Internal Controls

GAO identified areas in which the General Services Administration (GSA) needed to improve its internal accounting controls and procedures.

GAO found that GSA: (1) did not perform the number of test counts required to ensure the accuracy of general supply inventory records; (2) did not maintain adequate supporting documentation for certain fund transactions; (3) did not always properly record financial transactions in the proper fiscal year, resulting in $2.6 million in chargebacks on Federal Buildings Fund rent billings and adjustments of $29 million to increase unrecorded General Supply Fund assets and liabilities; (4) did not always properly account for cash, equity, and income in the receipt funds; (5) did not detect errors in the computation of future lease obligations and was unable to calculate future minimum lease payments beyond 1999; (6) manual calculations to supplement the lease payment system understated future minimum lease payments from the Federal Buildings Fund by over $18 million; (7) did not use general ledger expense accounts for financial statement expense line items in its statement of revenues and expenses; (8) lack of adequate written guidance and the amount of manual processing of financial data led to inaccuracies and inconsistencies in its financial reporting and consolidation process; (9) did not adhere to established accounting procedures during 1987, resulting in adjustments of over $2 million to correct uncollectible accounts receivable and related bad-debt expense accounts and $900,000 to increase year-end accounts payable and amounts withheld from vendor invoice payments from the Federal Buildings Fund; (10) did not adequately review accounts receivable subsidiary records to detect and eliminate erroneous and outdated information, resulting in an $8.9-million reduction in the Federal Buildings Fund's net income; (11) did not adequately review construction projects to determine their status, resulting in adjustments of $50 million to reclassify completed projects and $1.7 million for depreciation expenses; (12) lacked adequate separation of duties for personnel responsible for reviewing inventory operations; and (13) lacked written guidelines for some of its routine operations.

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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