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Unformatted text preview: Chapter 11 - Accounting and Reporting for the Federal Government CHAPTER 11: ACCOUNTING AND REPORTING FOR THE FEDERAL
OUTLINE Number Topic Type/Task Status
(re: 14/e) Identify, describe 12-1 revised 11-2
11-10 Role of OMB, GAO, Treasury, CBO in federal
Federal GAAP standards setting
Accounts used in federal accounting
Net position and net assets
FASAB compared to GASB
U.S. Government consolidated statements
Dual track accounting
Budgetary accounts used by federal agencies
Financial statements for federal agencies Describe
12-10 revised Cases:
11-3 OMB press release and audit opinions
U.S. Government-wide financial statements Locate, evaluate
Internet, evaluate 12-1 revised
12-3 revised Exercises/Problems:
Various Multiple choice 12-1 revised 11-2
JEs and FS
JEs and FS
Essay 12-2 revised
12-7 revised Questions:
11-1 Fund balance with U.S. Treasury
Agency financial statements, continuation of 12-2.
Statement of net cost
Statement of budgetary resources
Transactions and statement of financing
DOT audit report 11-1 Chapter 11 - Accounting and Reporting for the Federal Government CHAPTER 11: ACCOUNTING AND REPORTING FOR THE FEDERAL
GOVERNMENT Answers to Questions
11-1. The three principals of the Joint Financial Management Improvement Program (JFMIP)
are (1) the Controller General of the United States, who is head of the Governmental
Accountability Office, the auditing arm of the legislative branch, (2) the Secretary of the
Treasury who is part of the executive branch, and (3) the Director of the Office of
Management and Budget, also part of the executive branch. Federal statutes in 1950
assigned responsibility to these principals for establishing and maintaining a sound
financial management structure for the federal government. These principals sponsored
the Federal Financial Accounting Standards Board (FASAB) in 1990 as a permanent
standards-setting organization to establish generally accepted federal accounting
standards, much like the FASB and GASB do for the business and nongovernmental and
governmental sectors. The principals play similar roles in standards-setting in that they
each have a representative of their organization on the FASAB (among other members)
and they collectively receive recommendations from the FASAB on accounting
principles and standards. If the principals agree, the Comptroller General and the
Director of the OMB publish the accounting principles and standards.
By 2004, the principals, satisfied with the operations of the FASAB, delegated
responsibilities to review FASAB recommendations to the OMB’s Office of Federal
Financial Management (OFFM), the Office of Personnel Management, and the Chief
Financial Officers Council (CFOC). The JFMIP no longer meets as a stand-alone
11-2. The Federal Accounting Standards Advisory Board (FASAB), comprised of four federal
members and six nonfederal members, goes through a “due process” in setting
accounting and reporting standards for federal agencies and the federal government much
like the FASB does for businesses and nongovernmental entities and the GASB does for
governmental entities. The due process steps (laid out in “FASAB Facts” available at
www.fasab.gov ) are:
• Identification of accounting issues and agenda decisions.
Preparation of initial documents (issues papers and/or discussion memoranda).
Release of documents (e.g., exposure drafts) to the public, public hearings, and
consideration of comments.
Further deliberations, exposure draft, and consideration of comments.
Approval by at least a majority vote.
Submission of proposed statement to the Principals (or “sponsors”—Comptroller
General, Secretary of the Treasury, Director of the OMB) for a ninety day review
(forty-five days for Interpretations).
Publication of final Statement or Interpretation. 11-2 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Answers, (Cont’d) The AICPA has identified FASAB standards as category (a) GAAP in the GAAP
hierarchy (see SAS No. 91, an amendment to SAS No. 69).
11-3. The conceptual framework for the federal government is at about the same stage as that
for state and local governments, even though the GASB was established six years earlier.
The FASAB has issued five concepts statements, and the GASB four. Statement of
Federal Financial Accounting Concepts (SFFAC) No. 1 identifies the users of federal
financial information and their information needs, and establishes the objectives of
financial reporting for the federal government, much like GASB Concepts Statement No.
1. SFFAC No. 2 provides criteria for determining the reporting entity and provides
guidance on the nature of the financial statements to be prepared and their form and
content. The GASBS 14 (a reporting standard rather than a concepts statement) provides
comparable criteria to SFFAC No. 2 for defining the reporting entity. SFFAC No. 3
describes the Management Discussion & Analysis. Now that GASB has issued Statement
No. 34, both GASB and FASAB have provided for the MD&A as an integral part of
financial reporting for a government. SFFAC No. 4 for the federal government describes
five intended audiences and qualitative characteristics for the consolidated financial
report of the U. S. Government. In many ways, this statement is similar to the GASB’s
Concepts Statement 3 on communication methods in general purpose external financial
reporting. Finally, the most recent SFFAC (No. 5) describes the elements of financial
statements, similar to GASB’s most recent Concepts Statement 4 titled “Elements of
11-4. The account name Estimated Revenues used by state and local governments is a
budgetary account representing the government’s estimate of the amount of revenue
expected to be realized during the year. Federal agencies use the account Other
Appropriations Realized in their budgetary track to capture the amount Congress has
appropriated to an agency for the upcoming year. Other Appropriations Realized is for
basic operating appropriations, rather than appropriations earmarked for specific
purposes. Other Appropriations Realized is closer in meaning to Appropriations of state
and local governments than it is to Estimated Revenues.
A federal agency uses the account Fund Balance with U.S. Treasury in its proprietary
track as an asset that represents the balance available to the agency at the Department of
Treasury. Fund Balance with U.S. Treasury will be reduced throughout the year by the
dollar value of checks drawn. See Illustration 11-17 for a comparison of these terms.
Estimated Revenues and Other Appropriations realized have more in common than either
one does with Fund Balance with the U.S. Treasury because they are budgetary accounts.
11-5. Agree, in part. The net position account on the balance sheet of a federal agency
represents the difference between assets and liabilities, as net assets does for a state or
local government. However, net position is classified into two categories: unexpended
appropriations and cumulative results of operations which are different than the
classifications of net assets for a state or local government. Unexpended appropriations
is the amount of the entity’s appropriations represented by undelivered orders and
11-3 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Answers, 11-5, (Cont’d) unobligated balances. Cumulative results of operations is the net difference between
expenses/losses and financing sources, including appropriations, revenues, and gains,
since the inception of the activity.
11-6. Agree, in part. It is true that the FASAB sets standards for external financial reporting
for federal agencies; however, its mission is considerably broader in that it also sets
standards for internal management accounting and performance measurement. The
GASB does provide guidance in presenting information on service efforts and
accomplishments, but its mission and activities to date have been primarily focused on
external financial reporting and governmental GAAP. FASAB standards are designed to
serve a broader audience than those set by the GASB for state and local governments.
For example, FASAB’s objectives for external financial reporting are designed to assist
users in evaluating budgetary integrity, operating performance, stewardship, and
adequacy of systems and controls. The audiences for federal financial reports include
Congress, federal executives, program managers, as well as citizens and their
11-7. The federal government has produced consolidated financial statements, in some
prototype form, since 1980, but only since 1997 has the Government Accountability
Office (GAO) audited these statements. To date, the GAO has disclaimed an opinion on
the statements because of the unreliability of significant portions of the statements, even
though the majority of CFO Act agencies have received unqualified audit opinions on
their unit’s financial reports. However, the GAO gave the Statement of Social Insurance
(a fairly new statement) an unqualified opinion in FY 2007. Areas that are repeatedly
mentioned as problems are internal controls; plant, property and equipment and
inventories in the Department of Defense; environmental liabilities; and
intragovernmental activity and balances.
11-8. The accounting system of a federal agency must provide information useful for financial
management of the agency as well as information needed to demonstrate that agency
managers have complied with budgetary and other legal requirements. To meet these two
information needs, federal agency accounting is based on a dual-track system: One track
being a self-balancing set of proprietary (balance sheet and operating) accounts and the
other track being a self-balancing set of budgetary accounts.
In a very similar way, state and local governments must report both on operational
accountability through the government-wide statements, and on fiscal accountability or
compliance with the budget in the fund financial statements. The term “dual-track”
allows preparers to consider the effect of a transaction on both the entity or agency as a
whole, as well as the funds that focus on measuring what was spent compared to what
was budgeted to be spent over a one-year period.
11-9. The budgetary accounts required by the U.S. Government Standard General Ledger are:
• Other Appropriations Realized—the account that represents the agency’s available
resources for the year. This account normally has a debit balance.
11-4 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Answers, 11-9, (Cont’d) • Budgetary accounts that explain where funds are in the spending cycle—
Unapportioned Authority, Apportionments, Allotments, Commitments, Undelivered
Orders, and Expended Authority. These budgetary accounts normally have a credit
balance and when summed will add to the Other Appropriations Realized. • The use of the Commitments account is optional, though highly recommended. Budget authority flows down through the accounts in the sequence given.
11-10. Six financial statements are required and explained in OMB Circular A-136. They are:
(6) Balance sheet
Statement of net costs
Statement of changes in net position
Statement of budgetary resources
Statement of custodial activities
Statement of social insurance Certain statements may not be needed by some agencies, particularly the statements of
custodial activities and social insurance.
Solutions to Cases
11-1. a. Students can find a list of the 24 federal agencies required to produce audited
annual financial reports in the appendix to the Annual Financial Report of the U.S.
Government. The GAO provides an opinion in an audit report for each of these
agencies. Students will notice that these reports are much longer than those
typically prepared for businesses. For the five major agencies that did not receive an
unqualified audit report in FY 2007, one received a qualified opinion, and the
Departments of Defense, Homeland Security, State, and National Aeronautics and
Space Administration received a “disclaimer of opinion” in part because the GAO
was unable to determine the reliability of significant portions of the financial
statements due to material weaknesses in the financial systems. b. Agencies began to report comparative information showing prior years so students
will be able to identify those line-items that are significantly different from the prior
year and comment on the reasons for overall changes in net position. c. Agencies will be at different stages of progress in preparing a consolidated
performance accountability report (PAR) depending on the year of the statements
the student has chosen. After 2008, the PAR should include the annual
performance report (APR) required under the Government Performance and Results
Act, annual financial statements, management reports on internal control and other
accountability issues, and the Inspector General’s assessments of management and
performance challenges . Students should examine the transmittal letter that
11-5 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, Case 11-1, (Cont’d) accompanies the annual report for additional information about progress in
integrating financial information. Information about these reports is available in
OMB Circular A-136 available at www.omb.gov, under “Circulars.”
a. The solution to this case depends on the extent of future issuances of new FASAB
standards. The FASAB regularly updates a report called “Documents Resulting
from the FASAB and the Accounting and Auditing Policy Committee Processes”
that can be found at www.fasab.gov. b. The 2008 revision of OMB Circular A-136 is rather extensive and supersedes
OMB Bulletin 01-09 so students may not find a newer version of the guidance on
financial statement requirements. However, students should develop the skills to
locate authoritative information such as these Circulars and Bulletins to be able to
confirm that they have the most current and relevant information. 11-3. The FY 2008 report for the U. S. government is expected to be available at
www.fms.treas.gov/fr/index.html in December 2008. The answers to these questions for
FY 2007 (i.e., October 1, 2006 – September 30, 2007), the report that is presented in
Illustrations 11-2 and 11-3, are as follows:
a. From the perspective of the balance sheet, the federal government has a net
position of a $9,205,800,000,000 (or $9.2 trillion) deficit. There is a $275.5
billion excess of costs of government operations over revenue (i.e., net operating
cost) for FY 2007 as seen on the statement of operations and changes in net
position. b. The $275.5 billion decrease in net position for FY 2007 is less than the $449.5
billion deficit in FY 2006. The amount of unmatched transactions and balances
decreased in FY 2007 to $6.7 billion from $11 billion the year before. c. The Comptroller General of the GAO was not able to render an opinion, therefore
he reported a disclaimer of opinion because he was unable to determine the
reliability of significant portions of the consolidated financial statements
“…resulting from the material deficiencies, and other limitations on the scope of
our work...” in five of the major federal agencies (CFO Act agencies). The
Comptroller General does go on to express an adverse opinion on internal control
over financial reporting and compliance but an unqualified opinion on the new
Statement of Social Insurance. d. The GAO reported that the most serious financial management problems were at
the Department of Defense (DOD). They cited internal control weaknesses
related to capital assets, inventories, and environmental and disposal liabilities. In
addition, the report indicated that the DOD was unable to support the total net
Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, Case11- 3, (Cont’d) cost of operations and could not adequately account for intra-governmental
activity between federal agencies. Four other areas of material weaknesses in
internal control in other federal agencies related to certain lending programs,
determining the extent to which improper payments may exist, ability to manage
information security risks on an ongoing basis, and effectively managing its tax
collection activities. This information is included in the GAO Report that will
accompany each annual Financial Report of the United States Government.
e. Nineteen federal agencies out of 24 received unqualified opinions in FY 2007, up
considerably from the first audited consolidated financial report eleven years ago.
The list of agencies is included in the annual financial report of the U.S.
government. The management’s discussion and analysis reports on this topic in
the first introductory paragraph.
Note to Instructor: The annual report of the U.S. government is certainly
provocative and likely to result in a spirited discussion among students. We
suggest you focus on the tremendous accounting challenges in auditing the largest
organization in the world, and stress the positive aspects of how far federal
agencies have come in the few years since audit requirements were enacted. Solutions to Exercises and Problems
c. 11-7 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, (Cont’d) 11-2.
a. COMPUTATION OF MISSING AMOUNTS: Debits Credits PROPRIETARY ACCOUNTS
ACCOUNTS PAYABLE $ 2,300,000 ACCUMULATED DEPRECIATION 2,600,000 APPROPRIATIONS USED 4,500,000 OPERATING MATERIALS AND SUPPLIES $ 2,700,000 CUMULATIVE RESULTS OF OPERATIONS 10/1/10 7,700,000 OPERATING/PROGRAM EXPENSES 4,150,000 DEPRECIATION AND AMORTIZATION 1,150,000 PLANT AND EQUIPMENT 8,900,000 UNEXPENDED APPROPRIATIONS2011 2,100,000 TOTAL AMOUNTS GIVEN 16,900,000 19,200,000 2,300,000 __________ $19,200,000 $19,200,000 FUND BALANCE WITH TREASURY2011
TOTALSPROPRIETARY ACCOUNTS BUDGETARY ACCOUNTS
EXPENDED AUTHORITY2011 $ 4,500,000 APPORTIONMENTS2011 600,000 UNDELIVERED ORDERS2011 1,500,000 TOTAL AMOUNTS GIVEN $ OTHER APPROPRIATIONS REALIZED2011 -0- 6,600,000
_________ $ 6,600,000 TOTALSBUDGETARY ACCOUNTS 6,600,000 $ 6,600,000 Note:
Unexpended Appropriations ($2,100,000) + Expended Authority ($4,500,000) =
$6,600,000 (original appropriation);
Appropriations Used ($4,500,000) + Unexpended Appropriations ($2,100,000) =
$6,600,000 (original appropriation); 11-8 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-2, (Cont’d) b.
APPROPRIATIONS USED DURING FY 2011 $4,500,000 TOTAL EXPENSES DURING FY 2011 (Note A) 5,300,000 NET DECREASE IN CUMULATIVE RESULTS OF OPERATIONS $ 800,000 (NET DECREASE IN CUMULATIVE RESULTS OF OPERATIONS IS THE SAME AS
NET DECREASE IN ASSETS OTHER THAN FUND BALANCE WITH TREASURY IF
APPROPRIATIONS IS THE ONLY FINANCING SOURCE) (Note A: Total expenses is the sum of Operating/Program Expenses of $4,150,000
and Depreciation and Amortization of $1,150,000.) 11-3. a.
Debits Credits BUDGETARY
EXPENDED AUTHORITY2011 4,500,000 APPORTIONMENTS2011 600,000 OTHER APPROPRIATIONS REALIZED2011 5,100,000 PROPRIETARY
CUMULATIVE RESULTS OF OPERATIONS 5,300,000 OPERATING/PROGRAM EXPENSES 4,150,000 DEPRECIATION AND AMORTIZATION 1,150,000 APPROPRIATIONS USED 4,500,000 CUMULATIVE RESULTS OF OPERATIONS 11-9 4,500,000 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-3, (Cont’d) b. FEDERAL AGENCY
AS OF SEPTEMBER 30, 2011
FUND BALANCE WITH TREASURY2011 $ 2,300,000 GOVERNMENTAL:
OPERATING MATERIALS AND SUPPLIES 2,700,000 PLANT AND EQUIPMENT (NET OF ACCUMULATED
DEPRECIATION OF $2,600,000) 6,300,000 TOTAL ASSETS $11,300,000 LIABILITIES
ACCOUNTS PAYABLE $ 2,300,000 NET POSITION
UNEXPENDED APPROPRIATIONS 2,100,000 CUMULATIVE RESULTS OF OPERATIONS 6,900,000 TOTAL NET POSITION 9,000,000 TOTAL LIABILITIES AND NET POSITION 11-10 $11,300,000 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, (Cont’d) 11-4. RURAL ASSISTANCE AGENCY
STATEMENT OF NET COST
FOR THE YEAR ENDED SEPTEMBER 30, 2011 FOOD BANK
COSTS $ 9,632,800 LESS: EARNED REVENUE 2,611,900 NET COST 7,020,900 HOUSING SERVICES
COSTS 7,438,500 LESS: EARNED REVENUE 1,237,400 NET COST 6,201,100 CREDIT COUNSELING
COSTS 2,391,000 LESS: EARNED REVENUE 87,000 NET COST 2,304,000 TOTAL
COSTS 19,462,300 LESS: EARNED REVENUE 3,936,300 NET COST OF OPERATIONS $ 15,526,000 11-11 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, (Cont’d) 11-5. FEDERAL SCIENCE ADMINISTRATION
STATEMENT OF BUDGETARY RESOURCES
FOR THE 11 MONTHS ENDED AUGUST 31, 2011 BUDGETARY RESOURCES:
BUDGET AUTHORITY (Note A):
APPROPRIATIONS RECEIVED (Note A)
TOTAL BUDGETARY RESOURCES $ 4,894,555
$ 4,894,555 STATUS OF BUDGETARY RESOURCES:
OBLIGATIONS INCURRED (Note B)
UNOBLIGATED BALANCES (Note C)
TOTAL STATUS OF BUDGETARY RESOURCES
RELATIONSHIP OF OBLIGATIONS TO OUTLAYS:
OBLIGATED BALANCE, NETBEG. OF THE PERIOD
OBLIGATED BALANCE, NETEND OF THE PERIOD (Note D)
OUTLAYS: (Note B)
OBLIGATIONS INCURRED $ 3,794,855
$ 4,894,555 1,210,210
3,794,855 NET OUTLAYS (DISBURSEMENTS) (Note E)
Note A: Total budgetary resources are given by the balance of other
appropriations realized of $4,894,855.
Note B: Expended authority of current year of $3,130,724 plus
$664,131 obligated budgetary authority for undelivered
orders at 8/31/11.
Note C: Unobligated balances is the sum of unapportioned authority,
apportionments, allotments, and commitments.
Note D: Obligated balance at year-end is equal to undelivered orders
plus accounts payable and other accrued liabilities.
Note E: Outlays also equal the decrease in fund balances with the
U.S. Treasury during the periodthe equivalent of cash
disbursed. 11-12 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, (Cont’d) 11-6. a. FLOOD CONTROL COMMISSION
Debits 1. Credits BUDGETARY
REALIZED2011 7,000,000 UNAPPORTIONED AUTHORITY2011 7,000,000 PROPRIETARY
FUND BALANCE WITH TREASURY2011 7,000,000 UNEXPENDED APPROPRIATIONS2011 2. 7,000,000 BUDGETARY
UNAPPORTIONED AUTHORITY2011 7,000,000 APPORTIONMENTS2011 3. 7,000,000 BUDGETARY
APPORTIONMENTS2011 1,000,000 ALLOTMENTS2011 4. 1,000,000 BUDGETARY
ALLOTMENTS2011 970,000 UNDELIVERED ORDERS2011 5. 970,000 BUDGETARY
EXPENDED AUTHORITY2011 11-13 170,000
170,000 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-6, (Cont’d) PROPRIETARY
OPERATING/PROGRAM EXPENSES 170,000 DISBURSEMENTS IN TRANSIT2011
DISBURSEMENTS IN TRANSIT2011 170,000 170,000 FUND BALANCE WITH TREASURY2011
UNEXPENDED APPROPRIATIONS2011 170,000 170,000 APPROPRIATIONS USED 6. Credits 170,000 BUDGETARY
UNDELIVERED ORDERS2011 395,000 EXPENDED AUTHORITY2011 395,000 PROPRIETARY
FURNITURE AND EQUIPMENT 180,000 OPERATING MATERIALS AND SUPPLIES 175,000 OPERATING/PROGRAM EXPENSES 40,000 ACCOUNTS PAYABLE 395,000 UNEXPENDED APPROPRIATIONS2011 395,000 APPROPRIATIONS USED 7. 395,000 BUDGETARY
EXPENDED AUTHORITY2011 11-14 183,000
183,000 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-6, (Cont’d) Debits Credits PROPRIETARY
OPERATING/PROGRAM EXPENSES 183,000 ACCRUED FUNDED PAYROLL AND
BENEFITS 183,000 UNEXPENDED APPROPRIATIONS2011 183,000 APPROPRIATIONS USED 8. 183,000 PROPRIETARY
ACCOUNTS PAYABLE 189,000 ACCRUED FUNDED PAYROLL AND
BENEFITS 183,000 DISBURSEMENTS IN TRANSIT2011
DISBURSEMENTS IN TRANSIT2011 372,000 372,000 FUND BALANCE WITH TREASURY2011 9. 372,000 BUDGETARY
UNDELIVERED ORDERS2011 40,000 EXPENDED AUTHORITY2011 40,000 PROPRIETARY
OPERATING/PROGRAM EXPENSES 40,000 ACCRUED FUNDED PAYROLL
AND BENEFITS 30,000 ACCOUNTS PAYABLE 10,000 OPERATING/PROGRAM EXPENSES
OPERATING MATERIALS AND SUPPLIES 11-15 60,000
60,000 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-6, (Cont’d) Debits
DEPRECIATION AND AMORTIZATION 2,500 ACC. DEPRECIATIONFURN. AND EQUIP.
UNEXPENDED APPROPRIATIONS2011 2,500 40,000 APPROPRIATIONS USED 10. Credits 40,000 BUDGETARY
EXPENDED AUTHORITY2011 788,000 OTHER APPROP. REALIZED2011 788,000 PROPRIETARY
CUMULATIVE RESULTS OF OPERATIONS 495,500 OPERATING/PROGRAM EXPENSES 493,000 DEPRECIATION AND AMORTIZATION APPROPRIATIONS USED 2,500 788,000 CUMULATIVE RESULTS OF OPERATIONS 11-16 788,000 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-6, (Cont’d) b. FLOOD CONTROL COMMISSION
OCTOBER 31, 2011
FUND BALANCE WITH TREASURY2011 $6,458,000 GOVERNMENTAL:
OPERATING MATERIALS AND SUPPLIES 115,000 FURNITURE AND EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION OF $2,500
TOTAL ASSETS 177,500
ACCOUNTS PAYABLE $ 216,000 ACCRUED FUNDED PAYROLL AND BENEFITS 30,000 TOTAL LIABILITIES
COVERED BY BUDGETARY RESOURCES 246,000 NET POSITION
CUMULATIVE RESULTS OF OPERATIONS
TOTAL NET POSITION 6,212,000
6,504,500 TOTAL LIABILITIES AND NET POSITION 11-17 $6,750,500 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-6, (Cont’d) c. FLOOD CONTROL COMMISSION
STATEMENT OF CHANGES IN NET POSITION
FOR THE MONTH ENDED OCTOBER 31, 2011
OPERATIONS APPROPRIATIONS BEGINNING BALANCES $ 0 $ 0 BUDGETARY FINANCING SOURCES:
APPROPRIATIONS RECEIVED 7,000,000 APPROPRIATIONS USED 788,000 (788,000) TOTAL FINANCING SOURCES 788,000 6,212,000 NET COST OF OPERATIONS (Note A) (495,500) _________ ENDING BALANCES $ 292,500 $6,212,000 Note A: Operating/program expenses of $493,000 + depreciation and
amortization of $2,500. 11-18 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, 11-6, (Cont’d) d. FLOOD CONTROL COMMISSION
STATEMENT OF BUDGETARY RESOURCES
FOR MONTH ENDED OCTOBER 31, 2011 BUDGETARY RESOURCES:
BUDGET AUTHORITY (Note A) $7,000,000 STATUS OF BUDGETARY RESOURCES:
OBLIGATIONS INCURRED (Note B) $970,000 UNOBLIGATED BALANCES AVAILABLE (NOTE C) 6,030,000 TOTAL STATUS OF BUDGETARY RESOURCES $7,000,000 RELATIONSHIP OF OBLIGATIONS TO OUTLAYS:
OBLIGATED BALANCE, NET END OF PERIOD (428,000) (Note D)
OBLIGATIONS INCURRED 970,000 TOTAL NET OUTLAYS (DISBURSEMENTS) (Note E)
Note B: Note C:
Note D: Note E: $ 542,000 Total budgetary resources are the total appropriations for the year, or
Obligations incurred equals expended budgetary authority of $788,000
(see Entry 10A) plus the remaining balance of Undelivered
Orders2010 of $182,000 ($970,000 - $788,000), or $970,000. In this
case, since the Flood Control Commission obligates prior to all
expenditures of budgetary authority, the amount incurred also is
simply the amount obligated by the credit to Undelivered Orders2011
(see Entry 4).
Total budgetary resources of $7,000,000 less amount obligated of
$970,000 (see Note B) equals $6,030,000.
Obligated balances at year-end include Undelivered Orders ($182,000)
and Accounts Payable and other accrued liabilities ($246,000), or
$428,000 in total.
Outlays also equals the decrease in Fund Balances with the U.S.
Treasury during the periodthe equivalent of cash disbursed. 11-19 Chapter 11 - Accounting and Reporting for the Federal Government Ch. 11, Solutions, (Cont’d) 11-7.
a. A federal Inspector General (IG) is independently appointed to a department
or agency and is not part of the Government Accountability Office (GAO).
However, the IGs typically report to the department or agency of which they
are part, but can only be removed with the approval of Congress. So the audit
of a federal agency conducted by an IG should be considered independent.
For more information on the role of an Inspector General, go to www.gao.gov b. For the fiscal year that ended September 30, 2007, the date of this transmittal
letter (November 13, 2007) suggests that the report was available within 45
days of the end of year. That was the required due date for FY 2007. Most
federal agencies are making these reports available on their Web sites;
however, other ways of obtaining federal publications include going through
the Government Printing Office (www.gpo.gov ) or Web sites such as
www.FirstGov.gov or www.whitehouse.gov . c. The full Inspector General’s report shows that the department again was cited
for material weaknesses in timely process of transactions and accounting for
Federal Aviation Administration’s (FAA) property, plant, and equipment,
including the construction in process account; although significant
improvements were made over the year to result in an unqualified audit
opinion for the department as a whole. The FAA’s property, plant and
equipment represent 95% of the department’s capital assets, so this in an
important area to watch. In addition, significant deficiencies were identified
in the areas of internal controls over journal entries in the Highway
Transportation Fund, financial control systems, information security
programs, and grant accruals. 11-20 ...
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This note was uploaded on 05/20/2010 for the course ACCOUNTING 580 taught by Professor Waymire during the Spring '10 term at Northern Virginia.
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