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GAO-02-1018R 1 (2002-08-29)

handle is hein.gao/gaocrptaojs0001 and id is 1 raw text is: SGAO Accountability* Integrity* Reliability United States General Accounting Office Washington, DC 20548 August 29, 2002 Louise L. Roseman, Director Division of Reserve Bank Operations and Payment Systems Board of Governors of the Federal Reserve System Subject: Federal Reserve Banks: Areas for Improvement in Computer Controls Dear Ms. Roseman: In connection with fulfilling our requirement to audit the U.S. government's fiscal year 2001 financial statements, we reviewed the general and application computer controls over key financial systems maintained and operated by the Federal Reserve Banks (FRB) on behalf of the Department of the Treasury's Bureau of the Public Debt (BPD).' This report for public release summarizes the results of our fiscal year 2001 work, including our follow-up on previous years' recommendations. The 12 FRBs perform fiscal agent services on behalf of the U.S. government, including BPD. The debt-related services primarily consist of issuing, servicing, and redeeming Treasury securities and processing secondary market securities transfers. Five FRB data centers maintain and operate key BPD financial applications relevant to the Schedule of Federal Debt. We used a risk-based and rotation approach for testing general and application controls. Under that methodology, every 3 years each significant data center and each key application is subjected to a full-scope review, which includes testing in all the computer control areas defined in the Federal Information System Controls Audit Manual (FISCAM).2 In the interim years, we focus our testing on selected control areas defined in FISCAM. We performed our work at the FRBs from September 2001 through January 2002. Our work was performed in accordance with U.S. generally accepted government auditing standards. We requested comments on a draft of this report from the Board of Governors of the Federal Reserve System. The comments are discussed later in this report and are reprinted in the enclosure. As noted above, our review addressed both general and application controls. An effective general control environment (1) protects data, files, and programs from 131 U.S.C. 331(e) (2000). 'U.S. General Accounting Office, Federal Information System Controls Audit Manual, Volume I: Financial Statement Audits, GAO/AIMD-12.19.6 (Washington, D.C.: Jan. 1999). GAO-02-1018R Computer Controls at FRBs

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