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We conducted our review from July 2003 through March 2004, in accordance with
generally accepted government auditing standards. We requested comments from
HUD's Assistant Secretary for Administration/Chief Information Officer or her
designee. HUD's written comments are reprinted in the enclosure.
Results in Brief
HUD did not have an effective internal control system in place to maintain
accountability over its computer equipment. Fundamental internal control activities
were not performed, and as a result, computers and computer-related equipment
were highly vulnerable to loss or misappropriation. We found that HUD did not
consistently record computer equipment purchases in its asset management system
or effectively maintain or reconcile its records. In addition, HUD did not perform
regular physical inventories to verify the quantities and location of computer
equipment.
Because of these serious internal control weaknesses, neither HUD nor we were able
to reliably determine the total amount of computer equipment purchases during the
period of our review. However, for four of HUD's major computer equipment
vendors, we were able to identify over $2.2 million in computer equipment purchased
in fiscal years 2001, 2002, and 2003 that was not recorded in HUD's asset management
system, of which we determined over $82,000 to be lost or missing.5 Given the
seriousness of the identified control weaknesses, these numbers could be much
higher.
Although HUD has awarded a new information technology contract for essentially all
of its information processing, telecommunications, and related needs on an
agencywide basis," it will still be accountable for HUD-owned equipment at least
through fiscal year 2006. Until HUD corrects the weaknesses in its internal controls,
accountability over existing computer equipment will remain problematic, and these
assets will continue to be vulnerable to loss or misappropriation.
This report makes seven recommendations for actions that if fully implemented,
should help the department better protect and account for its computer equipment.
In written comments on a draft of this report, HUD concurred with our findings and
recommendations and outlined actions it plans to take in response.
Background
HUD's reported purchases of computers and computer-related equipment, hereinafter
referred to as computer equipment, and services in fiscal years 2001, 2002, and 2003
5 We define lost or missing computer equipment as that for which HUD was unable to provide location
information or that which HUD specifically stated it was unable to locate.
6 As discussed later in the report, in December 2003, GAO sustained a protest filed against HUD's
award of this contract.
GAO-04-520R Accountability for Computer Equipment Lacking
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