American Battle Monuments Commission:
Improvements Needed in Internal Controls and Accounting Procedures - Fiscal Year 2010
GAO-11-577R, Jul 28, 2011
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On March 1, 2011, we issued our report expressing our opinion on the American Battle Monuments Commission's (the Commission) fiscal years 2010 and 2009 financial statements and our opinion on the Commission's internal control as of September 30, 2010. We also reported on the results of our tests of the Commission's compliance with selected provisions of laws and regulations during fiscal year 2010. During the fiscal year 2010 audit, we identified several internal control deficiencies that, while not material individually or in the aggregate to the Commission's financial statements, warrant management's attention. The purpose of this report is to present these deficiencies, provide recommendations to address these matters, and provide an update on the status of our prior years' recommendations.
During our fiscal year 2010 financial statement audit, we identified nine deficiencies in the Commission's internal controls and accounting procedures at Commission headquarters and its Paris Overseas Office. At the Commission's headquarters, we identified the following internal control and accounting procedure deficiencies: (1) Management's discussion and analysis did not include a financial analysis. (2) Not all budgetary information was fully disclosed in the financial statements. (3) Monitoring controls over cash accounts were not fully effective. (4) Active Contracts List was not current, complete, or reconciled to accounting information. (5) Budgetary procedures were not fully effective in ensuring contracts were signed before funds were obligated. (6) Year-end reconciliation of accounts payable detail to the general ledger was not timely and accurate. At the Commission's Paris Overseas Office, we identified the following internal control and accounting procedure deficiencies: (7) Documentation of personnel actions was not current. (8) Controls over approvals and invoice dates were not always effective. (9) Rome office contract files were not current. To assist the Commission management, we present at the end of our discussion of each of the findings, our recommendations for corrective action. We are making a total of 15 recommendations to address the internal control deficiencies discussed in this report.
Status Legend:
- Review Pending
- Open
- Closed - implemented
- Closed - not implemented
Recommendations for Executive Action
Recommendation: The Secretary of the Commission should instruct the Director of Finance at Commission headquarters to include a financial analysis as part of its Management Discussion and Analysis within its reporting process to accompany future annual financial statements.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Finance at Commission headquarters to strengthen controls over financial reporting to ensure the complete disclosure of budgetary activity, including an explanation of any differences between amounts reported in the Commission's Statement of Budgetary Resources and actual amounts reported for the entity in the Budget of the United States Government, along with the availability of published information.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Finance at Commission headquarters to monitor monthly cash reconciliations for all Fund Balance with Treasury accounts Commissionwide to ensure their completeness and accuracy.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Human Resources and Administration at Commission headquarters to maintain a consolidated Active Contracts List, or require the Paris Overseas Office to maintain a separate list, with information on each contract including the name of the contact person; the status of work completed; whether retainage amounts had been paid; and whether any amounts were pending due to disagreements on work performed.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Human Resources and Administration at Commission headquarters to ensure that the Active Contracts List is reconciled to contracts on the undelivered orders report produced by the Commission's accounting system.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Finance at Commission headquarters to follow existing budgetary procedures to ensure that contracts are officially agreed to and executed as of or before the date of obligation.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Finance at Commission headquarters to direct accounting staff to follow existing accounting procedures to perform timely reconciliations of accounts payable general ledger balances to the Aged Vendor Liability Report balances to ensure reporting of accurate information, particularly at year-end.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Human Resources at the Commission's Paris Overseas Office to follow existing policy to prepare, approve, and file current forms to support pay changes in foreign employee's official personnel file.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Human Resources at the Commission's Paris Overseas Office to direct the Rome office personnel specialist to follow existing policy to prepare, approve, and file current forms to support pay changes in employee's official personnel files.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of Human Resources at the Commission's Paris Overseas Office to establish a consistent policy for Paris and Rome offices to support changes in employee's official personnel files by using an SF-50, Notification of Personnel Action, for all employees.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Finance Directorate's Finance Officer at the Commission's Paris Overseas Office to instruct Commission personnel to print their name and sign when approving the receipt of goods and services.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Finance Directorate's Finance Officer at the Commission's Paris Overseas Office to maintain an authorized list of approving Commission officials with their signature that Finance Directorate personnel can verify when processing invoices for payment.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Finance Directorate's Finance Officer at the Commission's Paris Overseas Office to modify existing accounting procedures to instruct Finance Directorate personnel to enter the date on the invoice into the accounting system.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of the Engineering Directorate at the Commission's Paris Overseas Office to instruct personnel to update and maintain all engineering and maintenance contract files for which the office is responsible to include the Rome office.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of the Commission should instruct the Director of the Engineering Directorate at the Commission's Paris Overseas Office to prepare an accrual report on all engineering contracts to determine the amount of work performed but not yet paid at year-end for accounting and inclusion in financial statements to include the Rome office.
Agency Affected: American Battle Monuments Commission
Status: Review Pending
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.