Review of Accounts of Accountable Officers, Headquarters, National Institutes of Health, Through June 30, 1970

Published by the Government Accountability Office on 1971-05-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                               UWED STATESGENERALAC~WNTING OFFICE
                                          WASHINGTON,     D.C.   20548

                                                                         MAY1 8 1971

           Dear Dr. Marston:

                   We have made a review for the settlement            of accounts of accountable
           officers     of the Headquarters,     National   Institutes      of Health (NIH), Depart-
           ment of Health,     Education,    and Welfare,     through June 30, 1970. The review,
           which was completed in February 1971, consisted               of an evaluation      of the
           administrative     procedures    and internal    controls     relative    to receipts    and
           disbursements,     excluding   payroll,    and included      such tests of financial
           transactions     and records as we considered         appropriate.

                   We found significant      differences    amounting to $34,011,507  between the
           financial     records of NIH and the Statement of Unexpended Balances of Appro-
           priations     and Funds submitted        to the Department of the Treasury as of
           June 30, 1970. Prior to the completion             of our review all but $170,809 had
           been reconciled.        Because of these discrepancies,       we are unable to autho-
           rize disposal       of the records relating      to these accounts.

                  We examined the Statement of Unexpended Balances of Appropriations        and
           Funds (Form BA-R 2108) submitted      to the Department of the Treasury for the
           fiscal   year ended June 30, 1970. Although the financial       data in this report
           should come from financial    records of NIH, our examination      showed that for
           three of the appropriations     there were significant  discrepancies    between
           the data reported    to the Department of the Treasury on the Form BA-R 2108
           and the balances in the general ledger.

                    We attempted to reconcile   the balances of these same appropriations
            in the general ledger with the balances shown in the allotment        ledgers.
            However, we noted differences     between the general ledger and the allotment
            ledger for two of these appropriations.         The information shown on the
            financial     records and in the report to the Treasury is summarized in the
            following      table:

                                        50TH ANNIVERSARY 1921- 1971
                        Comparison of Data Reported to the Department
                          of the Treasury with Financial   Records of
                         Headquarters,   NIH, for Three Appropriations
                                       as of June 30, 1970

                                     Unexpended balances                         Differences         between
Appropria-                                                                   Form BA-R 2108               and
tion                                           General        Allotment             and              allotment
symbol         Form BA-R 2108                  ledger          ledger        general ledger             ledger

7500849       $ 81,962,164.68          $ 94,383,902.86     $ 94,606,630.82   $12,421,738.18      $222,727.96
7500885         44,340,927.99            53,397,112.84       53,419,446.84     9,056,184.85        22,334.OO
7500886         39,092,412.73            51,625,996.68       51,625,996.68    12,533,583.95

              $165,395,505.40          $199,407,012.38     $199,652,074.34   $34,011,506.98      $245,061.96

       We furnished      the Chief of the Reports and Accounts Control Branch with a
copy of the above schedule and asked for an explanation                   as to why the accounts
could not be reconciled.           He subsequently     advised us that, in changing from
its central      accounting   system to the Department of Health, Education,                  and
Welfare's    accrual accounting       system, the Office of Financial            Management was
attempting     to operate the two accounting          systems on a parallel          basis.     In
other words, there was a transition            period during which time data were some-
times entered simultaneously          into both systems, while in other instances data
were entered into one system without a corresponding                  entry into the other
system.     This evidently      led to the differences        in account balances between
the Form BA-R 2108 and the general ledger and between the general ledger and
the allotment      ledgers.     In order to meet a fiscal         year-end reporting         deadline,
the Office of Financial         Management apparently        prepared the Form BA-R 2108 with-
out assurance that all records and reports were in agreement.                        The Branch Chief,
provided    us with documentation        which showed that as of February 1, 1971, NIH
had accounted for all but $170,809 of the $34,011,507                   in differences       between
the Form BA-R 2108 and the general ledger.                He  also   told  us   that   personnel
were involved      in an effort     to reconcile     the remaining differences           between the
two systems.

      We discussed the matter with the Assistant  Director of Finance, who
told us that the remaining differences  in account balances would be recon-
ciled before June 30, 1971, and that we would be furnished   with copies of
any adjustments.


  _.. -. - -._-*.-.- - ____. ___.~    .-   -
       In addition,      we are presently   drafting     a report to the Congress on
our review of renovations        of NIH laboratory       buildings    36 and 37. In
this report we plan to discuss the use by NIH of about $3 million                      in
operating     funds to finance what we believe         was construction       requiring
a specific      appropriation.     The funds were appropriated          for fiscal     years
1968, 1969 and 1970 under theJauthority             of title     IV of the Public Health
Service Act (42 U.S.C. 281) for the operations                of several NIH institutes.
This subject was discussed with the Deputy Associate Director                    for

      Until our work involving        exceptions      that may be taken by us in
connection with payments for renovations              to buildings     36 and 37 is
complete or otherwise     satisfactorily       resolved,      and until we are satisfied
that the financial    records accurately         reflect    the financial    condition   of
NIH as of June 30, 1970, NIH must retain              all fiscal    records and supporting
documents relating    to (1) the construction            and renovation    of buildings
36 and 37 and (2) the June 30, 1970, balance of appropriated                  funds.

      We wish to acknowledge the courtesies and cooperation   extended to our
representatives.   Your comments and advice as to any additional    action
taken or planned on the matters discussed in this letter    would be appreciated.

         Copies of this    letter  are being sent to the Assistant  Secretary,  Comp-
troller,      Department   of Health, Education,  and Welfare and to the Director,
HEW Audit Agency.

                                                   Sincerely    yours,

                                                   Morton A. Myers
                                                   Assistant Director

Dr. Robert Q. Marston
Director,    National Institutes
   of Health
Department of Health, Education,
   and Welfare


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