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092803 1 (1970-12-04)

handle is hein.gao/gaobacwrp0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE 0 WASHINGTON REGIONAL OFFICE Ut FIFTH FLOOR 803 WEST BROAD STREET FALLS CHURCH, VIRGINIA 22046 DEC 4 1870 Dear Mr. Allen: LMO92803 We have completed the review we undertook earlier this year of the internal controls employed by Government Services, Inc (GSI) for safeguard- ing the company's assets including the controls employed in GSI's automatic data processing system. In performing this work, we noted several areas in which it appeared that changes in existing practices would either improve internal control or be more economical. Our observations regarding these areas are presented below for your consideration. CONTROLS OVER CASH COLLECTIONS NEED IMPROVEMENT To test controls over cash collections, we reviewed a selected group of daily reports of cash collections prepared by the various cafeterias, snack bars, and other operating units. These reports are prepared by personnel at the operating units from cash register tapes which show begin- ning and ending balances that provide a basis for determining how much cash should have been received. We found that the cash register tapes from which the daily reports are prepared do not accompany the daily reports to the accounting department. Not sending the tapes to support the daily report eliminates an important element of internal control because, without these tapes, the accounting department cannot determine whether the proper amount has been deposited or is transmitted for deposit. We also found no evidence that errors reported on the daily report were investigated by management. For instance, one daily report stated that an overring of $259 had occurred because the cash register jumped. Similar overrings occurred on the following 2 days, yet we found no evidence that management had made an investigation of these overrings. Also, it is the practice to have the cashiers in the cafeterias mentally add the prices of items on the customers' trays instead of ringing the prices of individual items and using the subtotaling capability of the machines to total the diners' bills. In a special review made by the General Services Administration last year, it was reported that this prac- tice led to arithmetical errors and that these errors tended to favor the customers. We found that the procedures followed in determining the amount of individual sales in the cafeterias hav6 not been changed and still do not provide assurance that all collections are accurate. onuI P'N (o0 I4110>

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