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092381 1 (1972-04-26)

handle is hein.gao/gaobacwgx0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE 01 0 WASI-NNGTON REGIONAL OFFICE FIFTH FLOOR 6ss WEST BROAD STREET FALLS CHURCH, VIRGINIA 22046 APR 2 6 1972 Dear Mr. Galuardi: The General Accounting Office has examined the accounts of accountable officers of Region 3, General Services Administration (GSA), through fiscal year 1970. We evaluated the procedures and internal controls relative to the receipt and disbursement of funds and tested financial transactions and records as we considered appropriate. Our examination did not include a review of the Region's major programs or payroll operations. We found the procedures and internal controls generally effective and selected transactions normally processed in a satisfactory manner. There were, however, three areas identified during our examination where we believe administrative controls and procedures require strengthening. These three areas--involving the need to withhold income taxes on employees' relocation allowances, the improvement possible in the adminis- tration of travel advances, and the need for more frequent reviews of imprest funds--were discussed with officials of your Finance Division who indicated that corrective action had been or would be taken. These matters are summarized briefly below for your use and information. Need to withhold income taxes on relocation payments made Since July 1966, with the enactment of P.L. 89-516, Federal employees have been entitled to receive reimbursements and allowances for certain expenses incurred in connection with relocations to new permanent duty stations. A portion of such reimbursements and allowances, however, have historically been defined by the Treasury Department as being wages and, as such, subject to Federal income tax withholding. Although the specific categories and amounts of reimbursements that are considered to be taxable wages have been revised over the years, agencies have always been respon- sible for withholding the appropriate amounts due the Government as taxes. In examining into the Region's method of handling such relocations, we found that the Region has never withheld from the relocation reimburse- ments paid to employees any amounts for Federal income tax purposes. The Region has also not included on employees' statements of earnings--as required by established Treasury regulations--the gross amount of reimburse- ments and allowances paid to employees involved in relocations. Although we did not attempt to identify the total number of relocation payments

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