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GAO-10-596R 1 (2010-07-23)

handle is hein.gao/gaobaantx0001 and id is 1 raw text is: ~GA 0 Accountability I ntegrty Reliability United States Government Accountability Office Washington, DC 20548 July 23, 2010 The Honorable Max Cleland, Secretary American Battle Monuments Commission Courthouse Plaza II, Suite 500 2300 Clarendon Boulevard Arlington, VA 22201 Subject: Management Report: Improvements Needed in American Battle Monuments Commission's Internal Controls and Accounting Procedures Dear Mr. Secretary: On March 1, 2010, we issued our report expressing our opinion on the American Battle Monuments Commission's (the Commission) fiscal years 2009 and 2008 financial statements and our opinion on the Commission's internal control as of September 30, 2009.' We also reported on the results of our tests of the Commission's compliance with selected provisions of laws and regulations during fiscal year 2009. We reported that although certain internal controls should be improved, the Commission maintained, in all material respects, effective internal control over financial reporting as of September 30, 2009. However, we also reported on a significant deficiency in the Commission's governance structure related to vacant Commissioner positions and one instance of noncompliance with the Antideficiency Act related to a Commission contract with a commercial employment services firm to provide temporary employees. During our fiscal year 2009 audit, we also identified other internal control deficiencies3 that, while not material, individually or in the aggregate, to the Commission's financial statements, nevertheless warrant management's attention. The purpose of this report is to present these deficiencies, provide additional detailed information on the significant deficiency and compliance issue identified in our fiscal year 2009 audit report, provide recommendations to address these matters, and provide an update on the status of our prior year recommendations. Because of the sensitive nature of the issues, we are providing detailed information regarding our findings and recommendations on the Commission's information systems security in a separate Limited Official Use Only report. 'GAO, Financial Audit: American Battle Monuments Commission's Financial Statements for Fiscal Years 2009 and 2008, GAO-10-399 (Washington, D.C.: Mar. 1, 2010). 2 A significant deficiency in internal control is less severe than a material weakness, yet is important enough to merit attention by those charged with governance. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, 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. 3 A control 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. GAO-10-596R ABMC 2009 Public Management Report Page 1

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