Financial Management: Customs' Accounting for Budgetary Resources Was
Inadequate (Letter Report, 12/14/93, GAO/AIMD-94-23).

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.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-94-23
     TITLE:  Financial Management: Customs' Accounting for Budgetary 
             Resources Was Inadequate
      DATE:  12/14/93
   SUBJECT:  Internal controls
             Accounting procedures
             Federal agency accounting systems
             Budget outlays
             Appropriated funds
             Accounts receivable
             Offsetting collections
             Unobligated budget balances
             Budget administration
             Financial records
IDENTIFIER:  Customs Service Automated Receiving Report System
             Customs Service Automated Management Information System
             Customs Service Apportionment and Reapportionment Schedule
             
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