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GAO-01-910R 1 (2001-08-13)

handle is hein.gao/gaocrptanra0001 and id is 1 raw text is: SGAO Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 August 13, 2001 Mr. Richard Gregg Commissioner Financial Management Service Department of the Treasury Subject: Internal Controls: Federal Disbursement Controls Can Be Strengthened Dear Mr. Gregg: We recently reported on the U.S. government's consolidated financial statements for fiscal year 2000.' In connection with fulfilling our requirement to audit these statements,' we tested certain internal controls over federal disbursements processed by the Department of the Treasury's Financial Management Service (FMS). With some exceptions (the largest being the Department of Defense), FMS makes disbursements for all federal agencies through its Austin, Chicago, Kansas City, Philadelphia, and San Francisco Regional Financial Centers and the Birmingham Debt Management Operations Center. For fiscal year 2000, FMS reported processing approximately 890 million disbursements totaling over $1.2 trillion. The centers disburse funds by check, electronic fund transfer (EFT), or Fedwire. FMS reported that these disbursements for fiscal year 2000 included approximately 265 million checks amounting to over $265 billion, approximately 625 million EFTs amounting to over $720 billion, and approximately 47,000 Fedwires amounting to over $275 billion. The centers also process Automated Standard Application for Payments (ASAP) system enrollments.5 FMS reported that federal agencies authorized payments of over $254 billion in fiscal year 2000 using the ASAP system. 'US Government Financial Statements. FY2000 Reporting Underscores the Need to Accelerate Federal Financial Management Reform (GAO-O 1-570T, March 30, 2001). '31 U.S.C. 331(e) (1994). 3FMS informed us subsequent to fiscal year 2000 that the Chicago Financial Center ceased operations. 4Fedwire is a telecommunications network that electronically links FMS to the Federal Reserve Bank of New York and handles low-volume, high-dollar-value, or same-day payment requests. 'The ASAP system, jointly implemented by FMS and the Federal Reserve Bank of Richmond, is an electronic payment and information system. Under this system, once enrolled, an organization can draw federal funds from bank accounts preauthorized by federal agencies. GAO-01-91OR Federal Disbursement Controls

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