EPA-FMFIA

GAO reviewed the Environmental Protection Agency's (EPA) second-year implementation of the Federal Managers' Financial Integrity Act (FMFIA), focusing on: (1) improvements in EPA internal controls and the process EPA uses to evaluate and correct internal control weaknesses; (2) the status of the EPA accounting system and evaluations made to determine whether it conforms to the Comptroller General's requirements for such systems; and (3) the accuracy and completeness of the EPA annual FMFIA report.

GAO found that, while EPA has made progress in evaluating and improving its internal controls, it did not have an adequate basis for reporting that its systems of internal control met the objectives of FMFIA because: (1) the material weaknesses it reported for 1984 encompassed over 60 percent of its budget; (2) it failed to identify two uncorrected material weaknesses in its Superfund and Resource Conservation and Recovery Act programs that it reported in 1983; (3) it failed to identify material weaknesses in its automatic data processing (ADP) activities; (4) it did not uniformly implement its FMFIA process throughout the agency; and (5) it failed to perform internal control reviews (ICR) for a number of highly vulnerable program areas. GAO also found that EPA did not: (1) have an adequate basis to report that its accounting system was in conformance with the Comptroller General's requirements; (2) properly record and charge certain contract costs; (3) properly deobligate unspent grant funds; (4) establish documentation and data controls for its payroll accounting subsystem; (5) completely correct material weaknesses in its accounting system that it reported in 1983; or (6) adequately test its accounting system in operation to ensure conformance.

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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