Financial Audit

GAO is unable to provide an opinion on the financial statements of the District of Columbia Highway Trust Fund for the 14-month period ended September 30, 1996, because the District could not provide detailed supporting documentation for $3.7 million (36 percent of the $10.3 million) in capital appropriated expenditures and the related liability to the capital operating account. Thus, the financial statements may be unreliable. GAO found weaknesses in controls over (1) safeguarding assets, specifically cash receipts, and the related accounts receivables, from material loss and (2) ensuring that there were no material misstatements in the amounts reported in the financial statements. GAO also found material weaknesses in computer system controls. GAO is unable to report on the District's compliance with laws and regulations because of the District's lack of adequate documentation. Also because of the lack of adequate documentation, GAO is unable to give an opinion on whether the underlying assumptions and methodology used to develop the Fund's five-year forecasted statements provide a reasonable basis for such statements or whether the statements are presented in conformity with guidelines established by the American Institute of Certified Public Accountants.

GAO noted that: (1) GAO was unable to give an opinion on the financial statements of the Fund because the lack of adequate documentation limited the scope of its work; (2) specifically, the District did not provide evidence for $3.7 million (36 percent of the $10.3 million) in capital appropriated expenditures and the related liability to the Capital Operating account, thus the financial statements may be unreliable; (3) material weaknesses in internal controls resulted in ineffective controls over: (a) safeguarding assets, specifically revenue cash receipts and the related accounts receivable, from material loss; and (b) assuring that there were no material misstatements in amounts reported in the financial statements, specifically capital appropriated expenditures, the liability to the Capital Operating account, and revenue; (4) in addition, GAO identified material weaknesses in the computer system general controls over physical and logical security, segregation of duties, and service continuity; (5) GAO was unable to report on compliance with laws and regulations because the District lacked adequate documentation; and (6) also because of lack of adequate documentation, GAO was unable to give an opinion on whether the underlying assumptions and methodology used to develop the Fund's 5-year forecasted statements provide a reasonable basis for such statements or whether the statements are presented in conformity with guidelines established by the American Institute of Certified Public Accountants.

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: