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Friday, June 09, 2006

GAO: IRS lacks strong internal controls

"Despite clean audits and steps forward in improving financial management, deficiencies in internal controls still plague the Internal Revenue Service, according to a Government Accountability Office report released June 6.

The GAO said at the beginning of the audit of IRS' fiscal 2005 financial statement, 84 financial management-related recommendations from prior audits remained open because the IRS had not adequately addressed them. During the audit, the GAO was able to close 34; however, the GAO made 22 new recommendations.

Through the analysis, the GAO found that 29 recommendations, or 40 percent of the open cases, related to the IRS' lack of effective controls over safeguarding and securing assets, the report states. To do so, the GAO recommends keeping physical control over vulnerable assets and controlling information processing. It also recommends restricting and making people accountable for resources and records.

In all, 26 recommendations centered on proper documenting and recording of transactions, and 17 regarded effective management review and oversight, according to the report."

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