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090215 1 (1975-03-21)

handle is hein.gao/gaobacvxf0001 and id is 1 raw text is: UNITED STATES GENERAL AccoUNTING OFFICE ou~ WASHINGTON, D.C. 20548 RESOURCES AND ECONOMIC DEVELOPMENT DIVISION MAR 11975 Mr. Edward G. Jordan President and Chief Operating Officer U.S. Railway Association Dear Mr. Jordan: In accordance with the Government Corporation Control Act, we have made an audit of financial statements of the United States Railway Association (USRA) for the period February 1,-1974, through June 30, 1974. Our examination was made in accordance with generally accepted auditing standards and procedures and included such tests of the accounting records as we considered necessary under the circumstances. As required by the act, our report on the audit was issued to the Congress. Although we recognize that USRA is a new organization needing time to get fully staffed, several matters were observed during the examination that we wish to bring to your attention. These matters were discussed with the Vice President for Administration, the Comptroller, and the Assistant Comptroller and they indicated that corrective action would be taken. USRA EXPENSES ASSETS IN THE PERIOD PURCHASED At the time of our audit, USRA had expensed rather than capi- talized the purchase of furniture, equipment, and building improve- ments. This failure to capitalize these assets and charge their costs to operations over the period of their useful lives results in understatement of assets and could be misleading to readers of the financial statements. It could also hinder subisequent valuation and ultimate disposal of these assets at some futurb time. We were pleased to note in Mr. Lewis' letter dated February 14, 1975, that the Association is in the process of recording furniture, equipment and building improvements as assets. ~A~iP~~.C

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