Summary of Report 95-061

Report Number 95-061

Overall Conclusion

A material weakness exists in the control environment over the Department's accounting function. Both the type and number of problems identified emphasize the lack of adequate controls. These problems include the following issues:

• The Department has not established procedures to ensure accurate and timely federal reports for the $23 million Nutrition Services Program.
  
  
• Supervision of the federal and related internal reporting processes is inadequate.
  
  
• Reconciliations related to federal reports include unsupported adjusting entries.
  
  
• Payments to subrecipients are maintained on a subsidiary ledger which cannot be reconciled to the Department's internal accounting system.
  
  
• Accounting system policies and procedures are not documented.

Although known weaknesses in the accounting system were not corrected during fiscal year 1994, the Department has indicated a commitment to correcting the situation.

Key Findings

• Known control weaknesses in the accounting system were not corrected during fiscal year 1994. Although the Department took action to address problems within the accounting system in early 1994, significant weaknesses continued at the end of the fiscal year.
  
  
• The Department has not established procedures to ensure accurate and timely federal reports, and related internal reports, for the Nutrition Services Program (CFDA 93.635). Supervision of the reporting process is inadequate. Reconciliations related to federal reports include unsupported adjusting entries. While the errors found were not material to the $23 million Title III program, this lack of procedures indicates a control weakness within the accounting system.
  
  
• The Department does not ensure that subrecipients comply with federal cash management requirements. Subrecipients' cash balances are not monitored as their requests for advances are processed. As a result, subrecipients may be holding cash in excess of immediate needs.

Contact the SAO about this report.

Download the Acrobat version of this report. (.pdf)

If you prefer an HTML version, follow this link to an Adobe site which converts PDF files to HTML.