Our objective was to assess the controls over
U.S. Military Academy, West Point (West Point)
and the West Point Museum monetary and
nonmonetary gift processes for FY 2012 and
FY 2013. Specifically, we reviewed controls
for accepting, recording, reporting, and
disbursing West Point monetary gifts. We also
reviewed controls for accepting, recording,
reporting, and use of selected West Point
West Point and Museum controls for
accepting monetary and nonmonetary gifts
and recording monetary gifts were generally
effective; however, the controls for recording
nonmonetary gifts, reporting monetary
and nonmonetary gifts, and disbursing
monetary gifts were not effective. Specifically,
West Point did not:
- record $3.9 million of the $6.1 million of real and personal nonmonetary gifted property on the property books.
- report $8.6 million of the $26.2 million received in monetary and nonmonetary gifts on Army’s financial statements.
Museum personnel did not record the appraised
or acquisition amounts for $132,114 in
nonmonetary gifts into the Army Museum
Information System. These conditions
occurred because West Point did not have
policies and procedures in place to ensure
gifts were recorded as required by Army
regulations and did not use the General Fund
Enterprise Business System, to record gifts
received or expensed. As a result, West Point
property books are not complete, and asset
amounts on the balance sheet are misstated.
In addition, West Point used a commercial checking account
instead of the General Fund Enterprise Business System to
manage and disburse funds and appointed 108 disbursing
officers without proper authority. These conditions occurred
because West Point did not have approval to operate a
disbursing office and did not appoint disbursing officers in
accordance with the DoD Financial Management Regulation.
As a result, disbursing officers made unauthorized gift fund
disbursements for which the Army had no oversight, leaving
the Army susceptible to improper payments, fraud, waste,
Furthermore, the Army had statutory authority to accept
17 houses as “gifts-in-kind” totaling $7.7 million. However,
Army regulations for these types of gifts did not address
requirements for insurance, maintenance, and liability
before the acceptance of the gift or after its conversion to
Government property. Without a formal policy in place, the
Army could be held liable for unanticipated expenses for these
gifts, including destruction, defective materials, and poor
workmanship, without any available recourse.
We provided recommendations to the Secretary of the
Army; the Chief of Staff of the Army; the Assistant Secretary
of the Army (Financial Management and Comptroller);
the Administrative Assistant to the Secretary of the
Army; the Deputy Chief of Staff, G-1; the Superintendent,
U.S. Military Academy, West Point; and the Director, Center
of Military History.
The Army responses generally addressed the specifics
of the recommendations; however, the Superintendent,
U.S. Military Academy, West Point comments on
Recommendation A.2.a only partially addressed the specifics
of the recommendation. Therefore, we request additional
comments on Recommendation A.2.a by February 17, 2015.
This report is a result of Project No. D2014-D000FE-0097.000.