Internal Control Improvements Needed in Agriculture's Miscellaneous Payments System

GAO reviewed the Department of Agriculture's (USDA) National Finance Center's (NFC) miscellaneous payments system to assess the: (1) adequacy of internal controls for ensuring the accuracy and reliability of payment transaction processing; and (2) controls for ensuring the system's compliance with Comptroller General (CG) requirements pertinent to payment systems.

GAO found that: (1) key internal control objectives for the system were not being met because field agency and NFC internal control techniques were inadequate or not used; (2) internal control weaknesses significantly increased the system's vulnerability to transaction data errors and unauthorized payment transactions; and (3) transaction data errors could undermine the system's effectiveness in complying with CG standards for accuracy in processing and financial reporting. GAO also found that: (1) control improvements were needed at the field-certifying-officer level to ensure the accuracy of system transaction data; (2) improvements were needed in NFC data entry activities to ensure the accuracy of data processed; (3) NFC needs to discontinue bypassing a system designed to ensure proper reporting; (4) NFC needs to increase the scope of its payment transaction audits to better ensure that undetected errors are identified; (5) NFC needs to better control sensitive codes used by the system to assist in ensuring that only authorized transactions are processed; and (6) NFC needs to update internal procedures for the payments system.

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) 275-9454