Financial Audit

GAO reviewed the Department of Veterans Affairs' (VA): (1) consolidated financial statements for the fiscal years ended September 30, 1989 and 1988; (2) financial operations and appropriation activity; and (3) self-assessment of internal controls.

GAO found that, except for property and equipment, the consolidated financial statements presented fairly the financial position of VA as of September 30, 1989 and 1988. GAO qualified its opinion due to missing or undocumented values of VA assets and inconsistent adherence to capitalization and depreciation policies by VA field personnel. GAO also found that: (1) VA net operating costs decreased slightly from 1988 to 1989; (2) VA health care and veterans benefits costs remained steady but could change in the future; (3) veterans' housing credit assistance would require substantial future appropriations; (4) the veterans' life insurance program was secure; (5) VA general administrative costs did not grow significantly; (6) VA had serious credit management problems; (7) Congress and VA management needed greater assurance that unused and unliquidated appropriations were properly accounted for; (8) automatic data processing (ADP) software maintenance and data integrity control weaknesses continued at all three VA data processing centers; (9) internal controls were ineffective in preventing and recovering erroneous benefit payments on behalf of deceased recipients; and (10) VA major accounting systems failed to conform with accounting principles and standards for ADP, property management, personnel and organizational management, program management, and accounting and financial management systems.

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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