Governmentwide Governmentwide AccountingAccounting

Presenter: Jim Sturgill

May 8, 2007

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Presentation Summary

Where we are…

The future…

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Where we are…

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The Financial Report of the United States Government (FR)

Provides the President, Congress, and the American people with a comprehensive view of the Federal Government’s financial results

Discusses important financial issues and significant conditions that may affect future operations

Presents the financial condition of the Federal Government using the accrual basis of accounting

No opinion rendered for the 10th consecutive year from the Government Accountability Office (GAO)

GAO Findings

Three major impediments continue to

prevent GAO from issuing an opinion:

Serious financial management problems

at the Department of Defense (DoD)Inability to adequately reconcile

intragovernmental activity and balancesIneffective process for preparing the FR

DoD Financial Management

Problems Financial statements were not auditable

Efforts for improvementContinually to improve its system to

correct its financial reporting problems

and produce auditable statementsBusiness Management Modernization

Program

Efforts to Reconcile Intragovernmental Activity and

Balances

ProblemIntragovernmental Out-of-Balance Condition

Efforts for improvementBusiness Rules for Intragovernmental

ActivitiesUse of Central Accounting DataInspector General Agreed Upon Procedures

(IG AUP)

8

0

50,000

100,000

150,000

200,000

250,000

2006 2005 2004

$9

9,5

95

Intragovernmental Out-of-Balance Condition

All Categories

(In Millions)

$9

7,6

30

**Excludes agency activity that reported the General Fund as its trading partner, intradept activity, and benefits contributions activity with trading partners other than OPM & DOL

$2

47

,12

9

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Business Rules for Intragovernmental Activities

Collaborative effort between the CFO Council, Treasury, and OMB

Provide accounting guidance on the exchange of goods and services, transfers between Federal agencies, and for recording and reconciling nonexchange transactions with fiduciary agencies (BPD, FFB, DOL, & OPM) by OMB and Treasury

Established the need for the Dispute Resolution Committee to facilitate the resolution of accounting, reporting timing differences or contractual disputes between Federal entities

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Use of Central Accounting Data (UCAD)

Purpose To Improve interagency eliminations by providing

agencies a tool to reconcile transactions and balances directly to Treasury Central Accounting data

Benefit Addresses the reporting inconsistencies by matching

with the Treasury Central Accounting data (one-to-one relationship from Central Accounting System to year-end financial reporting)

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UCAD (cont’d)

Authoritative Source FMS’ central accounting system acts as the “bank” for

federal agencies. It is the authoritative source for:

FBWT CIHO Investments Borrowing Activity Net Outlays

Non-Expenditure Transfers

Appropriation Warrants

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IG AUP

Purpose Supplements the audit of intragovernmental activity

and balances

Benefit Supports the process of eliminating intragovernmental

activity and balances to the FR

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IG AUP (cont’d)

Based upon results in FY 2006, agencies need to

Update departmental policies and guidelines to ensure the accuracy of the intragovernmental reporting

Resolve on-going reportable conditions

Perform and complete all of the steps of the 3rd Quarter Audit Requirements to improve interagency eliminations by providing agencies a tool to reconcile transactions and balances

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FR Preparation Process Findings

#1: Consistency with underlying information

in agencies audited financial statements

Resolution: Developed the Closing Package

methodology, which is a set of special purpose financial statements used to prepare the FR

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FR Preparation Process Findings (cont’d)

#2: Address disclosures required by GAAP

Resolution: Modified the TFM to collect the disclosures

required by GAAP

in FY 2006:Earmarked Funds – Reporting requirement per

FASAB SFFAS No. 27Social Insurance – Reporting requirement per

FASAB SFFAS No. 25, 26, & 28

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FR Preparation Process Findings (cont’d)

#3: Define reporting entity

Resolution: Developed the procedures to identify the

entities to required to be consolidated into the FR

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FR Preparation Process Findings (cont’d)

#4: Internal controls

Resolution: Developed and documented policies and

procedures Instituted effective management reviews

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FR Preparation Process Findings (cont’d)

#5: Reconciliation Statements

Resolution: Develop a process to fully identify and

report the items needed to reconcile the operating results to the budget results

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The Future …

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Fiduciary Funds Disclosure

Include assets collected/received by agencies but that belong, by law, to non-federal entities

FASAB requires:These assets and related liabilities will

not be in agencies’ balance sheets, These activities must be disclosed

Effective in FY 2009

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GWA Modernization Project Objectives

Change the fundamental reconciliation process

Streamline agency access and eliminate the redundant reporting process

Provide a central location for accounting data

Replace the current legacy Central Accounting System (STAR)

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Cash Accounting and Reporting Modernization Activity

Internal system to define a strategy for General Ledger posting logic and to establish the logic and database relationships necessary to update General Ledger (GL) transactions

To Implement and integrate the United States Standard General Ledger to record cash and other monetary assets and liabilities of the Federal Government with the existing GWA database

CARMA

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Financial Information Reporting Standardization

Replaces FACTS I and II, IFCS, IRAS, and part of TROR

Provides a mechanism to implement the tie-points on a government-wide scale

Tentatively scheduled for 3rd quarter FY 2011

FIRST

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Impact on the reconciliation statements

Collect both the budgetary and proprietary SGLs

Apply edits at Treasury Account Symbol level based on SGL tie points

Provide feedback to agencies

FIRST (cont’d)