Essay ON Government of Accountability

	Congress	Treasury	OMB	Agencies
*	1. Appropriation of $
	2. Allocation of the $
	3. Other budget authority
		4. Appropriation warrants
			5. Apportionments
				6. Allotments
				7. Allowances
				8. Commitments
				9. Obligations
				10. Accrued expenditures
				11. Costs
				12. Accruals
		13. Disbursements
				14. Expired accounts

Responsible Parties

Note: some agencies, such as the US State department, can make disbursements from cash accounts

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Offices of Inspector General will conduct audits and evaluations.

GAO and the OMB will regularly make reviews, evaluations, and studies of the manner in which executive branch organizations are complying with the intent of Congress.

Federal entities have a tremendous amount of oversight and audits

One entity has seven different groups performing reviews– external auditors, internal auditors, A-123 auditors, General Accountability Office, Office of Inspector General and more

Entities can often have additional reviews – examples are reviews of travel expenses that OCFO performs

Budget / Oversight (Part IV of Budget)

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Budget notes

On or before	The following activities must take place
November 10	The President must submit a current services budget.
January—15 days after Congress meets	The President must submit a proposed budget for the next fiscal year, which begins October 1.
March 15	Committees and joint committees must submit reports to the Committees on the Budget.
April 1	The Congressional Budget Office (CBO) must submit report to Committees on the Budget.
April 15	These budget committees must report on the first concurrent resolution on the budgets of their Houses.
May 15	All committees report bills and resolutions authorizing new budget authority.
May 15	Congress must complete action on the first concurrent resolution of the budget.
7th day after that	Congress must complete action on bills and resolutions providing new budget labor authority and new spending authority.
September 15	Congress must complete action on the second required concurrent resolution of the budget.
September 25	Congress must complete action on a reconciliation bill or resolution, or both, implementing the second concurrent resolution.
October 1	New fiscal year begins.

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Budget Challenges

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

“Congress has difficulty limiting hearings, reconciling differences, ceasing debates, and passing the appropriation laws needed to run the government by October 1. In some years, difficulty is encountered in passing even the face-saving continuing resolutions”

Without a budget at end of year, Congress will often pass Continuing Resolution

Lack of Budget can lead to a shutdown

Example was in 1996

In 2013, government also had a shutdown for several weeks

In 2017, government had several brief shutdowns

In December 2018 – January 2019, the US federal government had a partial shutdown that furloughed hundreds of thousands of employees in many agencies (e.g., US Department of State) – longest shutdown in history

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Often, Congress will not complete action on all budget requests before the beginning of a fiscal year. Congress may enact a continuing resolution (CR), which provides temporary financing authority for a department to continue operations

This has occurred fairly frequently, especially since 2010

Congress passed a CR through Dec 2015 in September 2015

Congress passed several short-term CRs in December 2017, January 2018 and February 2018

Continuing Resolution

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Constraints for the federal entity

Federal entity may not undertake any new initiatives.

The federal entity must maintain its rate of expenditure at the same level as that of the preceding program year.

If one house of Congress has acted on the entity's budget request, then the federal entity may not exceed the expenditure rate of that action or the expenditure rate of the last year's appropriation, whichever is less.

Continuing Resolution

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Establishment of Accounting Standards A Political Process

GAAP

Internal Revenue

Service www.irs.gov

American Institute

of CPAs www.aicpa.org

Securities and

Exchange

Commission www.sec.gov

American

Accounting

Association http://aaahq.org/index.cfm

Governmental

Accounting

Standards Board - state www.gasb.org

Financial Executives

International www.fei.org

Federal Acct

Std Board – Federal

http://www.fasab.gov/

Finance Acct Std Board – For-profit

http://www.fasb.org/

Note = blue are primary sources of GAAP

 International Accounting Standards Board

http://www.ifrs.org/

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The Financial Accounting Standards Board must consider the potential economic consequences of accounting standards. Many times, financial accounting standards are a compromise between the Board’s position and the wishes of various special interest groups. Especially controversial in recent years has been the efforts to develop accounting standards for employee postretirement benefits, employee stock options, and business combinations.

On occasion, the financial Accounting Standards board has bowed to public pressure, and conceptual merit in the standards setting process has suffered..

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Track status of funds – such as funds appropriated committed obligated; status of funds is credited, source is debited

Done at same time as Proprietary (if applicable)

Debit 411900 Other Appropriations Realized

Credit 445000 Unapportioned Authority (note six characters in SGL code)

Proprietary

Shows revenue/expense, assets/liabilities/net position

Debit 101000 Fund Balance With Treasury

Credit 310100 Unexpended Appropriations - Appropriations Received

*source: Department of Treasury Financial Manual at https://tfm.fiscal.treasury.gov/v1/supplements/ussgl/ussgl_part_2/sec3/sec3_transactions_2019.pdf

Budgetary / Proprietary Transactions

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As in private sector, assets = debits, liabilities – credit , net position = credit; revenue = credit, expense = debit

“ No agency may collect receipts or earn revenues unless specific authorization is provided by Congress. Additionally, an agency may have the authority to collect receipts, but such receipts may be unavailable for expenditure by that collecting agency”

For example, an agency could be authorized to receive up to $2 million to do research for other entities about TV/radio/internet habits of people in a certain country

Proprietary Transactions

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Single year – obligations must occur within a year – e.g., a fund that is Beginning Year of Availability in 2017 must be obligated by September 30, 2017

Multi year – obligations must occur by the last year of the fund – e.g., a fund that is Beginning Year of Availability in 2014, Ending Year of Availability of 2016 must be obligated by September 30, 2016

No-Year - are available for obligation for an indefinite period, though Congress can decide to end

Also note that if a fund is Expired, an agency cannot make any more obligations, but can pay obligations (for five years after expiration)

Example: DHS obligates (awards a contract) to an accounting firm on September 1, 2014 for a fund with BBFY 2014; DHS can pay the vendor in 2016

Appropriation Types

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Appropriations are most common – funds from Congress

Authority to spend from offsetting collections– often from reimbursable agreements or other earned revenue – Department of State charging for visas or passports

Contract authority—Statutory authority under which contracts or other obligations may be entered into prior to an appropriation for payment of such obligations – not very common

Public debt authority—Derived from the sale of public debt securities of the federal government – not every agency has this item

Note – SF-133 will provide information about these items

Budget Authority

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Also note that if a fund is Expired, an agency cannot make any more obligations, but can pay obligations (for five years after expiration)

Example: DHS obligates (awards a contract) to an accounting firm on September 1, 2014 for a fund with BBFY 2014; DHS can pay the vendor in 2016

Cancelled funds

Five years after end of year, cannot have new spending and would need to pay with current year funds

Appropriation Types

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Proprietary Transactions