Financial Audit: U.S. Government Printing Office's Financial Statements
for Fiscal Year 1995 (Letter Report, 04/16/96, GAO/AIMD-96-52).
GAO is required to audit the U.S. Government Printing Office's (GPO)
financial statements at least once every three years. GAO contracted
with the independent public accounting firm Arthur Andersen to audit
GPO's financial statements for fiscal year 1995. GAO concurs in Arthur
Andersen's opinion that the statements present fairly, in all material
respects, GPO's financial position and the results of its operations and
cash flows. GPO maintained effective internal controls over financial
reporting, and Arthur Andersen found no instances of noncompliance with
laws and regulations that would be reportable under generally accepted
auditing standards. The firm did identify several deficiencies in GPO's
internal controls and operations, ranging from computer security
weaknesses to a failure to regularly reconcile subsidiary ledgers for
accounts receivable and payable.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: AIMD-96-52
TITLE: Financial Audit: U.S. Government Printing Office's
Financial Statements for Fiscal Year 1995
DATE: 04/16/96
SUBJECT: Financial records
Computer security
Financial management systems
Financial statement audits
Internal controls
Government publications
Federal agency accounting systems
Accounting procedures
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Cover
================================================================ COVER
Report to the Congress
April 1996
FINANCIAL AUDIT - U.S. GOVERNMENT
PRINTING OFFICE'S FINANCIAL
STATEMENTS FOR FISCAL YEAR 1995
GAO/AIMD-96-52
Government Printing Office
(911697)
Abbreviations
=============================================================== ABBREV
DOD - Department of Defense
EDP - electronic data processing
GPO - Government Printing Office
JCP - Joint Committee on Printing
Letter
=============================================================== LETTER
B-261557
April 16, 1996
To the President of the Senate and the
Speaker of the House of Representatives
This report presents the results of the audit of the U.S. Government
Printing Office's (GPO) financial statements for the fiscal year
ended September 30, 1995.
We are sending copies of this report to the Chairman of the Joint
Committee on Printing; the Chairmen and Ranking Minority Members of
the Senate Committee on Governmental Affairs and the House Committee
on Government Reform and Oversight; the Secretary of the Treasury;
the Public Printer; the Director of the Office of Management and
Budget, and other interested parties. Copies will be made available
to others upon request.
This report was prepared under the direction of David L. Clark,
Director, Audit Oversight and Liaison, who may be reached at (202)
512-9489 if you or your staffs have any questions.
Charles A. Bowsher
Comptroller General
of the United States
Letter
=============================================================== LETTER
B-261557
The Honorable Michael F. DiMario
Public Printer
U.S. Government Printing Office
Under 44 U.S.C. 309(d), the General Accounting Office is responsible
for auditing the U.S. Government Printing Office's (GPO) financial
statements at least once every 3 years. The purpose of the audit was
to determine whether the financial statements for the year ended
September 30, 1995, were reliable in all material respects; whether
management's assertion about the effectiveness of GPO's internal
control structure over financial reporting was fairly stated; and
whether GPO complied with selected provisions of certain laws and
regulations, including those governing the use of its budget
authority. The audit was conducted in accordance with generally
accepted government auditing standards.
To help fulfill our responsibility under 44 U.S.C. 309(d), we
contracted with the independent public accounting firm of Arthur
Andersen LLP to perform audit work. We determined the scope of the
audit work, monitored Arthur Andersen's progress at all key points,
reviewed its audit working papers, and performed other procedures we
deemed necessary. Our report, Financial Audit: U.S. Government
Printing Office's Financial Statements for Fiscal Year 1992
(GAO/AFMD-93-62, May 11, 1993), presented the results of the last
financial audit of GPO.
REPORTS ON GPO'S FINANCIAL
STATEMENTS, INTERNAL CONTROLS,
AND COMPLIANCE WITH LAWS AND
REGULATIONS
------------------------------------------------------------ Letter :1
We concur with Arthur Andersen's opinion that GPO's fiscal year 1995
consolidated financial statements present fairly, in all material
respects, GPO's financial position as of September 30, 1995, and the
results of its operations and its cash flows for the year then ended,
in conformity with generally accepted accounting principles.
The fiscal year 1994 financial statements (as restated - see note 2K)
are unaudited and, thus, no opinion is expressed on them.
The audit of the fiscal year 1995 financial statements was made for
the purpose of forming an opinion on the consolidated financial
statements taken as a whole. Supplemental schedules are presented
for purposes of additional analysis and are not a required part of
the basic financial statements. Arthur Andersen subjected this
information to the auditing procedures it applied to the fiscal year
1995 consolidated financial statements, and opined that this
information is fairly stated, in all material respects, in relation
to the consolidated financial statements taken as a whole. We concur
with Arthur Andersen's opinion.
Arthur Andersen evaluated management's assertion that, as of
September 30, 1995, GPO maintained an effective internal control
structure over financial reporting. The objectives of an internal
control structure are to provide management with reasonable, but not
absolute, assurance that
-- assets are safeguarded against loss from unauthorized
acquisition, use, or disposition;
-- transactions are executed in accordance with budgetary authority
and with the laws and regulations that could have a direct and
material effect on the financial statements; and
-- transactions are properly recorded, processed, and summarized to
permit the preparation of GPO's financial statements in
accordance with generally accepted accounting principles and to
maintain accountability over assets.
We concur with Arthur Andersen's opinion that GPO management's
assertion on its internal control structure is fairly stated. GPO's
assertion was based on its evaluation using OMB Circular A-123,
Revised, "Management Accountability and Control," dated June 21,
1995.
Arthur Andersen also reported that the results of its tests of GPO's
compliance with selected provisions of certain laws and regulations
disclosed no instances of noncompliance that would be reportable
under generally accepted government auditing standards. It further
stated that the objective of its audit of GPO's consolidated
financial statements was not to provide an opinion on overall
compliance with such provisions. Accordingly, Arthur Andersen did
not express such an opinion. We concur with Arthur Andersen's
conclusions regarding GPO's compliance with laws and regulations.
IMPROVEMENTS NEEDED IN INTERNAL
CONTROLS
------------------------------------------------------------ Letter :2
Based on the results of its audit work, Arthur Andersen identified
several deficiencies in GPO's internal controls and operational
procedures. While neither Arthur Andersen nor GAO consider these
deficiencies to be material weaknesses in the design or operation of
the internal control structure over financial reporting as of
September 30, 1995, improvements in these areas are needed. In
particular, GPO should
-- correct internal control deficiencies identified during the
audit of GPO's fiscal year 1992 financial statements\1 but which
GPO had not addressed as of September 30, 1995,
-- strengthen security over computer access by programmers and
systems application personnel to the financial management and
text processing electronic data processing (EDP) systems,
-- strengthen contingency and back-up planning for the financial
management and text processing EDP systems, and
-- reconcile subsidiary ledgers for accounts receivable and
accounts payable on a regular basis.
These areas are summarized in the enclosed Arthur Andersen report and
are discussed in more detail in a separate letter from Arthur
Andersen to the Public Printer. The letter also discussed a number
of suggested improvements in internal controls and operations which
warrant consideration by GPO management. Arthur Andersen discussed
each of these issues with GPO management and incorporated
management's comments in the report. We concur with Arthur
Andersen's conclusions and suggestions in these areas.
--------------------
\1 See GAO's Financial Audit: U.S. Government Printing Office's
Financial Statements for Fiscal Year 1992 (GAO/AFMD-93-62, May 11,
1993), which includes Arthur Andersen's report on the audit. In
addition, in January 1993, Arthur Andersen issued a report to GPO
titled Comments and Suggestions for Consideration that contained
recommendations for improving GPO's operations and internal control
structure.
ADDITIONAL FINANCIAL
INFORMATION
------------------------------------------------------------ Letter :3
Although GPO is not covered by the Chief Financial Officers Act of
1990, Public Law 101-576, it patterned certain aspects of its fiscal
year 1995 consolidated financial statements after the requirements of
the act and the associated Office of Management and Budget
implementing regulations. Specifically, GPO included with its
consolidated financial statements a Performance Measures section that
describes selected operational and financial performance measures and
management's comments on actions taken and being considered for
improving GPO's financial position. For example, this section
includes management's statement that it was able to reduce its
operating loss by downsizing its workforce.
The Performance Measures section presents further analysis of the
consolidated financial statements and is not a required part of those
statements. The information presented therein was not subjected to
the auditing procedures applied by Arthur Andersen in its audit and,
accordingly, Arthur Andersen expressed no opinion on it. Arthur
Andersen and GAO read this information and considered whether it, or
the manner of its presentation, was materially inconsistent with the
information, or its manner of presentation, appearing in the
financial statements and found no such inconsistencies.
Charles A. Bowsher
Comptroller General
of the United States
December 15, 1995
REPORT ON AUDIT OF U.S.
GOVERNMENT PRINTING OFFICE
=========================================================== Appendix I
Report of Independent Public
Accountants
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
Performance Measures
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
Consolidated Balance Sheets
(See figure in printed
edition.)
.
(See figure in printed
edition.)
Consolidated Statements of
Revenues and Expenses
(See figure in printed
edition.)
Consolidated Statements of Cash
Flows
(See figure in printed
edition.)
Notes to Consolidated Financial
Statements
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
Supplemental Schedules
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
(See figure in printed
edition.)
*** End of document. ***