Financial Audit

Financial Reporting and Internal Controls at the Air Force Systems Command Gao ID: AFMD-91-22 January 23, 1991

GAO provided information on the Air Force Systems Command's (AFSC) financial management operation, focusing on AFSC need for improved internal controls and financial reporting.

GAO found that: (1) AFSC trial balances for fiscal year (FY) 1988 and FY 1989 were substantially incomplete and inaccurate, resulting in unreliable financial reports and statements; (2) AFSC product divisions failed to promptly record commitments and obligations in accounting system records; (3) AFSC product divisions did not always reconcile disbursement transactions with accounting records; (4) AFSC product divisions inconsistently documented their efforts to ensure that contract awards and modifications were proper; (5) material weaknesses relating to prompt recording of expenditures affected the accuracy of accounting reports concerning the amount of unliquidated obligations; (6) AFSC lacked adequate controls to ensure the proper reconciliation of expenditures and unliquidated obligations; (7) the AFSC Contract Management Division overstated its liabilities by about $400 million in FY 1988 and by about $192 million in FY 1989; (8) the AFSC Contract Management Division lacked adequate control over its inventory process; and (9) AFSC low priority on ensuring the accuracy of trial balances resulted in its failure to detect and correct many easily identified errors and inaccuracies in the accounting records.

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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