[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1130 Introduced in Senate (IS)]

  1st Session
                                S. 1130

    To provide for the establishment of uniform accounting systems, 
  standards, and reporting systems in the Federal Government, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               August 8 (legislative day, July 10), 1995

     Mr. Brown (for himself, Mr. Craig, Mr. Burns, and Mr. Inhofe) 
introduced the following bill; which was read twice and referred to the 
                   Committee on Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
    To provide for the establishment of uniform accounting systems, 
  standards, and reporting systems in the Federal Government, and for 
                            other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Accounting Standardization Act of 
1995''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) Much effort has been devoted to strengthening Federal 
        internal accounting controls in the past. Although progress has 
        been made in recent years, there still exists no uniform 
        Federal accounting system for Federal Government entities and 
        institutions.
            (2) As a result, Federal financial management continues to 
        be seriously deficient, and Federal financial management and 
        fiscal practices have failed to identify costs, failed to 
        reflect the total liabilities of congressional actions, and 
        failed to accurately report the financial condition of the 
        Federal Government.
            (3) Current Federal accounting practices do not adequately 
        report financial problems of the Federal Government or the full 
        cost of programs and activities. The continued use of these 
        practices undermines the Government's ability to provide 
        credible and reliable financial data and encourages already 
        widespread Government waste, and will not assist in achieving a 
        balanced budget.
            (4) Waste and inefficiency in Federal Government undermine 
        the confidence of the American people in the Government and 
        reduces the Federal Government's ability to address adequately 
        vital public needs.
            (5) To rebuild the accountability and credibility of the 
        Federal Government, and restore public confidence in the 
        Federal Government, a uniform Federal accounting system, that 
        fully meets the accounting standards and reporting objectives 
        for the Federal Government, must be immediately established so 
        that all the assets and liabilities, revenues and expenditures 
        or expenses, and the full cost of programs and activities of 
        the Federal Government can be consistently and accurately 
        recorded, monitored, and uniformly reported throughout all 
        Government entities for control and management evaluation 
        purposes.
            (6) Since its establishment in October 1990, the Federal 
        Account Standards Advisory Board (hereinafter referred to as 
        the ``FASAB'') has made substantial progress in completing its 
        efforts to develop and recommend uniform ``generally accepted 
        accounting standards'' for the Federal Government. The FASAB 
        has issued statements on accounting and managerial cost 
        standards based on sound, modern business practices. The 
        proposed standards will provide cost and financial information 
        that will assist the Congress and financial managers evaluate 
        the cost and performance of Federal programs and activities, 
        and will therefore provide important information that has been 
        lacking, but is needed for improved decisionmaking by financial 
        managers and the Congress.
            (7) Through implementation of these standards in Federal 
        accounting systems, over the long term, improved financial 
        management is a likely outcome. Codification and implementation 
        of these standards will resolve a long standing deficiency with 
        Federal accounting systems.
    (b) Purposes.--The purposes of this Act are to--
            (1) establish a Federal accounting system that must be 
        implemented and used to ensure--
                    (A) consistency of accounting by a Federal entity 
                from one fiscal year to the next; and
                    (B) uniformity of accounting between the several 
                Federal entities and governmentwide; and
            (2) make full disclosure of Federal financial data, 
        including the full cost of Federal programs and activities, to 
        the citizens, the Congress, the President, and agency 
        management, so that programs and activities can be considered 
        based on their full costs and merits;
            (3) increase the accountability and credibility of Federal 
        financial management;
            (4) improve performance, productivity, and efficiency of 
        the Federal Government financial management;
            (5) control the cost of Federal Government;
            (6) build upon and complement the authorities provided the 
        Comptroller General, the Secretary of the Treasury, and the 
        Director of the Office of Management and Budget in the 
        Accounting and Auditing Act of 1950, the Chief Financial 
        Officers Act of 1990, the Government Performance and Results 
        Act of 1993, and the Government Management Reform Act of 1994; 
        and
            (7) monitor budget execution, financially and performance-
        wise, including the regular reporting to actual dollars and 
        activities.

SEC. 3. ESTABLISHMENT OF A UNIFORM FEDERAL ACCOUNTING SYSTEM.

    (a) In General.--Beginning with fiscal year 1997, the President 
shall require the heads of agencies to implement and maintain a uniform 
Federal accounting system established in accordance with this Act and 
other applicable law.
    (b) Federal Accounting Standards.--In accordance with the 
Memorandum of Understanding dated October 10, 1990 between the 
Department of the Treasury,
 the Office of Management and Budget, and the General Accounting 
Office, the Secretary of the Treasury, the Director, Office of 
Management and Budget, and the Comptroller General shall agree on 
proposed Federal accounting standards and interpretations recommended 
by the FASAB. The Comptroller General and the Director of the Office of 
Management and Budget shall publish such Federal accounting standards.
    (c) Approved Federal Accounting Standards.--
            (1) In general.--The Federal accounting system shall 
        satisfy existing and future Federal accounting standards as 
        recommended by the FASAB and approved by the Department of the 
        Treasury, the Office of Management and Budget, and the General 
        Accounting Office.
            (2) Interim principals.--Pending issuance of the FASAB 
        final accounting standards or in the absence of the FASAB 
        accounting standards, the following hierarchy of the generally 
        accepted accounting principles for the Federal Government shall 
        apply:
                    (A) Individual statements agreed to and published 
                by the Joint Financial Management Improvement Program 
                (JFMIP) principals.
                    (B) Form and content requirements included in OMB 
                Bulletin 93-02, dated October 22, 1992, and subsequent 
                issuance.
                    (C) Accounting standards contained in agency 
                accounting policy, procedures manuals, or related 
                guidance as of March 29, 1991, so long as they are 
                prevalent practices.
                    (D) Accounting principles published by 
                authoritative standards setting bodies and other 
                authoritative sources--
                            (i) in the absence of other guidance in the 
                        first three parts of this hierarchy; and
                            (ii) if the use of such accounting 
                        standards improve the meaningfulness of the 
                        financial statements.
    (d) Authority To Modify or Amend.--In accordance with the 
Memorandum of Understanding dated October 10, 1990, the FASAB may 
recommend the modification, amendment, or revision, or interpretation 
of any Federal accounting standard to the Secretary of the Treasury, 
the Director, Office of Management and Budget, and the Comptroller 
General.
    (e) Standard and General Ledger and Uniform Accounting 
Transactions.--For purposes of this Act, a Federal accounting system 
shall satisfy the United States Government Standard General Ledger as 
approved by the Department of the Treasury, the Office of Management 
and Budget, and the General Accounting Office to ensure all government 
entities and institutions account for similar activities in the same 
way and consistency from one fiscal year to the next.
    (f) Federal Accounting System Requirements.--For purposes of this 
Act, a Federal accounting system shall be consistent with the Federal 
financial management systems requirements, as amended from time to 
time, adopted by the Secretary of the Treasury, the Director of the 
Office of Management and Budget, and the Comptroller General pursuant 
to the continuing program for improving financial management authorized 
by section 3511(e), title 31, United States Code, and the Federal 
accounting standards published pursuant to subsections (b), (c), and 
(d) of this section.

SEC. 4. THE SCOPE OF THE APPLICATION.

    (a) In General.--The FASAB may recommend to the Secretary of the 
Treasury, the Director of the Office of Management and Budget, and the 
Comptroller General, the application of Federal accounting standards 
and Federal financial management systems requirements to a corporation, 
agency or instrumentality subject to chapter 91 of title 31, United 
States Code, or a federally chartered corporation or instrumentality.
    (b) Compliance Requirement.--Upon the recommendation of the FASAB, 
the Secretary of the Treasury, the Director of the Office of Management 
and Budget, and the Comptroller General may require a corporation, 
agency, or instrumentality subject to chapter 91 of title 31, United 
States Code, or a federally chartered corporation or instrumentality to 
comply with all or part of a Federal accounting standard and Federal 
financial management systems requirements.

SEC. 5. ENFORCEMENT.

    (a) In General.--
            (1) Uniform system.--Each Federal agency shall implement 
        and maintain a uniform Federal accounting system in accordance 
        with the requirements of this Act.
            (2) Priority.--Each Federal agency shall give priority in 
        funding and provide sufficient resources to implement this Act.
            (3) Private sector involvement.--Each Federal agency may 
        implement this Act by utilizing the assistance of private 
        sector firms to develop basic systems, subject to the 
        requirements specified in this Act.
    (b) Audit Compliance Finding.--Each audit required by section 3521 
of title 31, United States Code, shall report whether the agency 
accounting system complies substantially with the requirements of a 
uniform Federal accounting system.
    (c) Penalties.--
            (1) Compliance determination.--Not later than 30 days after 
        the receipt of an audit report identifying an agency accounting 
        system in substantial noncompliance with the requirements of a 
        uniform Federal accounting system under this Act, the 
        Controller of the Office of Federal Financial Management, based 
        on review of the audit report, agency comments thereto, and 
        such other information as the Controller deems relevant and 
        appropriate, shall determine whether the agency accounting 
        system complies substantially with the requirements of a 
        uniform Federal accounting system.
            (2) Penalties provided.--If the Controller determines that 
        an agency accounting system does not substantially comply with 
        the requirements of a uniform Federal accounting system, the 
        agency shall be subject to the following penalties:
                    (A) 1 percent across-the-board budget reduction of 
                the entity's or institution's budget for the fiscal 
                year 1998.
                    (B) 2 percent across-the-board budget reduction of 
                the entity's or institution's budget for the fiscal 
                year 1999.
                    (C) 3 percent across-the-board budget reduction of 
                the entity's or institution's budget for the fiscal 
                year 2000.
                    (D) 4 percent across-the-board budget reduction of 
                the entity's or institution's budget for the fiscal 
                year 2001.
                    (E) 5 percent across-the-board budget reduction of 
                the entity's or institution's budget for the fiscal 
                year 2002.
            (3) Penalties enforcement.--The Department of the Treasury 
        shall accordingly reduce the amount as set forth in paragraph 
        (2) upon receipt of determination of noncompliance from the 
        Controller.
            (4) Anti-deficiency violation penalties.--Any financial 
        officer who knowingly or willingly commits, permits, or 
        authorizes deviation from the accounting and reporting 
        standards and procedures established in accordance with this 
        Act and other applicable law, shall be subject to possible 
        administrative disciplinary action, suspension from duty, or 
        removal from office. and, when warranted, upon conviction, 
        shall be fined not more than $5,000 or imprisoned for not more 
        than 2 years, or both.

SEC. 6. APPLICATION TO CONGRESS AND THE JUDICIAL BRANCH.

    The Federal accounting system required by this Act may be--
            (1) adopted by the Senate by resolution as an exercise of 
        the rulemaking power of the Senate;
            (2) adopted by the House of Representatives by resolution 
        as an exercise of the rulemaking power of the House of 
        Representatives; and
            (3) adopted by the Administrative Conference of the Courts 
        by regulations for the judicial branch.

SEC. 7. REPORTING REQUIREMENTS.

    Not later than March 31 of each year, the Office of Management and 
Budget and the General Accounting Office shall report separately to the 
Congress regarding implementation of this Act. The Office of Management 
and Budget may include its report in the Financial Management Status 
Report and the 5-year Financial Management Plan issued pursuant to 
section 3512(a)(1) of title 31, United States Code.

SEC. 8. DEFINITIONS.

    For purposes of this Act:
            (1) Agencies.--The term ``agencies'' means a department or 
        agency of the United States Government but does not include a 
        Government corporation as such term is defined in chapter 91 of 
        title 31, United States Code, or a federally chartered 
        corporation.
            (2) Consistency.--The term ``consistency'' refers to the 
        compilation or allocation of reporting of costs in the same 
        manner by the Federal entity from one fiscal year to another. 
        An inconsistent compilation, use or reporting of data must be 
        clearly and conspicuously communicated by the Federal entity to 
        the Congress, President, GAO, OMB, and the Treasury in the year 
        of inconsistency.
            (3) Uniformity.--The term ``uniformity'' refers to the 
        comparability of compilation or allocation, use or reporting of 
        costs between Federal entities and governmentwide pursuant to 
        the standards recommended by the FASAB.
            (4) Full disclosure.--The term ``full disclosure'' refers 
        to the accuracy of the financial statements, operating reports 
        and related and appropriate footnote disclosures made in 
        compliance with the standards recommended by the FASAB.
            (5) Full cost.--The term ``full cost'' refers to the 
        uniform and consistent determination, compilation, and 
        reporting of costs in compliance with standards recommended by 
        the FASAB.
            (6) Federal accounting standards.--The term ``Federal 
        accounting standards'' includes reporting objectives.

SEC. 9. CONFORMING AMENDMENT.

    Section 3521(f) of title 31, United States Code, is amended by 
striking the period at the end of the first sentence and inserting 
``and the Controller of the Office of Federal Financial Management.''.

SEC. 10. DUTIES OF THE COMPTROLLER GENERAL.

    Nothing in this Act shall be construed to supersede or diminish the 
authority of the Comptroller General to prescribe accounting 
principles, standards, and requirements pursuant to section 3511, title 
31, United States Code.

SEC. 11. EFFECTIVE DATE.

    This Act shall take effect on the date of enactment of this Act.
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