Summary: GAO reviewed the Department of Agriculture's Food and Nutrition Service's (FNS) accounting operations to: (1) determine whether its controls, systems, and procedures were effective; and (2) identify any internal and accounting control weaknesses.
GAO found that FNS: (1) had several areas of internal control weaknesses, including undocumented and unauthorized transactions, incorrect and untimely transactions, inaccurate external reporting, and ineffective action on previous audit findings; (2) did not adequately account for letter-of-credit disbursements, advances receivable from grantees, and uncollectible accounts; (3) did not include information on bad debts on its external reports; (4) lacked the necessary controls and documentation for accounting system changes; and (5) did not have an adequate contingency plan for continuing its computer system operations in the event of a natural disaster. GAO also found that FNS: (1) did not disclose these internal and accounting control weaknesses in its annual Federal Managers' Financial Integrity Act (FMFIA) report to the Secretary of Agriculture; and (2) could not ensure that its system complied with internal control standards and accounting principles and standards.
