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AFMD-83-37 1 (1983-02-07)

handle is hein.gao/gaobabmuy0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE /ZC)$2) WASHINGTON, D.C. 20548 ACCOUNTING AND FINANCIAL MANAGEMNT DIVISION B-210637 FEBRUARY 7. 1983 The Honorable John R. Block The Secretary of Agriculture 120520 Dear Mr. Secretary: Subject: Improvements Needed in Internal Controls at the National Finance Center (GAO/AFMD-83-37) This report summarizes the results of our review of internal controls over procurement-related payments made by the United States Department of Agriculture's (USDA's) National Finance Center (NFC). Our work revealed a number of control weaknesses in NFC's payment processing. At the time of our review, controls at NFC were inade- quate to prevent payments from being made too early. Thus, over $1.6 million in interest may be lost annually due to early pay- ments. In addition, $293,000 could have been lost due to late payments if recently enacted late payment penalties had been re- quired. We also found procedural weaknesses which increased the vul- nerability of large payment systems to fraud and abuse, including the following: --Inadequate verification of authorizing signatures on pay- ment vouchers processed through the miscellaneous payments system could have allowed improper payments to be made. --The purchase order system had over $10 million in old, in- active purchase orders which had not been'canceled, creat- ing the possibility of payments being made for goods or services not received. --The gasoline credit card system did not provide field of- fices with reasonable means of verifying charges to the field offices' funds, and relied on inappropriate audit procedures to identify improper charges. Our findings are presented in detail in enclosure I. (905041) 47 -

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