Financial Management

Customs' Accounting for Budgetary Resources Was Inadequate Gao ID: AIMD-94-23 December 14, 1993

The U.S. Customs Service did not properly account for the receipt of goods and services. Delays in recording transactions overstated outstanding obligations by millions of dollars with corresponding understatements of accounts payable, expense, and asset accounts. This accounting practice, coupled with the failure to periodically deobligate amounts that were no longer supported by valid contracts or orders, undermined Customs' ability to accurately determine amounts available for obligation. It also undermined the accuracy of historical data on internal recurring obligations, thus inhibiting accurate budget preparation and inflating obligations for such expenses to avoid a shortfall. Intensive manual efforts were required at year-end to determine actual expenditures and the amount of unobligated funds. In addition, Customs did not properly account for its reimbursable work done on behalf of other agencies. Customs recorded and recognized intragovernmental receivables and revenue before incurring costs related to doing the work, thereby misstating its financial statements and providing the Office of Management and Budget with misleading information in the apportionment process. Further, Customs lacked documentation to substantiate amounts charged other agencies for doing reimbursable work.

GAO found that: (1) Customs does not properly account for its receipt of goods and services or classify its obligations; (2) Customs has overstated outstanding obligations by millions of dollars and understated its liabilities, expenses, and assets; (3) Customs' accounting procedures undermine its ability to accurately determine the amounts available for obligation; (4) material adjustments are required at year-end to determine Customs' actual expenditures and the amount of unobligated funds; (5) Customs records intragovernmental receivables and revenue before it incurs the costs related to its reimbursable work; (6) periodic reviews of Customs' unliquidated obligations are ineffective; and (7) Customs does not have documentation guidelines to substantiate amounts charged for work under interagency agreements.

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: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.