3.3 and 3.4 final Flashcards
Act Established the GSA
1949 Federal Property and administrative services act
Bugetary accounting
Relates to flow of funds. Apportionments, Obligations, Outlays etc
Proprietary Accounting
Accounts for assets and liabilities like private businesses
Government Management and Reform Act 1994
Amended CFO Act; agencies must turn in AUDITED Financial Report March 1st
Federal Financial Statements
- Balance Sheets 2. (statement of budgetary resources for DOD) Statements of Operations 3. Statements of Net Cost 4. Changes in net position
1921 Budget and Accounting Act
Established GAO to audit Executive Branch. Established Bereau of Budget (OMB), President annual budget
1982 Federal Managers Financial Integrity Act
FMFIA; Internal controls and report annually
GPRA Modernization Act of 2010
- Apply latest technologies 2. produce FREQUENT, RELEVANT DATA better inform decision makers, 3. Assign Performance Improvement Officers (PIOs) and Performance Improvement Council (PIC). 4. MANDATED 4 year strategic plans and ANNUAL performance plan tied to funding then ANNUAL performance REPORT to Potus/congress
Government Performance and Results Act 1993
Improve Federal Program and Effectiveness and PUBLIC accountability
Government management reform act of 1994
Direct deposit of wages required AUDITED Financial Statements due 1 March following end of FY ofr EXECUTIVE branch
Required annual Financial Report; Required AUDITED annual Financial report
1990 CFO Act; Government Management Reform Act 1994 (GMRA)
1996 Federal Financial Management Improvement Act
Requires Managerial Cost Accounting;
2002 Accountability of Tax Dollars Act
Audited Financial statements for ALL Executive Branch
2010 National Defense Authorization Act
DOD financial statements be ready for audit by 30 September 2017; gave them some time
OMB with regard to Accounting
OMB Conducts continuous program for improving accounting and financial reporting in Federal Gov
GAO with regard to auditing
An AGENT of CONGRESS; audits financial performance of Executive Branch, overseas executive branch implementation of legislation; “watchdog of congress”
Federal Accounting Standards Advisory Board (FASAB) established by
Comptroller General (GAO), Secretary of Treasury, Director of OMB
Federal GAAP comprised of
Statement of Federal Accounting CONCEPT, Statement of Federal Financial Accounting STANDARD
OMB Circular A-136
Implementation and procedures of the standards of federal financial accounting.
GAGAS
Generally Accepted Government AUDITING standards; formulated by GAO; guidance for government auditors
Maintains general ledger for DOD
DFAS
Maintains general ledger for US Government
Department of Treasury; consolodates all financial statements
_____ states objectives of Federal Financial Reporting which are _____
SFFAC No. 1 - 1.Budgetary Integrity 2. Operating Performance 3. Systems and Control 4. Concept of Stewardship
Concept of stewardship
Government’s duty to be publically acountable for monies
Other relevent information that is not dollars
Supplemental Information
Significant accounting principles and policies used by the organization published in
footnotes
Managerial Accounting standards including WCF located where
SFFAS #4; Statement of Federal Financial Accounting Standards
USD Comptrolloer duties related to accounting
- Principle advisor to Secretary for budgetary and fiscal 2. CFO for DOD 3. Formulates FM policies (7000.14r) 4. Directs DFAS and Defence Contract Audit Agency (DCAA)
Represents DOD on the Chief Financial Officers Council
DEPUTY CFO
General ledger classifies all financial transactions such as assets, liabilities, net income…
in order to control, summarize and report results
Prepares summarized financial reports for DOD
DFAS
General Fund Type
Almost all income tax receipts; appropriations come from the general fund; NOT earmarked by law
In order to accept reinbursable work an agency must
include the estimated amount of receipts in budget request
Foreign military sales go into what type of fund
Trust Fund
What fiscal year do you pay judgment fund
When the court makes the decision, not when person first raises it
A commitment require signature of _____ who has ______
official responsible for administrative control and has FIDUCIARY certification
PCS costs obligated when
orders issued
Military and Civ pay obligated when
beginning month it is earned
Which cannot cross Fiscal Years (Economy or Project)
Economy Act Orders therefore DEOBLIGATED when approp expires
Propietary and Bugetary USSGLs
Each have one and they are independently self-balancing (debits = credits)
USSGL code for Budgetary
Code 4000
Key equation for Budgetary Accounting what form
Resources(Debits) = Status of Resources (Credits); Status side reflects flow of funds. Statement of budgetary resources
Key Propriety accounting equation
Assets (1000)= Liabilities (2000)+ Net Position (3000)
Key Net Cost of operations equation
Expenses - Exchange Revenue = Net Cost Operations (or Net Operating Cost)
What is the basis for recording an accounting entry
A receiving report DD250
Propriety entry is made when you have
Received something of value; Just shuffling funds around (such as apportionment, commitment) is budgetary only
Fund Balance with Treasury USSGL number
Code 1010
Payment of invoice
Proprietary entry (Debit - Accounts payable) (Credit - Fund balance with treasury)
Accounts payable are debited when
When the invoice is paid
Who certifys final closed books for components
Service components comptroller and then they send to DFAS for consolidation
What is the Capitalization threshold
$250k
Acquisition value of PPE
amount paid for asset (or Fair market value), transportation, installation and other related costs of obtaining asset and preparing for use
How are weapons system reflected
Same as PPandE, listed on balance sheet, but ammo is OandM
Hertiage assets vs Multi-use heritage assets reporting difference
Heritage assets not valued or depreciated. Multi-Use ARE Valued,depreciated, listed on balance sheet
If the purchase price is not known
a cost estimate can be used
For fixed assets, the amount expected to be recovered from asset disposal is called
residual value
Excess obsolete and unserviceable inventory should be valued on financial statement at
net realizable value
Statement of net cost is ________ based
accrual based acconting
Bugetary accounting is __________ based
obligation based accounting
Full cost in Managerial Accounting is
- Direct Costs 2. Indirect Costs 3. Intra-entity costs 4. Inter-entity costs (aka inputed costs)
Lasting impact of CFO Act
Took financial management from “backroom function” to “boardroom function”
Strategic long-term plan to produce the audited financial statements
Financial Improvement and Audit Remediation Program (FIAR); get audit ready
FIAR strategy waves
- Appropriations received audit 2. Statement of budgetary resources (includes funds balance w/ treasury) 3. Mission Critical Asset Existence and completeness audit 4. Full Financial statement audit
Goal of FIAR
get an unmodified opinion
Wave 2
Statement of budgetary resources - internal controls, systems and supporting docs that will be in audit scope
Wave 3
Mission Critical Assest existence and completeness - What assets do we have and are their valuations correct
Wave 4
Full financial statements audit - bringing it all together and reconciling disconnects between accounts that should match
Can government contract out audit
Yes, if government…1. Don’t have the expertise 2. Don’t have the people
GAO General Standards for Audit
- Audior Independence 2. Auditor Professional Judgement 3. Auditor competence 4. Quality Control and Assurace
Auditor Independence
- Independence of Mind - No bias 2. Independence of Appearance -
Three impairments to auditor independence
- Personal 2. External 3. Organizational
Auditor Professional Judgement question
Exercise reasonable care, maintain integrity and objectivity, carefully select methodology and procedures, exercise skepticism, obtain reasonable but not absolute assurance
Auditor Competence
- Team collectively posseses prof comp 2. 80 hours of eductaion every 2 years
Quality control and assurance
- INTERNAL system of quality control 2. EXTERNAL peer reviews every 3 years
DOD Inspector General Reports to
SECDEF
Federal Inspector Generals comply with Comptroller General Standards and serve as independent and objective official in DOD
Inspector General Act of 1978
DOD Inspector General does what
Investigates and audits DOD programs
Guidance in DOD supplements the Yellow Book
DOD Audit Handbook
Who do DOD Audit organizations report to
Secretary of the DOD component
GAO is headed by the
Comptroller General, reports to congress
Types of audits
- Performance Audits 2. Financial Audits 3. Attestation Engagements
Defence Contract Audit Agency reports to
USD (comptroller). All contract auditing, accoutning and financial advisory services for DOD
Financial Audits
- Financial info in accordance with established criteria 2. Adhered to financial complicane requirements 3. Internal controls
Performance Audits
Assessment of 1. program efficiency, effectiveness 2. Internal controls and 3. Compliance with laws; state consequences of these not being met
Non-audit services
Other consulting type actions: Forecasting program outcomes, developing methods, investigative work
Non-audit services restrictions
- Should not involve performing management functoins 2. audit organization should not audit their own work.
Overall Audit Plan
- Check regulatory and statutory requirements 2. management/congressional concerns 3. High-risk areas
If an auditor comes in and find out they have broken a law it goes to…
A partner external to the audit agency
An auditors understanding of an agency’s internal control environment
Could influence the auditors plan
Phases in a governmental audit
- Plan 2. Review 3. Report
Audit Planning Phase
OSMIC (Objectives, Scope, Methodology), Internal controls, corrective action from previous audits
Basic toll used by auditors to organize and control audits is
audit program (consists of plan, review, report)
Review Phase
Review audit evidence and ensure 1. Sufficient and 2. appropriate materials; Especially suspect if data provided by one being audited
What is an example of a competent form of evidence
A listing of cleared checks
Audit working papers are LEAST likely to include…
documentation showing how management schedules are prepared (they don’t care about that)
Audit Report Phase
Finacial - Unmodified, modified, disclaimer, adverse; Condition (What?) Criteria (What it should be) Effect (so what?) Cause (why)
Which of the following is not included in a performance report
Areas for future audits (you never put those in)
Who is responsible for resolving audit findings
Agency management
Benefits of audit reports expressed in
- Monetary benefits -expressed in financial terms 2. Non-monetary benefits - safety, readiness, comliance, etc.
Excess equipment NOT evaluated for value by auditor
should not be expressed as having a monetary value in the audit report
Evaluating internal controls of an information system that prepares financial statements
What is an audit procedure
