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089036 1 (1977-02-28)

handle is hein.gao/gaobacvau0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON REGIONAL OFFICE FIFTH FLOOR 803 WEST BROAD S1 REET FALLS CHURCH, VIRGINIA 22046 FEB 2 8 1977 Mr. Harvey J. Baine III Assistant Administrator for Fiscal Affairs National Credit Union Administration - 2025 M Street, NW. Washington, D.C 20456 Dear Mr. Baine: As you know, we have recently completed our annual audit of the National Credit Union Administration's financial statements In connection-with that effoFt, we reviewed selected aspects of the internal control system in effect Based on our review, we found controls over payments to contractors, cash receipts and deposits, and voucher reviews could be strengthened and recommended improvements as dis- cussed below In addition, we found the Administration's lidbility for security services orovided had not been prop- erly recorded in the accounting records We discussed these points with the Director, Division of Financial Management (D.LLIJ , and .n all cases were nformed th4..'Lat4-. correct-ive action would oe casen Payments to contractors The Administration had 18 active non-Federal Government contracts totaling in excess of $346,000 as of June 24, 1976. These are contracts for products and services to various offices throughout the Administration Officials in the receiving offices are aware of contractual terms and contrac- tor performance, and effective fund control requires that such officials play a key role in processing contractor bill- ings for payment We found, however, that invoices against contracts are not subject to approval by the recipiert prior to payment by DFM DFM personnel do not routinely verify that the terms of the contract were met and that the charges do not exceed the contract price before processing an invoice for payment This practice could result in erroneous payments to con- tractors or payments for inadequate contractor performance We recommended action be taken to insure effective management control of disbursements to contractors The Director, DFM, also recognized tne weaknesses in this system

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