Summary: The U.S. Customs Service did not properly account for the receipt of goods and services. Delays in recording transactions overstated outstanding obligations by millions of dollars with corresponding understatements of accounts payable, expense, and asset accounts. This accounting practice, coupled with the failure to periodically deobligate amounts that were no longer supported by valid contracts or orders, undermined Customs' ability to accurately determine amounts available for obligation. It also undermined the accuracy of historical data on internal recurring obligations, thus inhibiting accurate budget preparation and inflating obligations for such expenses to avoid a shortfall. Intensive manual efforts were required at year-end to determine actual expenditures and the amount of unobligated funds. In addition, Customs did not properly account for its reimbursable work done on behalf of other agencies. Customs recorded and recognized intragovernmental receivables and revenue before incurring costs related to doing the work, thereby misstating its financial statements and providing the Office of Management and Budget with misleading information in the apportionment process. Further, Customs lacked documentation to substantiate amounts charged other agencies for doing reimbursable work.
