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:
- 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.
- 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.
- Resolved. Please inform us when all backlogged accounting documentation at
Headquarters Accounting Branch has been completely organized and filed.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Closed. This recommendation will be tracked in Recommendation 16.
- 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.
- 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.
- Resolved. Please provide us a copy of the procedures in place to ensure that
access is restricted to only authorized users.
- 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.
- Closed. This recommendation will be tracked in Recommendation 10.
- 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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