Improvements Needed in Internal Controls at the National Finance Center

GAO summarized the results of its review of internal controls over procurement-related payments made by the Department of Agriculture's (USDA) National Finance Center (NFC).

GAO found that internal controls at NFC were inadequate to prevent payments from being made too early, which may cause the loss of more than $1.6 million in interest annually. Further, almost $3 million might have been saved if recently enacted late payment penalties had previously been required. Procedural weaknesses increased the vulnerability of the payment systems to fraud and abuse. Inadequate verification of authorizing signatures on payment vouchers processed through the miscellaneous payments system may have allowed improper payments to be made. The purchase order system had more than $10 million in old, inactive purchase orders which had not been canceled, creating the possibility of payments being made for goods or services not received. In addition, the gasoline credit card system did not provide field offices with reasonable means of verifying charges to the field offices' funds and relied on inappropriate audit procedures to identify improper charges. GAO made recommendations to NFC officials on ways to improve internal controls over payment processing.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John F. Simonette Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-1581