Lapas attēli
PDF
ePub

Review of previously approved accounting systems

Our efforts during the last 2 years have included the review of selected accounting systems which were approved in prior years. The accounting system for the Bureau of the Budget, the Interstate Commerce Commission, the Selective Service System, and several accounting systems in the Veterans' Administration were reviewed and recommendations made for improvements in accounting for costs. Several previously approved systems are in the process of revision for resubmission to the Comptroller General (target dates for resubmission of previously approved systems are shown in app. I).

These and other reevaluation efforts have taken place as part of our regular cooperative accounting systems development work. We have concluded that it would be advisable to continue reevaluation efforts on this cooperative basis for the present, without undertaking to formalize the reevaluation of previously approved accounting systems as recommended by the House Committee on Government Operations in its report (No. 1159). This approach provides flexibility in matching available manpower with executive agency schedules for development of accounting systems for review and approval. Distribution of examples of good financial management practices

As stated on page 7, the General Accounting Office has, as recommended by the House Committee on Government Operations, continued to circulate among executive agencies examples of good financial management practices.

Accounting systems activity and status

At December 31, 1968, there were 147 systems subject to approval in the civil departments and agencies, of which 62 had been approved. During calendar year 1968, these departments and agencies submitted for approval of the Comptroller General 25 statements of principles and standards, three systems designs, six complete systems, and 10 segments of systems. Ten complete systems were approved during the year which compares with 52 approvals during the preceding 17 years.

We have been unable to ascertain the total number of accounting systems in the Department of Defense which should be subject to approval by the Comptroller General. The diversity of operations and the dispersal of its organizational structure have resulted in numerous segmented systems which have only recently come under analysis and evaluation. The Department of Defense submitted 16 directives and instructions, representing portions of their principles and standards, for approval during 1968.

A detailed status report at December 31, 1968, is shown in appendix I. Accounting systems activity during 1968 and the status at December 31, 1968, are summarized in the following schedule.

CIVIL DEPARTMENTS AND AGENCIES ACCOUNTING SYSTEMS APPROVALS-FORMAL, CALENDAR YEAR 1968

[blocks in formation]

DEPARTMENT OF DEFENSE ACCOUNTING SYSTEMS APPROVALS, FORMAL-CALENDAR YEAR 1968

[blocks in formation]

CHAPTER 5.-ACCOUNTING SYSTEMS DEVELOPMENT IN INDIVIDUAL DEPARTMENTS AND AGENCIES

DEPARTMENT OF AGRICULTURE

During 1968, the Department and its constituent agencies intensified their efforts to improve the accounting and financial management systems of the Department. The Department has 15 accounting systems subject to the approval of the Comptroller General; two have current approval. Although significant progress was made during 1968 by the Department and the responsible agencies to revise or redevelop the remaining systems, a large part of the necessary work is yet to be accomplished before most of the systems can be deemed adequate and in compliance with the requirements of the Comptroller General.

More specific comments regarding (1) inadequacies in the accounting systems of the Department which have been noted during our reviews, (2) efforts being applied by the Agriculture agencies to develop adequate systems, and (3) the current status of systems approval, are presented in the following sections.

INADEQUACIES IN ACCOUNTING SYSTEMS

In general, the systems are concerned primarily with appropriation and fund accounting with much less emphasis on accounting for costs by programs, activities, and organizational units. This is caused to a large extent, we believe, by the fact that present financial planning and budgeting systems for most of the agencies are conceptually on an obligation basis rather than on an accrued cost basis. Accounting systems are therefore generally limited to serving the budget needs for obligation and cash information, with limited emphasis being given heretofore to cost information.

Forest Service working capital fund

Our review of the accounting system for the Forest Service working capital fund (WCF), which was submitted for review in June 1967, disclosed that problems associated with funding the WCF services appeared, in our opinion, to have overly influenced the design and operation of the accounting system. Because of the attention given to the funding arrangements for the WCF operations, all of the inherent advantages of a working capital fund were not being realized and certain significant cost information was not being recorded in and reported by the accounting system. As a result, the Forest Service officials responsible for the management of the activities were not furnished with the cost information needed to (1) establish rates approximately equal to the cost of services provided as required by the legislation authorizing the fund, and (2) properly review the efficiency of the operations for which they are responsible.

Other problems noted in our review of the Forest Service's system for its working capital fund pertained to (1) the frequency of recording accruals in the accounting records, and (2) the adequacy of the accounting manual and related instructions for the day-to-day use of the accounting personnel.

The Forest Service has informed us that actions are being taken to resolve the problems noted during our review. The Service plans to resubmit the system for approval as a part of the overall Forest Service system.

Consumer and Marketing Service

Our review of the activities of the Consumer and Marketing Service pertaining to the inspection, grading, and classing of agricultural commodities-which are services authorized by law to be provided on a reimbursable basis-revealed that the Service's accounting system does not provide for the accumulation of costs in a manner that discloses whether all appropriate costs are recovered through the fees charged for the services rendered. For example, no consideration is given to the recovery of costs to the Federal Government for office space furnished to carry out these activities.

Our review showed also that workload data is not used to segregate and identify those costs of these activities which are considered to benefit the general public and therefore are not reimbursable. Accordingly, the Service does not have what we consider an adequate basis for determining whether costs for special benefit purposes (services provided to identifiable recipients) are fully recovered through the fees charged. In addition, we believe the accounting system does not provide appropriate methods for charging the Service's indirect costs to reimbursable activities on an equitable basis.

Federal Extension Service

Our review of the accounting system of the Federal Extension Service showed that the system was not designed to facilitate the accumulation of accounting data in a manner and form needed for prompt and efficient preparation of internal and external reports. The system did not contain appropriate means for accumulating costs by project for work performed for other Government agencies.

Also, the detailed accounting procedures were not fully documented for the day-to-day use and guidance of accounting personnel. It appeared to us that the Agency's use of informal procedures caused the maintenance of duplicate accounting records and excessive handling, posting, forwarding, and filing of accounting documents. Foreign Agricultural Service

Our review of the accounting system for the Foreign Agricultural Service (FAS) and International Agricultural Development Service (IADS) which was submitted to the Comptroller General for approval in December 1966, disclosed that the system was not adequately designed or documented. We advised the Department of the major problems noted during our review. In view of the need for additional development and implementation of the system, the Department withdrew its request for approval of the system in April 1967.

In July 1967, FAS entered into an agreement with a private contractor to (1) review and revise the FAS-IADS Accounting Systems Manual to conform it to the accounting principles and standards of the Comptroller General, (2) prepare internal budget and finance procedures for the day-to-day operation of the accounting system, and (3) install the procedures in the Budget and Finance Division, FAS/Washington.

We worked closely with Service officials and the contractor in developing the statement of accounting principles and standards. This statement was formally submitted in February 1968 and approved by the Comptroller General on May 14, 1968.

Also during calendar year 1968, we rendered cooperative assistance to Agency officials and reviewed on an informal basis the Accounting Systems Manual that had been developed. The results of our review were discussed with Agency officials. Major areas warranting additional development pertained to:

1. The organizational arrangement of the manual and the account structure,

2. The development of reports that would serve the needs of management, and

3. The development of adequate fund control procedures for project implementation orders for training of foreign nationals. Service officials, with assistance from the Department's office of budget and finance are currently revising the manual based on our suggestions and comments.

IMPROVEMENT EFFORTS BEING APPLIED

The Department's office of budget and finance is responsible for the overall coordination and direction of the accounting systems development effort of the Department. The office, which we were advised, invested about five and one-half man-years of effort in the accounting systems area in 1968, in our opinion assumed a more active leadership role in 1968 in spurring responsible agency officials to action. In addition to assisting agencies in the development of their systems, the office conducted a series of conferences designed to stress to top management officials the importance of adequate accounting and financial management systems.

Prior to 1968, the Department had made relatively little substantive progress toward the development of approvable accounting systems and the use of internal cost-based budgeting. Historically, many agencies of the Department had not recognized a need for accrual accounting for appropriated funds. We believe this is why they had made little progress in revising their accounting systems to provide accrual accounting. The current effort of the Agriculture agencies shows substantial improvement over that of past years.

In recent months, the Department has more actively pursued the development of accrual accounting systems. During 1968, the Department obtained the Comptroller General's approval of statements of principles and standards for nine of its systems; the statements provided for maintenance of accounts on the accrual basis where

« iepriekšējāTurpināt »