Financial Audit
Material Weaknesses in Internal Control Continue to Impact Preparation of the Consolidated Financial Statements of the U.S. Government Gao ID: GAO-09-387 April 21, 2009Since GAO's first audit of the fiscal year 1997 consolidated financial statements of the U.S. government (CFS), material weaknesses in internal control and other limitations on the scope of our work have prevented GAO from expressing an opinion on the accrual basis CFS. Certain of those material weaknesses relate to inadequate systems, controls, and procedures to properly prepare the CFS. The purpose of this report is to (1) provide details of the continuing material weaknesses related to the preparation of the CFS, (2) recommend improvements, and (3) provide the status of corrective actions taken to address GAO's previous 56 recommendations in this area.
During its audit of the fiscal year 2008 CFS, GAO identified continuing and new control deficiencies in the federal government's processes used to prepare the CFS. These control deficiencies contribute to material weaknesses in internal control over the federal government's ability to (1) adequately account for and reconcile intragovernmental activity and balances between federal agencies; (2) ensure that the CFS was consistent with the underlying audited agency financial statements, properly balanced, and in conformity with U.S. generally accepted accounting principles; and (3) identify and either resolve or explain material differences between components of the budget deficit reported in the Department of the Treasury's records, used to prepare the Reconciliation of Net Operating Cost and Unified Budget Deficit and Statement of Changes in Cash Balance from Unified Budget and Other Activities, and related amounts reported in federal agencies' financial statements and underlying financial information and records. The control deficiencies GAO identified involved: (1) establishing and documenting policies and procedures for identifying and eliminating federal agencies' intragovernmental payroll tax amounts when compiling the CFS, (2) establishing and documenting policies and procedures for preparing and reviewing information included in key sections of the Financial Report of the U.S. Government, (3) establishing criteria for identifying federal entities' significance to the CFS and annually assessing which entities meet such criteria, (4) enhancing procedures for analyzing and reviewing data used when compiling the Statements of Net Cost, and (5) various other control deficiencies identified in previous years' audits. Of the 56 open recommendations GAO reported in June 2008, 16 were closed and 40 remained open as of December 9, 2008, the date of our report on our audit of the fiscal year 2008 CFS. GAO will continue to monitor the status of corrective actions taken to address the 4 new recommendations as well as the 40 open recommendations from prior years.
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-09-387, Financial Audit: Material Weaknesses in Internal Control Continue to Impact Preparation of the Consolidated Financial Statements of the U.S. Government
This is the accessible text file for GAO report number GAO-09-387
entitled 'Financial Audit: Material Weaknesses in Internal Control
Continue to Impact Preparation of the Consolidated Financial Statements
of the U.S. Government' which was released on April 22, 2009.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to the Secretary of the Treasury and the Director of the Office
of Management and Budget:
United States Government Accountability Office:
GAO:
April 2009:
Financial Audit:
Material Weaknesses in Internal Control Continue to Impact Preparation
of the Consolidated Financial Statements of the U.S. Government:
GAO-09-387:
GAO Highlights:
Highlights of GAO-09-387, a report to the Secretary of the Treasury and
the Director of the Office of Management and Budget.
Why GAO Did This Study:
Since GAO‘s first audit of the fiscal year 1997 consolidated financial
statements of the U.S. government (CFS), material weaknesses in
internal control and other limitations on the scope of our work have
prevented GAO from expressing an opinion on the accrual basis CFS.
Certain of those material weaknesses relate to inadequate systems,
controls, and procedures to properly prepare the CFS. The purpose of
this report is to (1) provide details of the continuing material
weaknesses related to the preparation of the CFS, (2) recommend
improvements, and (3) provide the status of corrective actions taken to
address GAO‘s previous 56 recommendations in this area.
What GAO Found:
During its audit of the fiscal year 2008 CFS, GAO identified continuing
and new control deficiencies in the federal government‘s processes used
to prepare the CFS. These control deficiencies contribute to material
weaknesses in internal control over the federal government‘s ability to
(1) adequately account for and reconcile intragovernmental activity and
balances between federal agencies; (2) ensure that the CFS was
consistent with the underlying audited agency financial statements,
properly balanced, and in conformity with U.S. generally accepted
accounting principles; and (3) identify and either resolve or explain
material differences between components of the budget deficit reported
in the Department of the Treasury‘s records, used to prepare the
Reconciliation of Net Operating Cost and Unified Budget Deficit and
Statement of Changes in Cash Balance from Unified Budget and Other
Activities, and related amounts reported in federal agencies‘ financial
statements and underlying financial information and records.
The control deficiencies GAO identified involved:
* establishing and documenting policies and procedures for identifying
and eliminating federal agencies‘ intragovernmental payroll tax amounts
when compiling the CFS,
* establishing and documenting policies and procedures for preparing
and reviewing information included in key sections of the Financial
Report of the U.S. Government,
* establishing criteria for identifying federal entities‘ significance
to the CFS and annually assessing which entities meet such criteria,
* enhancing procedures for analyzing and reviewing data used when
compiling the Statements of Net Cost, and,
* various other control deficiencies identified in previous years‘
audits (see appendix I).
Of the 56 open recommendations GAO reported in June 2008, 16 were
closed and 40 remained open as of December 9, 2008, the date of our
report on our audit of the fiscal year 2008 CFS. GAO will continue to
monitor the status of corrective actions taken to address the 4 new
recommendations as well as the 40 open recommendations from prior
years.
What GAO Recommends:
GAO is making four new recommendations to address control deficiencies
identified during the fiscal year 2008 CFS audit that relate to the
federal government‘s processes used to prepare the CFS. In commenting
on our draft report, The Department of the Treasury and the Office of
Management and Budget stated that they generally concurred with our
recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-387]. For more
information, contact Gary Engel, (202) 512-3406, engelg@gao.gov.
[End of section]
Contents:
Letter:
Scope and Methodology:
Treatment of Intragovernmental Payroll Tax Amounts in Compiling the
CFS:
Consistency and Accuracy of Key Sections of the Financial Report:
Identifying Federal Entities Significant to the CFS:
Procedures for Reviewing the Statements of Net Cost:
Agency Comments and Our Evaluation:
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 Contact and Staff Acknowledgments:
Tables:
Table 1: Status of Treasury's and OMB's Progress in Addressing GAO's
Prior Year Recommendations for Preparing the CFS (as of December 9,
2008):
Abbreviations:
CFOC: Chief Financial Officers' Council:
CFS: Consolidated financial statements of the U.S. Government:
FASAB: Federal Accounting Standards Advisory Board:
GAAP: Generally Accepted Accounting Principles:
GFRS: Governmentwide Financial Report System:
IDRC: Intragovernmental Dispute Resolution Committee:
Justice: Department of Justice:
MD&A: Management's Discussion and Analysis:
OMB: Office of Management and Budget:
SFFAS: Statement of Federal Financial Accounting Standard:
SNC: Statement of Net Cost:
SOP: Standard Operating Procedure:
STAR: Treasury's Central Accounting and Reporting System:
TFM: Treasury Financial Manual:
Treasury: Department of the Treasury:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
April 21, 2009:
The Honorable Timothy F. Geithner:
The Secretary of the Treasury:
The Honorable Peter Orszag:
Director, Office of Management and Budget:
In our report dated December 9, 2008,[Footnote 1] we disclaimed an
opinion on the consolidated financial statements of the U.S. government
(CFS) for the fiscal years ended September 30, 2008 and 2007,[Footnote
2] except for the 2008 and 2007 Statements of Social Insurance, which
received unqualified opinions. Since GAO's first audit of the fiscal
year 1997 CFS, material weaknesses in financial reporting and other
limitations on the scope of our work have prevented us from expressing
an opinion on the federal government's accrual basis consolidated
financial statements.[Footnote 3] We have reported that the federal
government did not have adequate systems, controls, and procedures for
preparing the CFS to ensure that the consolidated financial statements
are consistent with the underlying audited agency financial statements,
properly balanced, and in conformity with U.S. generally accepted
accounting principles (GAAP).
On behalf of the federal government, the Department of the Treasury
(Treasury), in coordination with the Office of Management and Budget
(OMB),[Footnote 4] prepares the CFS. Many of the material weaknesses
[Footnote 5] in internal control that have contributed to our
continuing disclaimers of opinion were identified by other auditors
during their audits of individual federal agencies' financial
statements and were reported in detail with recommendations to the
agencies in separate reports. This report presents the additional
material weaknesses that we identified during our tests of the federal
government's processes used to prepare the CFS.
The purpose of this report is to (1) provide more detailed information
on the material weaknesses that we identified during our audit of the
fiscal year 2008 CFS that relate to internal control over the processes
used to prepare the CFS, (2) recommend improvements to address these
weaknesses, and (3) provide the status of corrective actions by
Treasury and OMB to address the 56 recommendations detailed in our
previous reports that remained open at the end of the fiscal year 2007
audit (see appendix I). We have discussed each of the new control
deficiencies identified during our fiscal year 2008 audit with your
staff and have incorporated their comments as appropriate.
Scope and Methodology:
As part of our audit of the fiscal years 2008 and 2007 CFS, we
evaluated the federal government's financial reporting procedures and
related internal control. Also, we determined the status of corrective
actions by Treasury and OMB to address open recommendations relating to
the processes used to prepare the CFS detailed in our previous reports.
In our audit report on the fiscal year 2008 CFS, which is included in
the fiscal year 2008 Financial Report of the United States Government
(Financial Report), we discussed the material weaknesses related to the
federal government's processes used to prepare the CFS. These material
weaknesses contributed to our disclaimer of opinion on the accrual
basis consolidated financial statements and also contributed to our
adverse opinion on internal control. We performed sufficient audit
procedures to provide the disclaimer of opinion on the accrual basis
consolidated financial statements in accordance with U.S. generally
accepted government auditing standards. This report provides the
details of the material weaknesses identified during the fiscal year
2008 audit that relate to the processes used to prepare the CFS and our
recommendations to correct these weaknesses, as well as the status of
corrective actions by Treasury and OMB to address recommendations from
previous 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 summarized in the Agency Comments and Our
Evaluation section of this report. Treasury's comments are reprinted in
appendix II and are also summarized in the Agency Comments section.
Treatment of Intragovernmental Payroll Tax Amounts in Compiling the
CFS:
Treasury did not establish policies and procedures to provide assurance
that federal agencies' intragovernmental payroll tax amounts are
identified and eliminated at the governmentwide level when compiling
the CFS. Consolidated financial statements are intended to present the
results of operations and financial position of all of the components
that make up the reporting entity as if the entity were a single
enterprise. Therefore, when preparing the CFS, Treasury should ensure
that intragovernmental activity and balances between federal agencies
are eliminated. Federal agencies, as well as other employers, are
required to pay, among other taxes, a matching amount of Social
Security and Medicare taxes for their employees (payroll taxes).
Federal agencies' payments of payroll taxes to the Internal Revenue
Service represent intragovernmental transactions. If these amounts are
not eliminated at the governmentwide level when compiling the CFS,
revenues and expenses become overstated in the CFS. However, in
disclosing the types of revenues included in the Statement of
Operations and Changes in Net Position in the draft CFS, Treasury's
description stated that "individual income tax and tax withholdings
include—.payroll taxes collected from other agencies." We inquired of
Treasury as to why these amounts would be included in the CFS and not
eliminated during the preparation process. Treasury subsequently
deleted the language regarding the inclusion of federal agency payroll
taxes from the CFS. However, Treasury was unable to provide any
documentation demonstrating that these amounts were appropriately
classified as intragovernmental transactions and eliminated from the
CFS. Without adequate policies and procedures to accurately identify
and eliminate intragovernmental payroll tax amounts in the process used
to prepare the CFS, the federal government's ability to determine the
impact of these amounts on the CFS is impaired and, consequently, the
CFS may be misstated.
Recommendation for Executive Action:
We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary to design, document, and implement policies and
procedures to identify and eliminate intragovernmental payroll tax
amounts at the governmentwide level when compiling the CFS.
Consistency and Accuracy of Key Sections of the Financial Report:
Treasury, in coordination with OMB, did not take the steps necessary to
help assure that certain key information related to significant
financial events and conditions were consistent and accurately
presented throughout the fiscal year 2008 Financial Report.[Footnote 6]
Specifically, Treasury, in coordination with OMB, has not fully
established an effective process for preparing and reviewing
information included in the Management's Discussion and Analysis
(MD&A), and "The Federal Government's Financial Health: A Citizen's
Guide to the Financial Report of the United States Government"
(Citizen's Guide) sections of the Financial Report. According to
Statement of Federal Financial Accounting Standards No. 15,
Management's Discussion and Analysis, the MD&A should highlight key
information and increase the understanding and usefulness of the
Financial Report. Similarly, the Citizen's Guide is intended to provide
readers with a brief, high-level summary of key financial information
from the Financial Report on our nation's current fiscal condition and
the long-term sustainability. Further, data presented in both the MD&A
and Citizen's Guide must be consistent with related data in the CFS.
Treasury, in coordination with OMB, performed certain procedures to
prepare and review the MD&A and Citizen's Guide. However, these
procedures were not effective in helping assure that (1) information
was consistently reported in the CFS and these related sections of the
Financial Report and (2) information reported in the MD&A and Citizen's
Guide was consistent, complete, and accurate. During our comparison of
information reported in draft versions of the MD&A and Citizen's Guide
with information reported in the fiscal year 2008 draft CFS, we
identified (1) several inconsistencies and (2) numerous instances in
which information was omitted from, or incorrectly reported in, these
draft sections of the Financial Report that were not detected by
Treasury's review process. For example, information in the draft MD&A
and Citizen's Guide regarding certain federal actions for addressing
the financial crisis was incomplete or incorrectly reported. In
addition, the $339 billion change in veterans benefit liability in
fiscal year 2008 reported in the draft CFS was incorrectly reported as
$365 billion in the draft versions of the MD&A and Citizen's Guide. We
communicated our findings to Treasury officials who corrected the data
presented in the MD&A and Citizen's Guide sections of the final
Financial Report. Without effective procedures for preparing and
reviewing the MD&A and Citizen's Guide to ensure that the information
is complete, accurate, and consistent with the information reported in
the CFS, Treasury is at risk that information provided in these key
sections of the Financial Report will not be reliable.
A contributing factor to the reporting errors and inconsistencies we
detected is that Treasury does not have documented procedures for
preparing and reviewing the MD&A and Citizen's Guide sections of the
Financial Report in comparison with data presented in the CFS. As
preparer of the Financial Report, Treasury management, in coordination
with OMB, is responsible for developing and documenting detailed
policies, procedures, and practices and for ensuring that internal
control is built into and is an integral part of operations to ensure
that information is consistent and accurate throughout the Financial
Report. GAO's Standards for Internal Control in the Federal Government
calls for clear documentation of policies and procedures.[Footnote 7]
Although, Treasury has documented policies and procedures used to
compile the CFS in its Standard Operating Procedures (SOP) entitled
"Preparing the Financial Report of the U.S. Government," the SOP does
not provide procedures for preparing and reviewing the MD&A and
Citizen's Guide--two key report sections providing information to the
Congress and the public regarding the fiscal condition of the U.S.
government--to help assure they are consistent and accurate in
comparison with related information presented elsewhere in the
Financial Report.
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, document, and implement processes and procedures for preparing
and reviewing the MD&A and Citizen's Guide sections of the Financial
Report to help assure that information reported in these sections is
complete, accurate, and consistent with related information reported
elsewhere in the Financial Report.
Identifying Federal Entities Significant to the CFS:
Treasury, in coordination with OMB, has not established and documented
criteria for identifying which federal entities are significant to the
CFS for purposes of verifying and validating the information submitted
by federal entities for inclusion in the CFS. Treasury, through the
Treasury Financial Manual (TFM), identified 35 significant federal
agencies and entities, referred to as "verifying agencies."[Footnote 8]
Those agencies are required to perform a number of procedures to
provide audit assurance over the information submitted to Treasury for
the CFS. However, Treasury and OMB have not (1) established and
documented criteria for designating federal entities as "verifying
agencies" significant to the CFS, and (2) established policies and
procedures for assessing and documenting, on an annual basis, which
entities meet the criteria.
Treasury, in coordination with OMB, is required to prepare the CFS.
According to the Federal Accounting Standards Advisory Board's
Statement of Federal Financial Accounting Concepts No. 4, Intended
Audience and Qualitative Characteristics for the Consolidated Financial
Report of the United States Government, the consolidated financial
report should be a general purpose report that is aggregated from
federal agencies' and other federal entities' financial reports. The
TFM provides policies and procedures on how federal agencies are to
provide their financial data to Treasury for consolidation.
In accordance with the TFM, verifying agencies are required to submit
their financial data to Treasury using a Closing Package. The verifying
agency's Chief Financial Officer must certify the accuracy of the data
in the Closing Package and have the Closing Package audited by the
agency's Inspector General. In addition, the Closing Package process
requires verifying agencies to reclassify their audited financial
statements to the Closing Package "special purpose financial
statements." Verifying agencies must also identify trading partners
[Footnote 9] and enter certain financial statement notes. The special
purpose financial statements are audited to obtain reasonable assurance
about whether the financial statements are (1) free of material
misstatements, (2) in conformity with accounting principles generally
accepted in the United States, and (3) presented pursuant to the
requirements of the TFM. Because the Closing Package process requires
verifying agencies to verify and validate the information in the
special purpose financial statements with their audited information and
receive an audit opinion, Treasury is provided a level of assurance
that it is compiling the CFS with audited financial information. All
other federal entities that contribute financial information to the CFS
are classified by Treasury as "nonverifying agencies." Over 100
nonverifying federal agencies and entities submitted data for fiscal
year 2008. Currently these entities are only required to submit
adjusted trial balance data to Treasury instead of an audited Closing
Package. Because of a lack of criteria for determining an entity's
significance to the CFS, it is unclear whether any of these
"nonverifying agencies" should be classified as "verifying agencies.":
One of Treasury's and OMB's goals for preparing the CFS is to link the
agencies' audited financial statements to the CFS. To accomplish this
goal, Treasury needs an appropriate level of assurance that it compiles
the CFS using audited Closing Packages from the federal entities
contributing the most significant amounts of financial information.
However, without establishing the criteria for identifying federal
entities as significant to the CFS and establishing related policies
and procedures to assess, on an annual basis, which entities meet such
criteria, Treasury and OMB cannot obtain this level of assurance.
Recommendations for Executive Action:
We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to (1)
establish and document criteria to be used in identifying federal
entities as significant to the CFS for purposes of obtaining assurance
over the information being submitted by those entities for the CFS and
(2) develop and implement policies and procedures for assessing and
documenting, on an annual basis, which entities met such criteria.
These actions will help provide Treasury and OMB with assurance that
the information being used to prepare the CFS is consistent with the
audited financial statements of the federal agencies, in all material
respects.
Procedures for Reviewing the Statements of Net Cost:
During fiscal year 2008, Treasury enhanced its SOP entitled "Preparing
the Financial Report of the U.S. Government" to require an overall
analysis of the consolidated numbers in the financial statements to
include a review for reasonableness of changes from the prior year to
the current year. However, because of a lack of details on the
objectives of the analysis and the procedures to be performed, the
overall analysis did not detect significant errors in amounts used to
prepare the Statements of Net Cost (SNC).
Internal control should provide, among other things, reasonable
assurance that financial reporting is reliable. GAO's Standards for
Internal Control in the Federal Government[Footnote 10] defines the
minimum level of quality acceptable for internal control in the federal
government and provides the standards against which internal control is
to be evaluated. These standards state that internal controls should
include, among other items, reviews by management at the functional or
activity level.
Treasury categorizes and allocates costs in the SNC by agency. For
example, most of the costs associated with pension and health benefits
that are reported by the Office of Personnel Management (OPM) in its
financial statements are allocated to the costs of OPM's federal user
agencies for governmentwide federal reporting purposes. Treasury uses
head count figures reported by OPM in its Closing Package to perform
the allocation of pension and health benefit costs across all user
federal agencies. However, we found that Treasury did not detect a
significant variance in head count between certain federal entities
from 2007 to 2008, which resulted in significant errors in the draft
SNC. Specifically, we found that, in fiscal year 2007, the head count
used for the Department of Defense (DOD) was 497,724, and the head
count used for "all other entities" was 92,566.[Footnote 11] In fiscal
year 2008, we found that the head counts were erroneously reversed. The
head count used for DOD was 95,157, while the head count used for "all
other entities" was 495,673. Treasury's review process and overall
analysis did not detect this error. As a result, Treasury's draft SNC
understated DOD's reported costs on the fiscal year 2008 SNC by
approximately $10 billion and costs for the "all other entities" line
item was equally overstated. Without sufficiently detailed procedures
including guidance for performing the analysis and review of data used
in the allocation process for compiling the SNC, significant errors
could occur in the SNC and not be detected.
Recommendation for Executive Action:
We reaffirm our recommendation that the Secretary of the Treasury
direct the Fiscal Assistant Secretary to further enhance the SOP
entitled "Standard Operating Procedures for Preparing the Financial
Report of the U.S. Government" to better ensure that CFS compilation
practices are proper, complete, and can be consistently applied,
including detailed procedures for conducting reviews and documenting
reasonableness of data used in the process for compiling the CFS.
Agency Comments and Our Evaluation:
OMB Comments:
In oral comments on a draft of this report, OMB stated that it
generally concurred with the new findings and related recommendations
in this report. In addition, OMB provided technical comments, which we
have incorporated as appropriate.
Treasury Comments:
In its April 15, 2009, written comments on a draft of this report,
which are reprinted in appendix II, Treasury stated that it concurs
with the new recommendations and expects to implement them by the end
of fiscal year 2009. We will evaluate the actions taken to address our
recommendations as part of our fiscal year 2009 CFS audit.
This report contains recommendations to the Secretary of the Treasury.
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 Oversight and
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 Chairman and Ranking Member
of the Senate Committee on Homeland Security and Governmental Affairs
and its Subcommittee on Federal Financial Management, Government
Information, Federal Services, and International Security and the
Chairman and Ranking Member of the House Committee on Oversight and
Government Reform and its Subcommittee on Government Management,
Organization, and Procurement. In addition, we are sending copies to
the Fiscal Assistant Secretary of the Treasury, the Director of OMB,
the Deputy Director for Management of OMB, and the Acting Controller of
OMB's Office of Federal Financial Management. 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 me (202) 512-
3406 or engelg@gao.gov. Key contributors to this report are listed in
appendix III.
Signed by:
Gary T. Engel:
Director Financial Management and Assurance:
[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 the status of recommendations from the following
six reports that were open at the beginning of our fiscal year 2008
audit:
Financial Audit: Process for Preparing the Consolidated Financial
Statements of the U.S. Government Needs Improvement, [hyperlink,
http://www.gao.gov/products/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,
[hyperlink, http://www.gao.gov/products/GAO-04-866] (Washington, D.C.:
Sept. 10, 2004);
Financial Audit: Process for Preparing the Consolidated Financial
Statements of the U.S. Government Continues to Need Improvement,
[hyperlink, http://www.gao.gov/products/GAO-05-407] (Washington, D.C.:
May 4, 2005);
Financial Audit: Significant Internal Control Weaknesses Remain in
Preparing the Consolidated Financial Statements of the U.S. Government,
[hyperlink, http://www.gao.gov/products/GAO-06-415] (Washington, D.C.:
Apr. 21, 2006);
Financial Audit: Significant Internal Control Weaknesses Remain in the
Preparation of the Consolidated Financial Statements of the U.S.
Government, [hyperlink, http://www.gao.gov/products/GAO-07-805]
(Washington, D.C.: July 23, 2007); and:
Financial Audit: Material Weaknesses in Internal Control over the
Processes Used to Prepare the Consolidated Financial Statements of the
U.S. Government, [hyperlink, http://www.gao.gov/products/GAO-08-748]
(Washington, D.C.: June 17, 2008).
Recommendations from these reports that were closed in prior years are
not included in this appendix. This appendix includes the status of the
56 remaining open 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 or our assessment of the status of a recommendation. We
will continue to monitor Treasury's and OMB's progress in addressing
GAO's recommendations.
Of the 56 recommendations relating to the processes used to prepare the
consolidated financial statements of the U.S. government (CFS) that are
listed in this appendix, 16 were closed and 40 remained open as of
December 9, 2008, the date of our report on the audit of the fiscal
year 2008 CFS.
Table 1: Status of Treasury's and OMB's Progress in Addressing GAO's
Prior Year Recommendations for Preparing the CFS (as of December 9,
2008):
GAO-04-45 (results of the fiscal year 2002 audit):
Count: 1;
No.: 02-4;
Recommendation: As the Department of the Treasury (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
the Office of Management and Budget (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 to net position, Treasury has continued to eliminate, at
the consolidated level, intragovernmental activity and balances using
formal balanced accounting entries (via Reciprocal Categories) and has
continued its analysis of transactions that contribute to the unmatched
transactions and balances adjustment. Major contributors to the plug
are transactions with the General Fund (Reciprocal Category 29). In
fiscal year 2008, a Treasury Task Force was formed to develop an
accounting model for the General Fund. Treasury continues to separately
identify General Fund transactions to facilitate their agency
reconciliation. Also in fiscal year 2008, Treasury focused its efforts
on particular areas (fiduciary and employee benefits) and increased its
analysis and monitoring efforts on agencies' explanations of material
differences with their trading partners;
Status of recommendation: Per GAO: Open. Treasury has continued
developing reconciliation procedures to aid in understanding the net
position balance but remains unable to eliminate the plugs associated
with compiling the CFS. In addition, there are hundreds of billions of
dollars of unreconciled differences between the General Fund and
federal agencies related to appropriation and other intragovernmental
transactions. The ability to reconcile these transactions is hampered
because not all General Fund transactions are reported in the
Department of the Treasury's financial statements.
Count: 2;
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-07-03, Business Rules for Intragovernmental Transactions;
Status of recommendation: Per Treasury and OMB: The business rules were
revised in fiscal year 2006 to expand and enhance the standard
practices for how federal agencies do business with each other. The
revised rules are published in Treasury Financial Manual (TFM) Bulletin
2007-03; OMB, Treasury, and the Chief Financial Officers' Council
(CFOC) are distributing quarterly, a "Watchlist" of the largest dollar
imbalances between two federal agencies and/or federal agencies not
reporting a trading partner. Federal agencies on the "Watchlist" meet
with OMB and Treasury to discuss the root causes of the imbalances and
come to resolution on how to mitigate the root causes. At the same
time, OMB, Treasury, and the CFOC are continuing their efforts toward
establishing the Intragovernmental Dispute Resolution Committee (IDRC),
as referenced in the business rules. The IDRC will be a vehicle for
resolving accounting disputes between federal agencies. The dispute
resolution process is also predicated on the principle that federal
agencies have implemented the business rules and will require the
disputing federal agencies to provide evidence of compliance with the
business rules during arbitration;
Status of recommendation: Per GAO: Open.
Count: 3;
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 federal 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. As
noted above, OMB, Treasury, and the CFOC are documenting the imbalances
identified on the "Watchlist" and subsequent resolutions. OMB,
Treasury, and the CFOC will continue to work toward establishing the
IDRC, as referenced in the business rules, and it will be used as a
vehicle for federal agencies to resolve their accounting disputes. The
IDRC will incorporate a standard practice of documenting all
resolutions and communicating the resolutions to all parties involved;
Status of recommendation: Per GAO: Open.
Count: 4;
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: Treasury has designed
formal consolidating and eliminating procedures to account for these
differences and has implemented them. See the status for recommendation
No. 02-4;
Status of recommendation: Per GAO: Open. Treasury's formal
consolidating and eliminating accounting entries could not fully
account for the difference in intragovernmental assets and liabilities
during the fiscal year 2008 compilation process. For example, there are
hundreds of billions of dollars of unreconciled differences between the
General Fund and federal agencies related to appropriation and other
intragovernmental transactions. These amounts are not eliminated by
Treasury's formal consolidating and elimination accounting entries due
to the fact that Treasury's ability to reconcile these transactions is
hampered because not all General Fund transactions are reported in the
Department of the Treasury's financial statements. As indicated in
Treasury's response to recommendation No. 02-4, additional analysis of
the General Fund is necessary to account for all differences in
intragovernmental assets and liabilities.
Count: 5;
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: Treasury continues to
provide to federal agencies information from its Central Accounting and
Reporting System (STAR) related to appropriations, transfers, and fund
balance with Treasury for the agencies' use in reconciling with this
centrally reported data. The agencies will be required to reconcile
with this information in fiscal year 2009;
Status of recommendation: Per GAO: Open. Treasury and OMB did not
provide federal agencies instructions on how to reconcile and report to
Treasury any differences between their records and Treasury's central
accounting records. Further, although Treasury's analysis of agencies'
transactions with the General Fund is ongoing, the ability to reconcile
these transactions is hampered because not all General Fund
transactions are reported in the Department of the Treasury's financial
statements.
Count: 6;
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: The current
reconciliation of intragovernmental activity does account for
differences caused by asset capitalization and agency advances or
deferred revenue. Given current intragovernmental differences, further
resolution of this activity is contingent on these differences being
materially resolved. See status of recommendation No. 02-4;
Status of recommendation: Per GAO: Open.
Count: 7;
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: These unmatched
transactions and balances will continue to be reflected in the
Statements of Operations and Changes in Net Position until they are
materially resolved. However, based on its analyses of these unmatched
transactions and balances, Treasury believes that these unmatched
transactions and balances are primarily caused by unreconciled
transactions that affect only the amounts reported on an accrual basis
of accounting (net operating cost) and, therefore, these unmatched
transactions and balances should not be included as a separate
reconciling item on this statement. Treasury will continue its analysis
in fiscal year 2009;
Status of recommendation: Per GAO: Open. Treasury has not implemented a
process that demonstrates the amount, if any, of unmatched transactions
and balances should be included as a separate reconciling item in the
reconciliation statement.
Count: 8;
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: Per GAO: Open. While Treasury has made
progress in developing certain Standard Operating Procedures (SOP), it
has not fully developed policies and procedures to ensure the
completeness of reporting of information on the reconciliation
statement and to document how all applicable components reported
elsewhere in the CFS are properly reflected in the reconciliation
statement.
Count: 9;
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: During fiscal year
2009, Treasury will revise its reporting materiality policy to address
any remaining concerns about the policy;
Status of recommendation: Per GAO: Open.
Count: 10;
No.: 02-15;
Recommendation: If Treasury chooses to continue using information from
both federal agencies' financial statements and STAR, Treasury should
demonstrate how the amounts from STAR reconcile to federal agencies'
financial statements;
Status of recommendation: Treasury has elected to continue the use of
information from STAR and has identified the material areas where STAR
data does not reconcile to federal agencies' financial statements.
Treasury intends to provide these specific items to agencies for their
reconciliation in fiscal year 2009;
Status of recommendation: Per GAO: Open.
Count: 11;
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: See status of
recommendation No. 02-15;
Status of recommendation: Per GAO: Open.
Count: 12;
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 federal agencies' audited financial
statements;
Status of recommendation: Per Treasury and OMB: Treasury has elected to
continue to use information from STAR. Treasury will document the
consistency of the significant line items on this statement to federal
agencies' audited financial statements as possible during fiscal year
2009. See status of recommendation No. 02-15;
Status of recommendation: Per GAO: Open.
Count: 13;
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: Treasury will continue
with its efforts to reconcile budgetary receipts to net operating
revenue. During fiscal year 2008, Treasury made significant progress
with identifying and documenting the larger differences between
budgetary receipts and net operating revenue. Efforts will continue in
fiscal year 2009, including looking into automating a portion of this
reconciliation in the Governmentwide Financial Reporting System (GFRS);
Status of recommendation: Per GAO: Open.
Count: 14;
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 continues to
define and document the reporting entity and made corresponding changes
to the reporting entity disclosure in the fiscal year 2008 CFS;
Status of recommendation: Per GAO: Open. Key decisions by the Fiscal
Assistant Secretary and the Controller of OMB have not been documented
showing the basis for including and excluding certain federal entities.
Count: 15;
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: See status of
recommendation No. 02-22;
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-22.
Count: 16;
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. 02-22;
Status of recommendation: Per GAO: Open. See status of recommendation
No. 02-22.
Count: 17;
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
revised their policies and procedures in fiscal year 2008 to improve
internal control over this process;
Status of recommendation: Per GAO: Closed.
Count: 18;
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: Treasury and OMB
revised their policies and procedures in fiscal year 2008 to improve
internal control over this process;
Status of recommendation: Per GAO: Closed.
Count: 19;
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 federal 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: Treasury updated the
SOP for the aggregation and analysis of federal agencies' summary of
unadjusted misstatements. Treasury also tracked federal agencies'
submissions of this information and prepared a CFS-level summary that
showed that federal agencies' unadjusted misstatements were immaterial
in the aggregate to the CFS;
Status of recommendation: Per GAO: Closed.
Count: 20;
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 federal agencies provide adequate information in their
legal representation letters regarding the expected outcomes of the
cases;
Status of recommendation: Per Treasury and OMB: During fiscal year
2008, Treasury and OMB continued to work with federal agencies to
ensure that adequate information was provided in the legal
representation letters regarding the expected outcomes of the cases;
Status of recommendation: Per GAO: Open. Treasury and OMB did not
ensure that all federal agencies reported adequate information relating
to expected outcomes of legal cases.
Count: 21;
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 federal 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: Based on the work
Treasury and OMB performed in fiscal year 2008, OMB believes it is
reasonable to continue disclosing treaties and other international
agreements in the CFS notes with the acknowledgment that the U.S.
government is a party to them and may have certain responsibilities
under them; also, the Note should include a reference to where more
detailed information is available (e.g., State Department's Treaties In
Force) similar to other notes. To that end, OMB proposed updating the
requisite Note and believes that this proposed Note meets the intent
and substance of Statement of Federal Financial Accounting Standard
(SFFAS) No. 32, Consolidated Financial Report of the United States
Government Requirements: Implementing Statement of Federal Financial
Concepts 4 "Intended Audience and Qualitative Characteristics for the
Consolidated Financial Report of the United States Government" because
the audience to whom the CFS is mainly directed is citizens and their
intermediaries and, as such, this information should be timely and
understandable to that audience. However, GAO has since provided some
additional insight to OMB regarding the recommendation, and OMB
established a working group of the OMB Circular No. A-136, Financial
Reporting Requirements (A-136) Subcommittee of the CFOC to address the
topic. Finally, OMB looks forward to meeting with GAO this year to
discuss the recommendation further;
Status of recommendation: Per GAO: Open.
Count: 22;
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 federal 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.
Count: 23;
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 federal 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.
Count: 24;
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 federal 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.
Count: 25;
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 federal 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: OMB questions this
recommendation, as it is not known whether any treaties or
international agreements are different than any other commitments or
contingencies. Additionally, if the difference were known, those that
were classified as "remote" contingencies would not be recorded or
disclosed as probable or reasonably possible in the CFS. Therefore,
until these can be established as actually being different than any
other commitments or contingencies, this recommendation should be
removed;
Status of recommendation: Per GAO: Open. Treasury, OMB, and the federal
agencies have not yet performed the necessary work to determine whether
commitments or contingencies exist under treaties and international
agreements with foreign countries that would be required to be
reported. In addition, Treasury and OMB have not established written
policies and procedures to help ensure that major treaty and other
international agreement information is properly identified and reported
in the CFS.
Count: 26;
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 Financial
Accounting Standards Board 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: This required
information was requested from federal agencies for disclosure in the
required supplementary information (risk assumed) section of the fiscal
year 2008 CFS. Further discussions with federal agencies will take
place in fiscal year 2009 to ensure proper and complete disclosure of
this information;
Status of recommendation: Per GAO: Open.
GAO-04-866 (results of the fiscal year 2003 audit):
Count: 27;
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: In fiscal year 2008,
Treasury disclosed the change in cash balances as reported on the
Balance Sheet on the Statement of Changes in Cash Balance;
Status of recommendation: Per GAO: Open. Although Treasury took steps
to improve the readability of the Statement of Changes in Cash Balance,
Treasury has not developed a process that will allow full reporting of
the changes in cash balance. For example, Treasury was unable to
identify and explain certain changes necessary to account for the
changes in cash and other monetary assets reported on the Statement of
Changes in Cash Balance.
Count: 28;
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 the Department of Justice (Justice) and certain other
executive branch federal agencies to ensure that these federal agencies
report or disclose relevant criminal debt information in conformity
with generally accepted accounting principles (GAAP) in their financial
statements and have such information subjected to audit;
Status of recommendation: Per Treasury and OMB: OMB will continue
working with Justice to develop a reasonable approach for the reporting
or disclosing of this information;
Status of recommendation: Per GAO: Open.
Count: 29;
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 in the CFS as it becomes available. See
status of recommendation No. 03-8;
Status of recommendation: Per GAO: Open.
Count: 30;
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: Treasury continues to
use its CFS compilation process, GFRS, to provide direct linkage from
the agency audited financial statements to most of the CFS principal
statements. However, additional work is needed related to the two
budgetary principal financial statements. See status of recommendation
No. 02-17. With regard to note disclosures, GFRS note references
(linkages), with additional Treasury analysis, ensure direct linking of
the CFS and agency note disclosures;
Status of recommendation: Per GAO: Open. Treasury has showed progress
by demonstrating that amounts in the Statement of Social Insurance were
consistent with the underlying federal agencies‘ audited financial
statements and that the Balance Sheet and the Statement of Net Cost
were consistent with federal agencies‘ financial statements prior to
eliminating intragovernmental activity and balances. However,
Treasury‘s closing package process did not ensure that the information
in the remaining three principal financial statements were fully
consistent with the underlying information in federal agencies‘ audited
financial statements and other financial data.
GAO-05-407 (results of the fiscal year 2004 audit):
Count: 31;
No.: 04-02;
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 continue
its efforts to better ensure that journal vouchers include appropriate
supporting documentation;
Status of recommendation: Per GAO: Open. Treasury did not have
appropriate supporting documentation for all journal vouchers recorded
in the CFS.
Count: 32;
No.: 04-03;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to require that Treasury employees contact and
document communications with federal agencies before recording journal
vouchers to change agency audited closing package data;
Status of recommendation: Per Treasury and OMB: Treasury will continue
its efforts to better ensure that journal vouchers are communicated to
the federal agencies before recording them in GFRS. However, because of
year-end time constraints, Treasury will make changes without agency
contact under the following circumstances: (1) adjustments to agree
closing packages to financial statements, (2) adjustments to ensure
consistency of GAAP between federal agencies, and (3) adjustments to
conform an agency to GAAP;
Status of recommendation: Per GAO: Open. We believe that Treasury
should be required to contact federal agencies to resolve any
discrepancies between federal agencies‘ audited closing packages and
audited financial statements and discuss any other situations that
require adjustments to federal agencies‘ audited closing package data
because Treasury could incorrectly adjust federal agencies‘ audited
information.
Count: 33;
No.: 04-04;
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 will continue
its efforts to ensure that data changes have appropriate management
review;
Status of recommendation: Per GAO: Open. Not all of Treasury‘s
procedures were effective for fiscal year 2008. We identified certain
adjustments and key spreadsheets that lacked documentation evidencing
management review.
Count: 34;
No.: 04-06;
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 continued to
make improvements to its internal control infrastructure during fiscal
year 2008. Treasury has updated its documentation to help ensure
control procedures are in place at all critical areas of the CFS
preparation process and is working with a contractor to ensure that
these controls are adequately monitored and assessed each year;
Status of recommendation: Per GAO: Open. Treasury has not completed an
assessment to ensure it has sufficient personnel with specialized
financial reporting experience to achieve a sound internal control
environment to carry out the compilation process and help ensure
reliable financial reporting by the reporting date. For example, for
fiscal year 2008, Treasury did not provide the final accrual basis CFS
and related supporting documentation in time for us to complete all of
our planned audit procedures.
Count: 35;
No.: 04-19;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that federal 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: This required
information was disclosed in Note 2, Cash and Other Monetary Assets, in
the fiscal year 2008 CFS;
Status of recommendation: Per GAO: Closed.
Count: 36;
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: The required
information related to life insurance in the other liabilities note
disclosure was not material to the fiscal year 2008 CFS;
Status of recommendation: Per GAO: Closed.
GAO-06-415 (results of the fiscal year 2005 audit):
Count: 37;
No.: 05-02;
Recommendation: The Director of OMB should 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 federal agencies;
Status of recommendation: Per Treasury and OMB: OMB has developed an
alternative solution and documented related procedures for obtaining
audit assurance related to those verifying entities that have a
calendar year-end and determined to be significant to the CFS. The
solution entails the requirement that these entities have an
examination attestation engagement performed;
Status of recommendation: Per GAO: Closed.
Count: 38;
No.: 05-03;
Recommendation: The Director of OMB should direct the Controller of the
Office of Federal Financial Management to consider, in order to provide
audit assurance over federal agencies‘ closing packages, not waiving
the closing package audit requirement for any verifying agency in
future years, such as Tennessee Valley Authority;
Status of recommendation: Per Treasury and OMB: OMB generally agrees
with the recommendation; however, it will continue to weigh the costs
against the benefits of global requirements during extenuating
circumstances. OMB and Treasury will continue to work with agencies
that are also subject to Securities and Exchange Commission filing
requirements;
Status of recommendation: Per GAO: Open. For fiscal year 2008, OMB did
not ensure that all verifying entities met the closing package audit
requirements.
Count: 39;
No.: 05-04;
Recommendation: The Secretary of the Treasury should 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;
Status of recommendation: Per Treasury and OMB: OMB concurs with the
recommendation and is committed to improving the corrective action
plans and monitoring progress against those plans;
Status of recommendation: Per GAO: Open.
Count: 40;
No.: 05-06;
Recommendation: The Secretary of the Treasury should 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 for restricted cash;
Status of recommendation: Per Treasury and OMB: Treasury revised its
guidance related to restricted cash and ensured that sufficient
information was requested to determine these amounts at the
governmentwide level;
Status of recommendation: Per GAO: Closed.
Count: 41;
No.: 05-08;
Recommendation: The Secretary of the Treasury should 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 for summaries of unadjusted misstatements;
Status of recommendation: Per Treasury and OMB: Treasury updated the
TFM in fiscal year 2008 related to the guidance to federal agencies
concerning agency management representations and related summaries of
unadjusted misstatements;
Status of recommendation: Per GAO: Closed.
GAO-07-805 (results of the fiscal year 2006 audit):
Count: 42;
No.: 06-1;
Recommendation: The Director of OMB and Secretary of the Treasury
should direct the Controller of the Office of Federal Financial
Management and Fiscal Assistant Secretary, respectively, to develop
formal processes and procedures for identifying and either resolving or
explaining any material differences in undistributed offsetting receipt
amounts between Treasury‘s central accounting records and information
reported in agency financial statements and underlying agency financial
information and records;
Status of recommendation: Per Treasury and OMB: Treasury has policies
and procedures for identifying and either resolving or explaining any
material differences in undistributed offsetting receipt amounts
between Treasury‘s central accounting records and information reported
in agency financial statements and underlying agency financial
information and records, and demonstrated their effectiveness during
fiscal year 2008;
Status of recommendation: Per GAO: Closed.
Count: 43;
No.: 06-2;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to develop formal processes and procedures for
ensuring that intragovernmental activity and balances related to
undistributed offsetting receipts, including intragovernmental
interest, are fully eliminated in the calculation of the budget
deficit;
Status of recommendation: Per Treasury and OMB: Treasury has processes
and procedures for ensuring that intragovernmental activity and
balances, including intragovernmental interest, are fully eliminated in
the calculation of the budget deficit, and demonstrated their
effectiveness during fiscal year 2008;
Status of recommendation: Per GAO: Closed.
Count: 44;
No.: 06-6;
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 establish effective
processes and procedures to ensure that appropriate information
regarding litigation and claims is included in the governmentwide legal
representation letter;
Status of recommendation: Per Treasury and OMB: In fiscal year 2008,
GAO drafted an approach for addressing the recommendation and OMB tried
to implement it via its governmentwide legal request letter it sends to
Justice annually. Due to unintended circumstances, all parties were not
able to come together to discuss the approach‘s additional requirements
if it was to be implemented in fiscal year 2008. Thereafter, OMB held a
meeting with GAO and Justice to discuss implementing the approach for
fiscal year 2009. However, Justice concluded that the approach‘s
requirements were not ’executable“ because it did not believe the
approach was cost effective, given its resources. OMB plans to meet
with GAO this year to discuss a workable solution for addressing this
recommendation;
Status of recommendation: Per GAO: Open. Treasury, in coordination with
OMB, has not established effective processes and procedures to ensure
that appropriate information regarding litigation and claims is
included in the governmentwide legal representation letter.
Count: 45;
No.: 06-6;
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 a process for
obtaining sufficient information from federal agencies to enable
Treasury and OMB to adequately monitor federal agencies‘ efforts to
reconcile intragovernmental activity and balances with their trading
partners. This information should include (1) the nature and a detailed
description of the significant differences that exist between trading
partners‘ records of intragovernmental activity and balances, (2)
detailed reasons why such differences exist, (3) details of steps taken
or being taken to work with federal agencies‘ trading partners to
resolve the differences, and (4) the potential outcome of such steps;
Status of recommendation: Per Treasury and OMB: During fiscal year
2008, Treasury continued a process for obtaining sufficient information
from federal agencies to enable Treasury and OMB to adequately monitor
federal agencies‘ efforts to reconcile intragovernmental activity and
balances with their trading partners. This information included (1) the
nature and a detailed description of the significant differences that
exist between trading partners‘ records of intragovernmental activity
and balances, (2) detailed reasons why such differences exist, (3)
details of steps taken or being taken to work with federal agencies‘
trading partners to resolve the differences, and (4) the potential
outcome of such steps. In addition, in fiscal year 2008, Treasury
required the federal agencies to provide additional information related
to their intragovernmental differences that would allow Treasury to
correct these differences within GFRS. This effort will continue in
fiscal year 2009 including following-up with any federal agencies that
either did not comply or provided incomplete information related to
this new requirement;
Status of recommendation: Per GAO: Open.
Count: 46;
No.: 06-11;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to disclose the balance of foreign currencies held
at fiscal year end in the Cash and Other Monetary Assets footnote to
the CFS;
Status of recommendation: Per Treasury and OMB: Treasury disclosed
these balances in Note 2, Cash and Other Monetary Assets, in the fiscal
year 2008 CFS;
Status of recommendation: Per GAO: Closed.
GAO-08-748 (results of the fiscal year 2007 audit):
Count: 47;
No.: 07-1;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to enhance and fully document all practices
referred to in the SOP entitled ’Standard Operating Procedures for
Preparing the Financial Report of the U.S. Government“ to better ensure
that practices are proper, complete, and can be consistently applied by
staff members;
Status of recommendation: Per Treasury and OMB: In fiscal year 2008,
Treasury updated this SOP by significantly expanding the functions
covered by this SOP and increasing the level of detail related to all
the key procedures. Treasury will update this SOP during fiscal year
2009, as necessary;
Status of recommendation: Per GAO: Open. Although Treasury made
significant improvements to this SOP during fiscal year 2008, we found
that additional enhancements are needed to help ensure that all
procedures referred to in the SOP are correctly performed and
consistently applied by all staff members.
Count: 48;
No.: 07-2;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to enhance its checklist or design an alternative
and use it to adequately and timely document Treasury‘s assessment of
the relevance, usefulness, or materiality of information reported by
the federal agencies for use at the governmentwide level;
Status of recommendation: Per Treasury and OMB: During fiscal year
2008, Treasury enhanced its analysis procedures to take into account
agency-specific disclosures and assess their impact at the
governmentwide level. Treasury will update its checklist during fiscal
year 2009, as necessary;
Status of recommendation: Per GAO: Open. Although Treasury made
significant improvements in documenting its assessment of agency
information, we found that the assessment and documentation were not
adequately or timely completed.
Count: 49;
No.: 07-3;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to enhance its checklist or design an alternative
and use it to adequately and timely document Treasury‘s consideration
of relevant accounting standards other than those issued by FASAB;
Status of recommendation: Per Treasury and OMB: Treasury‘s checklist
was revised in fiscal year 2008 to address these concerns;
Status of recommendation: Per GAO: Closed.
Count: 50;
No.: 07-4;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to enhance its checklist or design an alternative
and use it to adequately and timely document Treasury‘s final decisions
regarding the inclusion or exclusion of federal agencies‘ disclosure
information in the existing notes to the CFS;
Status of recommendation: Per Treasury and OMB: Treasury‘s checklist
was revised in fiscal year 2008 to address these concerns;
Status of recommendation: Per GAO: Closed.
Count: 51;
No.: 07-5;
Recommendation: The Director of OMB should direct the Controller of OMB‘
s Office of Federal Financial Management, in coordination with Treasury‘
s Fiscal Assistant Secretary, to develop formal processes and
procedures for identifying and resolving any material differences in
distributed offsetting receipt amounts included in the net outlay
calculation of federal agencies‘ Statement of Budgetary Resources and
the amounts included in the computation of the budget deficit in the
CFS;
Status of recommendation: Per Treasury and OMB: OMB is currently
updating its policies and procedures for identifying and resolving
material differences in distributed offsetting receipt amounts. In
addition, OMB worked with agencies on this issue throughout fiscal year
2008 and made significant progress;
Status of recommendation: Per GAO: Open.
Count: 52;
No.: 07-6;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to establish effective internal control to ensure
the spreadsheets used to compile the CFS are protected from inadvertent
change;
Status of recommendation: Per Treasury and OMB: Treasury revised its
internal control policies and procedures to ensure that the
spreadsheets were protected from inadvertent change;
Status of recommendation: Per GAO: Closed.
Count: 53;
No.: 07-7;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to establish effective internal control to ensure
the spreadsheets used to compile the CFS are documented to facilitate
detection and tracking of changes to key formulas and data;
Status of recommendation: Per Treasury and OMB: Treasury revised its
internal control policies and procedures to ensure that the
spreadsheets were documented to address these concerns;
Status of recommendation: Per GAO: Closed.
Count: 54;
No.: 07-8;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary to ensure that columns within key spreadsheets used
to compile the CFS are labeled and properly aligned to reflect the data
contained within;
Status of recommendation: Per Treasury and OMB: Treasury revised its
internal control policies and procedures to ensure that the
spreadsheets were labeled and aligned to address these concerns;
Status of recommendation: Per GAO: Closed.
Count: 55;
No.: 07-9;
Recommendation: The Secretary of the Treasury should direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB‘s
Office of Federal Financial Management, to develop and implement
effective processes for monitoring and assessing the effectiveness of
internal control over the processes used to prepare the CFS;
Status of recommendation: Per Treasury and OMB: Treasury is currently
reviewing its internal control procedures to develop a formal mechanism
for monitoring and assessing the effectiveness of internal control over
the preparation of the CFS. See status of recommendation No. 04-6;
Status of recommendation: Per GAO: Open.
Count: 56;
No.: 07-10;
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 and implement
alternative solutions to performing almost all of the compilation
effort at the end of the year, including obtaining and utilizing
interim financial information from federal agencies;
Status of recommendation: Per Treasury and OMB: Treasury will continue
to consider what information can be obtained during the interim period
to facilitate the year-end CFS preparation process;
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:
Assistant Secretary:
Washington, D.C.
April 15, 2009L
Mr. Gary T. Engel:
Director, Financial Management and Assurance:
Government Accountability Office:
Washington, DC 20548:
Dear Mr. Engel:
Thank you for the opportunity to comment on the Government
Accountability Office's (GAO) draft report on the Fiscal Year (FY) 2008
audit, GAO-09-387, Material Weaknesses in Internal Control Continue to
Impact Preparation of the Consolidated Financial Statements of the US.
Government.
The FY 2008 draft report identifies four new recommendations for
improving the Consolidated Financial Statements (CFS) preparation
process through documented policies and standard operating procedures.
We concur with GAO on these recommendations and expect to implement the
recommendations by the end of FY 2009.
During FY 2008, we continued to make significant progress in improving
the preparation of the CFS, leading to the closure of 16 of 56
recommendations outstanding from previous CFS audit reports. In
addition. the procedural and automated changes to our reporting
processes implemented during the year improved the internal controls
related to the preparation of the CFS. Our efforts included improved
Financial Report disclosures, new data reconciliations, and increased
data security.
Thank you, again, for the opportunity to review and comment on the
draft report. We look forward to working with you and your staff in
making the CFS more meaningful and usable to its readers.
Sincerely,
Kenneth E. Carfine:
Fiscal Assistant Secretary:
Cc: Dania Werfel, OMB:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gary Engel, (202) 512-3406 or engelg@gao.gov:
Acknowledgments:
In addition to the above contact, the following individuals made key
contributions to this report: Louise DiBenedetto, Assistant Director;
Lynda Downing, Assistant Director; Cole Haase; Dragan Matic; Maria
Morton; Thanomsri Piyapongroj; and Taya Tasse.
[End of section]
Footnotes:
[1] The fiscal year 2008 Financial Report of the United States
Government includes our report and was issued by the Department of the
Treasury (Treasury) on December 15, 2008, and is available through
GAO's Web site at [hyperlink, http://www.gao.gov/financial.html] and
Treasury's Web site at [hyperlink,
http://www.fms.treas.gov/fr/index.html].
[2] The consolidated financial statements for the fiscal years ended
September 30, 2008 and 2007, consist of the Statements of Net Cost,
Statements of Operations and Changes in Net Position, Reconciliations
of Net Operating Cost and Unified Budget Deficit, Statements of Changes
in Cash Balance from Unified Budget and Other Activities, Balance
Sheets, and the Statements of Social Insurance, including the related
notes to these financial statements.
[3] As used in this report, accrual basis consolidated financial
statements refer to all of the consolidated financial statements and
notes, except those related to the Statement of Social Insurance.
[4] The Government Management Reform Act of 1994 has required such
reporting, covering the executive branch of government, beginning with
financial statements prepared for fiscal year 1997. 31 U.S.C. 331(e).
[5] A material weakness is a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood
that a material misstatement of the financial statements will not be
prevented or detected. A significant deficiency is a control
deficiency, or combination of control deficiencies, that adversely
affects the entity's ability to initiate, authorize, record, process,
or report financial data reliably in accordance with generally accepted
accounting principles such that there is more than a remote likelihood
that a misstatement of the entity's financial statements that is more
than inconsequential will not be prevented or detected. A control
deficiency exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their
assigned functions, to prevent or detect misstatements on a timely
basis.
[6] The Financial Report is intended to provide an understanding of
both the government's current financial position and prospects for
moving forward.
[7] GAO, Internal Control: Standards for Internal Control in the
Federal Government, [hyperlink,
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.:
November 1999).
[8] Treasury refers to the significant agencies as "verifying
agencies." They are the 24 Chief Financial Officers Act agencies, the
Export-Import Bank of the United States, the Farm Credit System
Insurance Corporation, the Federal Communications Commission, the
Federal Deposit Insurance Corporation, the National Credit Union
Administration, the U.S. Postal Service, the Pension Benefit Guaranty
Corporation, the Railroad Retirement Board, the Securities and Exchange
Commission, the Smithsonian Institution, and the Tennessee Valley
Authority.
[9] "Trading partners" are U.S. government agencies, departments, or
other components included in the CFS that do business with each other.
[10] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1].
[11] "All other entities," a line item on the Statement of Net Cost
(SNC), consists of entities not individually listed on the SNC. The
entities in the "all other entities" line item are individually not
deemed significant agencies by Treasury.
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Phone:
The price of each GAO publication reflects GAO‘s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO‘s Web site,
[hyperlink, http://www.gao.gov/ordering.htm].
Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537.
Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional
information.
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
