Financial Audit
Significant Internal Control Weaknesses Remain in Preparing the Consolidated Financial Statements of the U.S. Government Gao ID: GAO-06-415 April 21, 2006For the past 9 years, since our first audit of the consolidated financial statements of the U.S. government (CFS), certain material weaknesses in internal control and in selected accounting and financial reporting practices have resulted in conditions that prevented GAO from expressing an opinion on the CFS. Specifically, GAO has reported that the U.S. government did not have adequate systems, controls, and procedures to properly prepare the CFS. Included with GAO's December 2005 disclaimer of opinion on the fiscal year 2005 CFS was its discussion of continuing weaknesses relating to the Department of the Treasury's (Treasury) preparation of the CFS. The purpose of this report is to (1) provide details of those additional weaknesses, (2) recommend improvements, and (3) describe the status of corrective actions on GAO's previous 154 recommendations.
GAO identified weaknesses during its tests of Treasury's process for preparing the fiscal year 2005 CFS. Such weaknesses in the CFS preparation process impair the U.S. government's ability to ensure that the CFS is consistent with the underlying audited agency financial statements, properly balanced, and in conformity with U.S. generally accepted accounting principles. The weaknesses GAO identified during the fiscal year 2005 CFS audit involved the following areas: (1) directly linking audited federal agency financial statements to the CFS, (2) comparability of financial statements, (3) audit assurance over certain federal agencies' closing packages, (4) internal control monitoring, (5) consolidated reporting guidance to federal agencies, (6) reconciling of intragovernmental activity and balances, and (7) various other internal control weaknesses that were identified in previous years' audits but remained in fiscal year 2005. Of the 154 recommendations GAO reported in May 2005 regarding the process for preparing the CFS, 131 remained open as of December 2, 2005, when GAO completed its fieldwork for the audit of the fiscal year 2005 CFS. However, 76 of these 131 recommendations relate to specific disclosures required under U.S. generally accepted accounting principles. Treasury has submitted a proposal to the Federal Accounting Standards Advisory Board (FASAB) seeking to amend previously issued standards and eliminate or lessen the disclosure requirements for the consolidated financial statements so that U.S. generally accepted accounting principles would no longer require certain of the information Treasury has not been reporting. Comments on the exposure draft of a proposed FASAB standard, based on the Treasury proposal, were due March 1, 2006. GAO will continue to monitor the status of corrective actions to address open recommendations during its fiscal year 2006 audit of the CFS.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-415, Financial Audit: Significant Internal Control Weaknesses Remain in Preparing the Consolidated Financial Statements of the U.S. Government
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GAO:
Report to the Secretary of the Treasury and the Director of the Office
of Management and Budget:
April 2006:
Financial Audit:
Significant Internal Control Weaknesses Remain in Preparing the
Consolidated Financial Statements of the U.S. Government:
GAO-06-415:
[End of Section]
GAO Highlights:
Highlights of GAO-06-415, a report to the Secretary of the Treasury and
the Director of the Office of Management and Budget:
Why GAO Did This Study:
For the past 9 years, since our first audit of the consolidated
financial statements of the U.S. government (CFS), certain material
weaknesses in internal control and in selected accounting and financial
reporting practices have resulted in conditions that prevented GAO from
expressing an opinion on the CFS. Specifically, GAO has reported that
the U.S. government did not have adequate systems, controls, and
procedures to properly prepare the CFS. Included with GAO‘s December
2005 disclaimer of opinion on the fiscal year 2005 CFS was its
discussion of continuing weaknesses relating to the Department of the
Treasury‘s (Treasury) preparation of the CFS. The purpose of this
report is to (1) provide details of those additional weaknesses, (2)
recommend improvements, and (3) describe the status of corrective
actions on GAO‘s previous 154 recommendations.
What GAO Found:
GAO identified weaknesses during its tests of Treasury‘s process for
preparing the fiscal year 2005 CFS. Such weaknesses in the CFS
preparation process impair the U.S. government‘s ability to ensure that
the CFS is consistent with the underlying audited agency financial
statements, properly balanced, and in conformity with U.S. generally
accepted accounting principles.
The weaknesses GAO identified during the fiscal year 2005 CFS audit
involved the following areas:
* directly linking audited federal agency financial statements to the
CFS,
* comparability of financial statements,
* audit assurance over certain federal agencies‘ closing packages,
* internal control monitoring,
* consolidated reporting guidance to federal agencies,
* reconciling of intragovernmental activity and balances, and
* various other internal control weaknesses that were identified in
previous years‘ audits but remained in fiscal year 2005 (see app. I).
Of the 154 recommendations GAO reported in May 2005 regarding the
process for preparing the CFS, 131 remained open as of December 2,
2005, when GAO completed its fieldwork for the audit of the fiscal year
2005 CFS. However, 76 of these 131 recommendations relate to specific
disclosures required under U.S. generally accepted accounting
principles. Treasury has submitted a proposal to the Federal Accounting
Standards Advisory Board (FASAB) seeking to amend previously issued
standards and eliminate or lessen the disclosure requirements for the
consolidated financial statements so that U.S. generally accepted
accounting principles would no longer require certain of the
information Treasury has not been reporting. Comments on the exposure
draft of a proposed FASAB standard, based on the Treasury proposal,
were due March 1, 2006. GAO will continue to monitor the status of
corrective actions to address open recommendations during its fiscal
year 2006 audit of the CFS.
What GAO Recommends:
GAO is making 12 new recommendations to address compilation and
reporting weaknesses identified during the fiscal year 2005 CFS audit.
The Office of Management and Budget stated that it generally agreed
with the new findings in this report. Treasury stated that it concurs
with 11 of our recommendations. For the twelfth recommendation,
Treasury offered an alternative solution that we believe should address
our concern if it is effectively implemented.
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Gary T. Engel at (202) 512-3406
or engelg@gao.gov.
Contents:
Letter:
Results in Brief:
Scope and Methodology:
Directly Linking Audited Federal Agency Financial Statements to the
CFS:
Comparability of Financial Statements:
Audit Assurance over Certain Federal Agencies' Closing Packages:
Internal Control Monitoring:
Consolidated Reporting Guidance to Federal Agencies:
Reconciling of Intragovernmental Activity and Balances:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Status of Treasury's and OMB's Progress in Addressing GAO's
Prior Year Recommendations for Preparing the CFS:
Appendix II: Comments from the Department of the Treasury:
Appendix III: GAO Contacts and Staff Acknowledgments:
Table:
Table 1: Status of Treasury's and OMB's Progress in Addressing GAO's
Prior Year Recommendations for Preparing the CFS:
[End of Section]
Letter:
April 21, 2006:
The Honorable John W. Snow:
The Secretary of the Treasury:
The Honorable Clay Johnson III:
Acting Director, Office of Management and Budget:
In our report dated December 2, 2005, we disclaimed an opinion on the
consolidated financial statements of the U.S. government (CFS) for the
fiscal years ended September 30, 2005, and 2004.[Footnote 1] For the
past 9 years, certain material weaknesses in internal control and in
selected accounting and financial reporting practices resulted in
conditions that prevented us from expressing an opinion on the CFS.
Specifically, we have reported that the federal government did not have
adequate systems, controls, and procedures to properly prepare its
consolidated financial statements. Many of these weaknesses in internal
control that contributed to our continuing disclaimers of opinion were
identified by agency financial statement auditors during their audits
of federal agencies' financial statements and were reported in detail
with recommendations to the agencies in separate reports. However, some
of the internal control weaknesses were identified during our tests of
the Department of the Treasury's (Treasury) process for preparing the
CFS.
The purpose of this report is to (1) discuss the details of the
additional weaknesses we identified during our audit of the fiscal year
2005 CFS regarding financial reporting procedures and internal control
over the process for preparing the CFS, (2) recommend improvements to
address those weaknesses, and (3) provide the status of corrective
actions on the recommendations detailed in our prior reports and listed
in appendix I. We have discussed each of the new weaknesses identified
during our fiscal year 2005 audit with your staff and have incorporated
their comments as appropriate. We also assessed Treasury's ongoing
effort to develop and implement the Governmentwide Financial Report
System (GFRS) and are providing the results of our assessment along
with our recommendations in a separate report.[Footnote 2]
Results in Brief:
We identified weaknesses in the compilation and reporting processes
during our audit of the fiscal year 2005 CFS. Such weaknesses impair
the federal government's ability to ensure that the CFS are consistent
with the underlying audited agency financial statements, balanced, and
in conformity with U.S. generally accepted accounting principles
(GAAP). Consequently, these weaknesses also contributed to our
inability to render an opinion on the CFS. Specifically, we found that:
* Treasury's process for compiling the CFS does not yet fully ensure
that financial information from federal agencies' audited financial
statements and other financial data directly link to amounts reported
in the CFS.
* Treasury lacked a process to ensure that fiscal years 2005 and 2004
consolidated financial statements and notes were comparable.
* Treasury and the Office of Management and Budget (OMB) did not have
audit assurance on closing packages received from 4 of the 35 agencies
that they have identified as significant to the CFS.
* Treasury, in coordination with OMB, had not developed policies and
procedures for monitoring internal control or provided us with adequate
documentation evidencing an executable plan of action and milestones
for short-term and long-range solutions for certain internal control
weaknesses we have previously reported regarding the process for
preparing the CFS, which may result in the findings of audits not being
properly and timely resolved and internal control weaknesses continuing
to exist.
* Treasury did not provide clear guidance to federal agencies about
certain financial information that agencies were required to provide in
the closing package and as a result agencies reported certain financial
information inconsistently, which increased the risk of incomplete and
inaccurate summarization of data in the CFS.
* As part of the intragovernmental reconciliation reporting process,
Treasury and OMB have not provided sufficiently clear guidance for
selecting the "confirmed reporting" category of the intragovernmental
reconciliation report and do not have an effective process to obtain
clarification for inconsistent explanations provided by federal
agencies in this category. Also, Treasury and OMB did not require
federal agencies' Inspectors General (IGs) to complete and report on
the results of intragovernmental agreed-upon procedures until over 2
weeks after federal agencies' audited financial statements were
required to be issued to OMB, which did not optimize their value to the
preparation of the agencies' financial statements or the CFS.
* Various other internal control weaknesses identified in previous
years' audits still existed during fiscal year 2005 (see app. I).
This report includes 12 new recommendations to address the additional
weaknesses we identified during our audit of the fiscal year 2005 CFS.
Appendix I of this report reflects the status of actions taken as of
December 2, 2005, the date of completion of our fieldwork on our audit
of the fiscal year 2005 CFS, to address the recommendations from our
previous reports. Our work showed that 131 recommendations contained in
our prior reports remained open and 23 were closed. Of the 131 open
recommendations, 76 relate to specific disclosures required under GAAP.
Treasury has submitted a proposal to the Federal Accounting Standards
Advisory Board (FASAB) seeking to amend previously issued standards and
eliminate or lessen the disclosure requirements for the consolidated
financial statements so that GAAP would no longer require certain of
the information Treasury has not been reporting. Comments on the
exposure draft of a proposed FASAB standard, based on the Treasury
proposal, were due March 1, 2006. Treasury stated that it is waiting
for FASAB approval and issuance of this proposed standard to determine
the disclosures that will be required in future consolidated financial
statements. We will continue to determine the status of corrective
actions on our open recommendations during our fiscal year 2006 audit
of the CFS.
In commenting on a draft of this report, OMB stated that it generally
agreed with the new findings and related recommendations in this
report. Treasury stated that it concurs with all of the new
recommendations in this report except for the recommendation to
accelerate the due date for IGs to complete the agreed-upon procedures
on the intragovernmental activity and balances. For fiscal year 2006,
Treasury does not plan to accelerate the due date for completing these
intragovernmental agreed-upon procedures. However, Treasury stated that
for fiscal year 2006, it plans to expand the audit coverage for
intragovernmental activity and balances by requiring the IGs to opine
on such information in their audit of the closing package, which is due
to Treasury by November 17, 2006. This is an appropriate alternative
solution to accelerating the due date for the IGs to complete the
intragovernmental agreed-upon procedures. We have modified our
recommendation to also include developing an alternative solution to
address this finding.
Scope and Methodology:
As part of our audit of the fiscal years 2005 and 2004 CFS, we
evaluated Treasury's financial reporting procedures and related
internal control, and we followed up on the status of Treasury and OMB
corrective actions to address open recommendations regarding the
process for preparing the CFS that were in our prior years' reports. In
our disclaimer of opinion on the fiscal year 2005 CFS, which is
included in the fiscal year 2005 Financial Report of the United States
Government, we discussed material deficiencies relating to Treasury's
preparation of the CFS. These material deficiencies contributed to our
disclaimer of opinion on the CFS and also constitute a material
weakness in internal control, which contributed to our adverse opinion
on internal control. We performed sufficient audit procedures to
provide the disclaimer of opinion in accordance with U.S. generally
accepted government auditing standards. This report provides the
details of the additional weaknesses we identified in performing our
fiscal year 2005 audit procedures related to the process for preparing
the CFS and our recommendations to correct those weaknesses, as well as
the status of corrective actions taken by Treasury and OMB to address
recommendations in our prior reports.
We requested comments on a draft of this report from the Director of
OMB and the Secretary of the Treasury or their designees. OMB provided
oral comments, which are discussed in the Agency Comments and Our
Evaluation section of this report. Treasury's comments are reprinted in
appendix II and are also discussed in the Agency Comments and Our
Evaluation section.
Directly Linking Audited Federal Agency Financial Statements to the
CFS:
As discussed in our fiscal year 2005 audit report, fiscal year 2005 was
the second year that Treasury used GFRS to collect agency financial
statement information taken directly from federal agencies' audited
financial statements. The goal of GFRS is to be able to directly link
information from federal agencies' audited financial statements to
amounts reported in the consolidated financial statements and resolve
many of the weaknesses we previously identified in the process for
preparing the consolidated financial statements, a goal we strongly
support. For both the fiscal year 2005 and 2004 reporting processes,
GFRS was able to capture agency financial information submitted to
Treasury, but GFRS is still under development and not at the stage that
it could be used to fully compile the consolidated financial statements
from the information captured.
As we have reported in the past, Treasury's process for compiling the
CFS does not yet fully ensure that financial information from federal
agencies' audited financial statements and other financial data
directly link to amounts reported in the CFS. In our fiscal year 2005
audit report, we noted that Treasury made progress in demonstrating
amounts in the Balance Sheet and the Statement of Net Cost were
consistent with federal agencies' audited financial statements prior to
eliminating intragovernmental activity and balances. However, about 25
percent of the significant[Footnote 3] federal agencies' auditors
reported internal control weaknesses related to the processes the
agencies perform to provide financial statement information to Treasury
for preparing the consolidated financial statements.
In our prior report,[Footnote 4] we recommended that as Treasury
continues to design and further implement its new process for compiling
the CFS, the Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
modify Treasury's closing package to (1) require federal agencies to
directly link their audited financial statement notes to the CFS notes
and (2) provide the necessary information to demonstrate that all of
the five principal consolidated financial statements are consistent
with the underlying information in federal agencies' audited financial
statements and other financial data.
Progress was made during fiscal year 2005. Treasury has been continuing
to design and further implement its new process for compiling the CFS
with the development of GFRS. We continue, though, to be concerned that
the disciplined processes necessary to reduce risks to acceptable
levels have not yet been effectively implemented. For example, Treasury
moved forward with the project before ensuring that certain key
elements, such as a concept of operations, were developed or even
defining and documenting the financial reporting weaknesses that were
expected to be addressed by the system. Not effectively implementing
such disciplined processes creates an unnecessary risk that the system
will cost more and take longer than expected to deploy, while not
providing all of the intended system functionality. The implementation
of any major system, such as GFRS, is not without risk; however,
organizations that follow and effectively implement accepted best
practices in systems development and implementation have been shown to
reduce these risks to acceptable levels. A more detailed discussion of
our assessment of Treasury's ongoing effort to develop and implement
GFRS, along with recommendations to reduce the risk noted above, can be
found in a separate report.[Footnote 5]
Comparability of Financial Statements:
The CFS includes 2 years of financial information. Because comparative
financial statements are intended to furnish useful data about the
differences in activity and balances between the 2 years shown,
consistency in how amounts are reported for the 2 years is a major
factor in creating comparability. We found that Treasury lacked a
process to ensure that consolidated financial statements and notes for
fiscal years 2005 and 2004 were consistently reported and therefore
comparable. During fiscal year 2005, Treasury requested that agencies
resubmit fiscal year 2004 financial information along with their fiscal
year 2005 financial information. Some agencies resubmitted fiscal year
2004 amounts in fiscal year 2005 that differed from what Treasury
published in fiscal year 2004. Also, certain information reported for
fiscal 2004 may have required reclassification to be comparable to the
fiscal year 2005 amounts. Treasury did not analyze the fiscal year 2004
information submitted in fiscal year 2005 or reclassify amounts within
various financial statement line items and notes to achieve
comparability and chose to continue to report what was published for
fiscal year 2004. For example, the Reconciliations of Net Operating
Cost and Unified Budget Deficit showed $47.8 billion and $.2 billion
for property, plant, and equipment disposals and revaluations for
fiscal years 2005 and 2004, respectively. However, based on the audited
financial information provided by agencies to Treasury in GFRS in
fiscal year 2005, the fiscal year 2004 amount should be $25.4 billion,
rather than $.2 billion. The difference should have been reclassified
from the Net Amount of All Other Differences line item on the
Reconciliations of Net Operating Cost and Unified Budget Deficit.
Recommendation for Executive Action:
We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary to develop a process to help ensure that, for each
reporting year, the 2 years of consolidated financial statements and
note information presented are consistently and comparably reported, in
all material respects.
Audit Assurance over Certain Federal Agencies' Closing Packages:
Treasury and OMB did not require closing packages from 4 of the 35
verifying agencies to be audited. Specifically, the Treasury Financial
Manual (TFM) states that the Inspector General or a contracted
independent public accountant for each federal verifying agency--except
those agencies whose fiscal year ends on a date other than September
30--must opine on the closing package data entered by the Chief
Financial Officer into GFRS. Because of these year-end differences, the
TFM does not require the Federal Deposit Insurance Corporation's Funds,
National Credit Union Administration, and Farm Credit System Insurance
Corporation--all of which have a year end other than September 30--to
have their closing package data be audited. In addition, for fiscal
years 2004 and 2005, OMB waived the closing package audit requirement
for the Tennessee Valley Authority (TVA), which does have a September
30 fiscal year end.[Footnote 6] In these four cases, Treasury and OMB
did not develop any alternative solutions that include the requirement
for adequate audit procedures to be performed over significant
information included in the CFS. As a result, unaudited September 30
information was included in the CFS for 4 agencies that Treasury and
OMB consider to be significant. Treasury, therefore, has less assurance
that the information included in the CFS for these agencies is fairly
stated and directly links to the agencies' audited financial
statements.
Recommendation for Executive Action:
We recommend that the Director of OMB direct the Controller of the
Office of Federal Financial Management, in coordination with the
Treasury Fiscal Assistant Secretary, to develop an alternative solution
for obtaining audit assurance related to the Federal Deposit Insurance
Corporation's Funds, National Credit Union Administration, and Farm
Credit System Insurance Corporation, which includes the requirement for
adequate audit procedures to be performed over significant information
included in the CFS for these agencies.
We also recommend that the Director of OMB direct the Controller of the
Office of Federal Financial Management to consider not waiving the
closing package audit requirement for any verifying agency in future
years, such as TVA.
Internal Control Monitoring:
GAO's Standards for Internal Control in the Federal Government states
that internal control is a major part of managing an organization and
should include monitoring.[Footnote 7] Monitoring of internal control
should include assessing the quality of performance over time and
implementing policies and procedures for the timely follow-up and
resolution of findings of audits and other reviews. The goal of these
policies and procedures is to ensure that managers (1) promptly
evaluate findings from audits and other reviews, including those
showing deficiencies and recommendations reported by auditors and
others who evaluate agencies' operations; (2) determine proper actions
in response to findings and recommendations from audits and reviews;
and (3) complete, within established time frames, all actions that
correct or otherwise resolve the matters brought to management's
attention. However, Treasury, in coordination with OMB, had not
developed policies and procedures for monitoring internal control or
provided us with adequate documentation evidencing an executable plan
of action and milestones for short-term and long-range solutions for
certain internal control weaknesses we have previously reported
regarding the process for preparing the CFS. Without effective
monitoring of internal control, findings of audits may not be resolved
timely and properly.
Recommendation for Executive Action:
We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
develop:
* policies and procedures for monitoring internal control to help
ensure that (1) audit findings are promptly evaluated, (2) proper
actions are determined in response to audit findings and
recommendations such as a documented plan of action with milestones for
short-term and long-range solutions, and (3) all actions that correct
or otherwise resolve the audit findings are completed within
established time frames; and:
* an executable plan of action and milestones for short-term and long-
range solutions for certain internal control weaknesses we have
previously reported regarding the process for preparing the CFS.
Consolidated Reporting Guidance to Federal Agencies:
The TFM prescribes how federal agencies are to submit financial
information to Treasury to be used in compiling the CFS. While our
planned audit procedures were not to review the entire TFM to determine
if its guidance to agencies was clear, we found several areas where the
TFM did not give clear guidance to federal agencies about the
information that they were required to provide to Treasury, GAO, and
OMB. Specifically, we found that the TFM did not give clear guidance
for (1) reporting note disclosures for restricted cash, (2) reporting
note disclosures for accounts payable, (3) preparing summaries of
unadjusted misstatements to be included with federal agencies' closing
package management representation letters, and (4) certain information
to be reported by OPM to Treasury that is used to allocate costs on the
Statement of Net Cost. For example, the TFM defines restricted cash as
"amounts of cash that an entity holds and does not have authority to
spend" and cash that is not restricted as "amounts of cash that an
entity holds for which it has the authority to spend." Although these
definitions are accurate at the agency level, these definitions are not
accurate at the CFS level. For example, an agency may hold cash that it
does not have the authority to spend because of a certain law or
regulation, but when this cash is consolidated at the governmentwide
level, the federal government as a whole may have the authority to
spend the cash. Therefore, this cash would appropriately be restricted
at the agency level, but not at the governmentwide level. As a result
of the unclear guidance, agencies reported certain financial
information inconsistently. This increases the risk of incomplete and
inaccurate summarization of data in the CFS.
Recommendations for Executive Action:
We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary to ensure that the TFM and any other guidance to
federal agencies provide clear instructions for providing reliable data
to Treasury in the following specific areas:
* restricted cash,
* accounts payable,
* summaries of unadjusted misstatements, and:
* certain information reported by OPM that is used to allocate costs on
the Statement of Net Cost.
Reconciling of Intragovernmental Activity and Balances:
OMB and Treasury require federal agencies to reconcile selected
intragovernmental activity and balances with their "trading
partners"[Footnote 8] and report on the extent and results of the
reconciliation efforts to Treasury. As part of the reconciliation
report, federal agencies were required to categorize any material
differences, as determined by Treasury, with their trading partners at
fiscal year end within five categories: (1) confirmed reporting; (2)
accounting methodology differences; (3) accounting or reporting errors;
(4) timing difference--current year, timing difference--prior year; and
(5) unknown/unreconciled. According to Treasury, confirmed reporting,
the first category listed above, is intended to indicate that the
agency has verified that the amount it has reported is accurate. The
TFM requires a federal agency that selects the category "confirmed
reporting" to provide a detailed explanation to support its response.
However, we found that in many cases where a federal agency selected
the "confirmed reporting" category, the agency did not provide detailed
explanations. We also found cases where both trading partners selected
"confirmed reporting" for the same material difference and the agencies
did not provide detailed explanations for how both trading partners'
amounts could be accurate when the material difference remained. When
this situation occurs, we found that Treasury and OMB do not have an
effective process to obtain clarification for inconsistent explanations
provided and that agencies may be unclear as to when to select this
category. Incorrect use of the confirmed reporting category and lack of
detailed explanations may hinder efforts to identify and correct
problems that federal agencies are experiencing in reconciling with
their trading partners.
Further, Treasury received the closing packages that contained each
agency's intragovernmental activity and balances amounts on November
18, 2005, and provided agencies with reconciliation reports that showed
material differences with their trading partners on November 21, 2005.
Treasury and OMB also require federal agencies' IGs to annually perform
agreed-upon procedures on the intragovernmental activity and balances
reported in the closing package. For fiscal year 2005, Treasury
required agency IGs for the 35 verifying agencies to complete and
report on these agreed-upon procedures by December 2, 2005. The timing
of these procedures did not optimize their value because (1) this
reporting date is over 2 weeks after federal agencies' audited
financial statements were required to be issued to OMB, and (2) did not
allow Treasury sufficient time to review the results and make any
necessary adjustments to the CFS.
Recommendation for Executive Action:
We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary, working in coordination with the Controller of
OMB, to:
* provide clear guidance to federal agencies as to when the "confirmed
reporting" category in the intragovernmental reconciliation report
should be selected,
* develop an effective process for obtaining clarification from federal
agencies for inconsistent or incomplete explanations provided in all
material difference categories, and:
* accelerate the due date for IGs to complete and report on the results
of agreed-upon procedures on the intragovernmental activity and
balances or develop an alternative solution that would allow Treasury
sufficient time to review the results and make any necessary
adjustments to the CFS.
Agency Comments and Our Evaluation:
OMB Comments:
In oral comments on a draft of this report, OMB stated that it
generally agreed with the new findings and related recommendations in
this report. In addition, OMB provided some technical comments, which
we have incorporated as appropriate.
Treasury Comments:
In written comments on a draft of this report, which are reprinted in
appendix II, Treasury stated that it agrees that the preparation
process still needs improvement and that it is addressing many of the
recommendations in our previous reports. Treasury also stated that it
concurs with all of the new recommendations in this report except for
the recommendation to accelerate the due date for IGs to complete the
agreed-upon procedures on the intragovernmental activity and balances.
For fiscal year 2006, Treasury does not plan to accelerate the due date
for completing these intragovernmental agreed-upon procedures. However,
Treasury stated that for fiscal year 2006, it plans to expand the audit
coverage for intragovernmental activity and balances by requiring the
IGs to opine on such information in their audit of the closing package,
which is due to Treasury by November 17, 2006. This is an appropriate
alternative solution to accelerating the due date for the IGs to
complete the intragovernmental agreed-upon procedures. We have modified
our recommendation to also include developing an alternative solution
to address this finding.
This report contains recommendations to the Secretary of the Treasury
and the Director of OMB. The head of a federal agency is required by 31
U.S.C. 720 to submit a written statement on actions taken on these
recommendations. You should submit your statement to the Senate
Committee on Homeland Security and Governmental Affairs and the House
Committee on Government Reform within 60 days of the date of this
report. A written statement must also be sent to the House and Senate
Committees on Appropriations with the agency's first request for
appropriations made more than 60 days after the date of the report.
We are sending copies of this report to the Chairmen and Ranking
Minority Members of the Senate Committee on Homeland Security and
Governmental Affairs; the Subcommittee on Federal Financial Management,
Government Information, and International Security, Senate Committee on
Homeland Security and Governmental Affairs; the House Committee on
Government Reform; and the Subcommittee on Government Management,
Finance, and Accountability, House Committee on Government Reform. In
addition, we are sending copies to the Fiscal Assistant Secretary of
the Treasury and the Deputy Director for Management of OMB. Copies will
be made available to others upon request. This report is also available
at no charge on GAO's Web site at [Hyperlink, http://www.gao.gov].
We acknowledge and appreciate the cooperation and assistance provided
by Treasury and OMB during our audit. If you or your staff have any
questions or wish to discuss this report, please contact Jeffrey C.
Steinhoff, Managing Director, Financial Management and Assurance, on
(202) 512-2600, or Gary T. Engel, Director, Financial Management and
Assurance, on (202) 512-3406. Staff contacts and other key contributors
to this report are listed in appendix II.
Signed By:
David M. Walker:
Comptroller General of the United States:
[End of section]
Appendix I: Status of Treasury's and OMB's Progress in Addressing GAO's
Prior Year Recommendations for Preparing the CFS:
This appendix includes open recommendations from three of our prior
reports: Financial Audit: Process for Preparing the Consolidated
Financial Statements of the U.S. Government Needs Improvement, GAO-04-
45 (Washington, D.C.: Oct. 30, 2003); Financial Audit: Process for
Preparing the Consolidated Financial Statements of the U.S. Government
Needs Further Improvement, GAO-04-866 (Washington, D.C.: Sept. 10,
2004); and Financial Audit: Process for Preparing the Consolidated
Financial Statements of the U.S. Government Continues to Need
Improvement, GAO-05-407 (Washington, D.C.: May 4, 2005).
Recommendations that were closed in prior reports are not included in
this appendix. This appendix includes the status of the recommendations
according to the Department of the Treasury (Treasury) and the Office
of Management and Budget (OMB) as well as our own assessments.
Explanations are included in the status of recommendations per GAO when
Treasury and OMB disagreed with our recommendation.
Of the 154 recommendations regarding the process for preparing the CFS
that are listed in this appendix, 131 remained open as of December 2,
2005, the end of GAO's fieldwork for the audit of the fiscal year 2005
CFS. Of these 131 recommendations, 76 relate to specific disclosures
required under U.S. generally accepted accounting principles (GAAP).
Treasury has submitted a proposal to the Federal Accounting Standards
Advisory Board (FASAB) seeking to amend previously issued standards and
eliminate or lessen the disclosure requirements for the consolidated
financial statements so that GAAP would no longer require certain of
the information Treasury has not been reporting. Comments on the
exposure draft of a proposed FASAB standard, based on the Treasury
proposal, are due March 1, 2006. Treasury stated that it is waiting for
FASAB approval and issuance of this proposed standard to determine the
disclosures that will be required in future consolidated financial
statements.
Table 1:
Status of Treasury's and OMB's Progress in Addressing GAO's Prior Year
Recommendations for Preparing the CFS:
GAO-04-45 (results of the fiscal year 2002 audit). Count: 1; No. 02-2:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in connection with Treasury's current compilation
process and the development of Treasury's new compilation system and
process, to develop and fully document policies and procedures for the
CFS preparation process so that they are proper, complete, and
consistently applied by staff members;
Status of recommendation: Per Treasury and OMB:
Treasury further revised and documented all of its major policies and
procedures for the fiscal year 2005 compilation process to ensure the
propriety, accuracy, and consistency of application.
Status of recommendation: Per GAO: Open. Treasury needs to further
document its policies and procedures.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 2; No. 02-4:
Recommendation: As Treasury is designing its new financial statement
compilation process to begin with the fiscal year 2004 CFS, the
Secretary of the Treasury should direct the Fiscal Assistant Secretary,
in coordination with the Controller of OMB, to develop reconciliation
procedures that will aid in understanding and controlling the net
position balance as well as eliminate the plugs previously associated
with compiling the CFS.
Status of recommendation: Per Treasury and OMB:
To eliminate or explain adjustments (plugs) to net position, Treasury
designed a process to eliminate, at the consolidated level,
intragovernmental activity and balances using formal balanced
accounting entries and developed a model to analyze unreconciled
transactions that affected net position (i.e., contributed to the
plug). Based on fiscal year 2005 data, the model disclosed the
magnitude of the intragovernmental elimination differences, by
reciprocal category that contributed to the net position elimination
plug. In fiscal year 2005, Treasury also started an analysis to
establish the reciprocal category for the General Fund.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 3; No. 02-5:
Recommendation: As Treasury is designing its new financial statement
compilation process to begin with the fiscal year 2004 CFS, the
Secretary of the Treasury should direct the Fiscal Assistant Secretary,
in coordination with the Controller of OMB, to use balanced accounting
entries to account for the change in net position rather than simple
subtraction of liabilities from assets.
Status of recommendation: Per Treasury and OMB: See status of
recommendation; No. 02-4; Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 4; No. 02-6:
Recommendation:
As OMB continues to make strides to address issues related to
intragovernmental transactions, the Director of OMB should direct the
Controller of OMB to develop policies and procedures that document how
OMB will enforce the business rules provided in OMB Memorandum M-03-01,
Business Rules for Intragovernmental Transactions.
Status of recommendation: Per Treasury and OMB: OMB, Treasury, and the
Chief Financial Officers' Council are reviewing
the business rules and are also performing additional analysis on
several groupings of intragovernmental transactions. Upon the
conclusion of the review and analysis, a determination will be made how
best to proceed with and enforce the business rules.
Status of recommendation: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 5; No.02-7:
Recommendation: As OMB continues to make strides to address issues
related to intragovernmental transactions, the Director of OMB should
direct the Controller of OMB to require that significant differences
noted between business partners be resolved and the resolution be
documented.
Status of recommendation: Per Treasury and OMB:
OMB will continue to work with individual agencies to resolve
imbalances that are referred to OMB on a case-by- case basis. As part
of OMB's standard practice, resolutions reached will be communicated to
all parties.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 6; No. 02-8:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
implement the plan to require federal agencies to report in Treasury's
new closing package, beginning with fiscal year 2004, intragovernmental
activity and balances by trading partner and to indicate amounts that
have not been reconciled with trading partners and amounts, if any,
that are in dispute.
Status of recommendation: Per Treasury and OMB:
Beginning in fiscal year 2004, Treasury has continued to identify
material differences on a quarterly basis and work with OMB and the
agencies to resolve differences. Treasury has provided and discussed
with OMB a list of items in dispute. Treasury is working with the
agencies to resolve these differences. Also, the Chief Financial
Officers Council Intragovernmental Subcommittee has begun efforts to
identify and resolve or mitigate issues or practices that result in
significant differences.
Status of recommendation: Closed.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 7; No. 02-9:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
design procedures that will account for the difference in
intragovernmental assets and liabilities throughout the compilation
process by means of formal consolidating and elimination accounting
entries.
Status of recommendation: Per Treasury and OMB:
See status of recommendation; No. 02-4.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 8; No. 02-
10:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
develop solutions for intragovernmental activity and balance issues
relating to federal agencies' accounting, reconciling, and reporting in
areas other than those OMB now requires be reconciled, primarily areas
relating to appropriations.
Status of recommendation: Per Treasury and OMB:
See status of recommendation; No. 02-4.
Status of recommendation: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 9; No. 02-
11:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
reconcile the change in intragovernmental assets and liabilities for
the fiscal year, including the amount and nature of all changes in
intragovernmental assets or liabilities not attributable to cost and
revenue activity recognized during the fiscal year. Examples of these
differences would include capitalized purchases, such as inventory or
equipment, and deferred revenue.
Status of recommendation: Per Treasury and OMB:
See status of recommendation; No. 02-4.
Status of recommendation: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 10; No. 02-
12:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to develop and implement a process that adequately
identifies and reports items needed to reconcile net operating cost and
unified budget surplus (or deficit). Treasury should report "net
unreconciled differences" included in the net operating results line
item as a separate reconciling activity in the reconciliation
statement.
Status of recommendation: Per Treasury and OMB:
Treasury disagrees with this recommendation. Treasury's position is
that the unknown nature of the plug argues for placement in net
position, not net cost. Treasury also does not believe that these
unreconciled transactions affecting the change in net position are also
differences between the two (accrual and budget) bases of accounting
being reconciled in this statement. Therefore, the "net unreconciled
differences" plug should not be included as a separate reconciling item
on this statement.
Status of recommendation: Per GAO: Open. Treasury currently reports on
the Statement of Operations and Changes in Net Position the plug as
part of net operating cost, not as a separate component of net
position. In addition, the reconciliation statement begins with the net
operating cost amount and ends with the budget deficit amount. As such,
unless the plug is also part of the unified budget deficit, then the
plug amount should be included as a reconciling item on the
reconciliation statement.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 11; No. 02-
13:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to develop and implement a process that adequately
identifies and reports items needed to reconcile net operating cost and
unified budget surplus (or deficit). Treasury should develop policies
and procedures to ensure completeness of reporting and document how all
the applicable components reported in the other consolidated financial
statements (and related note disclosures included in the CFS) were
properly reflected in the reconciliation statement.
Status of recommendation: Per Treasury and OMB:
Treasury will continue to improve the completeness and consistency of
the information in this reconciliation statement and will continue to
resolve significant inconsistencies, if any, to the applicable and
related components reported in the other basic financial statements,
and in the related note disclosures, included in the CFS.
Status of recommendation: Open.
GAO-04-45 (results of the fiscal year 2002 audit). Count: 12; No. 02-
14:
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to develop and implement a process that adequately
identifies and reports items needed to reconcile net operating cost and
unified budget surplus (or deficit). Treasury should establish
reporting materiality thresholds for determining which agency financial
statement activities to collect and report at the governmentwide level
to assist in ensuring that the reconciliation statement is useful and
conveys meaningful information.
Status of recommendation: Per Treasury and OMB:
Treasury communicated its disagreement with GAO on the need to report
items at a lower level of detail. However, Treasury will consider the
need for establishing a materiality threshold related to this statement
as part of the overall process to eventually eliminate the "net amount
of all other differences (plug)" included in this statement.
Status of recommendation: Per GAO: Open. Treasury disagrees with all of
our recommendations regarding the Statement of Changes in Cash Balance
from Unified Budget and Other Activities and the Reconciliations of Net
Operating Cost and Unified Budget Deficit even though these statements
include some amounts that Treasury cannot explain or fully support or
for which Treasury cannot demonstrate that the amounts clearly link to
agencies' audited financial statements. Treasury has not developed any
alternative solutions. We continue to believe that implementation of
our recommendations would result in the most efficient and effective
manner for Treasury, as the preparer of the CFS, to obtain and
demonstrate the necessary assurance on the significant amounts reported
in the Statement of Changes in Cash Balance from Unified Budget and
Other Activities and the Reconciliation of Net Operating Cost and
Unified Budget Deficit. Consistent reporting throughout the federal
government is an important goal.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 13; No.:02-
15:
Recommendation: If Treasury chooses to continue using information from
both federal agencies' financial statements and the Central Accounting
and Reporting System (STAR), Treasury should demonstrate how the
amounts from STAR reconcile to federal agencies' financial statements.
Status of recommendation: Per Treasury and OMB:
Treasury has previously communicated its disagreement with GAO on the
need for this reconciliation. Treasury does not use agency results in
preparing this statement.
Status of recommendation: Open. See status of recommendation No. 02-14.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 14; No.02-
16;
Recommendation: If Treasury chooses to continue using information from
both federal agencies' financial statements and from STAR, Treasury
should identify and document the cause of any significant differences,
if any are noted.
Status of recommendation: Per Treasury and OMB:
Treasury has previously communicated its disagreement with GAO on the
need for this reconciliation. Treasury does not use agency results in
preparing this statement.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02- 14.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 15; No.02-
17;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
develop and implement a process to ensure that the Statement of Changes
in Cash Balance from Unified Budget and Other Activities properly
reflects the activities reported in federal agencies' audited financial
statements. Treasury should document the consistency of the significant
line items on this statement to agencies' audited financial statements.
Status of recommendation: Per Treasury and OMB:
Treasury has previously communicated its disagreement with GAO related
to the use of data other than from STAR in the preparation of this
statement. There are no material differences between outlays reported
by us and those included in the President's Budget, nor is there a need
to reconcile to agency financial statements. Also, GAAP does not
require the disclosure of either receipts or outlays in this statement.
Status of recommendation: Per GAO: Open. GAO's recommendation does not
dictate the source of data Treasury should use to compile the Statement
of Changes in Cash Balance from Unified Budget and Other Activities,
but does recommend Treasury ensure consistency in reporting between
significant line items on the statement to agencies' audited financial
statements. We agree that GAAP does not specifically require the
disclosure of receipts and outlays in the Statement of Changes in Cash
Balance from Unified Budget or Other Activities. In previous years,
this statement reported budget outlays and budget receipts. However,
beginning in fiscal year 2004, the federal government chose not to
disclose budget outlays and budget receipts in this financial statement
and only included the budget deficit. As we have reported since fiscal
year 2003, we found material differences between the total net outlays
reported in selected federal agencies' Statements of Budgetary
Resources (SBR) and Treasury's central accounting record, which
Treasury uses to prepare the Statement of Changes in Cash Balance from
Unified Budget and Other Activities. Consistent reporting throughout
the federal government is an important goal.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 16; No.02-
18;
Recommendation:
The Secretary of the Treasury should direct the Fiscal Assistant
Secretary, in coordination with the Controller of OMB, to develop and
implement a process to ensure that the Statement of Changes in Cash
Balance from Unified Budget and Other Activities properly reflects the
activities reported in federal agencies' audited financial statements.
Treasury should request, through its closing package, that federal
agencies provide the net outlays reported in their Combined Statement
of Budgetary Resources and explanations for any significant differences
between net outlay amounts reported in the Combined Statement of
Budgetary Resources and the budget of the U.S. government.
Status of recommendation: Per Treasury and OMB:
Treasury disagrees with GAO's recommendation to collect the agency SBR
outlay data through the closing package process because Treasury
already collects agency outlay data for budgetary reporting purposes.
In addition, there is no requirement to disclose outlays in this
statement. Treasury and OMB are working closely with the agencies to
assure that the outlays reported in agency SBRs match the outlays
reported to Treasury for budgetary reporting purposes.
Status of recommendation: Per GAO: Open. See status of recommendation;
No.'s 02-14 and 02-17.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 17; No. 02-
19;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
develop and implement a process to ensure that the Statement of Changes
in Cash Balance from Unified Budget and Other Activities properly
reflects the activities reported in federal agencies' audited financial
statements. Treasury should investigate the differences between net
outlays reported in federal agencies' Combined Statement of Budgetary
Resources and Treasury's records in STAR to ensure that the proper
amounts are reported in the Statement of Changes in Cash Balance from
Unified Budget and Other Activities.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No.'s 02-17 and 02-18.
Status of recommendation: Per GAO: Open. See status of recommendation;
No.'s 02-14 and 02-17.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 18; No. 02-
20;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
develop and implement a process to ensure that the Statement of Changes
in Cash Balance from Unified Budget and Other Activities properly
reflects the activities reported in federal agencies' audited financial
statements. Treasury should explain and document the differences
between the operating revenue amount reported on the Statement of
Operations and Changes in Net Position and unified budget receipts
reported on the Statement of Changes in Cash Balance from Unified
Budget and Other Activities.
Status of recommendation: Per Treasury and OMB: GAO-04-45
See status of recommendation No.'s 02-17 and 02-18.
Status of recommendation: Per GAO: GAO-04-45
Open. See status of recommendation; No.'s 02-14 and 02-17.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 19; No.:02-
21;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
develop and implement a process to ensure that the Statement of Changes
in Cash Balance from Unified Budget and Other Activities properly
reflects the activities reported in federal agencies' audited financial
statements. Treasury should provide support for how the line items in
the "other activities" section of this statement relate to either the
underlying Balance Sheet or related notes accompanying the CFS.
Status of recommendation: Per Treasury and OMB:
Treasury disagrees with GAO as to the need to link all the items in the
"other activities" section of this statement to other components of the
CFS. With the exception of loan-related items and total operating cash,
the source for these items is STAR, and Treasury believes that the use
of any other data would be less accurate.
Status of recommendation: Per GAO: Open. See status of recommendation;
No.'s 02- 14 and 02-17.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 20; No.02-
22;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
perform an assessment to define the reporting entity, including its
specific components, in conformity with the criteria issued by the
Federal Accounting Standards Advisory Board (FASAB). Key decisions made
in this assessment should be documented, including the reason for
including or excluding components and the basis for concluding on any
issue. Particular emphasis should be placed on demonstrating that any
financial information that should be included but is not included is
immaterial.
Status of recommendation: Per Treasury and OMB:
Treasury defined and documented the reporting entity for fiscal year
2005.
Status of recommendation: Per GAO: Open. Documentation was not provided
to GAO as part of the fiscal year 2005 audit. GAO plans to review such
documentation during its audit of the fiscal year 2006 CFS.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 21; No.02-
23;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
provide in the financial statements all the financial information
relevant to the defined reporting entity, in all material respects.
Such information would include, for example, the reporting entity's
assets, liabilities, and revenues.
Status of recommendation: Per Treasury and OMB:
Treasury will implement changes to the reporting entity. See status of
recommendation No. 02- 22
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 22; No.:02-
24;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
disclose in the financial statements all information that is necessary
to inform users adequately about the reporting entity. Such disclosures
should clearly describe the reporting entity and explain the reason for
excluding any components that are not included in the defined reporting
entity.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-23.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 23; No.:02-
25;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to establish a formal process that will allow the
financial statements, related notes, and stewardship and supplemental
information in the CFS to be presented in conformity with GAAP. The
process should timely identify GAAP requirements.
Status of recommendation: Per Treasury and OMB:
Treasury established a formal process and completed an analysis of
fiscal year 2005 required agency financial statement and note
disclosures and made the appropriate disclosures in the fiscal year
2005 CFS. For items not disclosed, Treasury will discuss with agency
personnel and GAO any additional data needed to finalize the required
disclosures. In addition, in October 2005, FASAB issued an exposure
draft specific to the CFS that would result in the elimination or
reduction for certain disclosures. Treasury plans no further action on
these specific disclosures pending the outcome of this proposed
standard.
Status of recommendation: Per GAO: Open. Treasury's fiscal year 2005
process did not completely analyze the fiscal year 2005 disclosures.
Treasury stated that they planned no further action pending the outcome
of a proposed FASAB standard.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 24; No.02-26;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to establish a formal process that will allow the
financial statements, related notes, and stewardship and supplemental
information in the CFS to be presented in conformity with GAAP. The
process should make timely modifications to Treasury's closing package
requirements to obtain information needed; Status of recommendation:
Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 25; No.02-27;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to establish a formal process that will allow the
financial statements, related notes, and stewardship and supplemental
information in the CFS to be presented in conformity with GAAP. The
process should assess, qualitatively and quantitatively, the impact of
the omitted disclosures.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25;
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 26; No.02-28;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to establish a formal process that will allow the
financial statements, related notes, and stewardship and supplemental
information in the CFS to be presented in conformity with GAAP. The
process should document decisions reached and the rationale for such
decisions.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 27; No.02-
29;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures for preparing the
governmentwide management representation letter to help ensure that it
is properly prepared and contains sufficient representations.
Specifically, these policies and procedures should require an analysis
of the agency management representations to determine if discrepancies
exist between what the agency auditor reported and the representations
made by the agency, including the resolution of such discrepancies.
Status of recommendation: Per Treasury and OMB:
Treasury and OMB's policy and procedures include an analysis of the
agency management representations to determine if discrepancies exist
between what the agency auditor reported and the representations made
by the agency. Any discrepancies found are listed as exceptions on an
enclosure that is submitted with the governmentwide management
representation letter.
Status of recommendation: Per GAO: Open. Treasury's policies and
procedures are not adequate to identify all possible discrepancies
between the agencies' management representation letters and the
auditors' findings. Specifically, the policies and procedures only
identify and report discrepancies that relate to material weaknesses.
In addition, Treasury's policies and procedures state that items that
resulted in an agency disclaimer of opinion or qualification will be
included in an enclosure to the CFS management representation letter.
However, the governmentwide representation letter prepared by Treasury
is based primarily on the individual federal agency representation
letters. Any identified discrepancies at the agency level, whether they
affected the opinion or not, need to be considered so that Treasury and
OMB can adequately provide us representations at the governmentwide
level.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 28; No.02-30;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures for preparing the
governmentwide management representation letter to help ensure that it
is properly prepared and contains sufficient representations.
Specifically, these policies and procedures should require a
determination that the agency management representation letters have
been signed by the highest-level agency officials who are responsible
for and knowledgeable about the matters included in the agency
management representation letters.
Status of recommendation: Per Treasury and OMB:
OMB Bulletin No. 01-02, Audit Requirements for Federal Financial
Statements references the audit guidance on management representation
letters provided in the AICPA auditing standard AU § 333, Management
Representations; these are authoritative for audits of federal
financial statements. The AU § 333.09 instructs that the management
representation letters should be signed by management with the overall
responsibility and knowledge about the items covered by the
representations. Unless explicitly noted by an agency's auditor,
Treasury and OMB infer from the auditors' acceptance of agencies'
management representation letters that the proper signatures are
included. Treasury and OMB's policy is to rely on the integrity of the
agency audits, including the determination of the adequacy of the
agencies' signatories.
Status of recommendation: Per GAO: Open. The policies and procedures
discuss signatures on agency management representation letters, but do
not include steps for Treasury's review of the signatures to determine
if the letters have been signed by the highest-level agency officials
who are responsible for and knowledgeable about the matters included in
the agency management representation letters. Letters that have not
been appropriately signed impair Treasury's and OMB's ability to
provide representation at the governmentwide level. In connection with
our audit of the fiscal year 2004 CFS, we issued reports to 24 federal
agencies discussing areas, including signatures, where the agencies'
fiscal year 2004 management representation letters did not provide all
the information necessary to support Treasury's and OMB's preparation
of the CFS management representation letter. For example, in the report
we issued to one of the significant agencies, we made a recommendation
regarding signatures. In this agency's response to the report, it
represented that it would include the appropriate signatures on future
letters. However, the agency's fiscal year 2005 management
representation letter did not include such signatures.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 29; No.02-31;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures for preparing the
governmentwide management representation letter to help ensure that it
is properly prepared and contains sufficient representations.
Specifically, these policies and procedures should require an
assessment of the materiality thresholds used by federal agencies in
their respective management representation letters.
Status of recommendation: Per Treasury and OMB:
Neither OMB Bulletin No. 01-02, Audit Requirements for Federal
Financial Statements, nor OMB Circular A-136, Financial Reporting
Requirements, Part B, requires agencies to quantitatively disclose its
materiality in the management representation letters; these are
authoritative for audits of federal financial statements. This practice
is consistent with the AICPA auditing standard AU § 333 Management
Representations. Treasury continues to calculate the materiality
threshold for the governmentwide management representation letter using
the guidance provided in the PCIE/GAO Financial Audit Manual (FAM).
This guidance does not include consideration of component entities'
materiality thresholds.
Status of recommendation: Per GAO: Open. In preparing the
governmentwide management representation letter, Treasury and OMB limit
certain representations in the letter to matters that are considered to
be material. In doing so, OMB, Treasury, and GAO should confer on the
materiality level to be used at the governmentwide level. Treasury and
OMB need the agency thresholds in providing a materiality threshold for
the governmentwide management representation letter to represent that
all matters material to the CFS were properly considered and included.
This situation contributed to our scope limitation relating to the
fiscal year 2005 governmentwide management representation letter.
Specifically, one of the significant federal entities used a
materiality threshold in its management representation letter that far
exceeded what would be in conformity with the FAM, which in turn
negatively impacted Treasury's and OMB's ability to provide us with
representations at the governmentwide level within the materiality
threshold we had established for the governmentwide letter.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 30; No. 02-
32;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures for preparing the
governmentwide management representation letter to help ensure that it
is properly prepared and contains sufficient representations.
Specifically, these policies and procedures should require an
assessment of the impact, if any, of federal agencies' materiality
thresholds on the management representations made at the governmentwide
level.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-31.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-31.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 31; No. 02-
33;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures for preparing the
governmentwide management representation letter to help ensure that it
is properly prepared and contains sufficient representations.
Specifically, these policies and procedures should require an
evaluation and assessment of the omission of representations ordinarily
included in agency management representation letters.
Status of recommendation: Per Treasury and OMB:
OMB Bulletin No. 01-02, Audit Requirements for Federal Financial
Statements references the audit guidance on management representation
letters provided in the AICPA auditing standard AU § 333, Management
Representations; these are authoritative for audits of federal
financial statements. The AU § 333.08 allows for the management
representations to be limited to items that are material to the
financial statements, with noted exceptions, provided that management
has reached an understanding with its auditors on materiality. Unless
explicitly noted by an agency's auditor, Treasury and OMB infer from
the auditors' acceptance of agencies' management representation letters
that the representations omitted from the agencies' letters are not
material to the respective agencies' financial statements. It is
Treasury and OMB's policy to rely on the integrity of the agency
audits, including the determination of the adequacy of the agencies'
management representation letters.
Status of recommendation: Per GAO: Open. Treasury's policies and
procedures do not include steps to review the agencies' management
representation letters for omitted or incomplete representations. In
addition, the policies and procedures do not include steps to assess
the impact of omitted or incomplete representations on the
governmentwide management representation letter. When agencies do not
provide all representations or include incomplete representations in
their management representation letter, it impairs GAO's ability to
audit the CFS and Treasury's and OMB's ability to make these types of
representations in the governmentwide management representation letter.
As noted above, we issued reports to 24 federal agencies in which we
cited issues with such agencies' fiscal year 2004 management
representation letters. These issues included omitted or incomplete
representations.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 32; No. 02-
34;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures for preparing the
governmentwide management representation letter to help ensure that it
is properly prepared and contains sufficient representations.
Specifically, these policies and procedures should require an analysis
and aggregation of the agencies' summary of unadjusted misstatements to
determine the completeness of the summaries and to ascertain the
materiality, both individually and in the aggregate, of such unadjusted
misstatements to the CFS taken as a whole.
Status of recommendation: Per Treasury and OMB:
In fiscal year 2005, Treasury updated the standard operating procedure
(SOP) for the summaries of unadjusted misstatements.
Status of recommendation: Per GAO: Open. Although Treasury did update
its SOP, it was not clear that these procedures called for Treasury to
review both the summaries of unadjusted misstatements included with
agencies' management representation letters and the summaries of
unadjusted misstatements submitted with the agencies' closing packages.
This analysis is necessary to ensure that all unadjusted misstatements
applicable to the CFS are aggregated. In addition, Treasury did not
include unadjusted misstatements for three significant agencies in its
fiscal year 2005 analysis.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 33; No. 02-
35;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
help ensure that agencies provide adequate information in their legal
representation letters regarding the expected outcome of the cases.
Status of recommendation: Per Treasury and OMB:
OMB and Treasury will work with agencies to ensure that adequate
information is provided in the legal representation letters regarding
the expected outcome of the cases.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 34; No. 02-
36;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
help ensure that agencies provide related management schedules.
Status of recommendation: Per Treasury and OMB:
OMB and Treasury will follow up with agencies that have not provided
their management schedules to ensure they do so.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 35; No.:02-
37;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures to help ensure that major
treaty and other international agreement information is properly
identified and reported in the CFS. Specifically, these policies and
procedures should require that agencies develop a detailed schedule of
all major treaties and other international agreements that obligate the
U.S. government to provide cash, goods, or services, or that create
other financial arrangements that are contingent on the occurrence or
nonoccurrence of future events (a starting point for compiling these
data could be the State Department's Treaties in Force).
Status of recommendation: Per Treasury and OMB:
To ensure a reasonable approach, OMB will analyze the appropriateness
of reporting "treaties" before developing specific corrective actions.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 36; No.:02-
38;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures to help ensure that major
treaty and other international agreement information is properly
identified and reported in the CFS. Specifically, these policies and
procedures should require that agencies classify all such scheduled
major treaties and other international agreements as commitments or
contingencies.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-37.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 37; No.02-39;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures to help ensure that major
treaty and other international agreement information is properly
identified and reported in the CFS. Specifically, these policies and
procedures should require that agencies disclose in the notes to the
CFS amounts for major treaties and other international agreements that
have a reasonably possible chance of resulting in a loss or claim as a
contingency.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-37.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 38; No.02-40;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures to help ensure that major
treaty and other international agreement information is properly
identified and reported in the CFS. Specifically, these policies and
procedures should require that agencies disclose in the notes to the
CFS amounts for major treaties and other international agreements that
are classified as commitments and that may require measurable future
financial obligations.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-37.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 39; No.02-41;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
establish written policies and procedures to help ensure that major
treaty and other international agreement information is properly
identified and reported in the CFS. Specifically, these policies and
procedures should require that agencies take steps to prevent major
treaties and other international agreements that are classified as
remote from being recorded or disclosed as probable or reasonably
possible in the CFS.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-37;
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 40; No.:02-
42;
Recommendation: As Treasury is designing its new compilation process,
which it expects to implement beginning with the fiscal year 2004 CFS,
the Secretary of the Treasury should direct the Fiscal Assistant
Secretary, in coordination with the Controller of OMB, to design the
new compilation process to directly link information from federal
agencies' audited financial statements to amounts reported in all the
applicable consolidated financial statements and related footnotes.
Status of recommendation: Per Treasury and OMB:
Treasury used its revised CFS compilation process, first implemented in
fiscal year 2004, to directly link agency audited financial statements
to three of the five CFS principal statements. The exceptions are the
Reconciliation of Net Operating Cost and Unified Budget Deficit (or
Surplus) and the Statement of Changes in Cash Balance, which Treasury
does not plan to link to agency financial statements. With regard to
note disclosures, the revised compilation process included direct
linkage between the CFS note disclosures and the related agencies'
audited note disclosures.
Status of recommendation: Per GAO: Open. Treasury's process for
compiling the consolidated financial statements did not ensure that the
information in all of the five principal financial statements and notes
were fully consistent with the underlying information in federal
agencies' audited financial statements and other financial data.
Treasury made progress in demonstrating amounts in the Balance Sheet
and the Statement of Net Cost were consistent with federal agencies'
audited financial statements prior to eliminating intragovernmental
activity and balances.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 41; No.02-
43;
Recommendation: As Treasury is designing its new compilation process,
which it expects to implement beginning with the fiscal year 2004 CFS,
the Secretary of the Treasury should direct the Fiscal Assistant
Secretary, in coordination with the Controller of OMB, to consider the
other applicable recommendations in this report when designing and
implementing the new compilation process.
Status of recommendation: Per Treasury and OMB:
Treasury will continue to consider applicable recommendations as the
current CFS compilation system is revised and enhanced.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 42; No.02-
44;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
Statement of Federal Financial Accounting Standards (SFFAS) No. 3,
Accounting for Inventory and Related Property, paragraph 91, which
requires the reporting entity to disclose the valuation basis for
foreclosed property.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No; 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 43; No.02-45;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 3, Accounting for Inventory and Related Property, paragraph
91, which requires the reporting entity to disclose the changes from
the prior year's accounting methods, if any.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No; 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 44; No.02-46;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 3, Accounting for Inventory and Related Property, paragraph
91, which requires the reporting entity to disclose the restrictions on
the use/ disposal of property.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No; 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 45; No.02-47;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 3, Accounting for Inventory and Related Property, paragraph
91, which requires the reporting entity to disclose the balances by
categories (i.e., pre-1992 and post-1991 foreclosed property).
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No; 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 46; No.02-48;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 3, Accounting for Inventory and Related Property, paragraph
91, which requires the reporting entity to disclose the number of
properties held and average holding period by type or category.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No; 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 47; No.:02-
49;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 3, Accounting for Inventory and Related Property, paragraph
91, which requires the reporting entity to disclose the number of
properties for which foreclosure proceedings are in process at the end
of the period for foreclosed assets acquired in full or partial
settlement of a direct or guaranteed loan.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No; 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 48; No.02-50;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 18, Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, paragraph 9, which requires credit programs to
reestimate the subsidy cost allowance for outstanding direct loans and
the liability for outstanding loan guarantees. There are two kinds of
reestimates:(1) interest rate reestimates and (2) technical/default
reestimates. Entities should measure and disclose each program's
reestimates in these two components separately.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No; 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 49; No.:02-
51;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 18, Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, paragraph 10, which requires the reporting entity to
display in the notes to the financial statements a reconciliation
between the beginning and ending balances of the subsidy cost allowance
for outstanding direct loans and the liability for outstanding loan
guarantees reported on the entity's balance sheet.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 50; No.02-52;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 18, Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, paragraph 11, which requires disclosure of the total
amount of direct or guaranteed loans disbursed for the current
reporting year and the preceding reporting year.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 51; No.02-53;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 18, Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, paragraph 11, which requires disclosure of the subsidy
expense by components, recognized for the direct or guaranteed loans
disbursed in the current reporting year and the preceding reporting
year.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 52; No.02-54;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 18, Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, paragraph 11, which requires disclosure of the subsidy
reestimates by components for the current reporting year and the
preceding reporting year.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 53; No.02-55;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 18, Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, paragraph 11, which requires disclosure, at the
program level, of the subsidy rates for the total subsidy cost and its
components for the interest subsidy costs, default costs (net of
recoveries), fees and other collections, and other costs estimated for
direct loans and loan guarantees in the current year's budget for the
current year's cohorts.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 54; No.02-56;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for loans
receivable and loan guarantee liabilities meets the requirements of
SFFAS No. 18, Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, paragraph 11, which requires the reporting entity to
disclose, discuss, and explain events and changes in economic
conditions, other risk factors, legislation, credit policies, and
subsidy estimation methodologies and assumptions that have had a
significant and measurable effect on subsidy rates, subsidy expense,
and subsidy reestimates.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 55; No.02-57;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for inventories
and operating materials and supplies meets the requirements of SFFAS
No. 3, Accounting for Inventory and Related Property, paragraph 30,
which requires the difference between the carrying amount and the
expected net realizable value to be recognized as a loss or gain and
either separately reported or disclosed when inventory or operating
materials and supplies are declared excess, obsolete, or unserviceable.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-
25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 56; No.02-58;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for inventories
and operating materials and supplies meets the requirements of SFFAS
No. 3, Accounting for Inventory and Related Property, paragraphs 35 and
50, which require disclosure of inventory and operating materials and
supplies general composition.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 57; No.02-59;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for inventories
and operating materials and supplies meets the requirements of SFFAS
No. 3, Accounting for Inventory and Related Property, paragraphs 35 and
50, that require disclosure of any changes from the prior year in
accounting methods for inventory and operating materials and supplies.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 58; No.02-60;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for inventories
and operating materials and supplies meets the requirements of SFFAS
No. 3, Accounting for Inventory and Related Property, paragraphs 35 and
50, which require the disclosure of any restrictions on the sale of
inventory and the use of operating materials and supplies.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 59; No.02-61;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for inventories
and operating materials and supplies meets the requirements of SFFAS
No. 3, Accounting for Inventory and Related Property, paragraphs 35 and
50, which requires disclosure of any changes in the criteria for
categorizing inventory and operating materials and supplies.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 60; No.02-62;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stockpile
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 56, which requires disclosure
of the basis for valuing stockpile material, including valuation method
and any cost flow assumptions.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 61; No.02-63;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stockpile
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 56, which requires disclosure
of any changes from the prior year's accounting methods.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 62; No.02-64;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stockpile
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 56, which requires disclosure
of restrictions on the use of stockpile material.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 63; No.02-65;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stockpile
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 56, which requires disclosure
of the balances in each category of stockpile material (i.e., stockpile
material held and held for sale).
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 5, Inventories and
Related Property, Net, in the fiscal year 2005 CFS.
Status of recommendation:
Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 64; No.02-66;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stockpile
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 56, which requires disclosure
of the criteria for grouping stockpile material held for sale.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 65; No.02-67;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stockpile
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 56, which requires disclosure
of changes in criteria for categorizing stockpile material held for
sale.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 66; No.02-68;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stockpile
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 55, which requires disclosure
of any difference between the carrying amount (i.e., purchase price or
cost) of stockpile material held for sale and the estimated selling
price of such assets.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25;
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 67; No.02-69;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for seized
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 66, which requires disclosure
of the valuation method.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 68; No.02-70;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for seized
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 66, which requires disclosure
of any changes from the prior year's accounting methods.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 69; No.02-71;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for seized
material meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 66, which requires disclosure
of the analysis of change in seized property (including dollar value
and number of seized properties) that is on hand at the beginning of
the year, seized during the year, disposed of during the year, and on
hand at the end of the year, as well as known liens or other claims
against the property. This information should be presented by type of
seizure and method of disposition, when material.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 70; No.02-72;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for forfeited
property meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 78, which requires disclosure
of the valuation method.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25;
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 71; No.02-73;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for forfeited
property meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 78, which requires disclosure
of the analysis of the changes in forfeited property by type and dollar
amount that includes (1) number of forfeitures on hand at the beginning
of the year, (2) additions, (3) disposals and method of disposition,
and (4) end-of-year balances.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 72; No.02-74;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for forfeited
property meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 78, which requires disclosure
of any restriction on the use or disposition of the property.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 73; No.02-75;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for forfeited
property meets the requirements of SFFAS No. 3, Accounting for
Inventory and Related Property, paragraph 78, which requires
disclosure, if available, of an estimate of the value of property to be
distributed to other federal, state, and local agencies in future
reporting periods.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
Count:74; No.02-76;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for goods held
under price support and stabilization programs meets the requirements
of SFFAS No. 3, Accounting for Inventory and Related Property,
paragraph 98, which requires that if a contingent loss is not
recognized because it is less than probable or it is not reasonably
measurable, disclosure of the contingency shall be made if it is at
least reasonably possible that a loss may occur.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 19,
Contingencies, in the fiscal year 2005 CFS. However, no related data
were received in fiscal year 2005; therefore, there is no disclosure
related to this requirement.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-
25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 75; No.02-77;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for goods held
under price support and stabilization programs meets the requirements
of SFFAS No. 3, Accounting for Inventory and Related Property,
paragraph 109, which requires disclosure of the basis for valuing
commodities, including valuation method and cost flow assumptions.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 76; No.02-78;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for goods held
under price support and stabilization programs meets the requirements
of SFFAS No. 3, Accounting for Inventory and Related Property,
paragraph 109, which requires disclosure of any changes from the prior
year's accounting methods.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 77; No.02-79;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for goods held
under price support and stabilization programs meets the requirements
of SFFAS No. 3, Accounting for Inventory and Related Property,
paragraph 109, which requires disclosure of any restrictions on the
use, disposal, or sale of commodities.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 78; No.02-80;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for goods held
under price support and stabilization programs meets the requirements
of SFFAS No. 3, Accounting for Inventory and Related Property,
paragraph 109, which requires disclosure of the analysis of the change
in dollar amount and volume of commodities, including those (1) on hand
at the beginning of the year, (2) acquired during the year, (3)
disposed of during the year listed by method of disposition, (4) on
hand at the end of the year, (5) on hand at year-end and estimated to
be donated or transferred during the coming period, and (6) received as
a result of surrender of collateral related to nonrecourse loans
outstanding. The analysis should also show the dollar value and volume
of purchase agreement commitments.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 79; No.02-81;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for property,
plant, and equipment (PP&E) meets the disclosure requirements of SFFAS
No. 6, Accounting for Property, Plant, and Equipment, paragraph 45,
which requires disclosure of the estimated useful lives for each major
class of PP&E.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 80; No.02-82;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for PP&E meets
the disclosure requirements of SFFAS No. 6, Accounting for Property,
Plant, and Equipment, paragraph 45, which requires disclosure of
capitalization thresholds, including any changes in thresholds during
the period.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25;
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 81; No.02-83;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for PP&E meets
the disclosure requirements of SFFAS No. 6, Accounting for Property,
Plant, and Equipment, paragraph 45, which requires disclosure of
restrictions on the use or convertibility of general PP&E.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02- 25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 82; No.02-85;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for PP&E meets
the disclosure requirements of SFFAS No. 10, Accounting for Internal
Use Software, paragraph 35, which requires disclosure of the estimated
useful life for each major class of software for internal use software.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25;
Status of recommendation: Per GAO: Open. See status of recommendation;
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 83; No.02-86;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for PP&E meets
the disclosure requirements of SFFAS No. 10, Accounting for Internal
Use Software, paragraph 35, which requires disclosure of the method of
amortization for internal use software.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 6, Property, Plant, and
Equipment, Net, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 84; No.02-87;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for PP&E meets
the disclosure requirements of SFFAS No. 16, Amendments to Accounting
for Property, Plant, and Equipment, paragraph 9, which requires an
appropriate PP&E note disclosure to explain that "physical quantity"
information for the multiuse heritage assets is included in
supplemental stewardship reporting for heritage assets.
Status of recommendation: Per Treasury and OMB:
This information was disclosed in the required supplementary
stewardship information section of the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 85; No.02-88;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for federal
employee and veteran benefits payable is completely and properly
reported, specifically, that (1) it include a line for the valuation of
plan amendments that occurred during the year and (2) the liability for
military pensions and note disclosure related to the "change in
actuarial accrued pension liability and components of related expenses"
agree with the information presented in the Department of Defense's
financial statements.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 11, Federal Employee
and Veteran Benefits Payable, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 86; No.02-89;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for
environmental and disposal liabilities meets the requirements of SFFAS
No. 6, Accounting for Property, Plant, and Equipment, which requires
(1) estimation and recognition of cleanup costs associated with general
PP&E at the time the PP&E is placed in service and (2) recognition of a
liability for the portion of the estimated total cleanup cost
attributable to that portion of the physical capacity used or that
portion of the estimated useful life that has passed since the general
PP&E was placed in service.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 12,
Environmental and Disposal Liabilities, in the fiscal year 2005 CFS.
However, further data are needed from one agency with significant
environmental and disposal liabilities as of September 30, 2005, to
fully comply with this specific disclosure requirement.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 87; No.02-90;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for
environmental and disposal liabilities meets the requirements of SFFAS
No. 6, Accounting for Property, Plant, and Equipment, which requires
inclusion of material changes in total estimated cleanup costs due to
changes in laws, technology, or plans.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 88; No.02-91;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for capital
leases meets the requirements of Federal Accounting Standards Board
(FASB), Statement of Financial Accounting Standards (SFAS) No. 13,
Accounting for Leases, paragraph 16, which requires future minimum
lease payments as of the date of the latest balance sheet presented, in
the aggregate and for each of the 5 succeeding fiscal years, with
separate deductions from the total for the amount representing
executory costs, including any profit thereon, included in the minimum
lease payments, and for the amount of the imputed interest necessary to
reduce the net minimum lease payments to present value.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 89; No.02-92;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for capital
leases meets the requirements of FASB, SFAS No. 13, Accounting for
Leases, paragraph 16, which requires a summary of assets under capital
lease by major asset category and the related total accumulated
amortization.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 90; No.02-93;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for capital
leases meets the requirements of FASB, SFAS No. 13, Accounting for
Leases, paragraph 16, which requires a general description of the
lessee's leasing arrangements, including but not limited to (1) the
basis on which contingent rental payments are determined; (2) the
existence and terms of renewal or purchase options and escalation
clauses; and (3) restrictions imposed by lease agreements, such as
those concerning dividends, additional debt, and further leasing.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 91; No.:02-
94;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for life
insurance liabilities meets the requirements of SFFAS No. 5, Accounting
for Liabilities of the Federal Government, paragraph 117, which
requires all federal reporting entities with whole life insurance
programs to follow applicable standards as prescribed in the private
sector standards when reporting the liability for future policy
benefits:
FASB SFAS No. 60, Accounting and Reporting by Insurance Enterprises;
SFAS No. 97, Accounting and Reporting by Insurance Enterprises for
Certain Long-Duration Contracts and for Realized Gains and Losses from
the Sale of Investments; SFAS No. 120, Accounting and Reporting by
Mutual Life Insurance Enterprises and by Insurance Enterprises for
Certain Long- Duration Participating Contracts; and American Institute
of Certified Public Accountants Statement of Position 95-1, Accounting
for Certain Insurance Activities of Mutual Life Insurance Enterprises.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 92; No.02-95;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for life
insurance liabilities meets the requirements of SFFAS No. 5, Accounting
for Liabilities of the Federal Government, paragraph 121, which
requires all components of the liability for future policy benefits
(i.e., the net-level premium reserve for death and endowment policies
and the liability for terminal dividends) to be separately disclosed in
a footnote with a description of each amount and an explanation of its
projected use and any other potential uses (e.g., reducing premiums,
determining and declaring dividends available, and reducing federal
support in the form of appropriations related to administrative cost or
subsidies).
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 93; No.02-96;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure on major
commitments and contingencies is consistent with disclosed information
in individual agencies' financial statements.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No.'s 02-25 and 02-42. In addition, this
required information was disclosed in Note 19, Contingencies, and Note
20, Commitments, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Open. See status of recommendation
No.'s 02-25 and 02-42.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 94; No.02-97;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure on major
commitments and contingencies discloses sufficient information
(detailed discussion) regarding certain major commitments and
contingencies.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-96.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 95; No.02-99;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for collections
and refunds of federal revenue meets the requirements of SFFAS No. 7,
Concepts for Reconciling Budgetary and Financial Accounting, paragraph
69.2, which requires collecting entities to provide in the other
accompanying information any relevant estimates of the annual tax gap
that become available as a result of federal government surveys or
studies.
Status of recommendation: Per Treasury and OMB:
This information was disclosed in the required supplementary
information section of the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 96; No.02-
100;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for dedicated
collections meets the requirements of SFFAS No. 7, Part I, Accounting
for Revenue and Other Financing Sources, paragraph 85, which requires
inclusion of condensed information about assets and liabilities showing
investments in Treasury securities, other assets, liabilities due and
payable to beneficiaries, other liabilities, and fund balance.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 21, Dedicated
Collections, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 97; No.02-
101;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for dedicated
collections meets the requirements of SFFAS No. 7, Part I, Accounting
for Revenue and Other Financing Sources, paragraph 85, which requires
inclusion of condensed information on net cost and changes to fund
balance, showing revenues by type (exchange/nonexchange), program
expenses, other expenses, other financing sources, and other changes in
fund balance.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 21, Dedicated
Collections, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 98; No.02-
102;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for dedicated
collections meets the requirements of SFFAS No. 7, Part I, Accounting
for Revenue and Other Financing Sources, paragraph 85, which requires
inclusion of any revenues, other financing sources, or costs
attributable to the fund under accounting standards but not legally
allowable as credits or charges to the fund.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 21,
Dedicated Collections, in the fiscal year 2005 CFS. However, no data
were received in fiscal year 2005, and therefore, no disclosure was
needed related to this requirement.
Status of recommendation: Per GAO: Open. Treasury expected the required
information from applicable agencies as requested in the TFM. When no
disclosure information was provided by such agencies, Treasury did not
have any policies and procedures for following up with agencies to
determine why the information was not provided.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 99; No.02-
103;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for Indian trust
funds meets the requirements of SFFAS No. 7, Part I, Accounting for
Revenue and Other Financing Sources, paragraph 85, which requires a
description of each fund's purpose, how the administrative entity
accounts for and reports the fund, and its authority to use those
collections.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 100; No.02-
104;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for Indian trust
funds meets the requirements of SFFAS No. 7, Part I, Accounting for
Revenue and Other Financing Sources, paragraph 85, which requires
disclosure of the sources of revenue or other financing for the period
and an explanation of the extent to which they are inflows of resources
to the government or the result of intragovernmental flows.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 101; No.02-
105;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for Indian trust
funds meets the requirements of SFFAS No. 7, Part I, Accounting for
Revenue and Other Financing Sources, paragraph 85, which requires
condensed information about assets and liabilities showing investments
in Treasury securities, other assets, liabilities due and payable to
beneficiaries, and other liabilities.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 22, Indian Trust Funds,
in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 102; No.02-
106;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for Indian trust
funds meets the requirements of SFFAS No. 7, Part I, Accounting for
Revenue and Other Financing Sources, paragraph 85, which requires
condensed information on net cost and changes to fund balance, showing
revenues by type (exchange/nonexchange), program expenses, other
expenses, other financing sources, and other changes in fund balance.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 103; No.02-
107;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for Indian trust
funds meets the requirements of SFFAS No. 7, Part I, Accounting for
Revenue and Other Financing Sources, paragraph 85, which requires
disclosure of any revenues, other financing sources, or costs
attributable to the fund under accounting standards, but not legally
allowable as credits or charges to the fund.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 104; No.02-
114;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for social
insurance meets the requirements of SFFAS No. 17, Accounting for Social
Insurance, paragraph 32(4), which requires individual program
sensitivity analyses for projection period cash flow in present value
dollars and annual cash flow in nominal dollars. The CFS includes only
present value sensitivity analyses for Social Security and Hospital
Insurance. Paragraph 32(4) states that at a minimum the summary should
present Social Security, Hospital Insurance, and Supplementary Medical
Insurance separately.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 105; No.02-
115;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for social
insurance meets the requirements of SFFAS No. 17, Accounting for Social
Insurance, paragraph 27(4)(a), which requires the individual program
sensitivity analyses for Social Security and Hospital Insurance to
include an analysis of assumptions regarding net immigration.
Status of recommendation: Per Treasury and OMB:
This information was disclosed in the required supplementary
stewardship information section of the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 106; No.02-
118;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for nonfederal
physical property included in stewardship information meets the
requirements of SFFAS No. 8, Supplementary Stewardship Reporting,
paragraph 87, which requires disclosure of the annual investment,
including a description of federally owned physical property
transferred to state and local governments. This information should be
provided for the year ended on the balance sheet date as well as for
each of the 4 preceding years. If data for additional years would
provide a better indication of investment, reporting of the additional
years' data is encouraged. Reporting should be at a meaningful category
or level.
Status of recommendation: Per Treasury and OMB:
Treasury reports stewardship assets and stewardship investments in
accordance with SFFAS No. 8, paragraph 39 which requires the disclosure
in the CFS of such "summary (stewardship) information or selected
information as is feasible." Therefore, the component entity required
reporting for stewardship assets and stewardship investments is not
applicable to the CFS and the current CFS reporting of this stewardship
information is in accordance with GAAP.
Furthermore, SFFAS No. 24, Selected Standards for the Consolidated
Financial Report of the United States Government, did not change this
situation since SFFAS No. 24, paragraph 8 indicates that provisions for
different accounting treatments made in current or subsequent SFFAS
override the general rule of universal applicability. For example,
until SFFAS No 29, Heritage Assets and Stewardship Land, becomes
effective, CFS reporting for stewardship heritage assets will be done
in accordance with the requirements of SFFAS No. 8, paragraph 39.
Similarly, until FASAB provides specific CFS disclosure requirements
for stewardship investments, CFR reporting for stewardship investments
will be done in accordance with the requirements of SFFAS No. 8,
paragraph 39.
As Treasury has disclosed the stewardship information deemed feasible
to present, no further related disclosure is required.
Status of recommendation: Per GAO: Open. SFFAS No. 8, paragraph 39 also
states that until further FASAB deliberations, the CFS should include
such summary or selected information as is feasible and that
experimentation is encouraged, as is the reporting of such additional
information as will enhance the CFS. Treasury has not documented in its
policies or procedures how stewardship information should be reported
in the CFS or the basis for its determination that the disclosure of
the stewardship information in accordance with the related paragraph in
SFFAS No. 8 is not feasible. In addition, Treasury requests information
on stewardship investments in the TFM and certain agencies report such
information in their Performance and Accountability Reports.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 107; No.02-
119;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for nonfederal
physical property included in stewardship information meets the
requirements of SFFAS No. 8, Supplementary Stewardship Reporting,
paragraph 87, which requires a description of major programs involving
federal investments in nonfederal physical property, including a
description of programs or policies under which noncash assets are
transferred to state and local governments.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-118.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-118.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 108; No.02-
120;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for human
capital included in stewardship information meets the requirements of
SFFAS No. 8, Supplementary Stewardship Reporting, paragraph 94, which
requires a narrative description and the full cost of the investment in
human capital for the year being reported on as well as the preceding 4
years (if full cost data are not available, outlay data can be
reported).
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-118;
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-118.
GAO-04-45(results of the fiscal year 2002 audit): Count: 109; No.:02-
121;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for human
capital included in stewardship information meets the requirements of
SFFAS No. 8, Supplementary Stewardship Reporting, paragraph 94, which
requires the full cost or outlay data for investments in human capital
at a meaningful category or level (e.g., by major program, agency, or
department).
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-118.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02- 118.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 110; No.02-
122;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for human
capital included in stewardship information meets the requirements of
SFFAS No. 8, Supplementary Stewardship Reporting, paragraph 94, which
requires a narrative description of major education and training
programs considered federal investments in human capital.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-118.
Status of recommendation: Open. See status of recommendation No. 02-
118.
GAO-04-45 (results of the fiscal year 2002 audit):Count:111; No.02-123;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for research and
development included in stewardship information meets the requirements
of SFFAS No. 8, Supplementary Stewardship Reporting, paragraph 100,
which requires reporting of the annual investment made in the year
ended on the balance sheet date as well as in each of the 4 years
preceding that year. (As defined in this standard, "annual investment"
includes more than the annual expenditure reported by character class
for budget execution. Full cost shall be measured and accounted for in
accordance with SFFAS No. 4, Managerial Cost Accounting Standards for
the Federal Government.) If data for additional years would provide a
better indication of investment, reporting of the additional years'
data is encouraged. In those unusual instances when entities have no
historical data, only current reporting year data need be reported.
Reporting must be at a meaningful category or level, for example, a
major program or department.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-118.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-118.
Count:112; No.02-124;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for research and
development included in stewardship information meets the requirements
of SFFAS No. 8, Supplementary Stewardship Reporting, paragraph 100,
which requires a narrative description of major research and
development programs.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-118.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-118.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 113; No.02-
125;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for deferred
maintenance meets the requirements of SFFAS No. 6, Accounting for
Property, Plant, and Equipment, paragraphs 83 and 84, which requires
inclusion of the method of measuring deferred maintenance for each
major class of PP&E.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 114; No.02-
126;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for deferred
maintenance meets the requirements of SFFAS No. 6, Accounting for
Property, Plant, and Equipment, paragraphs 83 and 84, which requires
that if the condition assessment survey method of measuring deferred
maintenance is used, the following should be presented for each major
class of PP&E:
(1) description of requirements or standards for acceptable operating
condition, (2) any changes in the condition requirements or standards,
and (3) asset condition and a range estimate of the dollar amount of
maintenance needed to return the asset to its acceptable operating
condition.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 115; No.02-
127;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for deferred
maintenance meets the requirements of SFFAS No. 6, Accounting for
Property, Plant, and Equipment, paragraphs 83 and 84, which requires
that if the total life-cycle cost method is used, the following should
be presented for each major class of PP&E:(1) the original date of the
maintenance forecast and an explanation for any changes to the
forecast; (2) prior year balance of the cumulative deferred maintenance
amount; (3) the dollar amount of maintenance that was defined by the
professionals who designed, built, or managed the PP&E as required
maintenance for the reporting period; (4) the dollar amount of
maintenance actually performed during the period; (5) the difference
between the forecast and actual maintenance; (6) any adjustments to the
scheduled amounts deemed necessary by the managers of the PP&E; and (7)
the ending cumulative balance for the reporting period for each major
class of asset experiencing deferred maintenance.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit): Count: 116; No.02-
128;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, to ensure that the note disclosure for deferred
maintenance meets the requirements of SFFAS No. 6, Accounting for
Property, Plant, and Equipment, paragraphs 83 and 84, which requires
that if management elects to disclose critical and noncritical amounts,
the disclosure is to include management's definition of these
categories.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-45 (results of the fiscal year 2002 audit) Count:117; No.02-129;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for stewardship
responsibilities related to the risk assumed for federal insurance and
guarantee programs meets the requirements of SFFAS No. 5, Accounting
for Liabilities of the Federal Government, paragraph 106, which
requires that when financial information pursuant to FASB standards on
federal insurance and guarantee programs conducted by government
corporations is incorporated in general purpose financial reports of a
larger federal reporting entity, the entity should report as required
supplementary information what amounts and periodic change in those
amounts would be reported under the "risk assumed" approach.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open.
Count:
GAO-04-866 (results of the fiscal year 2003 audit). Count:118; No.03-4;
Recommendation: The Director of OMB should direct the Controller of
OMB, in coordination with Treasury's Fiscal Assistant Secretary, to
work with the federal agencies so that the differences between net
outlays the agencies report in their Statement of Budgetary Resources
and the net outlay records Treasury uses to prepare the Statement of
Changes in Cash Balance are reconciled;
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-18;
Status of recommendation: Per GAO: Open. See status of recommendation
No.'s 02-14 and 02-17.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 119; No.03-5;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to determine and address the effects that any of
the differences between net outlays the agencies report in their
Statement of Budgetary Resources and Treasury's net outlay records may
have on the CFS
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-18.
Status of recommendation: Per GAO: Open. See status of recommendation
No.'s 02-14 and 02-17.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 120; No.03-6;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to develop a process that will allow full reporting
of the changes in cash balance of the U.S. government. Specifically,
the process should provide for reporting on the change in cash reported
on the consolidated balance sheet, which should be linked to cash
balances reported in federal agencies' audited financial statements.
Status of recommendation: Per Treasury and OMB:
Treasury disagrees with this recommendation. Total operating cash
reported in the fiscal year 2005 CFS was linked to amounts reported in
agencies' audited financial statements. The Statement of Changes in
Cash Balance reconciles to Operating Cash. SFFAS No. 24, paragraphs 12
and 13, require reconciliation to the government's cash balance. It
also references an illustration that is not prescriptive.
Status of recommendation: Per GAO: Open. We agree that SFFAS No. 24
requires the reconciliation of the federal government's cash balance.
However, the Statement of Changes in Cash Balance reconciles to
operating cash of $28.3 billion rather than the cash reported on the
Balance Sheet of $85.8 billion, as of September 30, 2005.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 121; No. 03-7;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to report gross amounts for receipts and
disbursements of cash related to direct loans and loan guarantees.
Status of recommendation: Per Treasury and OMB:
Treasury disagrees with this recommendation. SFFAS No. 24 shows gross
receipt and disbursement amounts as an illustration, but does not
require their disclosure.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-14.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 122; No. 03-8;
Recommendation: The Director of OMB should direct the Controller of
OMB, in coordination with Treasury's Fiscal Assistant Secretary, to
work with Justice and certain other executive branch agencies to ensure
that these agencies report or disclose relevant criminal debt
information in conformity with GAAP in their financial statements and
have such information subjected to audit.
Status of recommendation: Per Treasury and OMB:
An interagency task force has been established under the direction of
the Attorney General and has developed a strategic plan for improving
criminal debt collection and has provided the plan to Congress. The
task force includes representatives from DOJ, Treasury, OMB, and the
Administrative Office of the U.S. Courts. The task force continues to
make progress in implementing new policies and procedures.
Status of recommendation: Per GAO: Open.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 123; No. 03-9;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to include relevant criminal debt information in
the CFS or document the specific rationale for excluding such
information.
Status of recommendation: Per Treasury and OMB:
Treasury will include criminal debt information as it becomes
available. See status of recommendation No. 03-08.
Status of recommendation: Per GAO: Open.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 124; No. 03-
10;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to include in the new system a request for federal
agencies to provide contingency loss information to assist Treasury in
disclosing contingencies in the CFS in accordance with GAAP.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 19, Contingencies, in
the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 125; No. 03-
11;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
modify Treasury's plans for the new closing package to (1) require
federal agencies to directly link their audited financial statement
notes to the CFS notes and (2) provide the necessary information to
demonstrate that all of the five principal consolidated financial
statements are consistent with the underlying information in federal
agencies' audited financial statements and other financial data.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-42.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-42.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 126; No. 03-
15;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for federal
employees and veterans benefits payable meets the requirements of SFFAS
No. 5, Accounting for Liabilities of the Federal Government, paragraph
83, which requires the reporting entity to disclose the assumptions
used for veterans compensation and burial benefits.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 11, Federal Employee
and Veteran Benefits Payable, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 127; No. 03-
16;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for federal
employees and veterans benefits payable meets the requirements of SFFAS
No. 5, Accounting for Liabilities of the Federal Government, paragraph
72, which requires the reporting entity to disclose prior service costs
from plan amendments as a separate component.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 11, Federal Employee
and Veteran Benefits Payable, in the fiscal year 2005 CFS;
Status of recommendation: Per GAO: Closed.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 128; No. 03-
17;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for federal
employees and veterans benefits payable meets the requirements of SFFAS
No. 5, Accounting for Liabilities of the Federal Government, paragraph
88, which requires the reporting entity to disclose gains or losses due
to a change in the medical inflation rate assumption for health
benefits as a separate component.
Status of recommendation: Per Treasury and
OMB:
This required information was disclosed in Note 11, Federal Employee
and Veteran Benefits Payable, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 129; No. 03-
18;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for
environmental and disposal liabilities meets the requirements of SFFAS
No. 6, Accounting for Property, Plant, and Equipment, which requires
the reporting entity to disclose the method for assigning estimated
total cleanup costs to current operating periods.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 130; No. 03-
19;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for
environmental and disposal liabilities meets the requirements of SFFAS
No. 6, Accounting for Property, Plant, and Equipment, which requires
the reporting entity to disclose, for cleanup costs associated with
general property, plant, and equipment, the unrecognized portion of
estimated total cleanup costs be disclosed.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 12,
Environmental and Disposal Liabilities, in the fiscal year 2005 CFS.
However, further data are needed from one agency with significant
environmental and disposal liabilities as of September 30, 2005, to
fully comply with this specific disclosure requirement.
Status of recommendation: Per GAO: Open.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 131; No. 03-
20;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for
environmental and disposal liabilities meets the requirements of SFFAS
No. 6, Accounting for Property, Plant, and Equipment, which requires
the reporting entity to disclose the nature of estimates and
information regarding possible changes to the estimates resulting from
inflation, deflation, technology, or applicable laws and regulations.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02- 25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 132; No. 03-
21;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to consider whether the reader would be interested
in understanding why the environmental and disposal liabilities amount
significantly changed during the year and include the explanation for
the change in the note disclosure.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 12,
Environmental and Disposal Liabilities, in the fiscal year 2005 CFS.
However, no data were received in fiscal year 2005, and therefore,
there was no disclosure related to this requirement.
Status of recommendation: Per GAO: Open. Treasury expected the required
information from applicable agencies as requested in the TFM. When no
disclosure information was provided by such agencies, Treasury did not
have any policies and procedures for following up with agencies to
determine why the information was not provided.
GAO-04-866 (results of the fiscal year 2002 audit) Count: 133; No. 03-
22;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the information in stewardship
information for research and development meets the requirements of
SFFAS No. 8, Supplementary Stewardship Reporting, paragraph 99, which
requires the reporting entity to include a narrative discussion of the
major results achieved by the program along the lines of basic
research, applied research, and development.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-118.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-118.
GAO-04-866 (results of the fiscal year 2002 audit)Count: 134; No. 03-
24;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the required supplemental
information for deferred maintenance meets the requirements of SFFAS
No. 6, Accounting for Property, Plant, and Equipment, paragraph 83,
which requires the reporting entity to disclose the identification of
each major class of asset (i.e., building and structures, furniture and
fixtures, equipment, vehicles, and land) for which maintenance has been
deferred.
Status of recommendation: Per Treasury and OMB:
This information was disclosed in the required supplementary
information section of the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 135; No. 04-
1;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to segregate the duties of individuals performing
key functions in Treasury's processes for preparing governmentwide
adjustments to the financial statements, making changes to Excel
spreadsheets that contain audited agency financial information, and
accessing federal agencies' closing package data in Treasury's new
system.
Status of recommendation: Per Treasury and OMB:
Treasury further revised and documented its major procedures in fiscal
year 2005 related to the CFS compilation process, including those
related to the duties of the individuals with the capability to enter,
change, and delete data within the GFRS database and the posting of
adjustments to the CFS to address segregation of duties.
Status of recommendation: Per GAO: Open. Treasury's procedures were not
effective for fiscal year 2005. Treasury was unable to explain why
numerous GFRS users appeared to have inappropriate access to GFRS
agency information or demonstrate that the appropriate segregation of
duties exists.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 136; No. 04-
2;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to require and maintain appropriate supporting
documentation for all journal vouchers recorded in the CFS.
Status of recommendation: Per Treasury and OMB:
Treasury will follow its standard operating procedure that includes
maintaining documentation for all recorded journal vouchers, except in
certain circumstances described in the status of recommendation 04-3.
Status of recommendation: Per GAO: Open. Treasury did not have
appropriate supporting documentation for all transactions recorded in
the CFS. Recording transactions in the financial statements without
adequate underlying support increases the risk that inappropriate
adjustments to balances in the financial statements could be made.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 137; No. 04-
3;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to require that Treasury employees contact and
document communications with agencies before recording journal vouchers
to change agency audited closing package data.
Status of recommendation: Per Treasury and OMB:
Treasury policy is to notify agencies before making needed data
changes. However, due to time constraints, Treasury needs the
flexibility to make changes without prior agency contact. Nevertheless,
as time permits, Treasury will make an effort to contact the agencies
prior to making changes. Treasury believes that agency approval is not
needed when making the following types of changes:
(1) adjustments to agree closing packages to financial statements, (2)
adjustments to ensure consistency of GAAP between agencies, and (3)
adjustments to conform an agency to GAAP.
Status of recommendation: Per GAO: Open. We believe that Treasury
should contact agencies to resolve any discrepancies between agencies'
audited closing packages and audited financial statements and discuss
any other situations that require adjustments to agencies' audited
closing package data because Treasury could incorrectly adjust
agencies' audited information.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 138; No. 04-
4;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to require and document management reviews of all
procedures that result in data changes to the CFS.
Status of recommendation: Per Treasury and OMB:
Treasury further revised its procedures to ensure management reviews of
data changes to the CFS. Also, see status of recommendation No. 04-1.
Status of recommendation: Per GAO: Open. Treasury's procedures were not
effective for fiscal year 2005. Undetected errors occurred in key
templates used to compile the CFS.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 139; No. 04-
5;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to configure the GFRS database to prevent Treasury
personnel from altering data submitted by federal agencies and to use
separate GFRS databases for testing and production.
Status of recommendation: Per Treasury and OMB:
Treasury revised its automated processes in fiscal year 2005 to prevent
unauthorized changes to agency-submitted data.
Status of recommendation: Per GAO: Open. Information system weaknesses
existed within the segments of GFRS that were used during the fiscal
years 2005 and 2004 reporting processes. We found that the GFRS
database (1) was not configured to prevent the alteration of data
submitted by federal agencies and (2) was used for both production and
testing during the reporting processes. Therefore, information
submitted by federal agencies within GFRS is not adequately protected
against unauthorized modification or loss.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 140; No. 04-
6;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to assess the infrastructure associated with the
compilation process and modify it as necessary to achieve a sound
internal control environment.
Status of recommendation: Per Treasury and OMB:
Treasury has recruited and is currently recruiting highly qualified
personnel to be trained in the CFS compilation process and in the
associated internal controls related to the CFS compilation.
Status of recommendation: Per GAO: Open.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 141; No. 04-
7;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to review the TFM and any other guidance to federal
agencies to ensure that they provide clear instructions for reporting
accurate data to Treasury in the area of loans receivable and loan
guarantees.
Status of recommendation: Per Treasury and OMB:
Treasury updated the TFM in fiscal year 2005 related to the required
GAAP disclosures to ensure accurate financial data reporting by federal
agencies.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 142; No. 04-
8;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to review the TFM and any other guidance to federal
agencies to ensure that they provide clear instructions for reporting
accurate data to Treasury in the area of property, plant, and
equipment.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 04-7.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 143; No. 04-
9;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to review the TFM and any other guidance to federal
agencies to ensure that they provide clear instructions for reporting
accurate data to Treasury in the area of federal employee and veteran
benefits payable.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 04-7.
Status of recommendation: Per GAO: Open. The TFM continues to need
updates in this area.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 144; No. 04-
10;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to review the TFM and any other guidance to federal
agencies to ensure that they provide clear instructions for reporting
accurate data to Treasury in the area of contingencies.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 04-7.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 145; No. 04-
11;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to review the TFM and any other guidance to federal
agencies to ensure that they provide clear instructions for reporting
accurate debit and credit amounts to Treasury.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 04-7.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 146; No. 04-
12;
Recommendation: The Director of OMB should direct the Controller of the
Office of Federal Financial Management, in coordination with the Fiscal
Assistant Secretary, to ensure that federal agencies submit to GAO a
complete closing package, as required by the TFM as part of the
consolidation process, consisting of the (1) special purpose audit
opinion, (2) management representation letter for the closing package,
(3) audit trail report (reclassification journal voucher report), (4)
closing package financial statement reports, (5) trading partner
summary reports, (6) notes reports, and (7) other data reports.
Status of recommendation: Per Treasury and OMB:
Treasury updated the TFM instructions requiring agencies to submit a
complete closing package to GAO. OMB also referenced the TFM, in OMB
Circular A-136, Part B, for a listing of the required documents to be
submitted with the closing package.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 147; No. 04-
13;
Recommendation: As Treasury continues to make strides to address issues
related to intragovernmental transactions, the Secretary of the
Treasury should direct the Fiscal Assistant Secretary, working in
coordination with the Controller of OMB, to require that federal
agencies provide detailed explanations for all material differences
identified in the intragovernmental reconciliations.
Status of recommendation: Per Treasury and OMB:
Treasury updated the TFM with instructions requiring agencies to
provide detailed explanations for material differences.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 148; No. 04-
14;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, working in coordination with the Controller of
OMB's Office of Federal Financial Management, to develop policies and
procedures to determine the proper resolution and the appropriate legal
representations to GAO at the governmentwide level when Justice's legal
counsel and agencies' legal counsel provide inconsistent opinions.
Status of recommendation: Per Treasury and OMB:
OMB and Treasury will work with Department of Justice to discuss
possible solutions to this issue.
Status of recommendation: Per GAO: Open.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 149; No. 04-
15;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for federal
employee and veteran benefits payable meets the requirements of SFFAS
No. 5, Accounting for Liabilities of the Federal Government, paragraph
110, table 9, which states that all components of the liability for
future policy benefits should be separately disclosed in a footnote
with a description of each amount and an explanation of its projected
use and any other potential uses.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 11,
Federal Employee and Veteran Benefits Payable, in the fiscal year 2005
CFS. However, no data were received in fiscal year 2005, and therefore,
there was no disclosure related to this requirement. Treasury plans to
discuss these disclosure requirements further with the agencies and
with GAO during fiscal year 2006 to ensure that all relevant data are
being received from the agencies.
Status of recommendation: Per GAO: Open.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 150; No. 04-
16;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for federal
employee and veteran benefits payable meets the requirements of SFFAS
No. 5, Accounting for Liabilities of the Federal Government, paragraphs
117 and 118, which states that all federal reporting entities with
whole life insurance programs should follow the standards as prescribed
in the private sector standards when reporting the liability for future
policy benefits, in addition to the following required disclosures:
liability for future policy benefits relating to participating life
insurance contracts should be equal to the sum of (1) the net level
premium reserve for death and endowment policy benefits, (2) the
liability for terminal dividends, and (3) any premium deficiency.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 151; No. 04-
17;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for federal
employee and veteran benefits payable meets the requirements of SFFAS
No. 5, Accounting for Liabilities of the Federal Government, paragraph
121, which states that all components of the liability for future
policy benefits (i.e., the net-level premium reserve for death and
endowment policy and the liability for terminal dividends) should be
separately disclosed in a footnote with a description of each amount
and an explanation of its projected use and any other potential uses
(e.g., reducing premiums, determining and declaring dividends
available, or reducing federal support in the form of appropriations
related to administrative cost or subsidies).
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this disclosure
would be directly affected by the implementation of the FASAB exposure
draft mentioned in the status of recommendation No. 02-25.
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-25.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 152; No. 04-
18;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for cash and
other monetary assets meets the requirements of SFFAS No. 1, Accounting
for Selected Assets and Liabilities, paragraph 30, which requires that
financial reports disclose the reasons for and nature of restricted
cash. SFFAS No. 1 defines restricted cash as restrictions usually
imposed on cash deposits (in escrow or other special accounts) by law,
regulation, or agreement.
Status of recommendation: Per Treasury and OMB:
This required information was disclosed in Note 2, Cash and Other
Monetary Assets, in the fiscal year 2005 CFS.
Status of recommendation: Per GAO: Closed.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 153; No. 04-
19;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that agencies designate in the note
disclosure for cash and other monetary assets any amounts reported for
the "other cash" line items that are restricted with respect to the
federal government taken as a whole.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 2,
Cash and Other Monetary Assets, in the fiscal year 2005 CFS. Treasury
plans to discuss these disclosure requirements further with the
agencies and with GAO during fiscal year 2006 to ensure that all
relevant data are being received from the agencies.
Status of recommendation: Per GAO: Open.
GAO-05-407 (results of the fiscal year 2004 audit): Count: 154; No. 04-
20;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that the note disclosure for other
liabilities meets the requirements of SFFAS No. 5, paragraph 114, which
requires the reporting of indicators of the range of uncertainty around
insurance-related estimates and the sensitivity of the estimates to
changes in major assumptions.
Status of recommendation: Per Treasury and OMB:
See status of recommendation No. 02-25. In addition, this required
information was requested from the agencies for inclusion in Note 15,
Other Liabilities, in the fiscal year 2005 CFS. However, no data were
received in fiscal year 2005, and therefore, there was no disclosure
related to this requirement. Treasury plans to discuss these disclosure
requirements further with the agencies and with GAO during fiscal year
2006 to ensure that all relevant data are being received from the
agencies.
Status of recommendation: Per GAO: Open.
Source: GAO.
[End of table]
[End of section]
Appendix II:
Comments from the Department of the Treasury:
Department Of The Treasury:
Washington, D.C.
Assistant Secretary:
April 3, 2006:
Mr. Gary T. Engel:
Director, Financial Management And Assurance:
Government Accountability Office:
Washington, D.C. 20548:
Dear Mr. Engel:
Thank you for the opportunity to comment on GAO's draft management
letter on the Fiscal Year 2005 audit, GAO-06-415, Significant Internal
Control Weaknesses Remain in Preparing the Consolidated Financial
Statements of the U.S. Government.
Your report clearly pointed out the issues we need to address in
continuing to develop and deploy our closing package system to collect
and consolidate the data for preparing the consolidated statements.
While significant improvements have been made in the compilation
process and the usefulness and accuracy of the FR, we agree that the
preparation process still needs improvement. We have been addressing
many of the recommendations in previous reports through procedural
changes to address items such as documentation and management review.
The FY 2005 audit report offers 12 new recommendations for improving
the internal control weaknesses in the preparation process. We concur
with all of the new recommendations except the acceleration of the due
date for the IGs to complete the agreed-upon procedures on the
intragovernmental activity and balances. For FY06 reporting, the IGs
will be required to submit their AUP reports on January 16, 2007.
However, this year we plan to expand the audit coverage to
intragovermental transactions by requiring the IGs to opine upon the
intragovernmental activity and balances in their audit of the closing
package which is due November 17, 2006. We will continue to work with
OMB and the agencies to adopt the other new recommendations and improve
preparation and reporting practices. We have developed detailed
corrective action plans to address the items in this report, some of
which can be implemented in a short period of time while others will
take longer than a year to resolve.
While we continue to disagree with some of your recommendations
relating to the Statement of Changes in Cash Balance from Unified
Budget and Other Activities, the Reconciliation of Net Operating Cost
and Unified Budget Deficit, and the adjustment process, we will
continue to work with your staff on alternative ways to satisfactorily
address these recommendations.
We concur that a significant material weakness is the intragovernmental
out-of-balance condition and have taken steps to work with the CFO
Council to develop new "business rules" for intragovernmental
transactions that we believe will bring about more consistent
accounting transactions. In addition we have developed new steps for
the agency auditors to review the out-of-balance condition between
their agency and its trading partners in the hope that greater auditor
involvement will encourage the agencies to accurately record these
transactions and correct the imbalances.
In conclusion, we will continue to work with you on the items on which
improvement needs to be made, and we will continue the dialogue to try
to resolve those areas in which we differ with your recommended
approach.
Sincerely,
Signed By:
Donald V. Hammond:
Fiscal Assistant Secretary:
cc:Linda Combs:
cc:Daniel Werfel:
GAO Comments:
1. See "Agency Comments and Our Evaluation" section.
2. We continue to believe that our recommendations relating to the
Statement of Changes in Cash Balance from Unified Budget and Other
Activities, Reconciliations of Net Operating Cost and Unified Budget
Deficit, and the adjustment process are sound. Our recommendations are
intended to allow flexibility in developing viable solutions to address
the issues. We will consider any alternative action that Treasury may
take to satisfactorily address the recommendations with which it has
disagreed. See appendix I for the status of related recommendations.
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Gary Engel, (202) 512-3406:
Staff Acknowledgments:
In addition to the above contact, the following individuals made key
contributions to this report: Lynda Downing, Assistant Director; Keith
Kronin; Katherine Schirano; and Taya Tasse.
(198414):
[End of Section]
FOOTNOTES
[1] The fiscal year 2005 Financial Report of the United States
Government includes our report and was completed by the Department of
the Treasury (Treasury) on December 15, 2005, and is available through
GAO's Web site at[hyperlink: www.gao.gov/financial.html] and Treasury's
Web site at [hyperlink www.fms.treas.gov/fr/index.html].
[2] GAO, Financial Management Systems: Lack of Disciplined Processes
Puts Effective Implementation of FMS' Governmentwide Financial Report
System at Risk, GAO-06-413 (Washington, D.C. Apr. 21, 2006).
[3] Treasury defines the verifying agencies as the 24 Chief Financial
Officer (CFO) Act agencies, Export-Import Bank of the United States,
Farm Credit System Insurance Corporation, Federal Communications
Commission, Federal Deposit Insurance Corporation, National Credit
Union Administration, U.S. Postal Service, Pension Benefit Guaranty
Corporation, Railroad Retirement Board, Securities and Exchange
Commission, Smithsonian Institution, and Tennessee Valley Authority.
FMS considers the verifying agencies to be significant agencies to the
CFS.
[4] GAO, Financial Audit: Process for Preparing the Consolidated
Financial Statements of the U.S. Government Needs Further Improvement,
GAO-04-866 (Washington, D.C. Sept. 10, 2004).
[5] GAO-06-413.
[6] OMB stated that for fiscal year 2005 TVA was faced with challenges
in obtaining an audit opinion on its closing package, and therefore OMB
instead required TVA to perform agreed-upon procedures on TVA's closing
package data. However, these procedures did not provide audit assurance
over certain significant information included in the CFS for this
agency.
[7] GAO, Internal Control: Standards for Internal Control in the
Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C. November
1999). These standards define the minimum level of quality acceptable
for internal control in the federal government and provide the
standards against which internal control is to be evaluated.
[8] Trading partners are U.S. government agencies, departments, or
other components included in the CFS that do business with each other.
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