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GAO-14-105R 1 (2013-11-12)

handle is hein.gao/gaobaahkk0001 and id is 1 raw text is: GO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 November 12, 2013 The Honorable Merrill McPeak, Chairman The Honorable Max Cleland, Secretary American Battle Monuments Commission Courthouse Plaza II, Suite 500 2300 Clarendon Boulevard Arlington, Virginia 22201 Management Report: Improvements Are Needed to Strengthen the American Battle Monuments Commission's Internal Controls and Accounting Procedures In July 2013, we issued our report on the results of our audit of the financial statements of the American Battle Monuments Commission (the Commission) as of and for the fiscal years ending September 30, 2012 and 2011.1 We also reported our conclusions on our consideration of the Commission's internal control and its compliance with selected provisions of laws and regulations. In that report, we concluded that the Commission did not maintain effective internal control over financial reporting because of material weaknesses in internal control concerning the Commission's (1) financial reporting process and (2) monitoring process.2 We also determined that a significant deficiency in internal control over the Commission's foreign employee payroll processes,3 which we reported in last year's audit,4 continued to exist in fiscal year 2012. In addition, we disclosed one area of noncompliance with laws governing the Commission's use of its Foreign Currency Fluctuation Account (FCFA).5 The purpose of this report is to present additional information on the internal control issues and the area of noncompliance that we identified during our fiscal year 2012 audit, along with 6 new recommendations for corrective action. In addition, this report presents the status of our 30 prior years' recommendations related to internal control and accounting procedures and the 24 prior years' recommendations related to information systems issues that remained open at the beginning of our fiscal year 2012 audit. 1 GAO, Financial Audit: American Battle Monuments Commission's Financial Statements for Fiscal Years 2012 and 2011, GAO-13-641 (Washington, D.C.: July 19, 2013). 2 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 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. 3 A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit the attention of those charged with governance. 4 GAO, Financial Audit: American Battle Monuments Commission's Financial Statements for Fiscal Years 2011 and 2010, GAO-12-404 (Washington, D.C.: Mar. 1,2012). 5 Congress created the FCFA in 1988. FCFA funds are only to be used to pay the cost of salaries and expenses that exceed the amount appropriated for salaries and expenses because of fluctuations in foreign currency exchange rates that occur after the Commission's budget request is submitted to Congress. 36 U.S.C. § 2109(a). GAO-1 4-105R ABMC 2012 Management Report Page 1

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