United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Accounting and Information Management Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1999-08-09 monographic deposited born digital 44 p. GA 1.13:AIMD-99-196 https://www.govinfo.gov/app/details/GAOREPORTS-AIMD-99-196 P0b002ee18038fc9f f:ai99196 DGPO 2010-08-12 2011-03-24 GAOREPORTS-AIMD-99-196 machine generated eng fdlp REPORT GAOREPORTS-AIMD-99-196 AIMD-99-196 Internal controls Reporting requirements Accounting procedures Financial records Federal agency accounting systems Financial statement audits Tax administration systems Financial management Auditing standards Inventory control Letter Report AIMD

Serious financial management system limitations and internal control weaknesses prevented the Internal Revenue Service (IRS) from reliably reporting on the results of its administrative activities for fiscal year 1998 and from having reliable financial information for managing its operations. These deficiencies are long-standing, many being reported in GAO's first financial audit of IRS for fiscal year 1992. Comparable to an individual reconciling his or her checkbook to a bank statement, IRS' records on its available funds should be reconciled to the Treasury Department's records monthly. In fiscal year 1998, however, IRS did not reconcile its administrative fund balance with Treasury's accounts. IRS did not promptly record some types of expenditures against appropriations. IRS' systems were unable to generate detailed subsidiary records of its accounts payable and outstanding obligations. IRS' property and equipment was probably materially understated because of several deficiencies in its recording of property and equipment. IRS lacked adequate review procedures to oversee and manage the accounting and financial reporting process. GAO found significant errors and omissions in IRS' draft financial statements involving, in some cases, hundreds of millions of dollars. IRS acknowledges these weaknesses and plans to improve its financial data for its administrative accounts. However, past efforts to correct these problems have been ineffective. Future success depends on sustained attention by senior IRS management. Left uncorrected, the internal control weaknesses cited by GAO will continue to hinder IRS' ability to manage its financial operations and routinely prepare reliable and timely financial information. https://www.govinfo.gov/content/pkg/GAOREPORTS-AIMD-99-196/html/GAOREPORTS-AIMD-99-196.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-AIMD-99-196/pdf/GAOREPORTS-AIMD-99-196.pdf GAO/AIMD-99-196 https://www.govinfo.gov/app/details/GAOREPORTS-AIMD-99-196 Letter Report GAO/AIMD-99-196; Internal Revenue Service: Serious Weaknesses Impact; Internal controls Reporting requirements Accounting procedures Financial records Federal agency accounting systems Financial statement audits Tax administration systems Financial management Auditing standards Inventory control Title 31 Section 720 31 U.S.C. 720