Financial Management - Serious Deficiencies in State's Financial Systems Require Sustained Attention: Afmd-93-9 (Paperback)

GAO reviewed the Department of State's accounting and financial management operations and systems, focusing on: (1) major weaknesses; (2) State's efforts to correct known problems; and (3) actions that could improve the usefulness and relevance of State's financial reports. GAO found that State: (1) lacked a centralized management entity to control financial operations, which led to duplication and cost inefficiencies; (2) consolidated many financial operations under the Chief Financial Officer (CFO); (3) planned to delegate control of overseas posts' financial management operations to various bureaus that would operate under CFO-directed policies; (4) lacked fully qualified and trained financial management personnel and planned to supplement existing staff with trained specialists, provide training exercises and experience to personnel, and increase supervision; (5) financial systems lacked the capacity to handle all transactions, and in some cases were obsolete; (6) planned to standardize and integrate its primary and subsidiary accounting systems so that all data would be processed uniformly and validated based on standard criteria; and (7) developed a reasonable strategy to improve its financial operations and systems, which included faster online response time, streamlined processing capabilities, and better system linkages. GAO also found that: (1) State's accounting systems did not provide a fully functional general ledger to support its financial statements, analysis, and oversight of financial operations; (2) managers did not receive adequate information on real property, personal property, and foreign nationals' benefits to monitor their programs properly; and (3) State's strategy for improving financial operations did not address its financial systems' ability to provide managers with needed financial information as required by regulations.