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092122 1 (1970-12-28)

handle is hein.gao/gaobacweq0001 and id is 1 raw text is: 








IN REPLY REFER Tot


UNITED STATES GENERAL  ACCOUNTING OFFICE          D6   0   3
            REGIONAL  OFFICE
    3086 FEDERAL OFFICE BUILDING, 909 FIRST AVENUE
         SEATTLE, WASHINGTON 98104






                                       DEC  2 8 1970


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Mr. Paul Ward
Superintendent
Federal Prison Industries, Inc.
Department of Justice
McNeil Island, Washington


(:-)


Dear Mr. Ward:

     We have completed our examination of the financial statements
of the Federal Prison Industries, Inc. (FPI), McNeil Island, Wash-
ington, for fiscal year 1970.  The results of our review were.dis-
cussed with you and your staff.  Those items for which your central
office has control will be considered for inclusion in a report to
that office.

     There are certain areas, however, in which you may wish to make
improvements at the local level.  These matters, which we have dis-
cussed with members of your staff, are  (1) overstatement of accounts
receivable, (2) control over requisitioning of materials and supplies,
(3) control over raw materials inventory,  (4) obsolete and slow-moving
items in the raw materials and supplies inventory,  (5) fixed assets
understated, (6) overstatement of unliquidated obligations,  (7) cost
of sales understated, and  (8) premature purchase of equipment. A
brief discussion of each of these areas follows.

Overstatement of accounts receivable


     The accounts receivable listed as due from Triangle Electronics
Manufacturing Company, $11,940.50, is contingent on the outcome of the


1..,


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