Financial Management Profile

GAO conducted a survey to identify: (1) the financial management systems used by the Department of Health and Human Services (HHS); (2) the internal control strengths and weaknesses in these systems; and (3) the interrelationships of the systems.

GAO identified 81 HHS financial management systems. GAO found that: (1) HHS budget development systems, except for the Social Security Administration's system, are not directly integrated with its accounting systems; (2) budget development timeframes preclude the use of the actual financial results of the preceding year's program and administrative operations in developing budget requests; (3) Congress can directly control only about 13 percent of HHS budget authority through the appropriation process; (4) accountability for the four trust funds that support major benefit payment programs is divided between three agencies; (5) HHS does not maintain a central accounting system; and (6) HHS maintains eight accounting systems which are supported by 63 subsidiary systems. The eight general ledger systems and the disbursement systems for administrative costs seem adequate, the central personnel/payroll system and the disbursement systems for six benefit payment programs did not appear to be adequate, while the personal property system and the grant and contract systems did appear generally adequate. However, GAO also found that many of the systems are not designed to operate efficiently and do not effectively use electronic data processing resources. GAO ranked, according to risk, 73 of the 81 financial management systems, and found that HHS has 3 high-risk systems, 32 medium-risk systems, and 38 low-risk systems.