HW

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Regulations

Very important to know about regulations

Employees and contractors should know about various accounting, contracting and other administration regulations

Regulations change often

Covered in Week 2 in more detail

Regulations - OMB / GAO

OMB:  Circulars/Bulletins are rules, regulations, and directives providing details for to implement laws of Congress. OMB Circulars issued when the nature of the subject is to be of continuing effect and is to remain in force until rescinded or superseded. Circulars are identified by the letter "A" and a number (e.g., OMB Circular A-11, Preparation, Submission, and Execution of the Budget).

GAO:  provides audits will assess and report on program performance related to a federal department's goals and objectives, and may consider such issues as the efficiency, economy, and effectiveness of operations; includes agencies that provide revenue (Customs of DHS, IRS). Also creates important regulations via Comptroller General rulings

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Federal Accounting Standards Advisory Board (FASAB)

Formed from U.S. Comptroller General (who heads the GAO), the Secretary of the Treasury, and the Director of the OMB

Provides rules and regulations for US federal government accounting

Currently (though not always historically) source of the GAAP for federal agencies – AICPA ruled that FASAB is GAAP

Different from GASB, which is for state & local and FASB, for non-profit and for-profit

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FASAB (continued)

Creating guidance

“Identify accounting issues and agenda decisions.

Conduct preliminary deliberations.

Prepare initial documents (e.g., issue papers, discussion memoranda).

Release documents to the public, hold public hearings, consider comments.

Hold further deliberations, publish exposure drafts, consider comments.

Obtain general consensus (at least a majority vote) of the FASAB members and submit final documents to the Comptroller General, the Secretary of the Treasury, and the Director of the OMB.””

Create standards (SFFAS) often

Note that since August 2005 (SFFAS 30), FASAB has issued over 25 new standards

Statements - http://files.fasab.gov/pdffiles/handbook_contents.pdf

Also note - http://fasab.gov/accounting-standards/

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Financial Statements

Balance Sheet: present resources, liabilities, and the financial status of the entity at a specific point in time

Statement of Net Cost -  present the various components of the net cost of a reporting entity's operations (i.e., total, gross, or full costs less any exchange revenues

Focus on costs of programs, usually in high-level categories

Statement of Changes in Net Position reports the beginning net financial position, the items that caused changes in the net position, and the ending net position of a federal entity

Note – all three similar to for-profit entities (e.g., Net Cost = Income Statement; Changes in Net Position = Shareholder’s Equity; Balance Sheet = Balance Sheet)

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Financial Statements - Continued

Statement of Budgetary Resources provides information on the status of congressional spending authority by those entities whose financing derives, wholly or in part, from congressional budget and spending authority – this is a statement that for-profit entities do not use

Statement of Custodial Activity is used to record custodial revenue collected by a federal agency which is not considered revenue to the entity. Collections on behalf of other funds (e.g., trust funds, etc.). – this is a statement that for-profit entities do not use

Audio file and the A-136 (see later slide) list other statements

Called “Form and Content” of Financial Statements

More details at A-136

Note the above does not list all statements, and some statements have been added/deleted in past few decades (lecture has more details)

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Financial Statements - Continued

Statement of Social Insurance provides information on various long-term programs that provide benefits to citizens, including “Medicare Old-Age, Survivors, and Disability Insurance (OASDI or Social Security); • Hospital Insurance (HI) and Supplementary Medical Insurance (SMI), collectively known as Medicare – source is A-136 at https://www.whitehouse.gov/wp-content/uploads/2019/06/OMB-Circular-A-136.pdf

Some statements have been removed as standard external reports, such as the Statement of Financing (no longer required)

A-136 lists the “Form and Content” of Financial Statements

Note the slides in this slide deck does not list all statements, and some statements have been added/deleted in past few decades

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Other - General Legislation Important to Federal Financial Management

CFO Act of 1990

A very good analysis of the CFO Act

Source: http://www.gao.gov/special.pubs/af12194.pdf

Government Performance and Results Act

http://govinfo.library.unt.edu/npr/library/misc/s20.html

Recently revised – will include more information in book

Anti-Deficiency Act

http://www.gao.gov/legal/lawresources/antideficiencybackground.html

Very important for agencies – ADA violation could drastically damage one’s career

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Other Acts

 At a minimum, all appropriations and budget authorities have three specific compliance considerations:

Supplemental Appropriation Act of 1954

no amount shall be recorded as an obligation of the government unless it is supported by one of the prescribed forms of documentary evidence.

Every entity must report, at year-end, unliquidated obligations and its remaining unobligated appropriation balances

Other notes: http://www.gpo.gov/fdsys/pkg/STATUTE-67/pdf/STATUTE-67-Pg418.pdf

https://www.law.cornell.edu/uscode/text/31/1501

Congressional Budget and Impoundment Act of 1974

Established CBO to perform research on the budget

established Committees on the Budget in each house of Congress to force the many committees of Congress to coordinate and agree

mandated a new fiscal year of the federal government, changing it from July 1 of each year to October 1

Federal Financial Management Improvement Act of 1996

Requiring that systems requirements, accounting standards, and the Standard General Ledger were to be implemented "…at the transaction-level." 

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Other Acts

Federal Financial Management Improvement Act of 1996

Requiring that systems requirements, accounting standards, and the Standard General Ledger were to be implemented "…at the transaction-level." 

Requiring federal departments and agencies to implement financial management systems that comply with federal requirements, applicable accounting standards, and the government's Standard General Ledger.

Directing the GAO to make, every year (starting) by October 1, 1998, a report concerning whether the financial statements of the federal government have been prepared in accordance with applicable accounting standards and the adequacy of uniform accounting standards for the federal government.

The Accountability of Tax Dollars Act of 2002

Requires that all but the smallest of executive agencies (generally executive agencies with $25 million or less in budget authority) issue annual audited financial statements.

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Creating an Agency

Perceived Need

Enabling Legislation

Defining Role and Scope

Defining Structure

Do not be surprised: agency roles may crossover

Look at two agencies that matter to accountants:

SEC http://www.sec.gov/about/whatwedo.shtml#create

IRS https://www.irs.gov/about-irs

Look at the legislation and then look at their structures. The Legislation may not always dictate the organization’s structure

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Required cabinet level agencies to create financial reports – similar to publicly traded companies

Increased requirements on financial reporting – previously, federal agencies had often focused on budget reports

Requires CFO that has proper knowledge

In one defense entity, CFO is an admiral

In a smaller agency, CFO was a career federal employee

Other- CFO and the PAR

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Upcoming Assignment Information

Please select an Agency to review by Week 1

See next slide for an example of agencies

Complete Discussions for Week 1 – Due on Aug 25, 2020

For full credit, need at least two posts for each graded discussion (unless otherwise noted)

Posts must be at least three full sentences

Complete Discussions for Week 2 – Due on Sept 1, 2020

Complete Homework #1, covering Weeks 1-2 (very helpful for exam) – Due on Sept 1, 2020

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