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AIMD-96-51R 1 (1996-03-13)

handle is hein.gao/gaobaclcf0001 and id is 1 raw text is: United States GA O General Accounting Office Washington, D.C. 20548 Accounting and Information Management Division B-271223 March 13, 1996 The Honorable Richard L. Greene Chief Financial Officer Department of State Dear Mr. Greene: We reviewed the Department of State's guidance and efforts to reconcile 24 inactive foreign currency bank accounts at its Mexico City, Mexico, Financial Service Center (FSC). As you know, this FSC disburses funds in foreign currencies throughout Latin America on behalf of State Department posts and other U.S. government agencies. As State reported in Federal Managers' Financial Integrity Act (FMFIA) reports to the President and the Congress since fiscal year 1990, its Mexico City FSC has been unable to reconcile its foreign currency bank accounts. In 1991, the Department of the Treasury expressed concerns about State's cashier accountability, its inability to balance Treasury accounts, and the potential for fraudulent activity to go undetected. State initiated a comprehensive, multipart plan to increase oversight and control of overseas disbursing and cashiering functions, including a program to reconcile foreign currency bank accounts and report on progress. In its 1991 FMFIA report, State also disclosed that its worldwide disbursing and cashiering function was changed from a material weakness to a high-risk area. State reported some improvements during 1995, such that the function was no longer considered high risk; however, it remained a material weakness in State's 1995 FMFIA report. In September 1995, State's Managing Director of International Financial Services requested that we review the Mexico City FSC's draft guidelines and actions to reconcile its inactive foreign currency bank accounts. We found that State had identified almost all of the differences between 24 inactive foreign bank account balances and FSC's book balances necessary to correct the FSC's cash balances and Treasury reports. However, until January 1996, FSC had performed only a few of the required monthly reconciliations of its GAO/AIMD-96-51R State Bank Reconciliations

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