Status, Progress, and Problems in Federal Agency Accounting During Fiscal Year 1977

The head of each executive agency is responsible for establishing and maintaining accounting systems that conform to principles and standards prescribed by the Comptroller General. A tentative statement of principles and standards was issued in 1952, and GAO started granting formal approval of accounting systems that conformed to it. Approval is granted in two phases, first of principles and standards adopted by agencies, then of system designs.

At September 30, l977, principles and standards were approved for 98 percent of the 330 systems that were subject to approval, and 60 percent of system designs had been approved. At that time, 132 system designs in 34 agencies remained unapproved. Reports of serious deficiencies in Government accounting usually involved unapproved systems. Reasons that some agencies have not completed accounting efforts include: frequent changes in top management, inability of accountants to convince agency management that better accounting is worthwhile, failure to design systems that comply with approved principles and standards, and the lack of Office of Management and Budget (OMB) support in the past for improvements in accounting systems. Recently, OMB required updates of fund control regulations. In spite of the GAO objective of having all agency accounting systems approved by the end of fiscal year 1980, as of September 30, l977, about one-fourth of the unapproved systems were not scheduled for approval before the end of 1980. Progress has been made recently in approvals of Department of Defense systems, but some systems must be redesigned to obtain approval. Other departments have significant problems which must be resolved before all their accounting systems can be approved.

Recommendations

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