Financial Audit

Farmers Home Administration's Financial Statements for 1988 and 1987 Gao ID: AFMD-90-37 January 25, 1990

GAO examined the Farmers Home Administration's (FmHA) consolidated statements of its financial position as of September 30, 1988 and 1987, and the related statements of operations and cash flows for the fiscal years then ended.

GAO found that: (1) the statements presented fairly the FmHA financial position as of September 30, 1988 and 1987, and the related statements of operations and cash flows for the years then ended, in conformity with generally accepted accounting principles; (2) although FmHA implemented the Acquired Property Tracking System (APTS) in response to internal accounting deficiencies, the system did not conform to federal agency policies and procedures; (3) FmHA had not completed system modifications which would allow it to properly record acquired property or integrated APTS data with the related general ledger control accounts; (4) APTS contained inaccurate and incomplete information from FmHA field offices, since the software did not include parameter checks to detect unreasonable property values; (5) FmHA field supervisors did not establish market values for collateral in order to project loan losses; and (6) FmHA did not have an appropriate methodology for determining the necessary property holding and disposition costs to ensure reasonable loan loss estimates and acquired property balances.

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.

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