at
instr
ucti
on
s
on
im
ple
men
tin
g
the
syst
em
h
av
e
been
re
vis
ed
so
th
at
data
o
f a
un
ifo
rm
natu
re w
ill
be
pro
du
ced
. R
ecen
t d
iscu
ssio
ns
wit
h
Defe
nse
o
ffic
ials
in
dic
ate
th
at
the
Dep
art
men
t is
still
en
co
un
teri
ng
d
iffic
ult
ies
in
imp
lem
en
tin
g
a u
nif
orm
d
ep
ot
main
ten
an
ce co
st
syst
em
.
Th
is re
po
rt is
a
foll
ow
-up
o
f o
ur
Octo
ber
19
77
re
po
rt
on
th
is su
bje
ct
perf
orm
ed
-un
der
lin
e o
f effo
rt
28
03
.1/
Th
e D
efe
nse
D
ep
art
men
t h
as
no
t y
et
-d
ev
elo
ped
reli
ab
le esti
mate
s o
f p
er
so
nn
el
req
uir
ed
to
ad
min
iste
r th
e
Fo
reig
n M
ilit
ary
S
ale
s
pro
gra
m,
no
r h
as
it
inclu
ded
th
e fu
ll
co
sts
o
f em
plo
yee b
en
efi
ts
in calc
ula
tin
g
the
co
sts
o
f th
ese
pers
on
nel.
A
s a
l/P
rfo
r-re
v1
ew
w
ork
p
erf
orm
ed
b
efo
re
-2
81
1 li
ne-o
f-effo
rt
was
esta
bli
sh
ed
.
REM
AR
KS
Req
uest
ed
b
y
the
Sen
ate
C
om
mit
tee
on
A
pp
rop
r i.
a-.
tio
ns
...... .....
w
RE
POR
T
TO
CO
NG
RES
SMA
N
LE
E
HA
MIL
ITO
N:
AR
MS
SAL
ES
CE
ILIN
G
BA
SED
O
N
INC
ON
S
IST
EN
T
AN
D
ERR
ON
EOU
S D
ATA
(F
GM
SD
-78
-30
, 4
-12
-78
)
11
)
FGM
SD
resu
lt,
the
Dep
art
men
t h
as
no
re
al
basis
fo
r d
ete
rmin
ing
if
all
ad
min
istr
ati
ve co
sts
o
f th
e
pro
gra
m are
re
co
vere
d,
as
req
uir
ed
b
y
law
, fr
om
fo
reig
n
pu
rch
asers
o
f U
.S.
mil
itary
eq
uip
men
t an
d
serv
ices.
Th
e D
ep
art
m
en
t is
in
th
e
pro
cess o
f re
vis
ing
g
uid
an
ce
for
the
dev
elo
pm
en
t o
f p
ers
on
nel
sta
tisti
cs
an
d
has
rev
ised
p
ricin
g g
uid
eli
nes
for
the co
st
of
reti
rem
en
t b
en
efi
ts
wh
ich
w
ill
resu
lt
in
a m
ore
accu
rate
d
ete
rmin
ati
on
o
f th
e co
sts
o
f th
e
pro
gra
m.
Th
e d
oll
ar
valu
e o
f fis
cal
year
19
77
arm
s sale
s re
po
rted
b
y
the
Dep
art
men
t o
f D
efe
nse
w
as
use
d
as
a b
asis
in
esta
bli
sh
ing
$
8.6
b
illi
on
as
the
19
78
arm
s sale
s ceil
ing
. T
he
ceil
ing
set
by
th
e
Pre
sid
en
t re
pre
sen
ted
a
$6
95
m
illi
on
, o
r a
7.5
p
erc
en
t,
red
ucti
on
in
sale
s
fro
m fis
cal
year
19
77
.
GA
O
iden
tifi
ed
in
co
nsis
ten
cie
s
an
d
err
ors
in
acco
un
tin
g
wh
ich
re
su
lted
in
su
bsta
nti
al
ov
ers
tate
men
t o
f fis
cal
year
19
77
sale
s.
Usi
ng
co
rrecte
d
sale
s fi
gu
res,
the ceil
ing
no
w re
p
resen
ts o
nly
a
$6
6 m
illi
on
re
du
cti
on
fr
om
fis
cal
year
19
77
sale
s.
Fu
rth
er,
h
ad
a
7.5
p
erc
en
t re
du
cti
on
b
een
ap
pli
ed
to
th
e co
rrecte
d sale
s
fig
ure
th
e fis
cal
year
19
78
ceil
ing
w
ou
ld
hav
e
been
set
$5
84
m
illi
on
lo
wer.
..-.
.......
.i::..
AC
CO
UN
TA
BIL
ITY
M
OD
EL
MA
JOR
R
EPO
RT
S O
R
OT
HE
R
OU
TPU
T
AU
DIT
G
UID
E
FOR
R
EL
IAB
ILIT
Y
AS
SE
SS
ME
NT
O
F C
ON
TR
OL
S IN
C
OM
PUT
ER
IZE
D
SYST
EM
S (F
INA
NC
IAL
ST
AT
EM
EN
T
AU
DIT
S)
(92
10
2)
RE
VIE
W
OF
SE
CR
ET
S
ER
VIC
E
RE
IMB
UR
SEM
EN
T
PRO
CE
DU
RE
S R
EQ
UIR
ED
BY
T
HE
P
RE
SID
EN
TIA
L
PR
OT
EC
TIO
N
AS
SIS
'£A
NC
E
AC
'f
P R
OG
RAM
M IN
G
DIV
ISIO
N
FGM
SD
GG
D
RE
LIA
BIL
ITY
A
SSE
SSM
EN
T
OF
CED
FE
DE
RA
L
HO
USI
NG
A
DM
INIS
TR
A-
TIO
N 1
S C
OM
PUT
ER
IZE
D
AC
CO
UN
TIN
G
SYST
EM
RE
VIE
W
OF
UN
CO
STE
D
OB
LIG
A-
EMO
T
ION
S
IN
DO
E'S
SO
LA
R
ENER
GY
PR
OG
RA
M
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
flV
ES
O
F L
INE
-OF
-EF
FO
RT
Th
e au
dit
g
uid
e,
issu
ed
in
M
ay
19
78
, p
resen
ts
pro
ced
ure
s
for
ev
alu
ati
ng
in
tern
al
co
ntr
ols
in
co
mp
ute
r sy
stem
s th
at
pro
du
ce
fin
an
cia
l sta
tem
en
t in
fo
rmati
on
. A
ud
ito
rs
freq
uen
tly
en
co
un
ter
co
mp
ute
r-p
rod
uced
in
form
a
tio
n
wh
en
co
nd
ucti
ng
au
dit
s
to ex
pre
ss
an
o
pin
ion
o
n fi
nan
cia
l sta
tem
en
ts.
Th
e au
dit
g
uid
e
(1)
help
s
the au
dit
or
dete
rmin
e
the d
eg
ree
an
d
typ
e o
f ris
ks
run
in
re
lyin
g
on
th
e
co
mp
ute
r-p
rod
uced
in
form
ati
on
, an
d
(2)
mak
es
the au
di
tor co
nsid
er
ad
dit
ion
al
au
dit
te
sts
n
ecessary
to
m
inim
ize
such
ris
ks.
REM
AR
KS
Wh
ile
the
au
dit
g
uid
e
was
p
ub
lish
ed
to
aid
th
e
GA
O
au
dit
or,
it
has
been
re
qu
este
d
by
man
y
ag
en
cy
m
an
ag
ers
an
d
inte
rnal
au
dit
sta
ffs
to ev
alu
ate
au
tom
ate
d
syst
em
s w
ith
in th
eir
ag
en
cie
s .
......
......
U1
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
TASK
FO
RC
E
TO
DE
VE
LO
P C
ON
SOL
I
DA
TED
F
INA
NC
IAL
ST
AT
EM
EN
TS
FOR
T
HE
FE
DE
RA
L
GO
VER
NM
ENT
BO
OK
LE
T
EN
TIT
LE
D,
"MA
NA
GE
RS,
Y
OU
R
AC
CO
UN
TIN
G
SYST
EM
CA
N
DO
A
LO
T FO
R
YO
U"
(CO
DE
9
01
22
)
ACCOU~TABILITY
MO
DEL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TfV
ES
O
F L
INE
-OF
-EF
FO
RT
GA
O is
p
art
icip
ati
ng
w
ith
th
e T
reasu
ry
an
d
an
in
tera
gen
cy
ad
vis
ory
co
mm
itte
e
to d
ev
elo
p b
usin
ess-t
yp
e
fin
an
cia
l sta
tem
en
ts
for
the
Fed
era
l G
ov
ern
men
t.
Th
e C
om
ptr
oll
er
Gen
era
l ch
air
s
the
inte
rag
en
cy
co
mm
itte
e.
Vari
ou
s ta
sk
g
rou
ps
are
stu
dy
ing
sig
nif
ican
t acco
un
tin
g
issu
es.
Th
is effo
rt
is
an
att
em
pt
to p
resen
t th
e
Go
vern
men
t fi
n
an
cia
l co
nd
itio
n
in p
lain
la
ng
uag
e
an
d
pla
in acco
un
tin
g.
Th
ree sets
o
f p
ro
toty
pe
fin
an
cia
l sta
tem
en
ts fo
r Ju
ne
30
, 1
97
5,
Sep
tem
ber
30
, 1
97
6,
an
d
Sep
tem
ber
30
, 1
97
7,
were
p
rep
are
d
an
d
issu
ed
fo
r co
mm
ent
by
in
tere
ste
d
part
ies
in
Go
vern
men
t an
d p
riv
ate
in
du
str
y.
Th
is
bo
ok
let
wil
l d
iscu
ss
(1)
wh
at
fin
an
cia
l in
form
ati
on
accoun~ing
sy
s
tem
s sh
ou
ld g
ive
to m
an
ag
ers
, (2
) ho
w
man
ag
ers
sh
ou
ld
use
th
is
info
rmati
on
to
(a
) co
ntr
ol
ap
pro
pri
ate
d
fun
ds
an
d
reso
urc
es
an
d
(b)
decid
e
on
th
e b
est
way
s to
u
se
reso
urc
es
to ach
iev
e
pro
g
ram
g
oals
so
th
e
mo
st b
en
efi
t is
p
r6d
uced
at
the le
ast practica~le
co
st,
an
d
(3)
wh
at
ste
ps
man
ag
ers
sh
ou
ld
tak
e
to
pro
mo
te eff
ecti
ve
acco
un
tin
g
syst
em
s in
th
eir
ag
en
cie
s.
REM
AR
KS
Fed
era
l G
ov
ern
men
t fi
nan
cia
l sta
tem
en
ts
wil
l p
rov
ide
info
rmati
on
ab
ou
t p
rio
r ev
en
ts
an
d
decis
ion
s
usefu
l fo
r assessin
g
their
eco
no
m
ic eff
ects
an
d
for
dete
rmin
ing
th
eir
cu
rren
t an
d
futu
re
fin
an
cia
l im
pli
cati
on
s.
Th
is
bo
ok
le
t w
ill
be
the
veh
icle
to
(1
) m
ake
ag
en
cy
m
an
a
gers
aw
are
aw
are
o
f th
e
pro
ble
ms
en
co
un
tere
d
and
su
ccesses
en
joy
ed
b
y
oth
ers
in
........
. .....
. 0
\
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
W
OF
TH
E
PRO
DU
CT
ION
O
F U
NU
SAB
LE
F
INA
NC
IAL
IN
FOR
MA
T
ION
(C
OD
E
90
13
0)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S
FGM
SD
AC
CO
MPL
ISH
ED
O
BJE
CT
IVE
S
OF
LIN
E-O
F-E
FF
OR
T
Th
e b
oo
kle
t in
clu
des
case stu
dy
ex
am
p
les th
at
we'v
e
run
in
to in
o
ur
wo
rk
to
(a)
ap
pro
ve
the d
esig
ns
of
ag
en
cy
acco
un
tin
g
sy
ste
ms,
an
d
(b)
rev
iew
th
e
op
era
tio
ns o
f th
ese
sy
ste
ms.
Th
is
bo
ok
let
sh
ou
ld
en
co
ura
ge
ag
en
cy
m
an
ag
ers
to
ta
ke
a h
ard
lo
ok
at
their
ex
isti
ng
acco
un
tin
g
syst
em
s to
(a
) d
ete
rmin
e
wh
eth
er
they
are
g
ett
ing
th
e
fin
an
cia
l in
form
ati
on
th
ey
sh
ou
ld,
(b)
dete
rmin
e
wh
eth
er
they
--m
an
ag
ers
-are
u
sin
g
the fi
nan
cia
l in
form
ati
on
th
ey
g
et
to
the
best
ad
van
tag
e,
an
d
(c)
dev
elo
p
imp
rov
em
en
ts
to th
eir
acco
un
tin
g
sy
ste
ms.
Th
e b
oo
kle
t ls
in
fi
nal
pro
cessin
g
an
d
wil
l b
e
issu
ed
ab
ou
t Ja
nu
ary
1
97
9.
Th
is
job
d
em
on
str
ate
s--
on
a
Bo
vern
m
en
t-w
ide b
asis
--th
e
need
fo
r ag
en
cie
s
to
tak
e ste
ps
to
(1)
imp
rov
e
the
use
fuln
ess
of
co
mp
ute
r-p
rod
uced
f ln
an
cia
l re
po
rts
to
man
ag
ers
an
d o
pera
tin
g p
er
so
nn
el
an
d
(2)
red
uce
au
tom
ati
c d
ata
p
rocessin
g co
sts
b
y eli
min
ati
ng
th
e
pro
du
cti
on
o
f u
nn
eed
ed
re
po
rts.
Th
e re
po
rt
to
be
dev
elo
ped
o
n th
is
job
w
ill
pre
sen
t G
ov
ern
men
t-w
ide
reco
m
men
dati
on
s to
m
inim
ize
the
pro
du
cti
on
usi
ng
acco
un
tin
g
syst
em
s an
d
info
rmati
on
to
b
ett
er
co
ntr
ol
ap
pro
pri
ate
d
fun
ds
an
d
reso
urc
es
an
d
use
re
so
urc
es
to
ach
iev
e
pro
g
ram
g
oals
an
d
( 2
) en
co
ura
ge
man
ag
ers
to
av
oid
th
e
pro
ble
ms
an
d
em
ula
te o
r su
rpass
the
su
ccesses
of
oth
ers
.
Th
e re
po
rt
resu
ltin
g
fro
m th
is
job
w
ill
gi.v
e...:
o
n
a G
ov
ern
m
en t-
w .i
de
basJs (i.
e.
bo
th civ
il
an
d m
ilit
ary
ag
en
c.L
es)
-sp
ed
f i
c
.._..
.......
-.)
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
of
inad
eq
uate
fi
nan
cia
l re
po
rts
in
futu
re.
Su
rvey
w
ork
u
nd
er
co
de
90
12
5 at
the
Tre
asu
ry's
C
hic
ag
o
Dis
bu
rsin
g
Off
ice,
Arm
y's
T
an
k-A
uto
mo
tiv
e
Read
iness
C
om
man
d,
Nav
y's
A
via
tio
n
Su
pp
ly O
ffic
e,
an
d
Nav
y's
G
reat
Lak
e R
eg
ion
al
Data
A
uto
mati
on
an
d
Fin
an
ce C
en
ters
sh
ow
ed
that
ag
en
cy
au
tom
ate
d fi
nan
cia
l m
anag
emen
t sy
stem
s are
p
rod
ucin
g
rep
ort
s th
at
man
ag
ers
an
d o
pera
tin
g
pers
on
nel
do
n
ot
an
d
can
no
t u
se.
Th
ese
in
ad
eq
uate
fi
nan
cia
l re
po
rts
hav
e
cau
sed
ag
en
cie
s
to
(1)
lose
co
n
tro
l o
ver
assets
an
d
pro
gra
m o
pera
-t lo
ns,
(2)
use
co
mp
ute
r re
so
urc
es
need
lessly
to
p
rod
uce re
po
rts th
at
man
ag
ers
d
o
no
t an
d/o
r can
no
t u
se,
an
d
(3)
incu
r ex
tra cle
ric
al
co
sts
to
k
eep
su
pp
lem
en
tary
"cu
ff"
acco
un
tin
g
reco
rds.
REM
AR
KS
ex
am
ple
s o
f:
1.
Bow
au
to
mate
d
acco
un
tin
g
syst
em
s are
n
ot
meeti
ng
m
an
a
gers
' f
inan
cia
l in
form
a
t Jo
n
need
s in
co
ntr
oll
ing
ap
pro
pri
ate
d
fun
ds
and
re
so
urc
es
an
d
usi
ng
re
so
ur
ces
to
ach
lev
e
pro
gra
m g
oals
at
least
pra
ctj
cab
le
co
st;
2
. W
hat
.i
s w
ron
g
w.i
th
au
tom
ate
d
acco
un
tin
g
sy
ste
ms--
e.g
.,
pro
gra
m
"b
ug
s,"
fa
ult
y
sy
s-·
te
rn d
esig
n,
po
or
maste
r fil
e str
uc
ture
, etc
.-
cau
s.i
ng
th
e
sh
ortf
all
in
m
eeti
ng
......
......
00
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
WS
OF
VA
'S
MO
RTG
AG
E LO
AN
~tCOUNTING
SYST
EM
A
ND
L
EA
A'S
LO
AN
A
CC
OU
NT
ING
SY
STE
M
RE
VIE
W
OF
TH~
NA
VA
L S
HIP
YA
RD
IN
DU
ST
RIA
L
FUN
D
AC
CO
UN
TIN
G
3YST
EM
(C
OO
E 9037~)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Th
ese
re
vie
ws
are
p
art
o
f o
ur
effo
rt
to
mak
e G
ov
ern
men
t-w
ide o
r m
ult
iag
en
cy
stu
die
s o
f th
ose p
art
s o
f ag
en
cy
acco
un
tin
g
syst
em
s th
at
acco
un
t fo
r an
d
co
ntr
ol
majo
r fi
nan
cia
l sta
tem
en
t it
em
s.
Th
ese
re
vie
ws
ad
dre
ss
the d
is
clo
su
re o
f fi
nan
cia
l resu
lts
to
the
Tre
asu
ry
an
d
to
the
Co
ng
ress
, as
well
as
the
ad
eq
uacy
o
f in
tern
al
f in
an
cla
l re
po
rts
to
ag
en
cy
m
an
ag
ers
. T
hese
re
vie
ws
als
o
co
ver
matt
ers
th
at
rela
te
to o
ther
prio
rit
y li
ne o
f eff6
rt,
su
ch
as
the
ad
eq
uacy
o
f b
illi
ng
an
d
co
llecti
on
p
roced
ure
s,
tim
eli
ness
in
dep
osit
ing
cash
co
llecti
on
s,
han
dli
ng
o
f d
eli
nq
uen
t acco
un
ts
an
d
the li
ke.
Th
e N
av
al
Ind
ustr
ial
Fu
nd
A
cco
un
tin
g
Sy
stem
fo
r sh
ipy
ard
s
has
no
t b
een
im
ple
m
en
ted
in
acco
rdan
ce w
ith
th
e
GA
O
ap
pro
ved
syst~m
desig
n.
As
a resu
lt,
the
syst
em
d
oes
no
t p
rov
ide
man
ag
ers
RE
MA
RK
S
man
ag
ers
' fi
nan
cia
l i.
nfo
rmat io
n
need
s;
an
d
3.
Wh
at
can
b
e d
on
e
to
"cu
re"
au
tom
ate
d
acco
un
tin
g
syst
em
d
efi
cie
ncie
s.
. '
......
......
\D
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
W
OF
TH
E
DE
FEN
SE
SE
CU
RIT
Y
AS
SIS
TA
NC
E
AG
EN
CY
'S
AC
CO
UN
TIN
G
SYST
EM
FO
R
FOR
EIG
N
MIL
ITA
RY
SA
LE
S (C
OD
E
90
37
7)
SUR
VE
Y
OF
DE
FEN
SE
PO
LIC
Y
AN
D
PRO
CE
DU
RE
S U
SED
FO
R
DE
SIG
NIN
G
AN
D
IMPL
EM
EN
TIN
G
AC
CO
UN
TIN
G
SYST
EM
S (C
OD
E
90
38
7)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
wit
h
an
accu
rate
an
d
co
mp
lete
d
escri
p
tio
n o
f th
e sh
ipy
ard
s'
fin
an
cia
l p
osi
tio
ns
an
d
man
y
rep
ort
s
pro
du
ced
b
y
the
syste~
co
nta
in
iria
ccu
rate
d
ata
w
hic
h
is
no
t u
sefu
l to
D
efe
nse
D
ep
art
men
t m
an
ag
ers
.
Th
e C
hair
man
, S
ub
co
mm
itte
e
on
E
uro
pe
an
d
the
Mid
dle
E
ast,
H
ou
se
Co
mm
itte
e
on
In
tern
ati
on
al
Rela
tio
ns,
ask
ed
th
at
we
rev
iew
th
e
Defe
nse
S
ecu
rity
A
ssis
ta
nce
Ag
en
cy
's
syst
em
o
f acco
un
tin
g
for
fore
ign
m
ilit
ary
sale
s ceil
ing
s.
Th
is
req
uest
was
p
rom
pte
d
by
D
efe
nse's
d
isclo
su
re th
at
pro
jecti
on
s o
f fis
cal
year
19
77
fo
reig
n m
ilit
ary
sale
s
ord
ers
w
ere
u
nd
ers
tate
d
by
$
1.4
b
il
lio
n
du
e
to
acco
un
tin
g
syst
em
s w
eak
n
esses.
Th
e S
tate
D
ep
art
men
t an
d
Dep
art
men
t o
f D
efe
nse
acco
un
tin
g
syst
em
s d
o
no
t p
rod
uce
the
pro
per
info
rmati
on
th
at
ag
en
cy
m
an
ag
ers
n
eed
to
re
com
men
d
to
the
Pre
sid
en
t th
e
lev
el
at
wh
ich
th
e
Fo
reig
n M
ilit
ary
_ S
ale
s
ceil
ing
s
sho
uld
b
e set.
Th
is
su
rvey
is
b
ein
g
un
dert
ak
en
to
d
ete
rmin
e if
th
e
Defe
nse
D
ep
art
men
t's
Co
mp
tro
llers
hip
fu
ncti
on
can
b
eco
me
mo
re eff
ecti
ve
by
p
rov
idin
g
the
Dep
art
m
ent
wit
h
accu
rate
d
ata
b
ase
d
on
u
ni
form
te
rmin
olo
gy
, p
rov
idin
g b
ett
er
train
ed
co
mp
tro
llers
fo
r m
ilit
ary
o
rgan
iz
at lo
ns,
an
d
dev
elo
pin
g
acco
un
tin
g
an
d
REM
AR
KS
t--'
IV
0
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
SUR
VE
Y
OF
CO
NT
RO
L
OV
ER
IND
IAN
FU
ND
S (C
OD
E
90
62
9)
RE
VIE
W
OF
NA
TIO
NA
L
PAR
K
SE
RV
ICE
'S
DIS
CR
ET
ION
AR
Y
FUN
DS
(CO
DE
9
06
40
)
SUR
VEY
O
F F
UN
DIN
G,
AC
CO
UN
TIN
G
~ND
RE
POR
TIN
G
OF
ARM
Y
~MMUNITION
PLA
NT
S (C
OD
E
90
38
4)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
rep
ort
ing
sy
stem
s w
hic
h
hav
e
the
need
s o
f D
efe
nse
D
ep
art
men
t m
an
ag
ers
as
their
fir
st
prio
rit
ies.
In th
is effo
rt
we
fou
nd
th
at
the
Bu
reau
o
f In
dia
n A
ffair
s'
fin
an
cia
l re
po
rtin
g
syst
em
d
id
no
t in
su
re
pro
mp
t re
co
rdin
g o
f o
bli
gati
on
s.
As
a resu
lt,
the
Bu
reau
in
cu
rred
a
$3
m
illi
on
A
nti
-Defi
cie
ncy
A
ct
vio
lati
on
an
d
did
n
ot
rep
ort
th
is v
iola
tio
n to
th
e
Pre
sid
en
t an
d
the
Co
ng
ress
as
req
uir
ed
b
y
law
.
We
hav
e
fou
nd
th
at
the
Nati
on
al
Park
S
erv
ice's
fi
nan
cia
l re
po
rts
to th
e
Co
ng
ress
d
o
no
t ad
eq
uate
ly d
isclo
se
the
resu
lts o
f it
s o
pera
tio
ns o
r p
rov
ide
usefu
l in
form
ati
on
to
ag
en
cy
m
an
ag
ers
. It
has
sev
era
l u
nre
po
rted
co
nti
ng
en
cy
fu
nd
s th
rou
gh
w
hic
h
ap
pro
pri
ate
d
mo
nie
s are
re
pro
gra
mm
ed
fo
r co
nstr
uc-
t io
n
an
d o
pera
tio
ns.
Th
is su
rvey
is
b
ein
g
perf
orm
ed
b
ecau
se
of
ind
icati
on
s
that
acco
un
tin
g
syst
em
p
rob
lem
s in
th
e
Arm
y A
rmam
ent
Mate
rial
Read
iness
C
omm
and
are
la
rgely
re
sp
on
si
ble
fo
r u
nd
ers
tati
ng
p
rog
ram
co
sts
an
d
that
co
st
acco
un
tin
g
syst
em
s in
u
se
at
the
Ro
ck
Isla
nd
A
rsen
al
do
n
ot
pro
vid
e
an
eff
ecti
ve
mea
ns
for
dete
rmin
ing
an
d co
ntr
oll
ing
co
sts
.
REM
AR
KS
----
Req
uest
ed
b
y
Ho
use
A
pp
ro
pr1
at
.i an
s C
om
m:i
t te
e,
Su
bco
mm
itte
e
on
In
ter.
ior
and
R
ela
ted
A
gen
cie
s
t-4
tv
t-
4
MA
JOR
O
N-G
OIN
G
ASS
IGN
ME
NT
S
SUR
VE
Y
OF
MIL
ITA
RY
PA
YR
OL
L
SYST
EM
S A
T M
ILIT
AR
Y
FIN
AN
CE
C
EN
TE
RS
(CO
DE
9
03
80
)
RE
VIE
W
OF
AC
CO
UN
TIN
G
SYST
EM
S U
SED
BY
TH
E M
ILIT
AR
Y
DIS
TR
ICT
O
F W
ASH
ING
TON
(M
DW
) (C
OD
E
90
37
9)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
We
are
su
rvey
ing
co
st
acco
un
tin
g
sy
s
tem
s at
the
Arm
y A
rmam
ent
Mate
rial
Read
iness
C
omm
and
and
R
ock
Is
lan
d
Ars
en
al
to d
ete
rmin
e
the ex
ten
t to
w
hic
h
these
syst
em
s m
eet
the
info
rm
ati
on
n
eed
s o
f A
rmy
man
ag
ers
to
ru
n
op
era
tio
ns at
am
mu
nit
ion
p
lan
ts.
Th
is
surv
ey
is
b
ein
g
un
dert
ak
en
to
carr
y o
ut
FGM
SD-S
O
resp
on
sib
ilit
y
to
rev
iew
m
ilit
ary
p
ay
roll
sy
stem
s in
o
pera
tio
n.
Th
is re
sp
on
sib
ilit
y
was
re
cen
tly
tr
an
sfe
rred
to
FG
MSD
fr
om
· FO
O.
Th
e fo
cu
s o
f th
is
wo
rk w
ill
be
to d
ete
rmin
e
how
w
ell
m
ilit
ary
p
ay
roll
sy
stem
s at
mil
itary
fi
nan
ce
cen
ters
m
eet
Arm
y m
an
ag
ers
' in
for
mati
on
n
eed
s to
eff
ecti
vely
(1
) co
n
tro
l an
d
safe
gu
ard
fu
nd
s,
(2)
assu
re
that
pers
on
nel
are
p
aid
ju
st
am
ou
nts
d
ue
and
are
n
ot
ov
er-
or-
un
der
paid
, an
d
(3)
man
age
and
co
ntr
ol
Arm
y's
p
ers
on
nel
ap
pro
pri
ati
on
.
Sev
era
l o
rgan
izati
on
s
pro
vid
ed
acco
un
tin
g
serv
ices
by
th
e M
ilit
ary
D
istr
ict
of
Wash
ing
ton
h
av
e
no
t b
een
ab
le
to
main
tain
ad
eq
uate
ad
min
istr
ati
ve
co
ntr
ol
ov~r
fun
ds
becau
se
acco
un
tin
g
rep
ort
s
receiv
ed
fr
om
th
e M
ilit
ary
D
istr
ict
are
in
accu
rate
an
d
inad
eq
uate
. In
ad
di
tio
n,
inte
rnal
co
ntr
ols
o
ver
civ
ilia
n
pay
, tr
av
el
an
d
co
mm
erc
ial
pay
men
ts,
and
d
isb
urs
ing
se
em to
b
e
inad
eq
uate
. In
th
is effo
rt
we
wil
l d
ete
rmin
e
wh
eth
er
~
N
N
MA
JOR
. O
N-G
OIN
G
ASS
IGN
ME
NT
S
RE
VIE
W
OF
FIN
AN
CIA
L
INF
OR
M
ATI
ON
PR
OV
IDE
D
TO
TH
E
MIL
ITA
RY
S
ER
VIC
ES
BY
T
HE
D
EFE
NSE
C
ON
.TR
AC
T A
DM
INI
ST
RA
TIO
N
SE
RV
ICE
(C
OD
E
90
36
8)
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
the M
ilit
ary
D
istr
ict
of
Wash
ing
ton
's
acco
un
tin
g
syst
em
s an
d
ad
min
istr
atj
ve
co
ntr
ol
syst
em
p
rod
uce
an
d g
ive
to
man
ag
ers
ad
eq
uate
f ln
an
cia
l an
d
rela
ted
q
uan
tita
tiv
e
info
rmati
on
to
en
ab
le
them
.to
eff
ecti
vely
m
anag
e civ
ilia
n p
ay
, tr
av
el,
an
d
co
mm
erc
ial
pay
men
t fu
ncti
on
s.
Ind
icati
on
s are
th
at
the
mech
an
ized
sy
stem
u
sed
to
d
isb
urs
e
fun
ds
for
Defe
nse
co
ntr
acts
h
as
sev
era
l seri
ou
s
pro
ble
ms
wh
ich
are
h
ind
eri
ng
th
e
ab
ilit
y o
f D
efe
nse
to
m
anag
e an
d
co
n
tro
l ap
pro
pri
ati
on
s,
to acco
un
t fo
r an
d
co
ntr
ol
ad
justm
en
ts
an
d co
rrec-
t io
ns
to
acco
un
tin
g d
ata
, an
d
ad
eq
uate
ly re
po
rt
an
d cla
ssif
y co
sts
as
req
uir
ed
b
y
GA
O T
itle
II
A
cco
un
tjn
g
Pri
ncip
les
an
d
Sta
nd
ard
s
for
Fed
era
l A
gen
cie
s.
In th
is effo
rt
we
wil
l re
vie
w
the
inte
rrela
tio
nsh
ip b
etw
een
th
e
Defe
nse
C
on
tract
Ad
min
istr
ati
on
S
erv
ices's
co
ntr
act
ad
min
istt
ati
on
sy
stem
an
d
the
rela
ted
co
ntr
act
acco
un
tin
g
syst
em
s o
f th
e
arm
ed ser
vic
es
to d
ete
rmin
e
wh
eth
er
the fin
an
cia
l an
d re
late
d q
uan
tita
tiv
e
info
rm
ati
on
ex
ch
an
ged
b
etw
een
th
ese
syst
em
s g
ives
man
ag
ers
ad
eq
uate
in
form
ati
on
to
en
ab
le
them
to
eff
ecti
vely
m
anag
e fu
nd
s ap
pro
pri
ate
d
for
pro
cu
rem
en
ts.
REM
AR
KS
.......
N w
AC
CO
UN
TA
BIL
ITY
M
OD
EL
AL
L
OT
HE
R
WO
RK
(co
mp
osi
te)
CO
MPT
RO
LL
ER
G
EN
ER
AL
M
EMO
RAN
DU
M
TO
TH
E
HEA
DS
OF
DE
PAR
TM
EN
TS,
A
GE
NC
IES
, A
ND
O
TH
ER
S C
ON
CER
NED
IN
T
HE
U
SE
OF·
DIS
CO
UN
T
AIR
LIN
E
FAR
ES
(FG
MS
D-7
7-6
7,
8-2
5-7
7)
PRO
GR
AM
MIN
G
DIV
ISIO
N
FGM
SD
USE
O
F D
ISC
OU
NT
A
IRL
INE
FA
RE
S FG
MSD
A
ND
'r
EL
ET
ICK
ET
ING
W
OU
LD
HE
LP
SAV
E O
N
GO
VER
NM
ENT
TR
AV
EL
E
XPE
NSE
S (F
GM
SD
-78
-46
, 7
-21
-78
)
RE
VIE
W
OF
FED
ER
AL
A
GEN
CY
EE
O
MA
NA
GEM
ENT
INFO
RM
AT
ION
A
ND
E
VA
LU
AT
ION
FPC
D
OV
ER
AL
L
ASS
ESS
ME
NT
O
F L
INE
-OF
-EF
FO
RT
IM
PAC
T
HO
H
AN
D
TO
WH
AT
EX
TE
NT
H
AS
TH
IS
WO
RK
AC
CO
MP
LIS
HE
D O
BJE
CT
IVE
SO
FL
iNE
-OF
=E
FF
OR
T
Th
is
mem
ora
nd
um
to
F
ed
era
l ag
en
cie
s
call
ed
th
eir
att
en
tio
n to
th
e
need
fo
r ad
eq
uate
fi
nan
cia
l re
po
rtin
q
syst
em
s to
b
ett
er
co
ntr
ol
trav
el
ex
pen
ses.
A
cco
rdin
gly
, th
e ag
en
cie
s
issu
ed
ap
pro
pri
ate
in
str
ucti
on
s
to th
eir
sta
ffs.
Th
is re
po
rt p
oin
ted
o
ut
that
Fed
era
l ag
en
cie
s d
id
no
t h
av
e
ad
eq
uate
co
n
tro
l o
ver
their
tr
av
el
ex
pen
ses
becau
se o
f th
e
lack
o
f ad
eq
uate
fi
n
an
cia
l re
po
rtin
g
syst
em
s to
g
en
era
te
necessary
fi
nan
cia
l in
form
ati
on
to
m
an
ag
ers
. A
s a
resu
lt,
mo
st
Fed
era
l ag
en
cie
s
ag
reed
to
th
e eff
ecti
ve
co
rrecti
ve acti
on
w
hic
h
sho
uld
sa
ve
mil
lio
ns o
f d
oll
ars
in
tr
av
el
co
sts
th
rou
gh
in
cre
ased
u
se o
f d
isco
un
t air
lin
e
fare
s
and
te
leti
ck
eti
nq
p
roced
ure
s.
Ou
r w
ork
u
nd
er
this
p
rio
rit
y li
ne-o
f-effo
rt
has
resu
lted
in
ag
en
cie
s
usi
ng
an
d
pla
nn
ing
ste
ps
to str
en
gth
en
an
d
imp
rov
e th
eir
fi
nan
cia
l re
po
rtin
g
syst
em
s.
Th
e w
ork
h
as
als
o
bro
ug
ht
to th
e att
en
tio
n o
f th
e
Co
ng
ress
it
s
need
fo
r im
pro
ved
fi
nan
cia
l re
po
rtin
q--
part
icu
larl
y fo
r acco
un
ts
receiv
ab
le
fro
m
the
pu
bli
c.
On
-go
ing
w
ork
n
eari
ng
co
mp
leti
on
w
ill
giv
e ag
en
cie
s
gu
idan
ce
on
l1
ow
to
imp
rov
e th
eir
acco
un
tin
g
and
fi
nan
cia
l re
po
rtin
g
syst
em
s an
d
to
sharp
en
th
eir
u
se o
f fi
nan
cia
l in
form
ati
on
p
rod
uced
to
b
ett
er
co
ntr
ol
reso
urc
es
and
m
ake
mo
re eff
ecti
ve
fin
an
cia
l d
ecis
ion
s.
REM
AR
KS
~
IV
.i:..
AC
CO
UN
TA
BIL
ITL
Y
MO
DEL
AL
L
OT
HE
R
WO
RK
(co
mp
osi
te)
WH
AT
IS
LE
FT
TO
B
E D
ON
E?
PRO
GR
AM
MIN
G
DIV
ISIO
N
We
wil
l co
nti
nu
e
to
loo
k in
to
FGM
SD
the q
uali
ty
an
d
use
m
ade
of
info
rmati
on
co
min
g o
ut
of
ag
en
cy
acco
un
tin
g
sy
ste
ms.
We
beli
ev
e
ou
r ap
pro
ach
o
f ma~ing
Go
vern
m
en
t-w
ide/m
ul ti
ag
en
cy
re
vie
ws
of
majo
r o
pera
tin
g
sta
tem
en
t li
ne
item
s is
eff
ecti
ve.
We
pla
n
to
do
ad
dit
ion
al
wo
rk
in
the
loan
s
receiv
ab
le are
a;
sp
ecif
icall
y,
we
pla
n
to
rev
iew
lo
an
sy
stem
s at
the
Healt
h
Heso
urc
es
Ad
min
istr
a
tio
n
and
F
arm
ers
H
ome
Ad
min
i str
ati
on
. W
e als
o
ho
pe
to
co
mp
lete
a
rev
iew
o
f a
majo
r li
ab
ilit
y
item
(p
rob
ab
ly acco
un
ts
pay
ab
le
to
the
pu
bli
c
an
d
rev
en
ue
an
d
ex
pen
se
item
s).
We
wil
l co
nti
nu
e
to
mak
e FG
MSD
sele
cte
d
rev
iew
s o
f th
e
tech
-n
iqu
es
use
d
by
in
div
idu
al
ag
en
cie
s
in d
esig
nin
g,
op
era
tin
g,
and
u
sin
g
acco
un
tin
g
syst
em
s in
th
e
man
agem
ent
pro
cess.
We
pla
n
a m
ajo
r effo
rt
to
loo
k at
how
w
ell
ag
en
cie
s
are
b
uil
din
g so
ph
isti
ca
ted
co
ntr
ols
in
to th
eir
au
tom
ate
d
syst
em
s to
en
han
ce
the reli
ab
ilit
y
of
fin
an
cia
l in
form
ati
on
. S
ome
of
the b
ett
er, mor~.sophisticated
co
ntr
ols
in
clu
de
inte
gra
ted
te
st
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
Th
is
wo
rk w
ill
all
ow
u
s to
co
nti
nu
e o
ur
lon
g-t
erm
effo
rts
to
ev
alu
ate
ag
en
cy
fi
nan
cia
l acco
un
tin
g
an
d re
po
rtin
g
syst
em
s an
d
mak
e su
gg
esti
on
s
to
imp
rov
e
these
syst
em
s so
th
ey
w
ill
pro
vid
e
for
ad
eq
uate
in
form
ati
on
to
m
an
ag
ers
n
eed
ed
to
(a
) eff
ecti
vely
co
ntr
ol
pu
bli
c
fun
ds
an
d
reso
urc
es,
(b)
eff
ecti
vely
, effic
ien
tly
, an
d
eco
no
mic
all
y
use
fu
nd
s an
d
reso
urc
es
to ach
iev
e
pro
gra
m g
oals
, an
d
(c)
full
y d
isclo
se
the
fin
an
cia
l re
su
lts
of
op
era
tio
ns.
Th
is
wo
rk w
ill
en
ab
le
us
to b
rin
g
to
the att
en
tio
n o
f all
ag
en
cy
m
an
ag
ers
o
pp
ort
un
itie
s
to
imp
rov
e
the d
esig
ns
an
d o
pera
tio
ns o
f th
eir
acco
un
tin
g
syst
em
s th
ere
by
en
han
cin
g
the
info
rma
tio
n
they
q
et
to su
pp
ort
b
ett
er d
ay
-to
d
ay
o
pera
tin
g d
ecis
ion
s
an
d
to
mo
re
full
y
an
d cle
arl
y d
isclo
se
the
fin
an
cia
l resu
lts o
f o
pera
tio
ns.
REM
AR
KS
I-'
"->
VI
AL
L
OT
HE
R
WO
RK
(co
mp
osi
te)
facil
itie
s,
au
tom
ati
c sele
cti
on
o
f au
dit
sa
mp
le
tran
sacti
on
s,
an
d
a sin
gle
d
ata
base
com
mon
to
m
ore
th
an
o
ne
acco
un
tin
g
ad
min
istr
ati
ve
fun
cti
on
. W
ith
th
ese
typ
es
of
co
ntr
ols
m
an
ag
ers
can
h
av
e gr~ater
assu
ran
ce th
at
the
info
rmati
on
th
ey
g
et
and
u
se
is
co
mp
lete
, accu
rate
, an
d
cu
rren
t.
(~.
;i
:--:~
·,,· ...
. ,-x~
.:·:, !~
AC
CO
UN
TA
BIL
ITY
M
OD
EL
PRO
GR
AM
MIN
G
DIV
ISIO
N
HOW
A
ND
TO
W
HA
T E
XT
EN
T
HA
S T
HIS
W
ORK
R
EMA
RK
S A
CC
OM
PLIS
HE
D
OB
JEC
TIV
ES
O
F L
INE
-OF
-EF
FO
RT
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