JULY 6, 2012 — In August 2009, the GAO (U.S. Government Accountability Office) issued a report that identified numerous deficiencies in the internal control activities of the U.S. Merchant Marine Academy, Kings Point, N.Y. and weaknesses in its overall internal control environment that resulted in "numerous instances of improper and questionable sources and uses of funds by the academy and its affiliated organizations."
A new GAO report issued today finds the academy has made progress in improving its internal control, but has not yet fully addressed one key recommendation related to fundamental weaknesses in its overall internal control system.
GAO says that while the academy has appointed an Internal Control Officer responsible for coordinating reviews of internal controls, it has not yet established a comprehensive risk-based internal control system to ensure effective and efficient operations, reliable financial reporting, and compliance with laws and regulations, including a monitoring system to help ensure that control deficiencies are proactively identified and promptly corrected.
GAO says that Maritime Administration (MARAD) officials state that their strategy has been to focus on the deficiencies that could be readily resolved. As of September 30, 2011, Academy and MARAD officials had addressed 32 of the other 46 prior recommendations regarding control activity deficiencies.
Importantly, for many of the specific control-related recommendations that remain open, the academy and MARAD have not yet identified the cause of the related internal control deficiencies, a critical step for designing effective controls.
GAO says that the academy and MARAD have taken steps to improve Capital Improvement Program (CIP) oversight. But the academy does not yet have an up-to-date, comprehensive plan for capital improvements to provide a basis for oversight. Specifically, it does not have a capital improvement plan that identifies long-term capital improvement needs aligned with the Academy’s strategic objectives, reliable cost estimates for planned improvements, and a phased implementation approach for prioritizing capital improvement needs.
Read the GAO report HERE