Millions Paid Out in Duplicate and Forged Government Checks

GAO was asked to study the Treasury Department's accounting procedures for duplicate payments and payments on forged checks.

A GAO review disclosed that the Treasury is not meeting all legal requirements in accounting for and recovering the payments with the result that funds are being disbursed without congressional approval and amounts due the government are not recovered promptly. A GAO review of Treasury's procedures for handling duplicate payments and check forgeries showed that: (1) contrary to legal requirements, Treasury has paid both original and substitute checks in many cases; (2) second payments involving original and substitute checks were not charged to appropriations; (3) replacement checks for forgeries were not charged to the fund that Congress established for this purpose; (4) there is no appropriation for payment of a forged check discovered after the substitute check is issued; (5) the exact amount of receivables and losses resulting from the duplicate payments and check forgeries was not known because of inadequate accounting procedures and controls; (6) Treasury was not acting promptly and effectively to enable recovery of all the receivables; and (7) more efforts are needed to reduce the number of future duplicate payments and forgeries. Although they represent an extremely small percentage of the total checks issued by Treasury, the amounts involved are substantial and total millions of dollars.

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: John F. Simonette Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-9490