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092453 1 (1971-10-19)

handle is hein.gao/gaobacwjj0001 and id is 1 raw text is: UNITED STATES GENERAL AccoUNTING OFFICE WASHINGTON. D.C. 20548 CIVIL DIVISION Dear Mr. Condon: We have reviewed the accounting records of the Working Capital Fund (WCF) which was established by the Department of Housing and Urban Development (HUD) to provide administrative services such as printing, communications, supply, and automatic data processing (ADP), on a reimbursable basis, to the HUD central office organizational units. On June 30, 1971, the WCF had assets of about $8.4 million. The objectives of our review were to determine whether (1) the operating procedures of the WCF accounting system complied with the accounting principles and standards prescribed by the Comptroller General, (2) the WCF accounting system was functioning in the manner contemplated in the Design of Accounting System Requirements for HUD (Design) approved by the Comptroller General in April 1970, and (3) the accounting records were maintained accurately. We have concluded that (1) the operating procedures for the WCF accounting system complied with the accounting principles and standards prescribed by the Comptroller General, (2) the system functioned in the manner contemplated in the Design, and (3) the WCF accounting records, except for the two items discussed below, were maintained in a generally satisfactory manner. The WCF accounting records pertaining to the ADP supply inventory--which amounted to about $128,000 at July 31, 1971, or 57 percent of the total WCF inventory--were not maintained accurately and therefore were unreliable and purchase discounts were not handled correctly. Our review covered transactions. recorded in the accounting records during the period from January 1, 1970 through November 30, 1970. How- ever, the part of our review concerned with the records pertaining to the ADP supply inventory was extended to include entries made in the general ledger account and the subsidiary perpetual inventory records through July 31, 1971--the date on which WCF employees counted the inventory. ADP SUPPLY INVENTORY The dollar value of the ADP supply inventory determined by physical count amounted to $128,287, compared with $107,185 recorded in the inventory account in the general ledger. Also, comparison of the quan- tities determined by the physical count and the quantities shown in the perpetual inventory records--the records in which a continuous balance 50TH ANNIVERSARY 1921-1971

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