2000 Census: Analysis of Fiscal Year 2000 Budget and Internal Control Weaknesses at the U.S. Census Bureau
Highlights
In September 2000, the U.S. Census Bureau told Congress that it had at least $305 million in budget savings out of its $4.5 billion fiscal year 2000 no-year appropriations for the 2000 decennial census. Of the $4.5 billion appropriated to the U.S. Census Bureau in fiscal year 2000, lower-than-expected expenditures and obligations resulted in available balances of at least $415 million. A lower-than-expected support staff workload reduced salary and benefit costs by about $348 million. Enumerator workload is largely determined by the initial mail response rate for returned census questionnaires. The initial mail response of 64 percent meant that Census enumerators did not have to visit more than three million American households. However, the available balances from the higher mail response rate and the lower support staff workload were partially offset by about $100 million of higher salary and benefit costs for enumerators, including a higher workload for unanticipated recounts. According to Bureau data, enumerator productivity did not significantly affect budget variances for the 2000 decennial census. The Bureau reported the national average time to visit a household and complete a census questionnaire was about the one hour estimated. Because of significant internal control weaknesses, the Bureau was unable to develop and report complete, accurate, and timely information for managing decision-making. Specific control weaknesses for fiscal year 2000 were related to the lack of controls over financial reporting and financial management systems. Financial reporting issues included (1) the inability to produce accurate and timely financial statements and other financial management reports needed for oversight and day-to-day management; (2) the lack of timely and complete reconciliations needed to validate the balances of key accounts; and (3) unsupported and inaccurate reported balances for accounts payable and undelivered orders--two key accounts needed to manage and report on unliquidated obligations.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Commerce | The Secretary of Commerce should ensure that the U.S. Census Bureau deobligate at least $55 million for contracts GAO identified for which work has been completed and amounts are not needed to close out contracts. |
Closed – Implemented
In accordance with GAO's recommendation, in June 2002 the Census Bureau deobligated $55 million of contract obligations for six vendors with contracts over $1 million that were no longer needed for the purposes intended. Furthermore, these deobligated no-year funds that remain available until expended, rescinded, transferred, reprogrammed, or closed were no longer available for obligation when they were returned to the Treasury.
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| Department of Commerce | The Secretary of Commerce should ensure that the U.S. Census Bureau review the remaining $90 million of undelivered order balances as of September 30, 2000, to identify and deobligate amounts not needed for those orders. |
Closed – Implemented
In accordance with GAO's recommendation, in June 2002, the Census Bureau identified and deobligated $38 million of obligations with vendors having balances under $1 million for which work had been completed and amounts were no longer needed. Furthermore, these deobligated no-year funds that remain available until expended, rescinded, transferred, reprogrammed, or closed were returned to Treasury so they could no longer remain available for obligation.
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| Department of Commerce | The Secretary of Commerce should ensure that the U.S. Census Bureau instruct accounting personnel to follow the written policy for establishing accruals and proper cutoff for goods and services received at year-end. |
Closed – Implemented
In accordance with GAO's recommendation to follow written policy for establishing accruals and proper cutoff for goods and services received at year-end, the Census Bureau has taken three steps. First, the Bureau's finance division and a contractor have conducted staff training on the accrual process to ensure proper recording of transactions at year-end. Second, as changes in accounting personnel occur, the finance division will continue to educate new personnel and provide refresher training to existing personnel as needed. Lastly, the finance division has set up an internal audit review process to examine year-end policies and procedures, review propriety of year-end accruals, match subsequent disbursements, and review vendor invoices for delivery dates.
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| Department of Commerce | The Secretary of Commerce should ensure that the U.S. Census Bureau post accounting adjustments to subsidiary records in a timely manner. |
Closed – Implemented
In accordance with GAO's recommendation to post accounting adjustments to subsidiary records in a timely manner, the Census Bureau has taken the following four steps by March 29, 2002. First, the Bureau has implemented a new year-end closing program to its Commerce Administrative Management System (CAMS). Second, all year-end adjustments for fiscal year 2001, were entered into CAMS. Third, year-end trial balances and closing entries were validated in CAMS. Lastly, all CAMS modules for fiscal year 2001, were closed, final ending balances were established, and new opening balances for fiscal year 2002 were created by March 29, 2002.
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| Department of Commerce | The Secretary of Commerce should ensure that the U.S. Census Bureau complete efforts to modify the bureau's financial systems to produce usable accounts payable and undelivered order subsidiary reports by vendor, close out thousands of completed transactions with small balances, and archive all completed transactions. |
Closed – Implemented
The Census Bureau implemented the first part of our recommendation by producing a usable accounts payable and undelivered orders subsidiary reporting by vendor in connection with its FY 2002 audit. This also resolved a FY 2001 reportable condition that was considered a material weakness. The Bureau implemented the second part of our recommendation to close out thousands of completed transactions with small balances by reviewing balances quarterly beginning in FY 2003 and deobligating balances that were no longer needed. The third part of our recommendation to archive all completed transactions was because over 200 million transactions had accumulated in the Bureau's accounting system (CAMS) since it became operational in FY 1998 and was slowing down system processing time. Since FY 2002, Bureau officials have stated their intent to implement our archive recommendation but other priorities and funding considerations had delayed the project. In July 2006, Bureau officials informed us that due to advances in computer technology, they have decided that it is now more cost effective to add additional computer storage capacity rather than create an archive application to fix the problem of slowdowns in system processing. As a result, both the Census Bureau and GAO now consider this recommendation to be implemented and closed.
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| Department of Commerce | The Secretary of Commerce should ensure that the U.S. Census Bureau amend policies and procedures to require supervisors to closely review employee time charges and project codes to more accurately reflect project costs for salaries and benefits. |
Closed – Implemented
In accordance with GAO's recommendation, the Census Bureau revised its procedures and plans to more effectively monitor project codes and actual charges. Personnel were hired and trained in these policies and procedures in connection with the 2004 Census Test that was completed in November 2004. However, in April 2005, Bureau officials stated that evaluation of test results was planned for completion by December 30, 2005, at which time the effectiveness of project codes and actual charges will be determined. By July 2006 the Bureau's budget, financial, and program officials were meeting monthly to review detailed budgets, costs, and results by project and to investigate any unusual items identified. Both the Census Bureau and GAO now consider this recommendation implemented and closed.
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| Department of Commerce | The Secretary of Commerce should ensure that the U.S. Census Bureau reconsider the bureau's property and equipment capitalization threshold, as the current policy did not recognize about 57 percent of the bureau's total gross accountable property and equipment as of September 30, 2000. |
Closed – Implemented
The Census Bureau, as one of 13 bureaus in the Department of Commerce, must follow departmental guidance to ensure consistent capitalization of property, plant, and equipment (PPE) of $25,000 and over, even though this resulted in 57 percent of the bureau's gross PPE not being recognized in its stand alone financial statements as of September 30, 2000. Subsequent to this recommendation, the Bureau is now consolidated with the Department of Commerce and no longer issues stand-alone audited financial statements. All of Commerce's bureaus/agencies now use the capitalization thresholds and policies. In March 2016, DOC provided documentation showing that the Census Bureau is now rolled up into DOC's financial records and that all bureaus/agencies use the same capitalization thresholds/policies.
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