Skip to main content

Financial Audit: Food and Nutrition Service's Financial Statements for 1987

AFMD-89-22 Published: Mar 15, 1989. Publicly Released: Mar 15, 1989.
Jump To:
Skip to Highlights

Highlights

GAO examined the Food and Nutrition Service's (FNS) financial statements for the fiscal year ended September 30, 1987.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Agriculture To correct these weaknesses, the Secretary of Agriculture should direct the Administrator, FNS, to determine whether all issuance points are properly reporting food coupons returned to inventory on the FNS-250 reports and direct those that are not properly reporting them to do so.
Closed – Implemented
FNS has revised its FNS-250 reporting with new instructions issued on December 31, 1991, and is obtaining issuance data from a new issuance and reconciliation report (FNS-46) effective November 13, 1991. The effectiveness of these reports is being examined by the USDA IG as part of its 1991 audit of FNS.
Department of Agriculture To correct these weaknesses, the Secretary of Agriculture should direct the Administrator, FNS, to reduce the food stamp expense and unredeemed food coupon liability accounts for the value of the coupons returned to inventory, as reported by the issuance points.
Closed – Implemented
In October 1989, FNS reduced the redemption liability account for amounts that would not be needed to cover future coupon redemptions. In August 1990, FNS proposed a methodology to analyze the redemption account at year-end to ensure that the account only includes amounts needed to cover future coupon redemptions. This methodology has not been evaluated to determine its effectiveness.
Department of Agriculture To correct these weaknesses, the Secretary of Agriculture should direct the Administrator, FNS, to reconcile account balances to the relevant supporting documentation, such as Treasury account balances, and to supporting subsystem balances, such as the accounts receivable subsystem balance. Adjusting entries resulting from this reconciliation process should be recorded promptly.
Closed – Implemented
FNS has sent out instructions to its regional offices to perform recommendations and promptly record adjustments, and has verified compliance through site visits.
Department of Agriculture To correct these weaknesses, the Secretary of Agriculture should direct the Administrator, FNS, to record all relevant accounting transactions, such as year-end liability accruals, in the accounting system.
Closed – Implemented
Effective September 30, 1991, FNS has developed procedures for preparing financial reports, recording adjustments, calculating bad debt allowances, and determining the food stamp redemption liability. The effectiveness of these procedures is being examined by USDA IG as part of its 1991 audit of FNS.
Department of Agriculture The Secretary of Agriculture should direct the Administrator, FNS, to include the two internal control weaknesses disclosed in the next FNS Financial Integrity Act report.
Closed – Implemented
These internal control weaknesses were included in the FNS Financial Integrity Act report, dated November 28, 1988.

Full Report

Office of Public Affairs

Topics

Accounting proceduresCivil auditsFederal agency accounting systemsFinancial managementFinancial recordsFinancial statement auditsInternal controlsNoncomplianceReporting requirementsSystems evaluation