Department of Education: status of financial management weaknesses reported in the fiscal year 1999 financial statement audit

Original publisher: Washington, DC : The Office, [2000] OCLC Number: (OCoLC)47248647 Excerpt: ... Inadequate Accounting for FFELP Loans During fiscal year 1999, Education did not transfer unobligated balances in its 27 liquidating account for FFELP loans to Treasury's general fund as required by FCRA. Specifically, it did not return about $ 2.7 billion in net collections specific to its FFELP liquidating account to Treasury until February 2000. The liquidating account includes transactions for loans that originated prior to fiscal year 1992. Any unobligated balances in this account at fiscal year-end are unavailable for obligation in subsequent fiscal years and must be transferred to the general fund. Further, Education did not sufficiently analyze the balances reflected on the financial statements to ensure that the FFELP balances agreed with relevant balances in the department's budgetary accounts. As a result, the auditors stated that an unexplained difference of about $ 700 million existed between the FFELP liquidating account and the related budgetary accounts as of September 30, 1999. According to Education officials, the department has analyzed the $ 700 million unexplained difference and determined the proper balance for the accounts; however, we have not reviewed the adequacy of the department's analysis. Because it did not properly account for and analyze its FFELP transactions and properly reconcile related accounting and budgetary accounts consistent with FCRA, Education could not be assured that its financial or budgetary reports were accurate. This lack of assurance that the financial or budgetary reports are accurate diminishes the potential that these reports will help the Congress and others determine how Education spent program funds. Education Is Taking Actions to Correct Material Internal Control Weaknesses Each year, following receipt of the annual auditors ' report on the results of its financial statement audit, Education prepares a corr...