Status, Progress, and Problems in Federal Agency Accounting During Fiscal 1980

The head of each executive agency is responsible for establishing and maintaining systems of accounting and internal controls that conform to the principles, standards, and related requirements prescribed by the Comptroller General. GAO examines the accounting principles and standards prescribed by an agency as the basis for its accounting system and those procedures and practices that will be followed to perform the agency's accounting to determine whether the system is in conformance with approved principles and standards. GAO also reviews the accounting system in operation from time to time to see that it is being operated in accordance with the approved design and is serving management's needs.

As of September 30, 1980, 297 of 301 systems identified by the agencies as being subject to GAO approval were covered by approved accounting principles and standards. Only 193 of the 301 system designs have been approved by the Comptroller General. The 108 unapproved systems include some of the largest and most important ones and account for the expenditure of more than half the Federal budget. A large number of the approved systems were approved over a decade ago, and most of these systems have undergone revisions and should be submitted for reapproval. Congress should ensure that agencies have adequate resources to improve and qualify their systems for approval. In many cases, an agency installs and begins operation of a system without GAO approval, and GAO finds that the system lacks important features and is therefore not approvable. When a performance measurement system is integrated with an accurate time and cost reporting system, efficiency of operations is measurable. GAO has encountered many major accounting problems, such as inadequate property and cost accounting, ineffective fund control, and improper accrual accounting, which prevent approval of systems. Some agencies do not adequately document their system designs in a manner that would assist them in operating and maintaining their systems and permit an orderly evaluation. It has been difficult during the development and documentation process to convince agencies to seek GAO assistance. Some agencies make changes in their documentation to get GAO approval and then do not implement them.

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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