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OMB lists agencies most vulnerable to fraud.


A list of government programs vulnerable to fraud, waste and abuse has been compiled by the Office of Management and Budget and released by Senator John Glenn (D-Ohio), chairman of the Senate Governmental Affairs Committee. "This list represents the smoke behind which a fire may be raging," warned Glenn, adding that when the inspector general of the Department of Housing and Urban Development reported similar problems in past years, insufficient notice was taken by both the administration and Congress and a scandal erupted.

Trouble spots in 16 federal departments and agencies were identified by the OMB. These include the following:

* The Internal Revenue Service, which failed to collect $63 billion in delinquent taxes.

* The Department of Defense's $103 billion supply operations, where weaknesses have led to payment for goods not received and prohibit the department from ensuring materials purchased are available and ready to use.

* The Social Security Administration, where employee earning records show $58.5 billion less than IRS records indicate.

OMB also noted inadequate accounting systems and internal controls in various agencies.

Legislative action on the agenda

In congressional hearings, Comptroller General Charles A. Bowsher estimated that the amount of money lost to waste, fraud and mismanagement could be as much as $150 billion.

"Identifying these risks is a good first step," Glenn said. "Now we have to do something about them, such as putting into place effective management systems and financial controls. These are checks that every business needs to function smoothly, and the U.S. government is the largest business in the world."

Glenn said he plans to introduce legislation to establish a chief financial officer for the federal government--a move long supported by the American Institute of CPAs.
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Publication:Journal of Accountancy
Date:Feb 1, 1990
Previous Article:Political leaders endorse AICPA reform proposals.
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