APPENDIX I

OFFICE OF THE INSPECTOR GENERAL, AUDIT DIVISION
ANALYSIS AND SUMMARY OF ACTIONS NECESSARY
TO CLOSE THE REPORT

Our procedure for tracking the status of annual financial statement recommendations is to close the current recommendation if that recommendation was presented in a prior year financial statement or management letter report and its status remains open. This procedure allows us to monitor the progress on each recommendation from its onset, rather than tracking multiple, comparable recommendations. However, since this is the first year for a financial statement audit of the entire INS, rather than a portion of INS (for example, INS Fee Accounts), current recommendations will remain open even if they are similar to prior year recommendations. The reason for this is that prior year recommendations addressed only a portion of INS, and not necessarily all of INS. Appendix II provides a matrix comparing current year recommendations that are the same or similar to prior year recommendations that remain open as of June 1997.

Recommendation Number:

  1. Resolved. Please provide us the status of the realignment of the finance offices into a consolidated transaction processing center and a consolidated debt management center. In addition, please provide us copies of revised organization charts resulting from the realignment.
  2. Resolved. Please inform us as to whether monthly reconciliations of all general ledger accounts are being performed and provide copies of a sample of these reconciliations, including the payroll reconciliation that will be the responsibility of the Twin Cities Administrative Center.
  3. Resolved. Please inform us when all backlogged accounting documentation at Headquarters Accounting Branch has been completely organized and filed.
  4. Resolved. Please inform us when a structured filing system has been implemented at headquarters and all regions/administrative centers. This filing system should include assigning responsibility for archived documents to an individual. In addition, please provide us with the results of the survey to determine the conditions of the filing systems at each finance office.
  5. Resolved. Please provide us with a copy of the portion of the INS Financial Management Procedures Handbook which contains up-to-date guidance on retention policies for accounting source documentation.
  6. Resolved. Please inform us of the results of the investigation into the unreconciled difference in the fund balance with Treasury general ledger account, of the adjustments that will be made to this account in order to establish an accurate balance going forward, and when the account has been adjusted to its reconciled balance.
  7. Resolved. Please provide us with a copy of the memorandum to the regions/administrative centers instructing them to follow the procedures in the new Administrative Manual for the reconciliation of the fund balance with Treasury. In addition, provide us with copies of the reconciliations completed by Headquarters and administrative centers and inform us of the results of the follow-up with the regions/administrative centers to ensure that the correct reconciliation procedures are being followed.
  8. Resolved. Please provide us with the results of the monthly follow-ups with the regions/administrative centers that are performed to ensure that all reconciling items and adjustments are identified and cleared timely.
  9. Resolved. Please provide us with the results of the working group's efforts to: (1) complete a reliable inventory of capitalized personal property by September 1, 1997 and real property by September 30, 1997 (including construction in progress and capital leases), (2) fully populate the AMIS database with correct information on capitalized property by September 30, 1997, (3) reconcile fixed assets records with the general ledger by September 30, 1997, (4) develop and implement instructions for timely and accurately recording and reconciling capitalized property in AMIS and the general ledger by September 30, 1997, and (5) develop and issue policies and procedures for use with INS' new financial management system. This recommendation will be closed when all of the above items have been completed by INS and we have received copies of the instructions for timely and accurately recording and reconciling capitalized property in AMIS and the general ledger and copies of the policies and procedures for use with INS' new financial management system.
  10. Resolved. Please provide us a copy of the memorandum sent to financial and property personnel clarifying their responsibilities relating to property management functions. Please provide us with the policies and procedures for reconciling property records with the general ledger, which include specific determinations of accountability for maintaining depreciation tables and providing depreciation information to the Office of Financial Management and for reconciling additions, deletions and ending balances for capitalizable property.
  11. Resolved. Please provide us a copy of the memorandum issued to all INS accounting offices which reaffirms and restates INS' current policies and procedures for recording obligations and accrued liabilities for ordered goods and services in FACS. In addition, please provide copies of the approved implementation plans that are developed by the regions/administrative centers and headquarters finance offices and branches.
  12. Resolved. Please provide us with a copy of the memorandum issued to all INS accounting offices which reaffirms and restates INS' current policy and procedures requiring (1) the recordation of accrued liabilities and accounts payable in the period in which the expense was incurred and (2) monthly reconciliations of FACS open obligation records with source documents. In addition, please provide copies of the approved implementation plans that are developed by the regions/administrative centers and headquarters finance offices and branches and copies of a sample of monthly reconciliations of FACS open obligation records with source documents completed by Headquarters and regions/administrative centers.
  13. Resolved. Please inform us of the results of the contract to assist INS in completing a cross walk from the INS chart of accounts to the SGL chart of accounts. In addition, please inform us when the SGL chart of accounts has been implemented with the new financial system and provide us a copy of INS' new chart of accounts.
  14. Resolved. Please inform us when the new financial management system is able to identify fixed assets and the liability for accrued annual leave by funding source. In addition please provide us with a copy of the methodology, which will be developed for the new financial system, for allocating common costs and expenses to funds.
  15. Resolved. Please inform us of the results of the contract undertaken to compile operating lease commitments. In addition, please provide us with copies of the procedures that are developed to ensure that all offices that administer leases are aware of the ongoing requirements to maintain and report annually on operating leases.
  16. Resolved. Please provide us a copy of the financial system contingency plan that will ensure continued financial reporting and control past the "hard" deadline of December 31, 1999, in the event that efforts to complete the implementation of a new financial management system by that date are not successful.
  17. Closed. This recommendation will be tracked in Recommendation 16.
  18. Resolved. Please describe how the additional IRM personnel will be used to control access rights to segregate operations from programming functions. In addition, please inform us of when a fully independent test environment has been implemented to ensure that proposed changes to live systems can be tested and moved into production in an orderly manner.
  19. Resolved. Please provide us a copy of the request form that will be used to document the approval process for all changes made directly to INS databases.
  20. Resolved. Please provide us a copy of the procedures in place to ensure that access is restricted to only authorized users.
  21. Resolved. Please provide us with a copy of the INSpect evaluation guide incorporating a comprehensive overview of the Computer and Telecommunications Security program. In addition, please provide us with the Office of Internal Audit's INSpect schedule and a copy of a sample INSpect evaluation report that addresses computer security requirements.
  22. Closed. This recommendation will be tracked in Recommendation 10.
  23. Resolved. Please provide us with a copy of the implementation plan for the new financial system that takes into account the need for updated policy and procedure guidance. In addition, please provide us with a copy of the statement of work for the contract that INS plans to issue for support of this function.

 

APPENDIX II

COMPARISON OF CURRENT YEAR RECOMMENDATIONS WITH
PRIOR YEAR RECOMMENDATIONS THAT REMAIN OPEN AS OF JUNE 1997

FY 1996 Annual Financial Statement Audit

Prior Fiscal Years' Annual Financial Statement Audits

INS Fee Accounts
FY 1991
No. 93-1A
INS Fee Accounts
FY 1992
No. 93-14B
INS Fee Accounts/Breached Bond Detention Fund
FY 1993
No. 95-2B
Violent Crime Reduction Trust Fund
FY 1995
No. 97-15A
Finding Recom-
mendation
Same or Similar Recommendation Remaining Open
INS' Overall Control Environment #1       #12
Fund Balance with Treasury #7       #1 and #2
#8       #3
Fixed Assets #9 #1 and #3 (Report on Compliance) #1 and #2   #4 and #5
Accounts Payable #11
and #12
#5 (Report on Internal Control)     #6 and #7
Revenue and Expense Allocation #14 #10 (Report on Internal Control)      
Operating Leases #15 #3 (Report on Compliance)      
Financial Management Systems #18     #13  
#21     #14  

 

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