The Small Business Administration's Second-Year Implementation of the Federal Managers' Financial Integrity Act
RCED-86-24
Published: Oct 18, 1985. Publicly Released: Oct 18, 1985.
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Highlights
GAO evaluated the Small Business Administration's (SBA) implementation of the Federal Managers' Financial Integrity Act (FMFIA) to determine: (1) the progress it has made to identify and correct internal control weaknesses and to evaluate systems of internal controls; (2) whether SBA accounting systems and evaluations conform to GAO requirements; and (3) the accuracy and completeness of the Administrator, SBA, annual report on internal controls and accounting systems.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Small Business Administration | The Administrator, SBA, should ensure that ICR are performed in accordance with OMB and SBA guidelines. Specifically, the internal control reviewers should be required to develop documentation to support the basis for the conclusions reached and the amount of testing done. |
Closed – Implemented
SBA issued a new internal control system standard operating procedure that provides more definitive guidance for documenting ICR.
|
| Small Business Administration | The Administrator, SBA, should require the Director, Office of Computer Sciences, to ensure that ADP controls are evaluated in accordance with OMB and SBA guidelines. |
Closed – Implemented
The ADP Administration developed and implemented an ADP plan in mid-1986.
|
| Small Business Administration | The Administrator, SBA, should issue guidelines describing what ADP controls are, who should evaluate them, and how to evaluate them. |
Closed – Implemented
The ADP Administration developed and implemented a plan for evaluating ADP controls in mid-1986.
|
| Small Business Administration | The Administrator, SBA, should provide SBA managers with training on how to evaluate ADP controls and, where necessary, ADP technical assistance, to assist them in their assessments. |
Closed – Implemented
Training was completed and a plan was developed in mid-1986.
|
| Small Business Administration | The Administrator, SBA, should expand SBA guidelines to include detailed steps for testing its accounting systems in operation and evaluating the ADP aspects involved. In addition, SBA should expand its guidelines to provide for examining conformance with titles 4, 5, and 7 of the GAO Policy and Procedures Manual for Guidance of Federal Agencies and with related requirements, such as those found in the Treasury Financial Manual and OMB circulars. |
Closed – Implemented
SBA revised the guidelines for future reviews of accounting systems.
|
| Small Business Administration | The Administrator, SBA, should coordinate planned internal control and accounting system reviews to ensure that all key accounting system internal controls are evaluated. Such evaluation is needed to support a statement regarding the degree of a system's conformance with the Comptroller General's principles, standards, and related requirements. |
Closed – Implemented
SBA revised the guidelines to be used in future reviews of accounting systems.
|
| Small Business Administration | The Administrator, SBA, should provide for increased staff involvement in accounting system reviews to the extent resources permit. |
Closed – Implemented
Additional staff have been given the responsibility for accounting system evaluations.
|
| Small Business Administration | The Administrator, SBA, should describe accurately the scope of assurance given and known system weaknesses in future FMFIA reports. For example, the report should include an indication of accounting system size, such as the number of dollars involved, use consistent terminology throughout, and summarize accounting system weaknesses. In addition, systems that have not been adequately evaluated should not be reported in conformance with the Comptroller General's requirements. |
Closed – Implemented
In future reviews/certifications, SBA plans to more accurately describe the scope of assurance given, more accurately present material in the report, use consistent terminology, and identify the extent of review in quantitative terms.
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Topics
Accounting systemsElectronic data processingInternal controlsMaterialityProgram evaluationReporting requirementsTestingSmall businessWarrantiesRevolving funds