Internal Controls at Department of Transportation's Federal Highway Administration

GAO made a survey of the accounting controls over revenue and expenditures of nine accounting stations within the Federal Highway Administration (FHwA). The survey was based on questionnaires designed to identify potential internal control problems and on interviews with accounting station officials. When responses indicated potential weaknesses, GAO tested selected transactions to determine if the weaknesses existed, but did not attempt to establish their extent or the precise corrective actions which were needed.

The survey disclosed that collections were not adequately controlled at many accounting stations. Collections were not properly logged in, correctly accounted for, or adequately safeguarded. Duties of employees were not adequately divided between handling of collections and other functions, and collections were not promptly deposited. Accounts receivable were improperly handled at most FHwA offices. They were not recorded in the accounting records or included in periodic aging schedules. Travel advances were not properly managed at several FHwA offices. They were not periodically reviewed or promptly recovered. Disbursement controls were weak at most locations. Vouchers were not adequately preaudited, payments were often not scheduled to coincide with due dates, and reasons for lost cash discounts were not documented. Government transportation requests were ineffectively controlled at several offices. They were not adequately safeguarded or periodically reconciled. Imprest funds at most locations were not properly managed or adequately safeguarded, basic control procedures were not in use, and reviews of funds were insufficient. Obligations were not adequately controlled at some locations and were not properly documented, promptly recorded, or periodically reviewed. Internal audit coverage of financial management functions was insufficient at several accounting stations. Adequate internal audit coverage could have detected most of the control weaknesses noted in the survey, thus, providing management with the opportunity to take timely corrective action.

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) 275-1581