Internal Controls

GAO evaluated the General Services Administration's (GSA) system of internal accounting controls to identify ways for improving them and other GSA financial management practices.

GAO found that GSA: (1) corrected three of four material internal accounting control weaknesses reported to Congress in 1985; and (2) has initiated corrections for the fourth material weakness and a new material weakness identified in 1986. GAO also found that other uncorrected problems within GSA management included: (1) infrequent assets inventories; (2) inadequate internal controls for its automatic data processing systems, billing processes, and credit card usage; (3) lack of supporting documentation for funds transactions; (4) errors in its consolidated financial statements; (5) improper recording of its financial transactions; and (6) improper application of accounting principles. In addition, GAO found that GSA: (1) automated systems contained many inefficiencies; and (2) used the moving-average cost method for valuing its general supply inventory. GSA agreed with most of these findings, but believed that: (1) its inventory practices were sufficient; (2) the financial transaction discrepancies identified did not materially affect the relevant financial statements; (3) it had achieved adequate control over its automated system operations; (4) its moving-average cost method was preferable to the use of standard costs; and (5) it had already implemented controls over its credit card system.

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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