Improvements Needed in Financial Management of GSA's Teleprocessing Services Program

Gao ID: AFMD-83-8 December 9, 1982

GAO reported on the financial management of the General Services Administration's (GSA) Teleprocessing Services Program and considered: (1) how well GSA administers the single billing method used under the schedule contracts; (2) what impact the single billing method has on the Automated Data Processing (ADP) Revolving Fund; and (3) how well user agencies conduct financial accounting, verification, and certification of invoices for teleprocessing services.

GAO found that GSA has not achieved all of its single billing method objectives because it lacks enough staff to review the voluminous monthly invoices it receives for teleprocessing services. As a result, many invoice discrepancies are missed in prepayment reviews and contractors often have interest-free use of Federal funds until the discrepancies are detected in postaudit and the credits for the erroneous payments are received. GAO found that the lag time between GSA payment of contractor invoices and rebilling the user agencies puts the ADP Fund in a reduced cash position for an extended period of time, adversely affecting other programs supported by the fund. In addition, user agencies frequently are late in reimbursing the fund, further straining its cash balances. GAO has helped GSA collect over $4.5 million in delinquent accounts. Unlike most Government procurements which require agency verification of receipt of goods and services before contractor payment, under these multiple award schedule contracts payment is made before verification. However, the required postpayment verification has been less than adequate. GAO found that many teleprocessing services users have not established internal control procedures for verifying invoices as required by regulations. GSA is aware of this problem, but has done little to address it.

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.

Director: Walter L. Anderson Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-5044


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