The government pays about a fourth of its bills too early and another fourth too late, thus forfeiting hundreds of millions of dollars in either interest income or late-payment penalties, the General Accounting Office said Wednesday.
The inability of federal agencies to pay their bills in a timely fashion is just one example of how the government is losing billions of dollars through poor accounting systems, the congressional investigative agency said.
About 30% of 1,515 weaknesses in accounting, procurement, debt collection and financial and property management identified by 18 government departments or agencies since 1983 remain uncorrected, the GAO report said.
Costly Early Payments
In 1986 alone, the government lost more than $350 million in interest earnings because agencies paid about 25% of their bills before they were due, the auditors said.
But progress is being made in a number of areas, according to the 50-page report, the GAO’s third on how agencies are living up to the 1982 Financial Integrity Act intended to curb fraud, waste and abuses in government.
In a previous report on the congressionally ordered reforms two years ago, the GAO singled out for criticism the White House Office of Management and Budget. It accused the budget office of allowing agencies to file financial integrity reports that omitted known specific weaknesses in accounting systems.
Budget Office Praised
In its report Wednesday, however, the GAO praised the budget office for ordering each agency to submit five-year plans on improving their financial integrity and for appointing chief financial officers to oversee the effort.
Although improvements have been made, most agencies “have a long way to go,” the GAO said.