Summary: Because an investigation at a Federal penitentiary revealed serious business management weaknesses at the institution, GAO was requested to review how well the Federal Bureau of Prisons' institutions managed their procurement, financial, property, services, and personnel activities. The Director of the Federal Prison System is responsible to the Attorney General for the management and direction of the Bureau. Business operations are to be conducted in accordance with the accounting system approved by GAO as provided in the Bureau's policies. The Bureau's central office is responsible for developing, executing, and monitoring the Bureau's financial plans, controlling the funds it receives from its Salaries and Expenses appropriation and Building and Facilities appropriation, and operating the computerized financial management system. Each institution is responsible for its own business operations, including developing resource requirements, executing financial plans, controlling funds and property, disbursement, and cash transactions. The review was conducted at five of the Bureau's institutions in three of its five administrative regions.
The bureau has satisfactory policies for managing its business activities, but many were not adequately implemented. Its accounting system meets the GAO standards for internal management control, but its plans were not adequate for allocating and controlling resources, expenditures were not controlled, property was not adequately safeguarded, and audit programs did not result in adequate reviews or corrective action. Thus, the Bureau managers did not carry out all their duties and responsibilities as effectively as possible. Institutions disregarded Bureau policies by inadequately determining and justifying their needs for the personnel, goods, and services to be used in fiscal year 1978. The appproved plans could not be used for monitoring and controlling operations and for assessing management performance.
