Summary: An audit was completed of the financial statements of the U.S. Railway Association (USRA). Several other matters were observed during the examination. These matters include the need for improvements to: (1) controls over equipment; (2) computer disaster preparation; (3) payroll simplification; (4) yearend expenses; (5) 211 H loan accounting; (6) internal audit procedures; (7) internal safeguards over cash on hand; and (8) controls over cash disbursements.
GAO found that: (1) the equipment card file and the computer inventory were not kept up-to-date for all sampled equipment; (2) copies of computer programs and data files were stored in the same building as the computers; (3) the potential for erroneous payments to USRA employees was greater than it should be because the payroll system pays employees on the last day of the pay period and has variable length pay periods; (4) accrued expensess were materially understated; (5) errors in the 211 H loan and interest accounts resulted in net changes to these accounts exceeding $2 million; (6)existed lack of internal auditor independence and an inconsistency in progress report policies; (7) receipts were deposited only when they exceeded large arbitrary amounts between $2 and $5 thousand; access to the safe where cash receipts are stored was not controlled, and the safe was left open during business hours; and (8) payment approval procedures were not consistently followed, invoices were not stamped paid, reimbursements were made of travel costs without proper forms, and executives were approving their own reimburseable claims.
