Summary: GAO tested certain internal controls over federal disbursements processed by the Department of the Treasury's Financial Management Service (FMS) in fiscal year 2000. With some exceptions, FMS makes disbursements for all federal agencies through its Regional Financial Centers and Debt Management Operations Center. For fiscal year 2000, FMS reported processing approximately 890 million disbursements totaling more than $1.2 trillion. The centers disburse funds by check, electronic funds transfer (EFT), or Fedwire. FMS reported that these disbursements for fiscal year 2000 included approximately 265 million checks amounting to more than $265 billion, approximately 625 million EFTs amounting to more than $720 billion, and approximately 47,000 Fedwires amounting to more than $275 billion. The centers also process Automated Standard Application for Payments (ASAP) system enrollments. FMS reported the federal agencies authorized payments of over $254 billion in fiscal year 2000 using the ASAP system. This report reviews the results of GAO's (1) follow-up work on previously recommended improvements and corrective actions taken to address such recommendations and (2) fiscal year 2000 testing and related recommendations for improving controls over safeguarding assets and processing and documenting delegation and designation of agency certifying officers. GAO found that FMS' and the centers' corrective actions resolved weaknesses reported for fiscal year 1999 relating to (1) controls over checks awaiting destruction and returned checks, (2) segregation of duties for the ASAP system, (3) documenting agency certifying officer's signature verification, (4) authorized signature for return of canceled Fedwire disbursements, and (5) reconciling courtesy disbursements. Similar to fiscal year 1999, FMS had internal control weaknesses in personnel screening, inventory control, audit procedures, and reporting requirements.
