GAO: Banks need stricter access controls

Federal Reserve Banks need to fix information security control weaknesses that the Government Accountability Office discovered during an audit of debt securities services, but none of them pose a significant risk to the banks' financial systems, GAO has reported. GAO reviewed the banks’ internal controls for financial reporting related to federal debt securities services for fiscal 2007 when its auditors identified the security weaknesses, Gary Engel, director of GAO’s financial management and assurance issues, said in a report released June 16. The control weaknesses were in general security program planning and management, access control, and system software, Engel said. Many Federal Reserve Banks issue, service and redeem Treasury securities and also handle the related fund transfers. The banks use a number of financial systems, which the Federal Reserve IT Computing Centers maintain and operate, to process debt-related transactions, Engel noted. The Board of Governors of the Federal Reserve System has already taken action or will shortly on GAO’s 14 recommendations, he said. The Federal Reserve Banks implemented physical security measures and a program of monitoring user and system activity, while the Bureau of the Public Debt improved management and reconciliation controls that are designed to detect potential irregularities in financial data or transactions, GAO said.