Financial Management

Pursuant to a legislative requirement, GAO compared the results of the Arthur Andersen (AA) study of the National Institutes of Health's (NIH) operations and the Ernst and Young (E&Y) audit of NIH's fiscal year 1997 financial statements to determine if they contained any conflicting information.

GAO noted that: (1) it compared the two reports and found no conflicting information; (2) rather, the reports were complementary, discussing the need to improve management controls and making recommendations that, if properly implemented, could improve overall financial management of NIH's operations; (3) although the reports did not have the same focus, some of the issues they discussed were similar; (4) the AA study, which was much broader in scope, focused on 17 administrative functions of NIH and their respective costs; (5) these functions included information technology, finance, procurement, property management, intramural and extramural research management, personnel, and budget; (6) for each function, AA discussed in detail related issues, identified best practices, and made recommendations; (7) the E&Y audit focused more on internal controls, compliance with laws and regulations, and issues that may impact NIH's financial statements; and (8) these issues included property, plant, and equipment, grant accrual, the decentralized accounting environment, physical access controls to systems, and grant monitoring.