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U. S. DEPARTMENT OF JUSTICE

Corrective Action Report

Issue and Milestone Schedule

Date of Submission
First Quarter Update:
Second Quarter Update:
Third Quarter Update:
End of Year Report: 12/27/02

Issue Title

FPI Adherence to Accounting Standards and Financial Management System Requirements

Issue ID

2000-6296

Organization

Federal Prison Industries

Date First
Initiated

12/05/00

Original Target for Completion

03/01/01

Current Target for Completion

01/31/04

Actual Date of Completion


Issue Type (Organization Rating)


Material Nonconformance

Source Title

FY 2000 Integrity Act Review and
FY 2002 Financial Statement Audit

Date of Source Report

12/05/00 and
FY 2002 draft audit report

Issue Type (DOJ Rating)

Material Nonconformance

Issue Description

In May 2000, the Federal Prison Industries (FPI) implemented Millennium, which does not yet meet all the financial management requirements of Office of Management and Budget (OMB) Circular No. A-127.  System generated reports require thorough review, analysis, and frequent corrections.  FPI has weaknesses in system security, and weaknesses were reported in controls over inventories and accounts receivable, as well as in the financial statement preparation process.

What We Will Do About It

The FPI is working with its contractors to correct weaknesses in inventories, accounts receivables, and the financial statement reporting process.  Substantial progress has been made in these areas.  FPI will implement policies and procedures to improve risk assessment/system security management.

Milestones

Original Target Date

Current Target Date

Actual Date of Completion

1.  Obtain system security certification.

12/31/00

12/31/00

12/31/00

2.  Obtain system security accreditation.

03/01/01

03/01/01

06/30/01

3.  Modify system procedures to comply with federal financial management requirements.  Implement policies and procedures to improve risk assessment/system security management, including procedures for granting system access and providing  employee security awareness training.

03/01/01

01/31/04

 

4.  Correct weaknesses in control over inventories.

03/15/02

01/31/03

12/13/02

5.  Correct weaknesses in control over accounts receivable.

03/15/02

01/31/03

12/13/02

6.  Refine financial statement reporting process.

03/15/02

01/31/03

12/13/02

How We Will Know It Is Fixed

Minimal errors will be found in accounting processing, recording, and reporting.  FPI has received system security certification and accreditation.  Management's evaluation of this issue will be verified by the FY 2002 financial statement audit.