Financial Audit

Examination of EPA's Financial Statements for Fiscal Year 1987 Gao ID: AFMD-89-24 February 9, 1989

GAO examined the Environmental Protection Agency's (EPA) consolidated financial statements for the year ended September 30, 1987, and the related consolidated statements of revenues and expenses and of changes in financial position and reconciliation to budget for the year then ended.

GAO found that EPA: (1) did not routinely reconcile its general ledger balances to external sources or subsidiary records; (2) used property management systems and records which lacked the necessary information for proper accounting, reconciliation, and internal controls; (3) did not include the material weakness in its internal control system over property in its 1987 Federal Managers' Financial Integrity Act (FMFIA) report; and (4) recorded inaccurate cost and property data in Superfund property records and did not properly maintain records. GAO also found that: (1) it could not determine whether EPA properly recorded assets, liabilities, equity, revenues, and expenses at the beginning of fiscal year (FY) 1987, since that was the first year EPA began preparing consolidated statements in accordance with generally accepted accounting principles; (2) it could not perform auditing procedures necessary to determine the aggregate net book value of land, buildings, and equipment, due to numerous property accounting problems; and (3) except as noted, the financial statements presented fairly the EPA financial position as of September 30, 1987.

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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