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GAO-12-830R 1 (2012-07-26)

handle is hein.gao/gaobacgjc0001 and id is 1 raw text is: Accountabiliy - Integrity - Reliability United States Government Accountability Office Washington, DC 20548 July 26, 2012 The Honorable Max Cleland, Secretary American Battle Monuments Commission Courthouse Plaza II, Suite 500 2300 Clarendon Boulevard Arlington, Virginia 22201 Subject: Management Report: Improvements Are Needed to Strengthen the American Battle Monuments Commission's Internal Controls and Accounting Procedures Dear Mr. Secretary: In March 2012, 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, 2011 and 2010, and on the effectiveness of its internal control over financial reporting as of September 30, 2011.1 We also reported our conclusions on the Commission's compliance with provisions of selected laws and regulations. Our report concluded that although certain internal controls could be improved, the Commission maintained, in all material respects, effective internal control over financial reporting as of September 30, 2011. However, we did report a significant deficiency2 in the Commission's internal control over its payroll processes for its non-U.S. citizen employees (foreign employees).3 The purpose of this report is to present additional information on the control issues that we identified during our audit of the Commission's fiscal year 2011 financial statements that constituted the significant deficiency and to provide our recommended actions to address those issues. Also, we identified an additional internal control issue that while not considered to be either a material weakness or a significant deficiency, nonetheless warrants management's attention. This report provides our recommendations to address this internal control issue as well. In addition, we are providing an update on the status of recommendations we made to address internal control issues 1 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). 2 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. 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. A material weakness is a deficiency, or 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. 3 During fiscal year 2011, the Commission used a total of 396 full-time equivalent positions. Of these, 73 positions were held by U.S. citizens, while the remaining 323 positions were held by non-U.S. citizens employed at the Commission's regional offices and at the cemeteries in the countries where the Commission operates. GAO-12-830R ABMC 2011 Management Report

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