Controls and Accountability for Checks Returned to Treasury's Disbursing Centers

A review was conducted of the Department of the Treasury's controls over checks on hand that were returned as undelivered or were withdrawn from delivery after preparation.

During fiscal year 1976, seven Treasury disbursing centers were holding about 53,000 negotiable checks, about $17.7 million, without adequate safeguards. About 41,000 of these undelivered checks were at least 6 months old. Because Treasury did not cancel the checks immediately, federal agencies have been precluded from making timely adjustments to their accounting records. Several weaknesses were noted in internal controls over the processing of returned checks: (1) mail containing checks was not always opened in the presence of other employees as required; (2) checks not under accounting control were placed in open desks accessible to anyone; and (3) uncancelled checks were processed without adequate controls. Treasury's problems in controlling returned checks could be minimized if such checks were cancelled shortly after receipt.

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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