7) TASK I FINDINGS AND RECOMMENDATIONS (CONTINUED) The cash reconciliation between Treasury cash and the general ledger cash balance. Each monthly cash reconciliation should not merely be a mechanical reconciliation of numbers but, properly reconciled to justify the This means that close attention be given to entries that must be made to adjust either the general ledger cash balance or the Treasury cash balance. Whelan, Barsky, Matelis & Company, Chartered CERTIFIED PUBLIC ACCOUNTANTS Page 9 of 17 1) 2) TASK II Analysis of Internal Financial Controls PLAN AND APPROACH Through an interview process we determined what internal controls exist. While performing Task I we determined if present internal controls are adequate to: a) Safeguard agency resources; b) Promote accuracy and reliability in accounting and operating data; c) Encourage and measure compliance with agency policy; d) Restrict obligations and costs and insure receipt of all agency revenues; e) Judge and promote efficiency and economy of operations in all divisions. TASK II FINDINGS AND RECOMMENDATIONS The internal financial controls, subject to the following observations, are accurate, complete and reliable. Our analysis indicates two major areas where further OTA procedures should be developed. These two areas are: 1) Adoption of a complete accrual basis of accounting. As defined in Section 9 of Title 2 of the General Accounting Office Policy and Procedures Manual for Guidance of Federal Agencies, "the maintenance of accounts on the accrual basis is a basic requirement for Federal agencies." Further requirements are stated as follows: Whelan, Barsky, Matelis & Company, Chartered CERTIFIED PUBLIC ACCOUNTANTS Page 10 of 17 TASK II FINDINGS AND RECOMMENDATIONS (CONTINUED) of "The proper recording of the obligation and disbursement "The techniques of applying the accrual basis may vary from OTA does record payroll and travel accruals, however all other 2) OTA does not properly record obligations as provided by Section 1311 of the Supplemental Appropriations Act of 1955. This law provides that no amount shall be recorded as an obligation unless it meets the specified criteria. Whelan, Barsky, Matelis & Company, Chartered CERTIFIED PUBLIC ACCOUNTANTS Page 11 of 17 TASK II FINDINGS AND RECOMMENDATIONS (CONTINUED) Contract documents are processed as obligations after signature by the appropriate division director but before the signature of the contracting party. The specific criteria states that both signatures should be obtained for recording as a valid obligation. OTA should comply with the above Section 1311 of the Supplemental Appropriations Act of 1955. Whelan, Barsky, Matelis & Company, Chartered CERTIFIED PUBLIC ACCOUNTANTS Page 12 of 17 1) TASK III Analysis of Internal Procedures Regarding Travel Orders; PLAN AND APPROACH Through the interview process we determined the internal procedures in existence. 2) We used a representative sample of miscellaneous vouchers and travel Accounting Office for transactions Thousand Dollars worth of disbursements, not previously obligated, previously obligated. For FY 80 a total of 954 miscellaneous invoices were processed. Material amounts for miscellaneous transactions should have been previously obligated prior to payment. Payments were being made to the same vendors during the year, yet being classified as a miscellaneous voucher with no obligation being established. Except for miscellaneous invoices of under One Hundred Dollars, all amounts should be obligated prior to payment. Whelan, Barsky, Matelis & Company. Chartered CERTIFIED PUBLIC ACCOUNTANTS Page 13 of 17 |