Summary

GAO reviewed the Department of Agriculture's (USDA) second-year implementation of the Federal Managers' Financial Integrity Act of 1982 (FMFIA) to assess: (1) improvements in internal controls and the process used to evaluate and correct control weaknesses; (2) the status of major accounting systems and evaluations; and (3) the accuracy and completeness of the Secretary's annual report on internal controls and accounting systems.

GAO found that: (1) although USDA has been correcting known internal control problems and has been improving its system for evaluating and correcting internal control weaknesses, it needs to strengthen techniques for measuring and reducing program vulnerability and monitoring the effectiveness of corrective actions; (2) four USDA agencies have not yet implemented an internal control program consistent with Office of Management and Budget and departmental guidelines; (3) in some instances, reported corrective actions did not correct the problem or were misleading because the action only partially solved the problem; and (4) the methods used by managers to examine program risk were not yielding consistent and reliable results. GAO also found that: (1) most large systems had not been examined using evaluation techniques to test systems in operation; (2) several large systems are undergoing a redesign which will take several years to correct long-standing deficiencies; and (3) the Secretary accurately reported that complete assurance could not be given that USDA was meeting FMFIA requirements because of the large number of uncorrected internal control and accounting weaknesses.