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088997 1 (1977-07-11)

handle is hein.gao/gaobacuze0001 and id is 1 raw text is: o L) UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D C 20548 IN REPLY REFER TO COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION July 11, 1977 Mr. Donald C. Cole Acting President and Chief Executive Officer United States Railway Association Dear Mr. Cole. In accordance with the Government Corporation Control Act, we have completedian audit of the financial statements of the United States Railway Association (USRA) for the period July 1, 1975, through June 30, 1976, and issued our report to the Congress entitled,Examination of the United States Railway Association's Financial Statements and Other Matters Concerning Its Operations (CED-77-64 dated July 8, 1977). We also observed several other matters during our examination which we wish to bring to your attention These matters were discussed with the Comptroller, the former Assistant Comptroller, and the Director of Audits who indicated that corrective action would be taken INTERNAL CONTROLS OVER CASH TO BE IMPROVED We noted that USRA had not reconciled its bank statements regularly, followed-up on checks outstanding for an undue amount of time, or stamped supporting documentation to indicate that a payment had been made Allowing checks to remain outstanding for long periods and not insuring that bank statements are reconciled regularly weakens the controls over cash disbursements. For example, a cash shortage may be concealed merely by omitting a check from the outstanding list. After we informed the Assistant Comptroller of this matter, he assured us that corrective action would be taken The Comptroller stated that stamping supporting documents CHECK ISSUED to indicate payment had been made was an additional safeguard instituted to help eliminate the recurrence of an embezzlement incident involving the resubmission of the same documents to receive two payments. He said that additional personnel had been assigned to his office so that, in the future, supporting documents would be stamped, bank statements would be reconciled within 25 days of receipt, and outstanding checks over 90 days old would be investigated.

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