This is the accessible text file for GAO report number GAO-11-398R entitled 'Management Report: Opportunities for Improvement in the Federal Housing Finance Agency's Internal Controls and Accounting Procedures' which was released on April 29, 2011. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. GAO-11-398R: United States Government Accountability Office: Washington, DC 20548: April 29, 2011: Mr. Edward J. DeMarco: Acting Director: Federal Housing Finance Agency: Subject: Management Report: Opportunities for Improvement in the Federal Housing Finance Agency's Internal Controls and Accounting Procedures: Dear Mr. DeMarco: In November 2010, we issued our opinion on the Federal Housing Finance Agency's (FHFA) fiscal years 2010 and 2009 financial statements. Our report also included our opinion on the effectiveness of FHFA's internal control over financial reporting as of September 30, 2010, and our evaluation of FHFA's compliance with provisions of selected laws and regulations for the fiscal year ended September 30, 2010. [Footnote 1] The Housing and Economic Recovery Act of 2008 (HERA) created FHFA and gave it responsibility for, among other things, the supervision and oversight of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the 12 federal home loan banks. Specifically, FHFA was assigned responsibility for ensuring that the regulated entities operate in a fiscally safe and sound manner, including maintenance of adequate capital and internal controls, in carrying out their housing and community-development finance mission. HERA requires FHFA to annually prepare financial statements, and requires GAO to audit these statements. The purpose of this report is to present additional information on the internal control and accounting procedure issues we identified during our audit of FHFA's fiscal year 2010 financial statements and to provide our recommended actions to address those issues. We are making three recommendations for strengthening FHFA's internal controls and accounting procedures. In addition, we are providing an update on the status of recommendations we made to address internal control issues identified during our audit of FHFA's fiscal year 2009 financial statements as reported in our June 3, 2010, management report on internal controls and accounting procedures[Footnote 2] and our April 30, 2010, report on controls related to information security.[Footnote 3] Results in Brief: During our audit of FHFA's fiscal years 2010 and 2009 financial statements, we identified two internal control issues that could adversely affect FHFA's ability to meet its internal control objectives. We do not consider these issues to represent material weaknesses or significant deficiencies[Footnote 4] in relation to FHFA's financial statements. Nonetheless, we believe they warrant management's attention and action. These issues concern necessary controls to ensure: * completing proper documentation and obtaining approval prior to disposing of capitalized assets and: * verifying vendor invoices for accuracy prior to payment. These issues increase the risk of FHFA not preventing or promptly detecting and correcting misappropriation of assets or misstatements in its financial statements. At the end of our discussion of each of these issues in the sections that follow, we present our recommendations for strengthening FHFA's internal controls over disposals of capitalized assets and vendor invoice payment processing. These recommendations are intended to improve management's oversight and controls and minimize the risk of misappropriation of assets and misstatements in FHFA's accounts and financial statements. As of the completion of our fiscal year 2010 audit on November 9, 2010, FHFA had taken action to fully address 6 of the 22 internal control-related recommendations from our fiscal year 2009 audit (see enclosures I and II). FHFA also took action to address the three internal control and accounting procedures-related recommendations that remain open, but more work is needed to fully resolve the underlying control issues. For the 13 recommendations related to information systems controls that remain open, FHFA had actions in process as of November 9, 2010, intended to address the related control issues. We did not identify any new weaknesses concerning information security controls during our fiscal year 2010 audit. In its comments, FHFA agreed with our recommendations and described actions it has taken, or plans to take, to address the control issues described in this report. At the end of our discussion of each issue in this report, we have summarized FHFA's related comments. We will evaluate the effectiveness of FHFA's corrective actions as part of our fiscal year 2011 audit. We have also reprinted FHFA's comments in their entirety in enclosure III. Scope and Methodology: As part of our audit of FHFA's fiscal years 2010 and 2009 financial statements, we evaluated FHFA's internal controls and tested its compliance with selected provisions of laws and regulations. We designed our audit procedures to test relevant controls over financial reporting, including those designed to provide reasonable assurance that transactions are properly recorded, processed, and summarized to permit the preparation of FHFA's financial statements in conformity with U.S. generally accepted accounting principles. We performed our audit of FHFA's fiscal years 2010 and 2009 financial statements in accordance with U.S. generally accepted government auditing standards. We believe that our audit provided a reasonable basis for our conclusions in this report. Further details on our audit methodology are presented in enclosure IV. Disposal of Capitalized Property and Equipment: During our testing of FHFA's property and equipment disposal transactions conducted as part of our fiscal year 2010 audit, we found that FHFA did not follow its procedures for disposing of capitalized property and equipment. Specifically, FHFA did not complete a Transfer of Property Receipt Form or obtain the proper approval for all capitalized property and equipment disposals made in fiscal year 2010. Standards for Internal Control in the Federal Government[Footnote 5] provides that agencies are to maintain appropriate documentation of transactions and that agencies are to ensure proper execution of transactions. According to FHFA's Property Management Policy, which is included in its Administrative Accounting Manual, a Transfer of Property Receipt form[Footnote 6] must be completed for the disposal of property. The Property Management Policy also states that the Chief Information Officer is responsible for approving the disposal of information technology equipment and the Chief Administrative Officer is responsible for approving the disposal of all other assets. FHFA did not enforce the internal control procedures documented in its Property Management Policy for the proper disposal of property. In addition, while FHFA's Property Management Policy does require approval for the disposal of capitalized assets, it does not specify how the approval will be documented. In reviewing all seven capitalized asset disposals that occurred during fiscal year 2010, which consisted of five catalysts,[Footnote 7] a printer, and a mailing station, we found that none had a completed Transfer of Property Receipt form nor any documentation demonstrating that approval was obtained prior to disposal of the assets. Deficiencies in procedures covering the disposal of capitalized assets can lead to the misstatement of assets in the financial statements and the underlying records FHFA maintains to support its capitalized assets. In addition, not adhering to the established controls over the disposal of property increases the risk of theft or loss of FHFA assets. Recommendations: We recommend that you direct the Chief Financial Officer to: * establish a mechanism to monitor compliance with policies and procedures surrounding the proper disposal of capitalized property and equipment and: * update the Property Management Policy to include procedures for how to properly document approval before disposal of FHFA assets. FHFA Comments: FHFA agreed with the recommendations and cited actions it has taken, or intends to take, to address this internal control issue. For example, FHFA stated that property management processes have been outlined and that property management procedures will be developed that will include strengthening controls over the disposal of property and equipment. Invoice Payment Procedures: During our testing of nonpayroll[Footnote 8] expense transactions conducted as part of our fiscal year 2010 audit, we found that FHFA did not always properly verify vendor invoice amounts prior to payment. Specifically, in reviewing one of our test transactions, we found a discrepancy with the number of hours billed by a law firm. The invoice included a summary page that documented the total number of hours worked by each individual for a specific period of time. The invoice also contained the detail that was supposed to support the total hours recorded on the summary page. In reviewing the detailed supporting documentation, we found that the summary page contained about 4 more hours for a specific law firm employee than was shown in the detailed supporting documentation. FHFA based the payment on the hours shown on the summary page and did not verify these amounts against the supporting documentation. After we raised this issue with FHFA officials, they reviewed all of the invoices received from two of FHFA's vendors that provide legal services to the agency. From this review, FHFA discovered one overpayment in the amount of $424 for which FHFA received a credit on its next invoice. Standards for Internal Control in the Federal Government[Footnote 9] provides that agencies are to ensure accurate and timely recording of transactions and events. FHFA's Administrative Accounting Manual contains Invoice and Payment Desktop Procedures that describe the procedures for processing payments for FHFA. Although these procedures contain detailed steps for invoice processing and payment, they do not require that invoiced amounts be confirmed against supporting documentation provided with the invoice prior to payment. Deficiencies in controls over FHFA's invoice payment processing procedures can increase the risk of it making improper payments and misstating expenses in its financial statements. Recommendation: We recommend that you direct the Chief Financial Officer to enhance FHFA's Invoice and Payment Desktop Procedures to include detailed instructions on how to verify the accuracy of invoice amounts prior to payment. FHFA Comments: FHFA stated that it agreed that additional guidance needs to be given to invoice approvers/contracting officer technical representatives (COTR) and cited actions it has taken, or intends to take, to address this internal control issue. For example, FHFA stated that it and the Bureau of the Public Debt (BPD), FHFA's accounting services provider, alerted invoice approvers/COTRs by means of written correspondence that an error had been identified during the fiscal year 2010 financial audit and instructed them on the necessity of careful verification of billed amounts and invoice details. FHFA outlined further actions to be taken, including conducting training, posting guidance on its intranet, and conducting verification reviews. Status of Fiscal Year 2009 Audit Recommendations: During our audit of FHFA's fiscal year 2009 financial statements, we identified seven internal control issue areas and made 22 recommendations for corrective actions. Of the 22 recommendations we made for corrective actions, 6 related to internal control and accounting procedures issues reported in our June 3, 2010, management report[Footnote 10] and 16 related to information security control issues reported in our April 30, 2010, report.[Footnote 11] During our audit of FHFA's fiscal years 2010 and 2009 financial statements, we found that FHFA had taken action to fully address 3 of the 6 recommendations related to internal control and accounting procedure issues from our prior audit (see enclosure I). The 3 recommendations that remained open as of November 9, 2010, the completion date of our fiscal year 2010 financial audit, relate to undelivered orders [Footnote 12] and expense accruals. Although FHFA improved its Administrative Accounting Manual by incorporating our recommendations related to the accurate calculation of undelivered orders balances, we continued to identify errors during the testing of undelivered orders balances at June 30, 2010. Even though our testing did not identify any errors in the undelivered orders balances at September 30, 2010, the presence of errors during the year indicates more efforts are needed to routinely enforce procedures related to the calculation of undelivered orders balances. In addition, FHFA took steps to implement our recommendation related to the calculation of expense accruals by providing training to staff that included examples of expenses that should and should not be accrued at the end of an accounting period. However, we continued to find some errors in the amounts accrued at September 30, 2010. Although these errors were not material to FHFA's fiscal year 2010 financial statements, the continued presence of such errors indicates that further efforts are needed to more effectively enforce procedures related to the calculation of expense accruals. During our fiscal year 2010 audit, we also found that FHFA took action to fully address 3 of the 16 recommendations related to information systems control issues from our prior audit (see enclosure II). The 13 recommendations that remained open as of November 9, 2010, relate to logical-access controls, physical access controls, and FHFA's information security program. While FHFA has made progress in each of these areas, our fiscal year 2010 testing revealed that additional work is required before these issues are fully addressed. For example, FHFA developed logical-access control procedures (the first step in addressing the logical-access control recommendations), developed a physical-security policy, and made progress in developing multiple policies and procedures related to its information security program. Although FHFA has made progress developing policies and procedures in these information systems areas, full implementation of certain procedures is not yet complete. During our fiscal year 2011 audit, we will assess the implementation of any new procedures employed by FHFA to address the recommendations related to information systems control issues. This report contains recommendations to you. The head of a federal agency is required by 31 U.S.C. § 720 to submit a written statement on actions taken on these recommendations. You should submit your statement to the Senate Committee on Homeland Security and Governmental Affairs and the House Committee on Oversight and Government Reform within 60 days of the date of this report. A written statement must also be sent to the House and Senate Committees on Appropriations with the agency's first request for appropriations made more than 60 days after the date of this report. This report is intended for use by FHFA management. We are sending copies of this report to the Chairman and Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs; the Chairman and Ranking Member of the House Committee on Financial Services; the Chairman of the Federal Housing Finance Oversight Board; the Secretary of the Treasury; the Secretary of Housing and Urban Development; the Chairman of the Securities and Exchange Commission; the Director of the Office of Management and Budget; and other interested parties. In addition, this report will be available at no charge on GAO's Web site at [hyperlink, http://www.gao.gov]. We acknowledge and appreciate the cooperation and assistance provided by FHFA management and staff during our audit of FHFA's fiscal years 2010 and 2009 financial statements. If you have any questions about this report or need assistance in addressing these issues, please contact me at (202) 512-3406 or sebastians@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are Peggy Smith, Assistant Director, and Megan McGehrin, Senior Auditor. Sincerely yours, Signed by: Steven J. Sebastian: Director: Financial Management and Assurance: Enclosures - 4: [End of section] Enclosure I: Status of Recommendations from GAO's 2009 Management Report: This enclosure presents the status of the six recommendations initially reported in GAO's June 3, 2010, management report. The recommendations are grouped according to deficiency areas specified in that management report. Table 1: Status of Recommendations from GAO's 2009 Management Report at the End of GAO's Audit of the Federal Housing Finance Agency's (FHFA) Fiscal Year 2010 Financial Statements: Audit area: Undelivered orders: 1. Enhance the Administrative Accounting Manual by incorporating specific, detailed steps for the contracting officer technical representatives (COTR) review of contract balances, including the use of the open obligations report provided by the Bureau of the Public Debt in the COTR review process; Year initially reported: 2009; Status of corrective action: In progress. 2. Enhance the Administrative Accounting Manual by including specific, detailed steps on when and how to properly account for obligating and deobligating contract amounts; Year initially reported: 2009; Status of corrective action: In progress:. Audit area: Documentation and review process for receipt and acceptance of goods and services: 3. Revise the Administrative Accounting Manual to provide for specific, detailed steps for obtaining and maintaining documentation as evidence of receipt and acceptance; Year initially reported: 2009; Status of corrective action: Completed. Audit area: Expense accruals: 4. Enhance training materials related to accruals to include examples of expenses that should and should not be accrued at the end of an accounting period; Year initially reported: 2009; Status of corrective action: In progress. Audit area: Classification and recording of costs: 5. Issue a memorandum reiterating policies surrounding the accurate recording and review of transactions to all staff involved in the process; Year initially reported: 2009; Status of corrective action: Completed. 6. Update the Administrative Accounting Manual to include the roles and responsibilities of the Manager of Financial Management Operations and secondary reviewers regarding the identifying and recording of capitalized transactions; Year initially reported: 2009; Status of corrective action: Completed. Source: GAO analysis of FHFA data. [End of table] [End of Enclosure I] Enclosure II: Status of Recommendations from GAO's 2009 Information Security Management Report: This enclosure presents the status of the 16 recommendations initially reported in GAO's April 30, 2010, information security management report. The recommendations are grouped according to deficiency areas specified in that management report. Table 2: Status of Recommendations from GAO's 2009 Information Security Management Report at the End of GAO's Audit of the Federal Housing Finance Agency's (FHFA) Fiscal Year 2010 Financial Statements: Audit area: Logical access controls: 1. Maintain network access authorizations for every agency network user; Year initially reported: 2009; Status of corrective action: In progress. 2. Review current access to network files and directories containing confidential information and restrict access to personnel with an authorized need to access that information; Year initially reported: 2009; Status of corrective action: In progress. 3. Continuously monitor use of privileged accounts on systems throughout the network so inadvertent or extended use of privileged access is promptly detected and removed; Year initially reported: 2009; Status of corrective action: Completed. Audit area: Controls over physical access: 4. Secure areas that contain information technology equipment and sensitive information; Year initially reported: 2009; Status of corrective action: In progress. 5. Complete sufficient physical-security policies to address protection of agency assets, including incident response, access authorizations, and environmental safety controls; Year initially reported: 2009; Status of corrective action: In progress. 6. Perform physical-security risk assessments at key facilities; Year initially reported: 2009; Status of corrective action: In progress. 7. Develop, document, and implement monitoring procedures to ensure that physical access authorizations to secure areas containing sensitive computer resources, including server rooms, and sensitive information are current and controlled; Year initially reported: 2009; Status of corrective action: In progress. 8. Develop, document, and implement monitoring procedures and install appropriate equipment to ensure that FHFA can detect and respond to potential physical-security incidents; Year initially reported: 2009; Status of corrective action: In progress. 9. Implement and enforce visitor-control practices at all facilities; Year initially reported: 2009; Status of corrective action: Completed. 10. Increase employees' awareness of the need to enforce physical- security safeguards; Year initially reported: 2009; Status of corrective action: In progress. 11. Secure and remove construction materials from telecommunications and electrical closets that support computer operations; Year initially reported: 2009; Status of corrective action: Completed. Audit area: Improvements to FHFA's information security program: 12. Develop, document, and implement procedures enforcing separation of incompatible duties among personnel; Year initially reported: 2009; Status of corrective action: In progress. 13. Finalize, approve, and implement configuration-management policies and procedures; Year initially reported: 2009; Status of corrective action: In progress. 14. Approve and test continuity of operations and disaster-recovery plans; Year initially reported: 2009; Status of corrective action: In progress. 15. Develop, document, and implement procedures to monitor access to agency financial information by the Bureau of the Public Debt (BPD) and Oracle Corporation staff and contractors; Year initially reported: 2009; Status of corrective action: In progress. 16. Develop, document, and implement procedures to assess all security reviews and plans of action and milestones developed by BPD and Oracle Corporation staff and contractors; Year initially reported: 2009; Status of corrective action: In progress. Source: GAO analysis of FHFA data. [End of table] [End of Enclosure II] Enclosure III: Comments from the Federal Housing Finance Agency: Federal Housing Finance Agency: 1700 G Street, N.W. Washington, D.C. 20552-0003: Telephone: (202) 414-3800: Facsimile: (202) 414-3823: [hyperlink, http://www.fhfa.gov] April 15, 2011: Mr. Steven J. Sebastian: Director: Financial Management and Assurance: Government Accountability Office: 441 G Street, NW: Washington, DC 20548: Dear Mr. Sebastian: Thank you for the opportunity to review and comment on the Management Report: Opportunities for Improvement in the Federal Housing Finance Agency's Internal Controls and Accounting Procedures. We appreciate GAO's efforts in completing this year's review of the Federal Housing Finance Agency's internal controls and accounting procedures. I am pleased that GAO found FHFA's fiscal years 2010 and 2009 financial statements were fairly presented in all material respects and that FHFA had effective internal control over financial reporting. During the course of the FY 2010 financial statement audit, GAO identified opportunities for improvements related to FHFA's internal controls and accounting operations. FHFA agrees that GAO's recommendations will strengthen our internal controls and accounting operations. To that end, FHFA has complied with all of GAO's recommendations contained in the Management Report as discussed below. Disposal of Capitalized Property and Equipment: GAO Recommendation: The Chief Financial Officer should: * establish a mechanism to monitor compliance with policies and procedures surrounding the proper disposal of capitalized property and equipment, and; * update the Property Management Policy to include procedures for how to properly document approval before disposal of FHFA assets. FHFA Response: FHFA agrees with the recommendations. The Deputy Chief Operating Officer held a one day meeting with managers from OBFM, OTIM, and Facility Operations to discuss property and inventory management including proper disposal of property and equipment. Property management processes have been outlined and property management procedures will be developed. The property management procedures will include strengthening controls over the disposal of property and equipment. FHFA will be moving to a new building in early FY 2012. Property management procedures will be updated to reflect the new environment including automation of processes as appropriate. Status: Held the property and inventory management meeting in January 2011. Updated the Property Management Policy and circulated the document for the Director's signature. Completed property management processes outline in March 2011. Property management procedures will be developed this fiscal year. Invoice Payment Procedures: GAO Audit Recommendation: The Chief Financial Officer should enhance FHFA's Invoice and Payments Desktop Procedures to include detailed instructions on how to verify the accuracy of invoice amounts prior to payment. FHFA Response: FHFA agrees that additional guidance needs to be given to Invoice Approvers/Contracting Officers Technical Representatives (COTR). FHFA and Bureau of the Public Debt (BPD) alerted Invoice Approvers/COTRs via written correspondence that an error had been identified during the FY 2010 financial audit and instructed them on the necessity of careful verification of billed amounts and invoice details. FHFA and BPD will provide training sessions covering invoice verification and calculation, obligation and expense tracking, and invoice approval and rejection process in April 2011. In addition, FHFA has created detailed instructions for the review and approval of an invoice that will be posted to the intranet and distributed to Invoice Approvers/COTRs during the invoice training in April 2011. FHFA has requested that BPD perform a 100% verification of legal contract invoices received from October 2010 — March 2011 that are similar in nature to those identified by GAO during the audit. Status: BPD distributed invoice verification email to all Accounting Operations Branch employees in September 2010. FHFA distributed invoice verification email to all Invoice Approvers/COTRs in September 2010. Completed Approving an Invoice process document in April 2011. The document will be posted to the intranet and distributed to Invoice Approvers/COTRs during the April 2011 invoice training. Invoice Approver/COTR training will be held in April 2011. BPD will complete 100% invoice review of FY 2011 legal invoices during May 2011. If you have any questions, please contact Michele Horowitz, Deputy Chief Financial Officer at (202) 414-3816 or Debbie Olejnik, Manager Financial Management Operations and Systems at (202) 414-3817. Sincerely, Signed by: Mark Kinsey: Chief Financial Officer: [End of Enclosure III] Enclosure IV: Details on Audit Scope and Methodology: To fulfill our responsibilities as auditor of the financial statements of the Federal Housing Finance Agency (FHFA), we did the following: * examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements; * assessed the accounting principles used and significant estimates made by FHFA management; * evaluated the overall presentation of the financial statements; * obtained an understanding of the entity and its operations, including its internal control over financial reporting; * considered FHFA's process for evaluating and reporting on internal control over financial reporting that FHFA is required to perform by 31 U.S.C. § 3512 (c), (d), commonly known as the Federal Managers' Financial Integrity Act of 1982; * assessed the risk that a material misstatement exists in the financial statements and the risk that a material weakness exists in internal control over financial reporting; * evaluated the design and operating effectiveness of internal control over financial reporting based on the assessed risk; * tested relevant internal control over financial reporting; * tested compliance with selected provisions of the following laws and their related regulations: 31 U.S.C. § 3902 (a), (b), (f) - Interest penalties under the Prompt Payment Act; 31 U.S.C. § 3904 - Limitations on Discount Payments Under the Prompt Payment Act; 12 U.S.C. § 4515 - Personnel; Federal Employees' Retirement System Act of 1986, as amended; Social Security Act of 1935, as amended; Federal Employees Health Benefits Act of 1959, as amended; 12 U.S.C. § 4516 (g) (4), which makes applicable 31 U.S.C. § 3512 (c), Federal Managers' Financial Integrity Act of 1982; and Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008; and: * evaluated information security controls based on our Federal Information System Controls Audit Manual[Footnote 13] which contains guidance for reviewing information systems. [End of Enclosure IV] Footnotes: [1] GAO, Financial Audit: Federal Housing Finance Agency's Fiscal Years 2010 and 2009 Financial Statements, [hyperlink, http://www.gao.gov/products/GAO-11-151] (Washington, D.C.: Nov. 15, 2010). [2] GAO, Management Report: Opportunities for Improvements in FHFA's Internal Controls and Accounting Procedures, [hyperlink, http://www.gao.gov/products/GAO-10-587R] (Washington, D.C.: June 3, 2010). [3] GAO, Information Security: Opportunities Exist for the Federal Housing Finance Agency to Improve Controls, [hyperlink, http://www.gao.gov/products/GAO-10-528] (Washington, D.C.: Apr. 30, 2010). [4] A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. [5] GAO, Standards for Internal Control in the Federal Government, [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: November 1999). [6] The Transfer of Property Receipt form provides a description of the property and the location to which the property is being transferred, and certifies that sensitive property containing FHFA data has been degaussed in accordance with FHFA policies and procedures. [7] A catalyst delivers switching solutions for enterprise and service- provider networks. [8] Nonpayroll expense transactions consist of program expenses other than payroll, such as rent, travel, consulting and other contracted services, postage, printing, and noncapitalized equipment. [9] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. [10] [hyperlink, http://www.gao.gov/products/GAO-10-587R]. [11] [hyperlink, http://www.gao.gov/products/GAO-10-528]. [12] Undelivered orders are the value of goods and services ordered and obligated that have not been received. This amount includes any orders for which advance payment has been made but for which delivery or performance has not yet occurred. [13] GAO, Federal Information System Controls Audit Manual (FISCAM), [hyperlink, http://www.gao.gov/products/GAO-09-232G] (Washington, D.C.: February 2009). 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