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 1999-12-06 monographic deposited born digital 14 p. GA 1.13:T-AIMD-00-50 https://www.govinfo.gov/app/details/GAOREPORTS-T-AIMD-00-50 P0b002ee18038c583 f:ai00050t DGPO 2010-08-12 2011-03-24 GAOREPORTS-T-AIMD-00-50 machine generated eng fdlp REPORT GAOREPORTS-T-AIMD-00-50 T-AIMD-00-50 Financial statement audits Financial management systems Internal controls Auditing standards Reporting requirements Federal agency accounting systems Financial records Noncompliance Accounting procedures Testimony AIMD GAO discussed its review of the independent auditors' reports on the Department of Education's financial statements covering fiscal year (FY) 1998, focusing on: (1) weaknesses in the financial reporting process; (2) inadequate reconciliations of financial accounting records; and (3) inadequate controls over information systems.<p/>GAO noted that: (1) the independent auditors found that the Department does not have adequate internal controls over its financial reporting process to provide reasonable assurance that its principal financial statements are reliable; (2) as a result, Education: (a) was unable to prepare reliable statements; and (b) could not support material amounts reported on its financial statements, including obligations, grant expenditures, and net position; (3) these limitations in the financial reporting process of the Department's new accounting system contributed to the disclaimer of opinion on its FY 1998 financial statements; (5) the system's reported weaknesses included its inability to perform an automated year-end closing process and directly produce consolidated financial statements as would normally be expected from such systems; (6) Department officials stated that they have recognized the seriousness of these problems and are working with a contractor to resolve them; (7) independent auditors reported that Education did not properly or promptly reconcile its financial accounting records during FY 1998; (8) the independent auditors also determined that the transactions Education reported to the Treasury routinely differed from those reported in Education's general ledger throughout FY 1998; (9) the auditors found that Education made large adjustments, which it did not research or support, merely to force the records into agreement; (10) in addition, Education did not reconcile its general ledger balance with its subsidiary debt collection system; (11) instead, Education made unsupported adjustments to the general ledger to align these records with amounts reported in its debt collection system; (12) many of these differences result from a lack of supporting documentation for proprietary accounts and budgetary balances, the failure to regularly perform formal reconciliations, and the serious problems with Education's accounting system; (13) errors in these accounts may also affect the accuracy of various Education financial reports, including budget execution reports and information reported to the Congress; (14) in connection with their review of Education's FY 1998 financial statements, the independent auditors also conducted a review of information systems controls over Education's accounting and financial reporting systems; and (15) continued weaknesses in these information system control areas place critical Education operations at risk of unauthorized access and disruption. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-AIMD-00-50/html/GAOREPORTS-T-AIMD-00-50.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-T-AIMD-00-50/pdf/GAOREPORTS-T-AIMD-00-50.pdf GAO/T-AIMD-00-50 https://www.govinfo.gov/app/details/GAOREPORTS-T-AIMD-00-50 Testimony GAO/T-AIMD-00-50; Financial Management: Financial Management Weaknesses at; Financial statement audits Financial management systems Internal controls Auditing standards Reporting requirements Federal agency accounting systems Financial records Noncompliance Accounting procedures Title 34 Part 682 34 CFR Part 682 Title 34 Part 682 34 CFR Part 682