Summary

The U.S. Customs Services, taking in more than $19 million in import duties, excise taxes, and the like in fiscal year 1990, is second only to the Internal Revenue Service in the amount of government revenue collected. Customs has yet to accurately account for its resources, however. Its automated and manual accounts receivable systems contain incomplete and inaccurate information. Customs also faces ongoing problems in accounting for and controlling its property. Furthermore, weak controls for identifying and collecting fees owed for debt collection may have allowed millions of dollars to go uncollected. Customs has established a chief financial officer position to handle its financial management problems. Efforts are also under way to develop a single fully integrated financial management system, but major financial management problems remain. The Chief Financial Officers Act of 1990 provides a framework for correcting many of the shortcomings at Customs. Top management's continued involvement and commitment are essential to achieving an effective financial management environment and successfully implementing the legislation.

GAO found that: (1) Customs' accounting and internal control systems do not provide complete and accurate financial information, its financial reports do not accurately reflect its financial position, and its financial management personnel are inadequately trained; (2) Customs' accounting and internal control systems do not fully account for its property and accounts receivable; (3) Customs may have failed to collect some duties and fees owed due to limited internal controls and deficient policies and procedures; (4) Customs' collection efforts on delinquent accounts receivable have such serious problems as system design deficiencies, noncompliance with debt collection policies and procedures, and legal limitations; (5) Customs has taken action to improve its debt collection by setting up a task force on accounts receivable over a year old, and by establishing financial advisor positions in some of its larger districts; (6) Customs has attempted to modernize and improve its accounting operations and fix its accounting system problems through two systems development efforts, one of which was unsuccessful, while the other shows promise; (7) Customs is not coordinating its financial systems improvements with its debt collection enhancements, which may render these two systems incompatible; (8) Customs has an effective chief financial officer structure in place and is actively addressing issues mandated by law, but additional steps are necessary to fully implement legislative requirements; and (9) Customs may not be able to consolidate all of its financial management operations under its chief financial officer because of its multifaceted mission.