Education Financial Management: Weak Internal Controls Led to Instances of Fraud and Other Improper Payments

PDF Version Also Available for Download.

Description

A letter report issued by the General Accounting Office with an abstract that begins "Because of internal control weaknesses, the Department of Education's student financial assistance programs are at high risk for fraud or erroneous payments. GAO discovered fraud in the grant and loan areas and pervasive control breakdowns and improper payments in other areas. Controls over grant and loan disbursements lacked a key edit check or follow-up process that would identify schools improperly disbursing Pell Grants. Significant internal control weaknesses over Education's third party drafts also increased the department's vulnerability. GAO found that individual Education employees could control the ... continued below

Creation Information

United States. General Accounting Office. March 28, 2002.

Context

This report is part of the collection entitled: Government Accountability Office Reports and was provided by UNT Libraries Government Documents Department to Digital Library, a digital repository hosted by the UNT Libraries. More information about this report can be viewed below.

Who

People and organizations associated with either the creation of this report or its content.

Publisher

Provided By

UNT Libraries Government Documents Department

Serving as both a federal and a state depository library, the UNT Libraries Government Documents Department maintains millions of items in a variety of formats. The department is a member of the FDLP Content Partnerships Program and an Affiliated Archive of the National Archives.

Contact Us

What

Descriptive information to help identify this report. Follow the links below to find similar items on the Digital Library.

Description

A letter report issued by the General Accounting Office with an abstract that begins "Because of internal control weaknesses, the Department of Education's student financial assistance programs are at high risk for fraud or erroneous payments. GAO discovered fraud in the grant and loan areas and pervasive control breakdowns and improper payments in other areas. Controls over grant and loan disbursements lacked a key edit check or follow-up process that would identify schools improperly disbursing Pell Grants. Significant internal control weaknesses over Education's third party drafts also increased the department's vulnerability. GAO found that individual Education employees could control the entire payment process for third party drafts. Education employees also circumvented a key computerized control designed to prevent duplicate payments. Education eliminated third party drafts in May 2001. Inconsistent and inadequate authorization and review processes for purchase cards, combined with a lack of monitoring, meant that improper purchases were unlikely to be detected. Inadequate control over these expenditures, combined with the inherent risk of fraud and abuse associated with purchase cards, led to fraudulent, improper, and questionable purchases totaling $686,000. Poor internal controls over computers acquired with purchase cards and third party drafts led to 241 missing personal computers and other equipment valued at $261,500. Although Education changed policies and procedures over disbursements to improve internal controls and program integrity, many of these changes have not been effectively implemented."

Language

Item Type

Identifier

Unique identifying numbers for this report in the Digital Library or other systems.

Collections

This report is part of the following collection of related materials.

Government Accountability Office Reports

The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for the U.S. Congress investigating how the federal government spends taxpayers' money. Its goal is to increase accountability and improve the performance of the federal government. The Government Accountability Office Reports Collection consists of over 13,000 documents on a variety of topics ranging from fiscal issues to international affairs.

What responsibilities do I have when using this report?

When

Dates and time periods associated with this report.

Creation Date

  • March 28, 2002

Added to The UNT Digital Library

  • June 11, 2014, 5:03 a.m.

Usage Statistics

When was this report last used?

Yesterday: 0
Past 30 days: 0
Total Uses: 3

Where

Geographical information about where this report originated or about its content.

Place Name

Publication Place

Map Information

  • map marker Automatically generated Place Name coordinates.
  • map marker Automatically generated Publication Place coordinates.
  • Repositioning map may be required for optimal printing.

Mapped Locations

Interact With This Report

Here are some suggestions for what to do next.

Start Reading

PDF Version Also Available for Download.

Citations, Rights, Re-Use

United States. General Accounting Office. Education Financial Management: Weak Internal Controls Led to Instances of Fraud and Other Improper Payments, report, March 28, 2002; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc291563/: accessed January 17, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.