Financial Reporting

Navy's 1986 Consolidated Report on Financial Position Is Unreliable Gao ID: AFMD-89-18 April 6, 1989

GAO reviewed the Department of the Navy's fiscal year 1986 Consolidated Report on Financial Position to determine its compliance with GAO and Department of the Treasury annual financial reporting requirements.

GAO found that the Navy provided inaccurate and incomplete financial position reports to Treasury, since it: (1) did not effectively supervise, review, or control report preparation to ensure accuracy; (2) did not disclose approximately $58 billion in real property, understating property assets by 34 percent and total assets by 18 percent; (3) did not disclose $1.7 billion in guaranteed loans or data on operating leases for ships; (4) presented accounts receivable data that differed from the accompanying support schedules by $164.5 million; (5) used different data sources, with different requirements, to prepare reports for Treasury and Congress; (6) did not reconcile property records with its accounting system; (7) did not develop service-specific guidelines for complying with Treasury reporting requirements; and (8) lacked controls to identify and correct problems occurring from dual recording of assets, property recording delays, and minimum acquisition-reporting thresholds.

Recommendations

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