American Battle Monuments Commission: Management Action Needed to Improve Internal Control Procedures.GAO-09-714R June 17, 2009 On February February: see month. 27, 2009, we issued our report expressing our opinion on the American Battle Monuments MONUMENTS. Permanent landmarks established for the purpose of ascertaining boundaries. 2. Monuments may be either natural or artificial objects, as rivers, known streams, springs, or marked trees. 7 Wheat. R. 10; 6 Wheat. R. 582; 9 Cranch, 173; 6 Pet. 498; Pet. Commission's (the Commission) fiscal years 2008 and 2007 financial statements and our opinion on the Commission's internal control as of September September: see month. 30, 2008. We also reported on the results of our tests of the Commission's compliance with selected provisions of laws and regulations during fiscal year 2008. We reported that the Commission maintained, in all material respects, effective internal control over financial reporting (including safeguarding of assets) and compliance as of September 30, 2008. During our fiscal year 2008 audit, we identified accountability and internal control deficiencies that, while not individually or in the aggregate material to the Commission's financial statements, warrant management's attention. The purpose of this report is to present these deficiencies, to provide recommendations to address these matters, and to provide an overview of the status of our prior year findings and recommendations. Because of the sensitive nature of some of the issues we identified, we are communicating detailed information regarding our findings and recommendations on information systems and physical security in a separately issued Limited Official Use Only report. During our fiscal year 2008 financial statement audit, we identified 13 control deficiencies related to accounting procedures of the American Battle Monuments Commission (the Commission). These issues existed at Commission headquarters, its European Regional (ER) and Mediterranean Regional (MR) offices, and its Manila Manila (mənĭl`ə), city (1990 pop. 1,601,234), capital of the Philippines, SW Luzon, on Manila Bay. Manila is the center of the country's largest metropolitan area, its chief port, and the focus of all governmental, commercial, industrial, American Cemetery cemetery, name used by early Christians to designate a place for burying the dead. First applied in Christian burials in the Roman catacombs, the word cemetery came into general usage in the 15th cent. . Specifically: At the Commission's headquarters, we identified the following accounting procedure deficiencies: (1) Significant intragovernmental transactions lacked supporting documentation (2) Some expenditure transactions lacked evidence of receipt dates and approvals (3) Trust funds did not adequately invest and account for donated do·nate v. do·nat·ed, do·nat·ing, do·nates v.tr. To present as a gift to a fund or cause; contribute. v.intr. To make a contribution to a fund or cause. funds (4) Trust fund receipts were not effectively reconciled with the Department of the Treasury (Treasury) (5) Miscellaneous receipts fund balance was not removed from the general ledger General Ledger A company's accounting records. This formal ledger contains all the financial accounts and statements of a business. Notes: The ledger uses two columns: one records debits, the other has offsetting credits. (6) Strategic plan was not updated in 3 years. At the Commission's ER office, we identified the following accounting procedure deficiencies: (1) Euro bank account transactions were not recorded and reconciled (2) English 1. English - (Obsolete) The source code for a program, which may be in any language, as opposed to the linkable or executable binary produced from it by a compiler. The idea behind the term is that to a real hacker, a program written in his favourite programming language is employees pension plan liability was not accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. timely (3) Some expenditure transactions lacked evidence of receipt dates and approvals (4) Undelivered undelivered adj → no entregado al destinatario; if undelivered return to sender → en caso de no llegar a su destino devolver al, remitente undelivered orders report did not support the general ledger balance (5) Some vendors had multiple identification numbers. At the Commission's MR office, we identified as a control deficiency that some post allowances were not paid when due. At the Commission's Manila American Cemetery, we identified as a control deficiency that some expenditure transactions lacked evidence of receipt dates and approvals. To assist Commission management in addressing these findings, this report contains 24 detailed recommendations. We also identified 8 control deficiencies in information systems and physical security at Commission headquarters and its ER and MR offices. Due to the sensitive nature of these issues, they are being communicated to the Commission in a Limited Official Use Only report, along with another 20 detailed recommendations. As stated in its letter dated June 10, 2009, the Commission agreed with the issues in the report. As a result of our fiscal years 2004 through 2007 financial statement audits, we have provided the Commission's worldwide locations with 233 information system and noninformation system recommendations to improve its information technology systems, security, and accounting procedures. Through January January: see month. 31, 2009, the Commission had implemented 220 of our recommendations, or 94 percent, and was working to implement the remaining 13 recommendations. Recommendations Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work. Director: Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. J. Sebastian Team: Government Accountability Office The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress, and thus an agency in the Legislative Branch of the United States Government. : Financial Management and Assurance Phone: (202) 512-9521 Recommendations for Executive Action ---------- Recommendation: The Director of Finance at Commission headquarters should obtain documentation from other federal agencies to support its intragovernmental charges paid through Treasury's Intra-governmental Payment and Collection (IPAC) system. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should instruct in·struct v. in·struct·ed, in·struct·ing, in·structs v.tr. 1. To provide with knowledge, especially in a methodical way. See Synonyms at teach. 2. To give orders to; direct. v. and monitor approving officials to ensure that expenditure transactions are dated when goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. are received and approved before payment is made. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should prepare documentation to support the complete and accurate calculation of interest earned on investments for monument Anything by which the memory of a person, thing, idea, art, science or event is preserved or perpetuated. A tomb where a dead body has been deposited. In real-property trust funds. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should allocate To reserve a resource such as memory or disk. See memory allocation. interest to all monument trust accounts with funds on deposit. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should establish monument trust fund accounts by program code in the headquarters trial balance. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should transfer monument trust funds needed for immediate operations as determined by Commission engineering to the European Regional (ER) office and maintain the balance of the funds at Commission headquarters for investment. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should timely investigate any differences identified during monthly reconciliations of Fund Balances with Treasury to the Government Wide Accounting system for trust funds. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should post adjusting entries monthly for items within the Commission's control. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should communicate adjustments identified through monthly reconciliations to be made by other entities and track such adjustments until corrected. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should adjust current balances to correct accounts for fund 3320 for miscellaneous receipts received and transferred to Treasury. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should reconcile Fund Balance with Treasury to the Government Wide Accounting system for the miscellaneous receipts fund balance on a monthly basis. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should update the strategic plan for fiscal years 2009-2013 to comply with the 3-year period specified by the Government Performance and Results Act The Government Performance and Results Act (GPRA) is a US Law enacted in 1993. It is one of a series of laws designed to improve government project management. The GPRA requires agencies to engage in project management tasks such as setting goals, measuring results, and reporting (GPRA GPRA Government Performance and Results Act of 1993 GPRA Gouvernement Provisoire de la Republique Algerienne GPRA Government Procurement Reform Act (Philippines) GPRA General Practice Registrars Australia ) of 1993. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's European Regional (ER) office should identify all unrecorded transactions pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the euro bank account and timely record them in the general ledger. Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's ER office should prepare monthly reconciliations of euro bank account balances to the general ledger. Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's ER office should accurately present the euro account balance in the monthly SF 1219 report, Statement of Accountability, filed with Treasury. Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's ER office should obligate and timely record pension liabilities Pension liabilities Future liabilities resulting from pension commitments made by a corporation. Accounting for pension liabilities varies widely by country. when identified by the plan actuary actuary One who calculates insurance risks and premiums. Actuaries compute the probability of the occurrence of such events as birth, marriage, illness, accidents, and death. . Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's ER office should instruct and monitor approving officials to ensure that expenditure transactions are dated when goods and services are received and approved before payments are processed. Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's ER office should research differences between the undelivered orders report balance and the general ledger account balance and make necessary adjustments to agree totals. Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's ER office should review identification numbers to eliminate duplicates for vendors assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. more than one vendor number. Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Finance Officer at the Commission's ER office should assign unique identification numbers to each vendor. Agency Affected: American Battle Monuments Commission: European Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of the Commission's Mediterranean Regional (MR) office should have the Human Resource Assistant arrange with payroll processing to pay GS employees their correct post allowances from January 6, 2008. Agency Affected: American Battle Monuments Commission: Mediterranean Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of the Commission's MR office should have the Human Resource Assistant establish and implement procedures for post allowances, particularly when changes occur, to document that amounts are accurately and timely paid. Agency Affected: American Battle Monuments Commission: Mediterranean Regional Office Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The superintendent of the Commission's Manila American Cemetery should provide dates when goods and services are received and approve all transactions before payment is made. Agency Affected: American Battle Monuments Commission: Manila American Cemetery Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. ---------- Recommendation: The Director of Finance at Commission headquarters should invest monument trust funds to earn interest as provided in the Commission's acceptance letter to donors. Agency Affected: American Battle Monuments Commission Status: In process Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. Categories: Financial Management, Accountability, Accounting, Accounting procedures, Auditing procedures, Documentation, Federal regulations, Financial management, Financial management systems, Financial statement audits, Financial statements, Funds management, Government Wide Accounting system, Information technology, Internal controls, Intra-governmental Payment and Collection System, Intragovernmental transactions, Program management, Records management, Strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. , Trust funds |
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