GAO/PCIE: Financial Audit Manual: Checklist for Federal Accounting Reporting, and Disclosures

GAO/PCIE: Financial Audit Manual: Checklist for Federal
Accounting Reporting, and Disclosures (01-JUL-04, GAO-04-942G).

The U.S. Government Accountability Office (GAO) and the
President's Council on Integrity and Efficiency (PCIE) maintain
the GAO/PCIE Financial Audit Manual (FAM). The FAM provides
guidance for performing financial statement audits of federal
entities. It is a key tool for enhancing accountability over
taxpayer-provided resources. GAO and PCIE are committed to
keeping the FAM current. With this goal in mind, in October of
2003, we revised the Checklist for Reports Prepared Under the CFO
Act (CFO Checklist), and requested comments on an exposure draft
of the checklist. One of the key changes in the final checklist
is its title, which has been changed to Checklist for Federal
Accounting, Reporting, and Disclosures. This change was made to
reflect the checklist's potential application to any federal
entity preparing annual audited financial statements in
accordance with the Office of Management and Budget's (OMB) form
and content guidance.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-942G
ACCNO: A11285
TITLE: GAO/PCIE: Financial Audit Manual: Checklist for Federal
Accounting Reporting, and Disclosures
DATE: 07/01/2004
SUBJECT: Auditing procedures
Auditing standards
Financial analysis
Financial management
Financial management systems
Financial records
Financial statement audits
Internal audits

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GAO-04-942G

July 2004

Dear Colleague:

GAO and PCIE are committed to keeping the FAM current. With this goal in
mind, in October of 2003, we revised the Checklist for Reports Prepared
Under the CFO Act (CFO Checklist), and requested comments on an exposure
draft of the checklist. One of the key changes in the final checklist is
its title, which has been changed to Checklist for Federal Accounting,
Reporting, and Disclosures. This change was made to reflect the
checklist's potential application to any federal entity preparing annual
audited financial statements in accordance with the Office of Management
and Budget's (OMB) form and content guidance.

This checklist is located in section 1050 of the GAO/PCIE FAM. It can be
accessed at either the GAO Web site (www.gao.gov) or the PCIE Web site
(www.ignet.gov/pande/audit1.html#guide). We extend our thanks to the
individuals and organizations that provided comments to make this
checklist

more effective.

Jeffrey C. Steinhoff
Managing Director
Financial Management and Assurance
U.S. Government Accountability Office

Attachment

The Honorable Everett L. Mosley Chair President's Council on Integrity

and Efficiency Audit Committee

United States Government Accountability Office President's Council on
Integrity and Efficiency

GAO/PCIE

FINANCIAL AUDIT MANUAL

Checklist for Federal Accounting, Reporting, and Disclosures

GAO-04-942G July 2004

Reporting 1050 - Checklist for Federal Accounting, Reporting, and
Disclosures

Contents

Abbreviations 2
Sections

I. Overview 3

II. General Items related to the Financial Statements 7

III. Balance Sheet 12

IV. Statement of Net Cost 102

V. Statement of Changes in Net Position 149

VI. Statement of Budgetary Resources 161

VII. Statement of Financing 171

VIII. Statement of Custodial Activity 182

IX. Notes to Financial Statements 192

X. Supplementary Information 193

XI. Social Insurance 218

July 2004 GAO/PCIE Financial Audit Manual - Part II

AcSEC Accounting Standards Executive Committee
AICPA American Institute of Certified Public Accountants
CFO Act Chief Financial Officers Act of 1990
COTS commercial off-the-shelf
CSRS Civil Service Retirement System
FASAB Federal Accounting Standards Advisory Board
FASB Financial Accounting Standards Board
FDIC Federal Deposit Insurance Corporation
FERS Federal Employees Retirement System
FFMIA Federal Financial Management Improvement Act of 1996
FHA Federal Housing Administration
FIFO first-in, first-out
FY fiscal year
GAAP Generally Accepted Accounting Principles
GDP gross domestic product
GMRA Government Management Reform Act of 1994
GPRA Government Performance and Results Act of 1993
HI Hospital Insurance (Medicare Part A)
IMF International Monetary Fund
Imple. Guide Implementation Guide
IRS Internal Revenue Service
LIFO last-in, first-out
MD&A Management's Discussion and Analysis
MRS Military Retirement System
NRV net realizable value
OASDI Old Age, Survivors, and Disability Insurance (Social Security)
OMB Office of Management and Budget
OPEB Other Postemployment Benefits
ORB Other Retirement Benefits
PP&E Property, Plant, and Equipment
RRB Railroad Retirement Benefits
RSI Required Supplementary Information
RSSI Required Supplementary Stewardship Information
SFAS Statement of Financial Accounting Standards
SFFAC Statements of Federal Financial Accounting Concepts
SFFAS Statements of Federal Financial Accounting Standards
SGL U.S. Government Standard General Ledger
SMI Supplementary Medical Insurance (Medicare Part B)
SOP Statement of Position
TVA Tennessee Valley Authority
UI unemployment insurance
UTF Unemployment Trust Fund

Page 1050-2

Introduction

The Chief Financial Officers (CFO) Act of 1990 and the Government
Management Reform Act of 1994 require, among other mandates, that
agencies' chief financial officers submit annual reports to their agency
heads and to the Office of Management and Budget (OMB). These annual
reports are to contain audited financial statements of their agencies. The
financial statements are to be presented in conformity with generally
accepted accounting principles (GAAP).1 The title of this checklist has
been changed to Checklist for Federal Accounting, Reporting, and
Disclosures. Previously referred to as the CFO Act Checklist, the change
was made to reflect its potential application to any federal entity
preparing annual audited financial statements in accordance with OMB's
proposed form and content guidelines.

This checklist is being issued to assist agencies in preparing these
statements and auditors in auditing them. Use of this checklist is not a
requirement. Rather, it is intended to help provide for a systematic,
organized, and structured approach to preparing or reviewing agency
financial statements. Furthermore, it should be noted that, while the
questions contained in the checklist are taken from authoritative sources,
the checklist itself is not authoritative, nor is it a comprehensive
guide. Preparers and auditors should also consult financial management
regulations for the individual agencies, as the regulations may have
specific guidance when the standards allow alternatives or management
flexibility.

Checklist Organization

The checklist has 11 sections: an overview section, a section related to
general items in the financial statements, a section for each of the six
financial statements, and three additional sections. The six sections
reflecting the financial statements are organized by the line items in
financial statements to allow the user to proceed through each statement
from the beginning to the end. The final three sections cover (1)
disclosures in the notes to the financial statements related to
significant accounting policies, (2) required supplementary stewardship
information and required supplementary information, and (3) social
insurance.

Since the financial statements are interrelated, some questions concerning
line items in one financial statement may also pertain to line items in
another statement. For example, the questions covering loans receivable in
the balance sheet section may also deal with matters related to interest
income and subsidy expense appearing in the statements of financing and
net cost sections. Because of these relationships, our general
organizational approach aggregates related information so that questions
on related line items appearing in more than one financial statement are
covered only in the first financial statement section in which the line
item appears. For example, questions concerning interest income and
subsidy expense would appear only in the balance sheet section. Similarly,
questions related to the notes to the financial statements section would
also appear only under the line item of the initial financial statement.

1The American Institute of Certified Public Accountants recognizes the
federal accounting standards promulgated by the Federal Accounting
Standards Advisory Board (FASAB) as generally accepted accounting
principles.

Page 1050-3

Except for sections I, II, VI, IX, and XI, the first page of each section
contains a list showing the number of questions in the section. This
checklist has 785 questions as follows.

General Items Related to the Financial Statements 23 Balance Sheet 355
Statement of Net Cost 180 Statement of Changes in Net Position 39
Statement of Budgetary Resources 27 Statement of Financing 27 Statement of
Custodial Activity 27 Notes to Financial Statements (Significant

Accounting Policies) 5 Supplementary Information 78 Social Insurance 24

Authoritative Guidance

Each question in this guide is referenced to a source. The sources cited
are (1) the Statements of Federal Financial Accounting Standards (SFFAS)
and (2) OMB Bulletin 01-09, Form and Content of Agency Financial
Statements.

FASAB statements include Statements of Federal Financial Accounting
Concepts (SFFAC) and Statements of Federal Financial Accounting Standards
(SFFAS). The three approved accounting concept statements are #1
Objectives of Federal Financial Reporting, 1993, #2 Entity and Display,
1995, and #3 Management's Discussion and Analysis, 1999. The 24 SFFAS
standards2 covered in this checklist are:

1. Accounting for Selected Assets and Liabilities, 1993.

2. Accounting for Direct Loans and Loan Guarantees, 1993.

3. Accounting for Inventory and Related Property, 1993.

4. Managerial Cost Accounting Concepts and Standards, 1995.

5. Accounting for Liabilities of the Federal Government, 1995.

6. Accounting for Property, Plant, and Equipment, 1995.

7. Accounting for Revenue and Other Financing Sources, 1996.

8. Supplementary Stewardship Reporting, 1996.

9. Deferral of the Effective Date of Managerial Cost Accounting Standards
for the Federal Government in SFFAS No. 4, 1997.

10. Accounting for Internal Use Software, 1998.

11. Amendments to Accounting for Property, Plant, and Equipment -
Definitional Changes, 1998.3

12. Recognition of Contingent Liabilities Arising from Litigation, 1998.

2FASAB promulgates accounting standards after considering the financial
and budgetary information needs of Congress,
executive agencies, other users of federal financial information, and
comments from the public.
3SFFAS 11 was rescinded in its entirety by SFFAS 23.

Page 1050-4

13. Deferral of Paragraph 65.2 - Material Revenue-Related Transactions
Disclosures, 1999.

14. Amendments to Deferred Maintenance Reporting, 1999.

15. Management's Discussion and Analysis, 1999.

16. Amendments to Accounting for Property, Plant, and Equipment -
Measurement and Reporting for Multi-Use Heritage Assets, 1999.

17. Accounting for Social Insurance, 1999.

18. Amendments to Accounting Standards For Direct Loans and Loans
Guarantees, 2000.

19. Technical Amendments to Accounting Standards for Direct Loans and
Loan Guarantees, 2001.

20. Elimination of Certain Disclosures Related to Tax Revenue
Transactions by the Internal Revenue Service, Customs and Others, 2001.

21. Reporting Corrections of Errors and Changes in Accounting Principles,
2001.

22. Change in Certain Requirements for Reconciling Obligations and Net
Cost of Operations, 2001.

23. Eliminating the Category National Defense Property, Plant, and
Equipment, 2003.

25. Reclassification of Stewardship Responsibilities and Eliminating the
Current Services Assessment, 2003.4

SFFAC 4, Intended Audience and Qualitative Characteristic for the
Consolidated Financial Report of the United States Government, and SFFAS
24, Selected Standards for the Consolidated Financial Report of the United
States Government, are not covered in this checklist, as this checklist is
intended for use at the agency reporting level, and is not to be used for
the financial report of the U.S. government.

SFFAS 7 Implementation Guide to Accounting for Revenue and Other Financing
Sources, 1996, is also covered in this checklist. OMB Bulletin 01-09
provides the detailed requirements for the form and content of agency
financial statements.

How to Use This Guide

To the right of each question are two columns. The first column provides
for a "yes," "no," or "N/A" (not applicable) answer to each question. The
second column provides for an explanation of the answer to each question.
A "yes" answer should indicate that the financial statements contain the
information asked by the question. For each "yes" answer, the explanation
column should include the page number or location in the financial
statements where the information can be found. Also, any other information
pertinent to the question and the response should be provided in the
explanation column.

4SFFAS 25 changes reporting requirements for social insurance information
required by SFFAS 17, effective for periods beginning after September 30,
2004, with earlier implementation encouraged.

Page 1050-5

An "N/A" answer might indicate that the question does not apply to the
federal entity. For example, most federal agencies do not administer loan,
loan guarantee, or loan insurance programs and, therefore, do not have
credit program receivables and related property. Consequently, the
questions on these receivables, property, and subsidies would not apply. A
simple explanation indicating that the reporting entity does not
administer loan programs would appear in the explanation column of the
first question in the series.

A "no" answer indicates that the information asked for in the question is
not included in the financial statements, notes, or supplementary
information, respectively. The explanation column should describe in
sufficient detail why the information is not included.

Page 1050-6

There are 23 questions in this section. All the questions relate to the
overall financial statements and are not further divided into categories.

General Items (1 - 23) Yes, No or N/A Explanation
1. Does the entity's annual financial statement
consist of the following items? a. management's
discussion and analysis (MD&A) of the reporting
entity b. basic statements and related notes c.
required supplementary stewardship information
(RSSI) d. required supplementary information
(RSI) e. other accompanying information (OAI)
that provides users of the financial statements
with a better understanding of the entity's
programs and the extent to which program
objectives are achieved (OMB Bulletin 01-09, p.
4, section 1.5)
2. Do the basic statements include? a. Balance
Sheet b. Statement of Net Cost c. Statement of
Changes in Net Position d. Statement of
Budgetary Resources e. Statement of Financing
f. Statement of Custodial Activity (OMB
Bulletin 01-09, pp. 4 & 5, section 1.5)

Page 1050-7

General Items (1 - 23) Yes, No or N/A Explanation
3. Does the entity use the following hierarchy
as its sources of guidance in preparing its
financial statements? a. FASAB Statements and
Interpretations as well as American Institute
of Certified Public Accountants (AICPA) and
Financial Accounting Standards Board (FASB)
pronouncements if made applicable to federal
government entities by a FASAB Statement or
Interpretation b. FASAB technical bulletins
and, if specifically made applicable to federal
government entities by AICPS and cleared by
FASAB, AICPA Industry Audit and Accounting
Guides and AICPA Statements of Position c.
AICPA Accounting Standards Executive Committee
(AcSEC) Practice Bulletins if specifically made
applicable to federal government entities and
cleared by FASAB, as well as Technical Releases
of the Accounting and Auditing Policy Committee
of FASAB d. Implementation guides published by
FASAB staff and practices that are widely
recognized and prevalent in the federal
government e. In the absence of a pronouncement
covered by federal Generally Accepted
Accounting Principles (GAAP) or another source
of established principles, other accounting
literature, depending on its relevance in the
circumstances. 5 (OMB Bulletin 01-09, p. 2,
section 1.2 & p. 13, section 2.1, item B)
4. Does the entity present comparative
information and related footnote disclosures
for the current year and prior year for the six
basic financial statements, and MD&A? (OMB
Bulletin 01-09, p. 5, section 1.6 & p. 13,
section 2.1, item F)

5Other accounting literature includes for example, FASAB Concept
Statements, Governmental Accounting Standards Board (GASB) Statements,
Interpretations, Technical Bulletins, and Concept Statements, and AICPA
Issue Papers.

Page 1050-8

General Items (1 - 23) Yes, No or N/A Explanation
5. Does the entity present comparative
information in the RSSI and RSI when the
information would be meaningful to the
user of the financial report? (OMB
Bulletin 01-09, p. 5, section 1.6)
6. Do the quarterly interim statements
include full accruals and are
intra-entity transactions eliminated?
(OMB Bulletin 01-09, p. 14, section 2.1,
item G)
7. Are these interim statements prepared
on a comparative basis?6 (OMB Bulletin
01-09, p. 14, section 2.1, item G)
8. To the extent that information is not
available on a quarterly basis, has the
entity developed reliable, alternative
means of estimating quarterly amounts and
balances? (OMB Bulletin 01-09, p. 14,
section 2.1, item G)
9. When an entity presents disaggregated
information for component organizations,
does the total column for the entity as a
whole reflect consolidated totals net of
intra-entity transactions, except for the
Statement of Budgetary Resources, which
is presented on a combined basis? (OMB
Bulletin 01-09, p. 14, section 2.1, item
H)
When a reporting entity presents its financial statements in a single
column format, the statements are referred to as consolidated statements.
With the exception of the Statement of Budgetary Resources, financial
statements that use a multicolumn format to present information on an
entity's major components or lines of business as well as the consolidated
amounts are referred to as consolidating statements. (OMB Bulletin 01-09,
p. 14, section 2.1, item H)
10. Are intra-entity transactions needed
to arrive at the consolidated amounts
presented in a column on the face of the
consolidating statements? (OMB Bulletin
01-09, p. 14, item H)

6Interim financial statements shall be prepared on a comparative basis
beginning 1 year following their initial preparation. That
is, statements shall be comparative for fiscal year 2004 for the
year-to-date ending December 31, 2003, March 31, 2004, and June
30, 2004.

Page 1050-9

General Items (1 - 23) Yes, No or N/A Explanation
11. Has the entity provided assurance of the
following? a. information in the financial
statements is presented in accordance with
federal GAAP b. the underlying records fully
support the information (OMB Bulletin 01-09, p.
14, section 2.1, item J)
12. Does the reporting entity include franchise
funds and other intragovernmental support
revolving funds among the activities covered by
its financial statements? (OMB Bulletin 01-09,
p. 15, section 2.1, item K & p. 113, section
11.6)
13. If information about the assets,
liabilities, costs, and revenues of these
franchise funds and intragovernmental support
revolving funds are not separately reported on
the entity's basic financial statements, then
is condensed information reported as required
supplemental information in accordance with the
applicable SFFAS and required segment
information? (OMB Bulletin 01-09, p. 15,
section 2.1, item K & p. 113, section 11.6)
14. Does the entity report its assets,
liabilities, and net position by the lines
displayed in the illustrative Balance Sheet and
Statement of Changes in Net Position in OMB
Bulletin 01-09? (OMB Bulletin 01-09, p.15,
section 2.1, item L)
15. If the entity aggregates such illustrated
line items in reporting at the departmental
level, is the composition of the aggregated
line items disclosed? (OMB Bulletin 01-09,
p.15, section 2.1, item L)
16. Conversely, if the entity disaggregates
such line items in its departmental statements,
does the entity report or disclose the total of
the disaggregated line items? (OMB Bulletin
01-09, p.15, section 2.1, item L)
17. Are line items, which are immaterial but
related in nature, combined? (OMB Bulletin
01-09, p. 15, section 2.1, item M)

General Items (1 - 23) Yes, No or N/A Explanation
18. Are discrete balances of an immaterial
amount designated as "other?" (OMB Bulletin
01-09, p. 15, section 2.1, item M)"
19. If not, are these material balances
separately reported and designated by name?
(OMB Bulletin 01-09, p. 15, section 2.1, items
M & N)
20. Are the statement line items, footnotes,
and lines or columns in footnotes that do not
apply or are not informative for the reporting
entity excluded? (OMB Bulletin 01-09, p. 15,
section 2.1, item O)
21. Do schedule totals presented in the
footnotes, in support of amounts presented in
financial statements, agree with the amounts
presented in the body of the financial
statements? (OMB Bulletin 01-09, p. 15, section
2.1, item P)
22. When presenting dollar amounts in the
statements and the notes, does the entity do
the following? a. round dollar amounts to the
nearest whole dollar, thousand, or million
based upon informative value to the reporting
entity b. maintain the chosen rounding level
throughout the financial statements and
footnotes c. ensure that individual line items
add up to the totals by adjusting the line
items for the differences created by the
rounding process rather than adjusting column
totals (OMB Bulletin 01-09, p. 16, section 2.1,
item Q)
23. Are footnotes sequentially numbered? (OMB
Bulletin 01-09, p. 16, section 2.1, item S)

The questions related to the balance sheet are contained under 23 line
items. The question numbers related to each line item follow.

Question numbers
General items 1 -6

Assets

1. Fund Balance with Treasury 7 - 22

2. Investments 23 -32

3. Accounts Receivable (Net) 33 -49

4. Interest Receivable (Net) 50 -54

5. Credit Program Receivables 55 - 96

6. Cash and Other Monetary Assets 97 - 102

7. Inventory and Related Property 103 -125

8. Operating Materials and Supplies 126 -137

9. Stockpile Materials 138 -150

10. Seized Property 151 -158

11. Forfeited Property 159 -172

12. Goods Held Under Price Support and
Stabilization Programs 173 -186

13. General Property, Plant, and Equipment (Net) 187 - 233

14. Software 234 -262

15. Other Assets 263 -268

Liabilities

16. Liabilities in General 269 -272

17. Accounts Payable and Interest Payable 273 -280

18. Liabilities for Loan Guarantees 281 -294

19. Lease Liabilities 295 -300

20. Federal Debt and Related Interest 301 -311

21. Pensions, Other Retirement Benefits, and
Postemployment Benefits 312 -319

22. Other Liabilities 320 -353

Net Position

23. Unexpended Appropriations and Cumulative
Results of Operations 354 - 355

General Items (1 - 6) Yes, No or N/A Explanation
The Balance Sheet presents, as of a specific time, amounts of future
economic benefits owned or managed by the reporting entity exclusive of
items subject to stewardship reporting (assets), amounts owed by the
entity (liabilities), and amounts that comprise the difference (net
position). (SFFAC 2, par. 57; OMB Bulletin 01-09, p. 17, section 3.1)
1. Are entity and nonentity assets
combined on the face of the balance
sheet?7 (OMB Bulletin 01-09, p. 17,
section 3.1 and p. 19, section 3.3)
2. Are the amounts and types of
nonentity assets disclosed in a note
to the financial statements? OMB
Bulletin 01-09, p. 17, section 3.1;
p. 19, section 3.3; p. 56, section
9.2)
Liabilities covered by budgetary resources are liabilities covered by
realized budgetary resources as of the balance sheet date. Budgetary
resources encompass not only new budget authority but also other resources
available to cover liabilities for specified purposes in a given year.
Available budgetary resources include (1) new budget authority, (2)
unobligated balances of budgetary resources at the beginning of the year
or net transfers of prior year balances during the year, (3) spending
authority from offsetting collections (credited to an appropriation or
fund account), and (4) recoveries of unexpired budget authority through
downward adjustments of prior year obligations. Liabilities are considered
covered by budgetary resources if they are to be funded by permanent
indefinite appropriations or borrowing authority, which have been enacted
and signed into law as of the balance sheet date, provided that the
resources may be apportioned by OMB without further action by the Congress
and without a contingency having to be met first. (OMB Bulletin 01-09, p.
24, section 3.4)
3. Are liabilities covered by
budgetary resources and liabilities
not covered by budgetary resources
combined on the face of the balance
sheet? (OMB Bulletin 01-09, p. 17,
section 3.1, p. 24, section 3.4)
4. Are liabilities not covered by
budgetary resources disclosed in a
note to the financial statements?
(OMB Bulletin 01-09, p. 17, section
3.1 & pp. 78 & 79, section 9.12)

9Entity assets are assets that the reporting entity has authority to use
in its operations. Nonentity assets are assets that are held by an entity
but are not available to the entity, for example, income tax receivables.
(OMB Bulletin 01-09, p. 19, section 3.3).

General Items (1 - 6) Yes, No or Explanation
N/A
5. Does the Balance Sheet display assets,
liabilities, and net position? (OMB Bulletin
01-09, p. 18, section 3.2)
Intragovernmental assets arise from transactions among federal entities.
Intragovernmental assets represent claims of a federal entity against
other federal entities. Intragovernmental liabilities are claims against
the reporting entity by other federal entities. (OMB Bulletin 01-09, p.
19, section 3.3; p. 24, section 3.4)
6. Are intragovernmental assets and
liabilities reported separately from
transactions with nonfederal entities,
including the Federal Reserve and government
sponsored enterprises?8 (OMB Bulletin 01-09,
p. 19, section 3.3 & p. 24, section 3.4)

8Government sponsored enterprises are federally chartered but privately
owned and operated entities.

Assets Fund Balance with Treasury (7 - Yes, No or N/A Explanation
22)
A federal entity's fund balance with the Treasury is the aggregate amount
of funds in the entity's accounts with Treasury for which the entity is
authorized to make expenditures and pay liabilities. Fund balance with
Treasury includes clearing account balances and the dollar equivalent of
foreign currency account balances. From the reporting entity's
perspective, a fund balance with Treasury is an asset. From the
perspective of the federal government as a whole, the fund balance is
neither an asset nor a liability; it instead represents a commitment to
make resources available to federal departments, agencies, programs, and
other entities. (SFFAS 1, par. 31 & 32)
7. Is the fund balance with Treasury
reported as an intragovernmental asset?
(SFFAS 1, par. 31; OMB Bulletin 01-09, p.
18, section 3.2)
8. Are amounts disclosed as fund balances
in deposit, suspense, and clearing
accounts that are not available to
finance entity activities reported as
nonentity assets? (OMB Bulletin 01-09, p.
19, section 3.3)
9. Are foreign currency account balances
reported on the balance sheet translated
into U.S. dollars at exchange rates
determined by the Treasury and effective
at the financial reporting date? (SFFAS
1, par. 32; OMB Bulletin 01-09, p. 19,
section 3.3)

Assets Fund Balance with Treasury (7 - 22) Yes, No or N/A Explanation
10. Does the entity's fund balance with
Treasury also include the following? a.
clearing account balances b. balances for
direct loan and loan guarantee activities held
in the credit reform program, financing, and
liquidating accounts c. funds actually borrowed
from Treasury under statutory authority d. the
dollar equivalent of foreign currency account
balances (SFFAS 1, par. 32 & 35)
11. Does the entity's fund balance with
Treasury exclude contract authority 9 or unused
authority to borrow? (SFFAS 1, par. 34)
12. Does the entity record an increase in its
fund balance with Treasury when it does at
least one of the following? a. receives
appropriations, reappropriations, continuing
resolutions, appropriation restorations, and
allocations b. receives transfers and
reimbursements from other agencies c. borrows
from the Treasury, Federal Financing Bank, or
other entities d. collects and credits amounts
to its appropriations or fund accounts that the
entity is authorized to spend or use to offset
its expenditures (SFFAS 1, par. 33)

9Contract authority is a statutory authority under which contracts or
other obligations may be entered into prior to receiving an appropriation
for the payment of obligations.

Assets Fund Balance with Treasury (7 - 22) Yes, No or N/A Explanation
13. Does the entity record a decrease in its
fund balance with Treasury when each of the
following occurs? a. disbursements are made to
pay liabilities or to purchase assets, goods,
and services b. investments are made in U.S.
securities c. expired appropriations are
canceled d. transfers and reimbursements are
made to other entities or to the Treasury e.
appropriations are sequestered or rescinded
(SFFAS 1, par. 36)
14. Does the entity distinguish funds within
fund balance with Treasury as the obligated
balance not yet disbursed10 and the unobligated
balance 11 in a note to the financial
statements? (SFFAS 1, par. 37; OMB Bulletin
01-09, p. 57, section 9.3, item B)
15. Are fund balances that agencies were
authorized to use disclosed by fund type (e.g.,
trust funds, revolving funds, appropriated
funds, other fund types)? (OMB Bulletin 01-09,
pp. 56 & 57, section 9.3, item A)
16. Are any restrictions on unobligated
balances related to future use disclosed?
(SFFAS 1, par. 38; OMB Bulletin 01-09, p. 57,
section 9.3, item B)

10The obligated balance not yet disbursed is the amount of funds against
which budgetary obligations have been incurred, but
disbursements have not been made.
11The unobligated balance is the amount of funds available to the entity
against which no claims have been recorded. (SFFAS 1,
par. 38)

Assets Fund Balance with Treasury (7 - 22) Yes, No or N/A Explanation
17. Does the entity explain any discrepancies
between fund balance with Treasury in its
general ledger accounts and the balance in the
Treasury's accounts and explain the causes of
the discrepancies in footnotes to the financial
statements?12 (SFFAS 1, par. 39; OMB Bulletin
01-09, p. 57, section 9.3, item C)
18. Does the entity disclose any other
information necessary for understanding the
nature of the fund balances, including
information on unused funds in expired
appropriations that are returned to Treasury at
the end of a fiscal year? (SFFAS 1, par. 39;
OMB Bulletin 01-09, p. 57, section 9.3, item C)
19. Are balances in deposit accounts, such as
collections pending litigation or funds being
held by the entity in the capacity of a banker
or agent for others, disclosed under "other
fund types?" (OMB Bulletin 01-09, p. 57,
section 9.3, item A)
20. If, however, any of the balances under
"other fund types" are material, are they
listed separately? (OMB Bulletin 01-09, p. 57,
section 9.3, item A)
21. Is other information necessary for
understanding the nature of the fund balances
with Treasury disclosed? (OMB Bulletin 01-09,
p.57, section 9.3, item C)
22. Are unexpended appropriations recognized as
capital and included under funds with Treasury
when they are made available for apportionment?
(SFFAS 7, par. 71)

12Discrepancies due to time lag should be reconciled and discrepancies due
to error should be corrected when financial reports are prepared.

Assets Investments (23 - 32) Yes, No or N/A Explanation
Investments in federal (i.e., treasury) securities include (1)
nonmarketable par value Treasury securities, (2) market-based Treasury
securities expected to be held to maturity, (3) marketable Treasury
securities expected to be held to maturity, and (4) securities issued by
other federal entities. Nonfederal securities include those issued by
state and local governments, private corporations, and
government-sponsored enterprises. (SFFAS 1, par. 62; OMB Bulletin 01-09,
p. 20, section 3.3)
23. Are investments in federal securities
reported separately from investments in
nonfederal securities? (SFFAS 1, par. 67;
OMB Bulletin 01-09, p. 20, section 3.3)
24. Are investments in federal securities
initially recorded and reported at their
acquisition cost or amortized acquisition
cost (less an allowance for losses, if
any)? (SFFAS 1, par. 68 & 69; OMB
Bulletin 01-09, p. 20, section 3.3)
25. Are investments in federal securities
acquired in exchange for nonmonetary
assets recognized at the fair market
value of either the securities acquired
or the assets given up, whichever is more
definitively determinable? (SFFAS 1, par.
68)
26. Subsequent to acquisition, are
investments in federal securities
reported at their carrying amount (i.e.,
acquisition cost) adjusted for amortized
premium or discount? (SFFAS 1, par.
70-71; OMB Bulletin 01-09, pp. 59 & 60,
section 9.5)
27. Is the interest method (i.e.,
effective interest rate multiplied by the
carrying amount) used in amortizing the
premium or discount over the life of the
treasury security? (SFFAS 1, par. 71)
28. Is the market value of market-based
and marketable securities disclosed?
(SFFAS 1, par. 72; OMB Bulletin 01-09,
pp. 59 & 60, section 9.5)
29. Are investments grouped by type of
security, such as marketable or
market-based Treasury securities? (SFFAS
1, par. 72)

Assets Investments (23 - 32) Yes, No or N/A Explanation
30. Are investment securities, which are
initially expected to be held to maturity,
reclassified as securities available for sale
or early redemption, if significant
unforeseeable circumstances cause a change in
the entity's intent or ability to hold these
securities to maturity? (SFFAS 1, par. 72 & 73;
OMB Bulletin 01-09, pp. 59 & 60, section 9.5)
31. If so, is the market value of such
securities disclosed? (SFFAS 1, par. 72 & 73;
OMB Bulletin 01-09, pp. 59 & 60, section 9.5)
32. Does the entity disclose any other
information relative to understanding the
nature of reported investments, such as
permanent impairments? (OMB Bulletin 01-09, p.
60, section 9.5, item B)

Assets Accounts Receivable (33 - 49) Yes, No or Explanation
N/A
33. Is a receivable recognized when a federal
entity establishes a claim to cash or other
assets against other entities based on legal
provisions or when goods or services are
provided? (SFFAS 1, par. 41)
34. If the exact amount of a receivable is
unknown, is a reasonable estimate made?
(SFFAS 1, par. 41)
35. Are receivables from federal entities
reported as intragovernmental receivables,
and reported separately from receivables from
nonfederal entities? (SFFAS 1, par. 42; OMB
Bulletin 01-09, p. 19, section 3.3)
Entity receivables are amounts due from other federal or nonfederal
entities that the federal entity is authorized by law to include in its
obligational authority or to offset its expenditures and liabilities upon
collection. Nonentity receivables are amounts that the entity is to
collect on behalf of the federal government or other entities, and the
entity is not authorized to spend. (SFFAS 1, par. 43)
36. Are receivables not available to an
entity disclosed in a note to the financial
statements as nonentity assets, separate from
receivables available to the entity? (SFFAS
1, par. 43; OMB Bulletin 01-09, p. 19,
section 3.3 & p. 56, section 9.2)
37. Are losses on receivables recognized when
it is more likely than not (greater than a 50
percent chance of occurrence) that the
receivables will not be totally collected?
(SFFAS 1, par. 44)
38. Is an allowance for estimated
uncollectible amounts recognized to reduce
the gross amount of receivables to their net
realizable value, and is this allowance
reestimated on each annual financial
reporting date and when information indicates
that the latest estimate is no longer
correct? (SFFAS 1, par. 45)
39. Is an allowance for uncollectible amounts
based on an analysis of both individual
accounts receivable and groups of accounts
receivable as prescribed by the standards?
(SFFAS 1, par. 47-51; SFFAS 7, par. 56)

Assets Accounts Receivable (33 - 49) Yes, No or N/A Explanation
40. Are accounts that represent significant
amounts individually analyzed to determine the
loss allowance? (SFFAS 1, par. 47)
41. Is the loss estimation for individual
accounts based on the following? a. debtor's
ability to pay b. debtor's payment record and
willingness to pay c. probable recovery of
amounts from secondary sources including liens,
garnishments, cross collections, and other
applicable collection tools (SFFAS 1, par. 47)
42. If information is not available to make a
reliable assessment of losses on an individual
account basis or if the nature of the
receivables does not lend itself to individual
account analysis, are the potential losses
assessed on a group basis? (SFFAS 1, par. 48)
43. If potential losses are assessed on a group
basis, are the receivables separated into
groups of homogeneous accounts with similar
risk characteristics? (SFFAS 1, par. 49-51)
44. Does the reporting entity disclose the
following? a. major categories of accounts
receivable by amount and type b. methodology
used to estimate the allowance for
uncollectible amounts c. dollar amount of the
allowance for uncollectible accounts (SFFAS 1,
par. 52; OMB Bulletin 01-09, p. 60, section
9.6)

Assets Accounts Receivable (33 - 49) Yes, No or N/A Explanation
45. Is an account receivable arising from a
nonexchange transaction recognized when a
collecting entity establishes a specifically
identifiable, measurable, and legally
enforceable claim to cash or other assets
through its established assessment processes to
the extent the amount is measurable? (SFFAS 7,
par. 53, footnote 9, 61-63)
46. Are assessments recognized as accounts
receivable if an enforceable claim for taxes
and duties exists in the following instances?
a. tax returns filed by the taxpayer without
sufficient payment b. customs documents filed
by the importer without sufficient payment c.
taxpayer agreements to assessments at the
conclusion of an audit or to substitute for a
tax return (or importer agreements to
supplemental assessments) d. court actions
determining an assessment e. taxpayer (or
importer) agreements to pay an assessment on an
installment plan f. receivables determined to
be currently not collectible, but with future
collection potential (SFFAS 7, par. 53, 54,
170, & 171)
47. Is an interentity receivable recognized
when (1) a legally enforceable claim exists
between a collecting entity and a recipient
entity for the transfer or repayment of taxes
or duties and (2) payment of such a claim is
probable and measurable? (SFFAS 7, par. 60)

Assets Accounts Receivable (33 - 49) Yes, No or Explanation
N/A
Compliance assessments are proposed assessments by the collecting entity
in definitive amounts, but with which the taxpayer (or importer) still has
the right to disagree or object. (SFFAS 7, par. 55.1) Preassessment
works-in-process are assessments not yet officially asserted by the
collecting entity that are subject to a taxpayer's right to conference in
response to initial information notices. (SFFAS 7, par. 55.2)
48. Do nonexchange-related accounts receivable for
taxes and duties exclude the following? a. amounts
received or due with tax returns received after
the close of the reporting period b. compliance
assessments c. preassessment work-in-process
(SFFAS 7, par. 54)
49. Are compliance assessments reclassified and
recognized as account receivables in the following
instances? a. if the taxpayer files an amended tax
return b. when customs' protest or retention
period lapses c. when court action or an appeal
finally determines the assessment d. if taxpayer
(or importer) agrees to pay currently or through
an installment agreement e. if an offer in
compromise is accepted (SFFAS 7, par. 55.1 &
178-180)

Assets Interest Receivable (50 - 54) Yes, No or N/A Explanation
50. Is interest receivable recognized for the
amount of interest income earned but not
received for the accounting period, including
interest earned on investments in
interest-bearing securities? (SFFAS 1, par. 53;
OMB Bulletin 01-09, pp. 20 & 21, section 3.3)
51. Is interest receivable also recognized on
outstanding accounts receivable and other U.S.
government claims against persons and entities
in accordance with provisions in 31 U.S.C.
3717, Interest and Penalty Claims?13 (SFFAS 1,
par. 53)
52. Does interest receivable exclude interest
on accounts receivable or investments that are
determined to be uncollectible unless the
entity actually collects interest? (SFFAS 1,
par. 54; OMB Bulletin 01-09, pp. 20 & 21,
section 3.3)
53. Is interest accrued on uncollectible
accounts receivable not disclosed until (1) the
interest payment requirement has been waived by
the federal government or (2) the related debt
has been written off? (SFFAS 1, par. 55)
54. Is interest receivable from federal
entities accounted for and reported separately
from interest receivable from the public?
(SFFAS 1, par. 56)

13See also Federal Claims Collection Standards, 4 CFR Part 103 par.
102.13)

14
Section 506 (a) of the Federal Credit Reform Act, as amended, exempts the
credit activities of certain agencies, such as the
Federal Deposit Insurance Corporation (FDIC) and the Tennessee Valley
Authority (TVA). These agencies can report in
accordance with other requirements.
15
Undelivered orders are the value of goods and services ordered and
obligated but not yet received. The term is synonymous
with unliquidated obligations. (The Federal Budget Politics, Policy,
Process; copyright 1995 by Allen Schick; p. 216)
The Federal
Credit 56. Are
Reform Act credit
of 1990, as program
amended, receivables 57. If a
divides considered loan
loans and an entity guarantee
loan 55. Is asset if at program,
guarantees interest least one which 58. Are
into two receivable of the guarantees special
groups: related to following a loan, is fund
pre-1992 pre-1992 criteria is generating receipt
and and met? a. The a negative accounts
post-1991. post1991 entity has subsidy and for
Pre-1992 direct the the lender negative
refers to loans and authority has not subsidies
direct loan acquired to disbursed and
Assets obligations defaulted determine the loan as downward
Credit Yes, or loan guaranteed the use of of the subsidy
Program No Explanation guarantee loans the funds balance reestimates
Receivables or commitments reported as collected. sheet date, included in
(55 - 96) N/A made prior a component b. The does the the credit
to fiscal of credit entity is entity reporting
year 1992; program legally record and entity's
post-1991 receivables obligated include financial
refers to and related to use the this amount statements?
direct loan foreclosed funds to as part of (OMB
obligations property? meet entity the total Bulletin
or loan (OMB obligations undelivered 01-09, p.
guarantee Bulletin (e.g., orders?15 21, section
commitments 01-09, p loans (OMB 3.3)
made after 21, section payable to Bulletin
fiscal year 3.3) Treasury). 01-09, p.
1991.14 (OMB 21, section
(OMB Bulletin 3.3)
Bulletin 01-09, p.
0109, p. 21, section
68, section 3.3)
9.8, item
A)

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
59. Are any assets in these special receipt
fund accounts shown as nonentity assets that
are offset by intragovernmental liabilities
covered by budgetary resources? (OMB Bulletin
01-09, p. 21, section 3.3)
60. Does the entity disclose that direct loan
obligations and loan guarantee commitments made
after fiscal year 1991, and the resulting
direct loans or loan guarantees, are governed
by the Federal Credit Reform Act of 1990, as
amended? (OMB Bulletin 01-09, p. 68, section
9.8, instruction A)
61. Are loan amounts broken out by group
(pre-1992 and post-1991) and loan program and
disclosed in a note to the financial
statements? (OMB Bulletin 0109, pp. 61 & 70,
section 9.8, items B & C)
62. Do the notes disclose other relevant and
appropriate information related to direct loans
and loan guarantees including the following? a.
description of the characteristics of the loan
program b. commitments to guarantee c.
management's method for accruing interest
revenue and recording interest receivable d.
management's policy for accruing interest on
nonperforming loans (OMB Bulletin 01-09, p. 69,
section 9.8)
For post-1991direct loans and guarantees, a subsidy expense is recognized
in the year they are disbursed. For pre-1992 direct loans and guarantees,
a loss and liability need not be recognized until it is more likely than
not that a loan (either direct or guaranteed) will go into default. (SFFAS
2, par. 24 & 39)
63. Are post-1991 direct loans disbursed and
outstanding recognized as assets at the present
value (discounted at a comparable Treasury
rate) of their estimated net cash inflows?
(SFFAS 2, par. 22 & app. B, part I A)

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
64. Is the difference between the outstanding
principal of post-1991 direct loans and the
present value of their net cash inflows
recognized as a subsidy cost allowance? (SFFAS
2, par. 22 & app. B, part I A)
65. When post-1991 guaranteed loans default, is
the value of the assets related to defaulted
guaranteed loans receivable16 included in the
reported credit program receivables? (OMB
Bulletin 01-09, p. 64 & 72, section 9.8, item
I)
66. When post-1991 direct loans are written
off, is the unpaid principal removed from
unpaid loans receivable and charged against the
allowance for subsidy costs? (SFFAS 2, par. 61)
67. Are the following components of the assets
that are related to post-1991 direct and
defaulted guaranteed loans receivable disclosed
by loan program? a. loans receivable, gross, or
defaulted guaranteed loans receivable, gross b.
interest receivable c. estimated net realizable
value of foreclosed property d. allowance for
subsidy costs (present value) e. value of
assets related to direct loans or defaulted
guaranteed loans receivable, net (OMB Bulletin
01-09, pp. 61, 64, 70, & 72, section 9.8, items
C & I)

16That is, the sum of (1) defaulted guaranteed loans receivable gross, (2)
interest receivable, and (3) foreclosed property, less the allowance for
subsidy cost at present value.

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
Pre-1992 Direct Loans
68. Are losses of pre-1992 direct loans
obligated recognized (and a corresponding
allowance amount set up) when it is more likely
than not that the direct loans will not be
totally collected? (SFFAS 2, par. 39 & app. B,
part II A)
69. Are allowances for uncollectible pre-1992
loans reestimated each year? (SFFAS 2, par. 39)
70. Are the following components of assets
related to pre-1992 direct loans receivable
disclosed by loan program? a. loans receivable,
gross b. interest receivable c. foreclosed
property d. present value allowance 17 (if the
present value method is used) e. allowance for
loan losses 18 (if the allowance-forloss method
is used) (OMB Bulletin 01-09, pp. 61 & 70,
section 9.8 item B)

17Under the present value method, the nominal amount of the direct loans
is reduced by an allowance equal to the difference
between the nominal amount and the present value of the expected net cash
flows from the loans. (OMB Bulletin 01-09, p. 68,
section 9.8, 4th par.)
18Under the allowance-for-loss method, the nominal amount of the direct
loans is reduced by an allowance for uncollectible
amounts. (OMB Bulletin 01-09, p. 68, section 9.8, 4th par.)

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
Pre-1992 Direct Loans
71. Are the following components of
defaulted guaranteed loans from pre-1992
guarantees disclosed by loan program? a.
defaulted guaranteed loans receivable, gross
b. interest receivable c. the estimated net
realizable value of related foreclosed
property d. the present value allowance (if
the present value method is used) e. the
allowance for loan losses (if the allowance
for loss method is used) f. value of assets
related to defaulted guaranteed loans
receivable, net of the respective allowance
(OMB Bulletin 01-09, pp. 64 & 72, section
9.8, item H)
A loan modification is a federal government action that directly or
indirectly alters the estimated subsidy cost and the present value of
outstanding direct loans or the liability of loan guarantees. A direct
modification changes the subsidy cost by altering the terms of existing
contracts or through the sale of direct loans. An indirect modification
changes the subsidy costs by altering the way loans and loan guarantees
are administered. A modification does not include subsidy cost
reestimates, routine administrative workouts of troubled loans, and other
actions permitted within existing contract terms. (SFFAS 2, par. 41-44)
72. When post-1991 loans are modified, is
their existing book value changed to an
amount equal to the present value of the
loans' net cash inflows that are projected
under the modified terms from the time of
the modification to the loans' maturity and
discounted at the original rate? (SFFAS 2,
par. 46 & app. B, part I D (4))

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
Pre-1992 Direct Loans
73. When pre-1992 loans are directly modified
do they meet the following conditions? a. They
are transferred from the liquidating account to
a financing account. b. Their book value is
recorded at their postmodification value.
(SFFAS 2, par. 47 & app. B, part II B (4))
74. Are subsequent (direct) modifications of
pre-1992 loans treated as a modification of
post-1991 loans? (SFFAS 2, par. 47)
75. When pre-1992 loans are indirectly modified
do they meet the following conditions? a. They
are kept in a liquidating account. b. Their bad
debt allowance is reassessed and adjusted to
reflect amounts that would not be collected due
to the modification. (SFFAS 2, par. 47)
76. Does the entity disclose the following by
program in the notes to the financial
statements? a. the nature of the modification
of direct loans or loan guarantees b. the
discount rate used in calculating the
modification expense c. the basis for
recognizing a gain or loss related to the
modification (SFFAS 2, par. 56; OMB Bulletin
01-09, p. 69, section 9.8, 5th par.)
77. When post-1991 and pre-1992 loans are sold,
is the sale treated as a direct modification if
the agency did not assume sales proceeds in the
cash flow estimates for the initial subsidy
calculation? (SFFAS 2, par. 53 & App. B, Part I
F, footnote 23)

Assets Credit Program Receivables (55 - Yes, No or N/A Explanation
96) Pre-1992 Direct Loans
78. Does the agency disclose the
expectation that proceeds from the sale
of its loans will differ from the
reported face value of the loans or the
value of their related assets? (OMB
Bulletin 01-09, p. 69, section 9.8, 1st
par.)
Foreclosed property is any asset, which is assumed to be held for sale,
that is either received in satisfaction of a loan receivable or as a
result of payment of a claim under a guaranteed or insured loan (excluding
commodities acquired under price support programs). Pre-1992 foreclosed
property refers to property associated with direct loans obligated or loan
guarantees committed before October 1, 1991. Post-1991 foreclosed property
refers to property associated with direct loans obligated or loan
guarantees committed after September 30, 1991. (SFFAS 3, par. 79 & 80)
79. Is post-1991 foreclosed property
valued at the net present value of the
projected future cash flows associated
with the property? (SFFAS 3, par. 81;
OMB Bulletin 01-09, p. 70, section 9.8,
item C)
80. Is pre-1992 foreclosed property
recorded at cost and adjusted to the
lower of cost or net realizable value
with any difference between cost and net
realizable value carried in a valuation
allowance? (SFFAS 3, par. 81)
81. In determining net present value,
does the projection of future cash flows
include estimates of the following? a.
sales proceeds b. rent, management
expense, and repair costs during the
holding period c. selling expense (i.e.,
advertising and commissions) (SFFAS No.
3, par. 82)
82. In estimating sales proceeds for
projecting the future cash flows
associated with the property in
determining net present value, has the
entity considered its historical
experience in selling property as well
as the nature of the sale? (SFFAS 3,
par. 82)

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
Pre-1992 Direct Loans
83. Were the estimated future cash flows of
post-1991 foreclosed property or acquired loans
discounted at the original (or Treasury)
discount rate in effect at the time the
underlying loan or guarantee was granted?
(SFFAS 2, par. 57& 59; SFFAS 3, par. 83; SFFAS
19, par. 7(e))
84. Is the net present value of post-1991
foreclosed property adjusted periodically to
recognize both changes in the expected future
cash flows and accrual of interest due to the
passage of time? (SFFAS 3, par. 84)
85. Are any adjustments in the carrying amounts
of post-1991 foreclosed property included in
the presentation of "interest income" and the
reestimate of "subsidy expense?" (SFFAS 3, par.
84)
86. For post-1991 foreclosed property, are the
following true? a. Third party claims are
recorded at their net present value at the time
of the foreclosure, using the same discount
rate that applies to related foreclosed
property. b. Any periodic changes in net
present value of the claim are reflected in
"interest income" and "subsidy expense." (SFFAS
3, par. 87)
87. Are receipts or disbursements associated
with acquiring and holding post-1991 foreclosed
property charged or credited to foreclosed
property? (SFFAS 3, par. 88)
88. When the entity acquires foreclosed assets
in full or partial settlement of post-1991
direct loans or guarantees, is the present
value of the government's claim against the
borrowers reduced by the amount settled as a
result of the foreclosure? (SFFAS 2, par. 60)

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
Pre-1992 Direct Loans
89. If a lender, debtor, or other third party
has a legitimate claim to a post-1991
foreclosed asset, is the net present value of
the estimated claim recognized as a special
contra-valuation allowance? (SFFAS 2, par. 58;
SFFAS 3, par. 87)
90. Is pre-1992 foreclosed property recorded at
cost and adjusted, if necessary, to the lower
of cost or net realizable value? (SFFAS 3, par.
81 & 85)
91. Is the net realizable value based on an
estimate of the market value of the property
adjusted for any expected losses consistent
with historical experience, abnormal market
conditions, and time limitations as well as any
other costs of the sale? (SFFAS 3, par. 85 &
86)
92. Is the estimate of market value based on
one of the following criteria? a. the market
value of the property if an active market
exists b. the market value of similar
properties if no active market exists c. a
reasonable forecast of expected cash flows
adjusted for estimates of all holding costs,
including any cost of capital (SFFAS 3, par.
85)
93. For pre-1992 foreclosed property, are
third-party claims recorded at the expected
amount of cash required to settle the claims?
(SFFAS 3, par. 87)
94. If foreclosed property is not sold but
placed into operation, is the asset removed
from foreclosed property? (SFFAS 3, par. 90)
95. If reimbursement for the transfer of assets
from one program to another is made, are the
proceeds from the transfer treated in the same
manner as a sale to a third party? (SFFAS 3,
par. 90)

Assets Credit Program Receivables (55 - 96) Yes, No or N/A Explanation
Pre-1992 Direct Loans
96. When the government acquires foreclosed
assets in full or partial settlement of a
direct or guaranteed loan (pre-1992 and
post-1991), is the following information
disclosed? a. valuation basis for foreclosed
property b. changes from prior-year's
accounting methods, if any c. restrictions on
the use/disposal of property d. balances by
categories (i.e., pre-1992 and post1991
foreclosed property) e. number of properties
held and average holding period by type or
category f. number of properties for which
foreclosure proceedings are in process at the
end of the period (SFFAS 3, par. 91; OMB
Bulletin 01-09, pp. 69 & 70, section 9.8)

Assets Cash and Other Monetary Assets Yes, No or N/A Explanation
(97 - 102)
Cash (including imprest funds) consists of: coins, paper currency, readily
negotiable instruments (such as checks, money orders, and bank drafts),
demand deposits, and foreign currencies stated in U.S. dollars at the
exchange rate on the financial statement date. (SFFAS 1, par. 27; OMB
Bulletin 01-09, p. 20, section 3.3) Other monetary assets consist of other
items such as gold, special drawing rights, and U.S. reserves in the
International Monetary Fund (IMF). (OMB Bulletin 01-09, p. 20, section 3.3
& p.57, section 9.4, item C)
97. Are the components of cash and
other monetary assets disclosed and
described in a note to the financial
statements? (OMB Bulletin 01-09, p. 20,
section 3.3 & pp. 57 & 58, section 9.4)
Entity cash is the amount of cash that the reporting entity holds and is
authorized by law to spend. Nonentity cash is the cash that a federal
entity collects and holds on behalf of the U.S. government or other
entities. In some instances the entity deposits cash in its accounts in a
fiduciary capacity for the U.S. Treasury or other entities. (SFFAS 1, par.
28 & 29)
98. Does cash available for agency use
include petty cash and cash held in
revolving funds that will not be
transferred to the general fund? (OMB
Bulletin 01-09, p.58, section 9.4,
instruction E)
99. Is nonentity cash disclosed in the
notes to the financial statements,
separately from entity cash? (SFFAS 1,
par. 29; OMB Bulletin 01-09, p. 17,
section 3.1, p. 19, section 3.3, & pp.
57-58, section 9.4)
100. If cash is restricted,19 is the
nature and reason disclosed? (SFFAS 1,
par. 30; OMB Bulletin 01-09, p. 56,
section 9.2 & p. 58, section 9.4)

19Nonentity cash is always restricted. Restricted cash also includes cash
held in escrow to pay property taxes and insurance related to property
associated with defaulted loans.

Assets Cash and Other Monetary Assets (97 - Yes, No or N/A Explanation
102)
101. Does the entity disclose any restrictions
on the use or conversion of cash denominated in
foreign currencies and the significant effects,
if any, of changes in the exchange rate on the
entity's financial position that occur after
the end of the reporting period but before the
issuance of financial statements? (OMB Bulletin
01-09, p. 58, section 9.4)
102. Is other information on cash and other
monetary assets disclosed, as appropriate, such
as the valuation rate of gold? (OMB Bulletin
01-09, p. 58, section 9.4)

Assets Inventory and Related Property Yes, No or N/A Explanation
(103 - 125)
Inventory is tangible personal property that is (1) held for sale
including raw materials and work in process, (2) in process of production
for sale, or (3) to be consumed in the production of goods for sale or in
the provision of services for a fee. Inventory does not include other
assets held for sale such as (1) stockpile materials, (2) seized and
forfeited property, (3) foreclosed property, and (4) goods held under
price support and stabilization programs. (SFFAS 3, par. 1; OMB Bulletin
01-09, p. 21, section 3.3)
103. Is inventory valued at historical
cost, latest acquisition cost, or net
realizable value? (SFFAS 3, par. 20 & 26)
104. If inventory is valued at historical
cost, does that cost include the purchase
amount and all other costs, such as
transportation and production costs,
incurred to bring the inventory into its
current condition and location? (SFFAS 3,
par. 21)
105. Are abnormal costs, such as
excessive handling or rework costs,
charged to operations for the period?
(SFFAS 3, par. 21)
106. Is donated inventory valued at its
fair value at the time of donation?
(SFFAS 3, par. 21)
107. Is inventory acquired through
exchange of nonmonetary assets (e.g.,
barter) valued at the fair value of the
asset received at the time of the
exchange? (SFFAS 3, par. 21)
108. For inventory acquired through
exchange of nonmonetary assets, is any
difference between the recorded amount of
the asset surrendered and the fair value
of the asset received recognized as a
gain or loss? (SFFAS 3, par 21)

Assets Inventory and Related Property (103 - Yes, No or N/A Explanation
125)
109. Are one of the following historical cost
flow assumptions used to value inventory? a.
first-in, first out (FIFO) b. weighted average
c. moving average d. any other valuation method
(such as a standard cost system) whose results
reasonably approximate "a," "b," or "c" above
(SFFAS 3, par. 22)
110. If the latest acquisition cost method of
inventory valuation is used, is the latest
invoice price (actual cost) applied to all like
units held, including those acquired through
donation or nonmonetary exchange? SFFAS 3, par.
23)
111. Under the latest acquisition cost method,
is the inventory revalued periodically (or at
least by the end of the fiscal year)?20 (SFFAS
3, par. 23)
112. If unrealized holding gains/losses are
recognized, is an allowance account established
to capture these gains/losses? (SFFAS 3, par.
24)
113. Is the ending balance of this [gain/loss]
allowance account the cumulative difference
between the historical cost, based on estimated
or actual valuation, and the latest acquisition
cost of ending inventory? (SFFAS 3, par. 24)
114. Is the balance for the gain/loss account
adjusted each time the inventory balance is
adjusted? (SFFAS 3, par. 24)

20Revaluation results in recognition of unrealized holding gains/losses in
the ending inventory value. Upon adjustment for unrealized holding
gains/losses, the latest acquisition cost method then results in an
approximation of historical cost.

Assets Inventory and Related Property (103 - 125) Yes, No or Explanation
N/A
115. Is the adjustment necessary to bring the
allowance to the appropriate balance a component of
the cost of goods sold as computed under the latest
acquisition cost method?21 (SFFAS 3, par. 24 & 25)
116. If the latest acquisition cost method is used
to value inventory, is the reported cost of goods
sold adjusted by the difference between the
beginning and ending unrealized holding gains and
losses? (SFFAS 3, par. 24 & 25)
117. If inventory is valued at net realizable
value, does it meet the following criteria? a.
There is an inability to determine approximate
cost. b. There is immediate marketability at quoted
prices. c. There is unit interchangeability (e.g.,
petroleum reserves). (SFFAS 3, par. 26)
118. Are inventory stocks, which are maintained
because they are not readily available in the
market or because there is more than a remote
chance that they will eventually be needed,
classified as inventory held in reserve for future
sale, and reported in one of the following manners?
a. included in the inventory line item on the face
of the financial statements with separate
disclosure in the footnotes b. shown as a separate
line item on the face of the financial statements
(SFFAS 3, par. 27)

21Cost of goods sold under the latest acquisition cost method equals (1)
beginning inventory at beginning-of-the period latest acquisition cost,
less: beginning allowance for unrealized holding gains/losses, plus:
actual purchases; and (2) resulting cost of goods available for sale,
less: ending inventory at end-of-the period latest acquisition cost, plus:
ending allowance for unrealized holding gains/losses.

Assets Inventory and Related Property (103 - Yes, No or N/A Explanation
125)
119. Is inventory identified as excess,
obsolete, or unserviceable reported in one of
the following manners? a. included in the
inventory line item on the face of the
financial statements with separate disclosures
in the footnotes b. shown as a separate line
item on the face of the financial statements
(SFFAS 3, par. 29; OMB Bulletin 01-09, p. 74,
section 9.9)
120. Is excess, obsolete, and unserviceable
inventory valued at its expected net realizable
value? (SFFAS 3 par. 30)
121. When inventory is declared excess,
obsolete, or unserviceable is the difference
between the carrying amount and the expected
net realizable value recognized as a loss (or
gain)? (SFFAS 3, par. 30)
122. For excess, obsolete, or unserviceable
inventory, are any subsequent adjustments to
the inventory's net realizable value or any
loss (or gain) upon disposal recognized as
losses (or gains)? (SFFAS 3, par. 30)
123. When inventory is held for repair, is it
valued using one of the following methods? a.
the allowance method (valued at the same value
as a serviceable item and a contra-asset repair
allowance account is established b. the direct
method (valued at the same value as a
serviceable item less estimated repair costs)
(SFFAS 3, par. 32 & 33)
124. If inventory is transferred to "inventory
held for repair," are estimated prior period
repair costs either credited to the repair
allowance (under the repair allowance method)
or to the inventory account (under the direct
method) and reported as an adjustment to
equity? (SFFAS 3, par. 34)

Assets Inventory and Related Property (103 - Yes, No or N/A Explanation
125)
125. Does the entity disclose the following
about its inventory? a. the general composition
b. the basis for determining inventory values
(including the valuation method and any cost
flow assumptions) c. changes from prior years'
accounting methods, if any d. balances for each
of the following categories of inventory
(unless otherwise presented on the financial
statements): i. inventory held for current sale
ii. inventory held in reserve for future use
iii. excess, obsolete, and unserviceable
inventory iv. inventory held for repair e. the
difference between the carrying amount of the
inventory before identification as excess,
obsolete, or unserviceable, and its expected
net realizable value f. restriction on the sale
of inventory g. the decision criteria for
categorizing inventory h. changes in the
criteria for categorizing inventory (SFFAS 3,
par. 18, 27-29, 31, 32 & 35; OMB Bulletin
01-09, pp. 74 & 75, section 9.9)

Assets Operating Materials and Supplies Yes, No or N/A Explanation
(126- 137)
Operating materials and supplies are tangible personal property to be
consumed in normal operations. Excluded are (1) goods that have been
acquired to construct real property and equipment for the entity's use (2)
stockpile materials, (3) goods held under price stabilization programs,
(4) foreclosed property, (5) seized and forfeited property, and (6)
inventory. (SFFAS 3, par. 36 & OMB Bulletin 01-09, p.21, section 3.3)
126. Are operating materials and supplies
recognized and reported as assets when
produced or purchased? (SFFAS 3, par. 38)
127. Are operating materials and supplies
valued at historical cost, including all
appropriate purchase and production costs
incurred to bring the items to their
current condition and location? (SFFAS 3,
par. 42-43)
128. Are donated operating materials and
supplies valued at their fair value at the
time of donation? (SFFAS 3, par. 43)
129. Are operating materials and supplies
acquired through exchange of nonmonetary
assets (e.g., barter) valued at the fair
value of the asset received at the time of
the exchange? (SFFAS 3, par. 43)
130. Are operating materials and supplies
acquired through exchange of nonmonetary
assets (e.g., barter) valued at the fair
value of the asset received at the time of
exchange, and is any difference between the
recorded amount of the asset surrendered
and the fair value of the asset received
recognized as a gain or loss? (SFFAS 3,
par. 43)

Assets Operating Materials and Supplies (126- Yes, No or N/A Explanation
137)
131. Is one of the following historical cost
flow assumptions used to value ending operating
materials and supplies under the consumption
method? a. first-in, first-out (FIFO) b.
weighted average c. moving average d. any other
valuation method (such as a standard cost
system) whose results reasonably approximate
"a," "b," or "c" (SFFAS 3, par. 42 & 44)
132. Are operating materials and supplies
stocks, which are maintained because they are
not readily available in the market or because
there is more than a remote chance that they
will eventually be needed (although not
necessarily in the normal course of
operations), classified as operating materials
and supplies held in reserve for future use,
and reported in one of the following manners?
a. included in the operating materials and
supplies line item on the face of the financial
statements with separate disclosure in the
footnotes b. shown as a separate line item on
the face of the financial statements (SFFAS 3,
par. 45)
133. Are operating materials and supplies
identified as excess, obsolete, or
unserviceable reported in one of the following
manners? a. included in the operating materials
and supplies line item on the face of the
financial statements with separate disclosure
in the footnotes b. shown as a separate line
item on the face of the financial statements
(SFFAS 3, par. 47)
134. Are excess, obsolete, and unserviceable
operating materials and supplies valued at
their estimated net realizable value? (SFFAS 3,
par. 48)

Assets Operating Materials and Supplies (126- Yes, No or N/A Explanation
137)
135. When operating materials and supplies are
declared excess, obsolete, or unserviceable is
the difference between the carrying amount
before identification as excess, obsolete, or
unserviceable and the estimated net realizable
value recognized as a loss (or gain)? (SFFAS 3,
par. 48)

Assets Operating Materials and Supplies (126- Yes, No or N/A Explanation
137)
136. For excess, obsolete, or unserviceable
operating materials and supplies, are any
subsequent adjustments to the operating
materials and supplies' estimated net
realizable value or any loss (or gain) upon
disposal recognized as losses (or gains)?
(SFFAS 3, par. 48)
137. Does the entity disclose the following
information about its operating materials and
supplies? a. general composition b. basis for
valuation (including valuation method and any
cost flow assumptions) c. change from prior
years' accounting methods, if any d. balances
in each operating material and supply category
22 e. the difference between the carrying
amount of the operating materials and supplies
before identification as excess, obsolete, or
unserviceable and their estimated net
realizable value f. restrictions on the use of
materials and supplies, if any g. decision
criteria for identifying each category to which
material and supplies are assigned h. changes
in the criteria for identifying the category to
which the operating materials and supplies are
assigned (SFFAS 3, par. 36, 37, 45-47, 49, &
50; OMB Bulletin 01-09, p. 75, section 9.9)

22Major categories of operating materials and supplies include (1) items
held for use; (2) items held in reserve for future uses; and (3) excess,
obsolete, and unserviceable items.

Assets Stockpile Materials (138- 150) Yes, No or N/A Explanation
Stockpile materials are strategic and critical materials held due to
statutory requirements for use in national defense, conservation, or
national emergencies. Not included under this category are (1) items held
for sale or use in normal operations, (2) items held for use in the event
of an agency's operating emergency or contingency, and (3) materials
acquired to support market prices. (SFFAS 3, par. 51 & OMB Bulletin 01-09,
p. 21, section 3.3)
138. Are stockpile materials recognized and
reported as assets when acquired (i.e.,
recognized as assets using the consumption
method)? (SFFAS 3, par. 52)
139. If the contract between the buyer and
seller of the stockpile materials is silent
regarding passage of the title, is title
assumed to pass upon delivery of the goods?
(SFFAS 3, par. 52)
140. Are stockpile materials valued at
historical cost, including all appropriate
purchase, transportation, and production
costs incurred to bring the items to their
current condition and location? (SFFAS 3,
par. 53)
141. Are abnormal costs, such as excessive
handling or rework costs, charged to
operations for the period? (SFFAS 3, par.
53)
142. Is one of the following historical
cost flow assumptions used to value
stockpile materials under the consumption
method? a. first-in, first-out (FIFO) b.
weighted average c. moving average d. any
other valuation method (such as a standard
cost system) whose results reasonably
approximate "a," "b," or "c" (SFFAS 3, par.
52 & 53)
143. If stockpile materials have either
suffered a permanent decline in value to an
amount below cost or have become damaged or
decayed, has their value been reduced to
expected net realizable value? (SFFAS 3,
par. 54)

Assets Stockpile Materials (138- 150) Yes, No or N/A Explanation
144. Is the resultant decline in value
recognized as a loss or expense in the period
in which it occurs? (SFFAS 3, par. 54)
145. When stockpile materials are authorized to
be sold, are those materials disclosed as
stockpile materials held for sale? (SFFAS 3,
par. 55)
146. Are the stockpile materials authorized for
sale valued using the same basis used before
they were authorized for sale? (SFFAS 3, par.
55)
147. Is any difference between the carrying
amount of the stockpile materials held for sale
and their estimated selling price disclosed?
(SFFAS 3, par. 55)
148. If stockpile materials are sold, is the
cost removed from stockpile materials and
reported as a cost of goods sold? (SFFAS 3,
par. 55)
149. Is any gain (or loss) from the sale of
stockpile materials recognized as a gain (or
loss) at that time? (SFFAS 3, par. 55)

Assets Stockpile Materials (138- 150) Yes, No or N/A Explanation
150. Does the entity disclose the following
information about its stockpile materials? a.
general composition b. basis for valuing
stockpile materials, including valuation method
and any cost flow assumptions c. changes from
prior year's accounting methods, if any d.
restrictions on the use of the material e.
balances in each category of stockpile material
(i.e., stockpile materials and stockpile
materials held for sale) f. decision criteria
for grouping stockpile material as held for
sale g. changes in criteria for categorizing
stockpile materials as held for sale (SFFAS 3,
par. 56; OMB Bulletin 01-09, pp. 75 & 76,
section 9.9)

Assets Seized Property (151- 158) Yes, No or N/A Explanation
Seized property includes monetary instruments, real property, and tangible
personal property belonging to others in actual or constructive possession
of the custodial agency. This includes illegal drugs, contraband, and
counterfeit items seized by authorized law enforcement agencies (SFFAS 3,
par. 59; OMB Bulletin 01-09, p. 22, section 3.3) There may be as many as
three government entities involved with seized property: (1) the seizing
agency, (2) the custodial agency, and (3) another agency with a "central
fund" set up for financial recordkeeping of seizure activities. (SFFAS 3,
par. 57)
151. If the central fund is other than
the seizing or custodial entity, does
the custodial entity maintain sufficient
internal records to carry out its
stewardship responsibility? (SFFAS 3,
par. 60)
152. If monetary instruments are seized,
are seized assets recognized at market
value of the monetary instruments, and a
corresponding liability equal to the
seized asset value established? (SFFAS
3, par. 61 & 65; OMB Bulletin 01-09, p.
22, section 3.3)
153. Is the existence of seized property
other than monetary instruments
disclosed in a note to the statements
and accounted for in the entity's
property management records? (SFFAS 3,
par. 62)
154. Is seized property valued at its
market value when seized (or as soon
thereafter as reasonably possible if the
market value cannot be readily
determined)? (SFFAS 3, par. 63)
155. If no active market exists for the
property in the general area in which it
was seized, is a value in the principle
market nearest the place of seizure
used? (SFFAS 3, par. 63)
156. Is the valuation of property seized
under the Internal Revenue Code based on
the taxpayer's equity (market value less
any third-party liens)? (SFFAS 3, par.
64)

Assets Seized Property (151- 158) Yes, No or N/A Explanation
157. Does the entity disclose the type of
seized property in its custody and include the
following information? a. explanation of what
constitutes a seizure and a general description
of the composition of seized property b.
valuation method(s) c. changes from prior
years' accounting methods, if any d. analysis
of change in seized property (including dollar
value and number of seized properties) that are
i. on hand at the beginning of the year, ii.
seized during the year, iii. disposed of during
the year, and iv. on hand at the end of the
year, as well as known liens or other claims
against the property (SFFAS 3, par. 66; OMB
Bulletin 01-09, p. 22, section 3.3; p. 76,
section 9.9)
158. Does the entity also disclose the method
of disposal of seized property, if material?
(SFFAS 3, par. 66; OMB Bulletin 01-09, p. 76,
section 9.9)

Assets Forfeited Property (159- 172) Yes, No or N/A Explanation
Forfeited property consists of (a) property (i.e., monetary instruments,
intangible property, real property, and tangible personal property)
acquired through forfeiture proceedings, (b) property acquired to satisfy
a tax liability, and (c) unclaimed and abandoned merchandise. (SFFAS 3,
par. 67 & 68 & OMB Bulletin 01-09, p. 22, section 3.3)
159. When a forfeiture judgment is obtained for
seized monetary instruments: a. Are they
reclassified as forfeited monetary instruments
at the current market value? b. Is revenue
recognized in an amount equal to the value of
the monetary asset? c. Is the liability
associated with the seized monetary instrument
classification removed? (SFFAS 3, par. 69)
160. When a forfeiture judgment is obtained for
real, tangible, and intangible property: a. Is
the property recorded as an asset at its fair
value at the time of forfeiture? b. Is an
allowance account (contra-asset account)
established for liens or claims from third
party claimants against forfeited property? c.
Is offsetting deferred revenue recognized?
(SFFAS 3, par. 70)
161. For forfeited property that cannot be sold
due to legal restrictions, but may be either
donated or destroyed, does the entity in lieu
of recognizing financial value make the
required disclosures concerning the
composition, valuation, and disposition of the
property? (SFFAS 3, par. 71 & 78)
162. Is revenue from the sale of forfeited
property recognized when sold? (SFFAS 3, par.
72)

Assets Forfeited Property (159- 172) Yes, No or N/A Explanation
Forfeited property not held for sale may be placed into official use,
transferred to another federal agency, distributed to a state or local law
enforcement agency, or distributed to a foreign government. (SFFAS 3, par.
73)
163. When a determination is made that
forfeited property will not be held for sale,
but distributed in one of the manners described
above, is the property reclassified as
forfeited property held for donation or use?
(SFFAS 3, par. 74)
164. Is revenue associated with property not
disposed of through sale recognized upon
approval of distribution and the previously
established deferred revenue reversed? (SFFAS
3, par. 74)
165. Is a distinction maintained in the
entity's accounting reports between revenue
arising from the sale of forfeited property and
revenue arising from forfeited property being
transferred, donated, or placed into official
use? (SFFAS 3, par. 72-75 & Table 1)
166. Is property acquired by the government to
satisfy a taxpayer's liability recorded when
title to the property passes to the federal
government, and is a credit made to the related
account receivable? (SFFAS 3, par. 76)
167. Is the property acquired in satisfaction
of a taxpayer's liability valued at its market
value less any third party liens? (SFFAS 3,
par. 76)
168. Upon sale of forfeited property acquired
in satisfaction of a taxpayer's liability, is
revenue recognized in the amount of the sale
proceeds, and are the property and third party
liens removed from the accounts? (SFFAS 3, par.
76)
169. Is unclaimed and abandoned merchandise
recorded with an offsetting deferred revenue
when statutory and/or regulatory requirements
for forfeiture have been met? (SFFAS 3, par.
77)
170. Is unclaimed and abandoned merchandise
valued at its market value? (SFFAS 3, par. 77)

Assets Forfeited Property (159- 172) Yes, No or N/A Explanation
171. Upon the sale of unclaimed and abandoned
merchandise, is revenue recognized in the
amount of the sale proceeds, and the
merchandise and the deferred revenue removed
from the accounts? (SFFAS 3, par. 77)
172. Does the entity disclose the following
information about forfeited property? a.
composition of the property b. valuation
method(s) c. restrictions on the use or
disposition of forfeited property d. changes
from prior year's accounting methods, if any e.
analysis of the changes in forfeited property
by dollar amount and number of forfeitures that
includes: i. forfeitures on hand at the
beginning of the year ii. additions iii.
disposals and method of disposition iv.
forfeitures on hand at the end of the year f.
if available, an estimate of the value of
property or funds to be distributed to other
federal, state, and local agencies in future
reporting periods (SFFAS 3, par. 78; OMB
Bulletin 01-09, p. 76, section 9.9)

Assets Goods Held Under Price Support and Yes, No or N/A Explanation
Stabilization Program (173- 186)
Goods acquired under price support and stabilization programs (i.e.,
commodities) are items of commerce or trade (usually farm commodities)
having an exchange value. Producers of the goods (1) are either given
nonrecourse loans under which they can, at their option, repay the loan
with interest or surrender their commodity pledged as collateral for the
loan or (2) may enter into purchase agreements that allow the producer of
the option to sell commodities to the government (the Commodity Credit
Corporation) at the price support rate. (SFFAS 3, par. 92, 93, & 94)
173. Are nonrecourse loans recognized as
assets when the loan principal is
disbursed and recorded at the amount of
the loan principal? (SFFAS 3, par. 96)
174. Is interest accrued on nonrecourse
loans? (SFFAS 3, par. 96)
175. When the entity has entered into a
purchase agreement and there is an
expected loss: a. Is a loss23 recognized
if it is probable that a loss has been
incurred on purchase agreements
outstanding and the amount of the loss
can be reasonably measured? b. Is a
corresponding liability recognized?
(SFFAS 3, par. 97 & 103)
176. If the contingent loss arising from
a purchase agreement is not recognized
because it is less than probable or is
not reasonably measurable, is the
contingent loss disclosed if it is at
least "reasonably possible that a loss
may occur?" (SFFAS 3, par. 98)
177. When commodities are acquired to
satisfy a nonrecourse loan or purchase
agreement, are they recognized and
reported as assets at the lower of cost
or net realizable value? (SFFAS 3, par.
99 & 104)

23The loss amount is the difference between the contract price and the net
realizable value of the commodities.

Assets Goods Held Under Price Support and Yes, No or N/A Explanation
Stabilization Program (173- 186)
178. When commodities acquired to satisfy the
terms of a nonrecourse loan or purchase
agreement are sold: a. Are revenues recognized?
b. Is the carrying amount of the commodities
removed from the asset account and reported as
a cost of goods sold? (SFFAS 3, par. 100)
179. When commodities are held for purposes
other than sale, is the carrying amount
reported as an expense and removed from the
commodity asset account upon transfer? (SFFAS
3, par. 101)
180. Are all nonrecourse loans recorded at
their face amounts, and is a valuation
allowance set up to recognize losses on such
loans when it is "more likely than not" (i.e.,
more than a 50 percent chance) that loans will
not be totally collected? (SFFAS 3, par. 102)
181. Is this allowance reestimated on each
financial reporting date? (SFFAS 3, par. 102)
182. Does the cost for the commodities acquired
through a nonrecourse loan settlement include
the following amounts? a. loan principal
(excluding interest) b. processing and
packaging costs incurred after acquisition c.
other costs (e.g., transportation) incurred in
taking title to the commodity (SFFAS 3, par.
105)
183. Does the cost for commodities acquired
though a purchase agreement include the
following amounts? a. the unit price agreed
upon in the purchase agreement multiplied by
the number of units purchased b. other costs
incurred in taking title to the commodity
(SFFAS 3, par. 106)

Assets Goods Held Under Price Support and Yes, No or N/A Explanation
Stabilization Program (173- 186)
184. Is any adjustment necessary to reduce the
carrying amount of the acquired commodities to
the lower of cost or net realizable value
recognized as a loss on farm price support in
the current period and recorded in a commodity
valuation allowance? (SFFAS 3, par. 107)
185. Are recoveries of losses recognized up to
the point of any previously recognized losses
on the commodities, and is the commodity
valuation allowance reduced accordingly in the
current period? (SFFAS 3, par. 107)

Assets Goods Held Under Price Support and Yes, No or N/A Explanation
Stabilization Program (173- 186)
186. Is the following information related to
goods held under price support and
stabilization programs disclosed? a. basis for
valuing commodities including valuation method
and cost flow assumptions (e.g., FIFO, weighted
average, moving average, specific
identification) b. changes from prior years'
accounting methods, if any c. restrictions on
the use, disposal, or sale of commodities d.
analysis of the changes in dollar amount and
volume of commodities, including those i. on
hand at the beginning of the year ii. acquired
during the year iii. disposed of during the
year by method of disposition iv. on hand at
the end of the year v. on hand at year's end
and estimated to be donated or transferred
during the coming period vi. received as a
result of surrender of collateral related to
nonrecourse loans outstanding vii. dollar value
and volume of purchase agreement commitments
(SFFAS 3, par. 108 & 109; OMB Bulletin 01-09,
pp. 76 & 77, section 9.9)

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
General property, plant, and equipment (PP&E) are any property, plant, and
equipment used in providing goods or services. (SFFAS 6, par. 23)
187. Has the entity established, disclosed, and
consistently followed appropriate
capitalization thresholds for property, plant,
and equipment (PP&E) suitable to its financial
and operational conditions? (SFFAS 6, par. 13)
188. Does the entity follow a policy that
ensures its PP&E consists of tangible assets,
including land, that meet the following
criteria? a. have estimated useful lives of 2
years or more b. are not intended for sale in
the ordinary course of operations c. are
acquired or constructed with the intention of
being used or being available for use by the
entity (SFFAS 6, par. 17)
189. Does PP&E consist of the following items?
a. assets acquired through capital leases,
including leasehold improvement b. property
owned by the reporting entity in the hands of
others (e.g., state and local governments,
colleges and universities, federal contractors)
c. land rights (SFFAS 6 par. 18)
Capital leases are leases that transfer substantially all the benefits and
risks of ownership to the lessee. Operating leases are leases in which the
federal entity does not assume the risks of ownership of PP&E. Multiyear
service contracts and multiyear purchase agreements for expendable
commodities are not capital leases. (SFFAS 6, par. 20, footnote 22; SFFAS
5, par. 43)

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
190. Does the entity classify a lease as a
capital lease if at its inception the lease
meets one or more of the following criteria? a.
the lease transfers ownership of the property
to the lessee by the end of the lease term b.
the lease contains an option to purchase the
leased property at a bargain price c. the lease
term is equal to or greater than 75 percent of
the estimated economic life of the leased
property, and the beginning of the lease term
does not fall within the last 25 percent of the
total estimated economic life of the property
d. the present value of rental and other
minimum lease payments, excluding that portion
of the payments representing executory cost,
equals or exceeds 90 percent of the fair value
of the leased property, and the beginning of
the lease term does not fall within the last 25
percent of the total estimated economic life of
the property (SFFAS 6, par. 20; SFFAS 5, par.
43)
191. Does the general PP&E asset line item
exclude the following items? a. items held in
anticipation of physical consumption such as
operating materials and supplies b. items the
federal entity has a reversionary interest in
c. heritage assets (except multiuse heritage
assets)24 d. stewardship land (i.e., land not
included in general PP&E) (SFFAS 6, par. 19,
21, 57, 58, & 68; SFFAS 16, par. 6)

24Multiuse heritage assets are heritage assets used predominately in
general government operations (e.g., the main Treasury building, which is
used as an office building).

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
192. In determining the level at which the
entity categorizes its PP&E, has the entity
considered the following factors? a. the cost
of maintaining different accounting methods for
property and the usefulness of the information
b. the diversity of the PP&E (e.g., useful
lives, value, alternative uses) c. the programs
being served by the PP&E d. future disposition
of the PP&E (SFFAS 6, par. 22)
193. Does the entity categorize an asset under
general PP&E if it has one or more of the
following characteristics? a. it could be used
for alternative purposes (e.g., by other
federal programs, state or local governments,
nongovernmental entities) but is used to
produce goods or services or to support the
mission of the entity b. it is used for
business-type activities 25 c. it is used by
entities in activities whose costs can be
compared to those of other entities performing
similar activities (e.g., federal hospital
services in comparison to other hospitals)
(SFFAS 6, par. 23; OMB Bulletin 01-09, p. 22,
section 3.3)
194. Is PP&E of entities operating as
business-type activities categorized as general
PP&E whether or not it meets the definition of
other PP&E categories (e.g., heritage assets)?
(SFFAS 6, par. 24; OMB Bulletin 01-09, p. 22,
section 3.3)

25A business-type activity is defined as a significantly self-sustaining
activity that finances its continuing cycle of operations through the
collection of exchange revenue.

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
195. Are land and land rights specifically
acquired for or in connection with other
general PP&E included in general PP&E? (SFFAS
6, par. 25; OMB Bulletin 01-09, p. 22 & 23,
section 3.3)
196. Is all general PP&E recorded at cost?
(SFFAS 6, par. 26)

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
197. Does the cost of general PP&E include all
costs incurred to bring the PP&E to a form and
location suitable for its intended use, such as
the following? a. amounts paid to vendors b.
transportation charges to the point of initial
use c. handling and storage costs d. labor and
other direct or indirect production costs (for
assets produced or constructed) e. costs of
engineering, architectural, and other outside
services for designs, plans, specifications,
and surveys f. acquisition and preparation
costs of buildings and other facilities g. an
appropriate share of the cost of the equipment
and facilities used in construction work h.
fixed equipment and related installation costs
required for activities in a building or
facility i. direct costs of inspection,
supervision, and administration of construction
contracts and construction work j. legal and
recording fees and damage claims k. fair value
of facilities and equipment donated to the
government l. material amounts of interest
costs paid (SFFAS 6, par. 26)
198. Is the cost of general PP&E acquired under
a capital lease equal to the amount recognized
as a liability 26 for the capital lease at its
inception? (SFFAS 6, par. 29)

26The liability is the net present value of lease payments unless the net
present value of the lease payments exceeds the fair value of the asset,
in which case the amount recorded as the liability would be the fair value
of the asset. (SFFAS 5, par. 44)

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
199. Is the cost of general PP&E acquired
through donation, will, or judicial process,
excluding forfeiture, capitalized at estimated
fair value at the time acquired by the
government? (SFFAS 6, par. 30)
200. Is general PP&E transferred from other
federal entities capitalized at the book value
recorded by the transferring entity? (SFFAS 6,
par. 31)
201. Is general PP&E transferred from other
federal entities capitalized at the fair value
at the time of the transfer, if the receiving
entity cannot reasonably ascertain the book
value of the PP&E being transferred? (SFFAS 6,
par. 31)
202. If general PP&E is acquired through
exchange between a federal entity and a
nonfederal entity, is it capitalized at the
fair value of the PP&E surrendered at the time
of the exchange? (SFFAS 6, par. 32)
203. If general PP&E is acquired through
exchange between a federal entity and a
nonfederal entity and the fair value of the
PP&E is more readily determinable than that of
the PP&E surrendered, is the acquired general
PP&E capitalized at it's fair value? (SFFAS 6,
par. 32)
204. If general PP&E is acquired through
exchange between a federal entity and a
nonfederal entity and neither the fair value of
the PP&E acquired or surrendered is
determinable, is the acquired general PP&E
capitalized at the book value of the PP&E
surrendered? (SFFAS 6, par. 32)
205. If cash is included in an exchange of
general PP&E between a federal entity and a
nonfederal entity, is the cost of PP&E acquired
increased by the amount of cash surrendered or
decreased by the amount of cash received?
(SFFAS 6, par. 32)

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
206. For general PP&E acquired through exchange
between a federal entity and a nonfederal
entity, is any difference between the net
recorded amount of the PP&E surrendered and the
cost of the PP&E acquired recognized as a gain
or loss? (SFFAS 6, par. 32)
207. Is PP&E recognized when title passes to
the acquiring entity or when PP&E is delivered
to the entity or to an agent of the entity?
(SFFAS 6, par. 34)
208. If general PP&E is under construction, is
it recorded as construction work in process
until it is placed into service and transferred
to general PP&E? (SFFAS 6, par. 34)
Depreciation expense is calculated through the systematic and rational
allocation of the cost of general PP&E, less its estimated salvage or
residual value over its estimated useful life. (SFFAS 6, par. 35, OMB
Bulletin 01-09, p. 23, section 3.3)
209. Is depreciation expense recognized on all
general PP&E, except land and land rights of
unlimited duration? (SFFAS 6, par. 35)
210. Do estimates of useful life of general
PP&E consider such factors as physical wear and
tear and technological change? (SFFAS 6, par.
35)
211. Are changes in estimated useful life or
salvage and residual value of general PP&E
accounted for in the period of change and
future periods? (SFFAS 6, par. 35)
212. Is the depreciation method systematic,
rational, and best reflective of the use of the
PP&E, including the use of a composite or a
group methodology 27 whereby the costs of PP&E
are allocated using the same allocation rate?
(SFFAS 6, par. 35; SFFAS 23, par. 9(f))

27The composite methodology is a method of calculating depreciation that
applies a single average rate to a number of heterogeneous assets that
have dissimilar characteristics and service lives. The group methodology
is a method of calculating depreciation that applies a single, average
rate to a number of homogenous assets having similar characteristics and
service lives.

Assets General Property, Plant, & Equipment (Net) Yes, No or Explanation
(187- 233) N/A
213. Are depreciation and amortization expenses
accumulated in contra-asset accounts? (SFFAS 6,
par. 36)
214. Are costs that either extend the useful life
of existing general PP&E or enlarge or improve its
capacity capitalized and depreciated/amortized over
the remaining useful life of the asset? (SFFAS 6,
par. 37)
215. When general PP&E is disposed of, retired, or
removed from service, is the asset removed from the
asset accounts along with the associated
accumulated depreciation/amortization? (SFFAS 6,
par. 38)
216. Are the differences between the book value of
the PP&E and the amounts realized, recognized as a
gain or loss in the period that the general PP&E is
disposed of, retired or removed from service?
(SFFAS 6, par. 38)
217. Is general PP&E removed from general PP&E
accounts along with associated accumulated
depreciation/amortization if prior to disposal,
retirement, or removal from service, it no longer
provides service in the operations of the entity?
(SFFAS 6, par. 39)
218. Is such PP& E that has been removed from the
asset accounts recorded in an appropriate asset
account at its expected net realizable value?
(SFFAS 6, par. 39)
219. Is any difference in the book value and its
expected net realizable value of the about-to-be
disposed, retired, or removal-from-service PP&E
recognized as a gain or loss in the period of
adjustment? (SFFAS 6, par. 39)
220. Is the expected net realizable value of such
PP&E assets adjusted at the end of each accounting
period, and are any further adjustments in value
recognized as a gain or loss? (SFFAS 6, par. 39)

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
221. If historical cost information for
existing general PP&E has not been maintained,
are cost estimates based on either of the
following costs? a. the cost of similar assets
at the time of acquisition b. the current cost
of similar assets discounted for inflation
since the time of acquisition (SFFAS 6, par.
40)
222. For general PP&E previously considered
national defense PP&E, is the initial
capitalization amount for these assets the
initial historical cost for the items including
any major improvements or modifications? (SFFAS
23, par. 10)
223. For general PP&E previously considered
national defense PP&E where obtaining initial
historical cost is not practical, is estimated
historical cost used, based on one of the
following alternatives? a. current replacement
cost of similar items, deflated through the use
of price-level indexes to the acquisition year
or estimated acquisition year if the actual
year is unknown b. other information indicating
amount expended, such as budget, appropriation,
or engineering documents and other reports
reflecting amounts expended c. other reasonable
approaches for estimating historical cost28
(SFFAS 23, par. 12 & 13)
224. For general PP&E previously considered
national defense PP&E that was in service upon
implementation of SFFAS 23, are cleanup cost
liabilities adjusted as needed?29 (SFFAS 23,
par. 15)

28For example, the latest acquisition cost may be substituted for current
replacement cost in some situations. 29This adjustment may be needed
because the Department of Defense may have already recognized the total
estimated cleanup costs as a liability and expense for some military
equipment (per paragraph 101 of SFFAS 6).

Assets General Property, Plant, & Equipment (Net) Yes, No or Explanation
(187- 233) N/A
225. Is accumulated depreciation/amortization
recorded based on one of the following methods? a.
the estimated cost of the PP&E and the number of
years the PP&E has been in use relative to its
estimated useful life b. the PP&E's estimated net
remaining cost30 and the depreciation/amortization
charged over the remaining life based on that net
remaining cost c. a composite or a group
methodology whereby the costs of PP&E are allocated
using the same allocation rate (SFFAS 6, par. 41;
SFFAS 23, par. 9(f))
226. If general PP&E would have been substantially
depreciated or amortized had it been recorded upon
acquisition, does the entity weigh materiality and
cost-benefit in considering either of the following
alternatives? a. record only improvements made
during the period beyond the initial expected
useful life of general PP&E b. make an aggregate
entry for whole classes of PP&E (e.g., entire
facilities rather than a building-by-building
estimate). (SFFAS 6, par. 42)
227. In recording existing general PP&E, is the
difference in amounts added to asset and
contraaccounts credited (or charged) to the net
position of the entity, with the amount of the
adjustment shown as a "prior period adjustment" in
the Statement of Changes in Net Position? (SFFAS 6,
par. 43)

30Net remaining cost is the original cost of the asset less any accumulated
depreciation/amortization to date (i.e., book value).

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
228. In recording existing general PP&E
previously identified as national defense PP&E,
is the difference in amounts added to asset and
contra accounts reported as a "change in
accounting principle" and reflected as an
adjustment to the beginning balance of
cumulative results of operations in the
statement of changes in net position, for the
period the change is made? (SFFAS 23, par. 10 &
16)
229. Does the entity make the following minimum
disclosures about its general PP&E? a. the
cost, associated accumulated depreciation, and
book value by major class (e.g., building and
structures, fixtures, equipment) b. the
estimated useful lives for each major class c.
the method(s) of depreciation for each major
class d. capitalization threshold(s) including
any changes in thresholds(s) during the period
e. restrictions on the use or convertibility of
general PP&E (SFFAS 6, par. 45; OMB Bulletin
01-09, p. 77, section 9.10)
Property, plant, and equipment are classified as heritage assets if they
have (1) historical or natural significance; (2) cultural, educational, or
artistic importance; or (3) significant architectural characteristic.
(SFFAS 6, par. 57) Multiuse heritage assets are heritage assets that are
predominately used in general government operations (e.g., buildings such
as the main Treasury building, which is used as an office building).
(SFFAS 16, par. 6; OMB Bulletin 01-09, p. 23, section 3.3)
230. If the predominant use of the heritage
asset(s) is in general government operations,
is the acquisition, betterment, or
reconstruction of the asset(s) capitalized as
general PP&E and depreciated over its useful
life? (SFFAS 16, par. 6 & 9; OMB Bulletin
01-09, p. 23, section 3.3; p. 98, section
10.2A)

Assets General Property, Plant, & Equipment Yes, No or N/A Explanation
(Net) (187- 233)
231. Does the entity also include a footnote
disclosure explaining that "physical quantity"
information for the multiuse heritage assets is
included in supplemental stewardship reporting
for heritage assets? (SFFAS 16, par. 9; OMB
Bulletin 01-09, p. 23, section 3.3; p. 98,
section 10.2A)
232. Are multiuse heritage assets acquired
through donation or devise recognized as
general PP&E at the assets' fair value? (SFFAS
16, par. 11)
233. For multiuse heritage assets acquired
through donation or devise, are the assets fair
value also recognized as "nonexchange revenue,"
as defined in SFFAS 7? (SFFAS 16, par. 11)

Assets Software (234- 262) Yes, No or N/A Explanation
Software includes the application and operating system programs,
procedures, rules, and any associated documentation pertaining to the
operation of a computer system or program. "Internal use software" is
software that is purchased from commercial vendors "off the shelf,"
internally developed, or contractor-developed solely to meet the entity's
internal or operational needs. (SFFAS 10, par. 8)
234. Does the entity capitalize the cost of
software when such software meets the following
criteria? a. specifically identifiable b.
determinate life of 2 years or more c. not
intended for sale in the ordinary course of
operations d. acquired or developed with the
intention of being used by the entity e. meets
the criteria for general property, plant, and
equipment in that it is used in providing goods
and services (SFFAS 6, par. 17; SFFAS 10, par.
15 & 38)
235. Does the capitalized cost of internally
developed software include the full cost (i.e.,
direct and indirect costs) incurred during the
software development stage? (SFFAS 10, par. 16)

Assets Software (234- 262) Yes, No or Explanation
N/A
236. Are capitalized internally developed software
development costs limited to costs incurred after
the following steps have been taken? a. management
authorizes and commits to a computer software
project and believes that it is more likely than
not that the project will be completed and the
software will be used to perform the intended
function with an estimated service life of 2 years
or more b. the conceptual formulation, design, and
testing of possible software project alternatives
(i.e., preliminary design stage) have been
completed. (SFFAS 10, par. 16)
237. Do software capitalization costs include costs
for new software 31 and documentation manuals?
(SFFAS 10, par. 17)
238. Do the capitalized costs for commercial
off-the-shelf (COTS) software include the amount
paid to the vendor? (SFFAS 10, par. 18)
239. Do the capitalized costs for
contractor-developed software include the amount
paid to a contractor to design, program, install,
and implement the software? (SFFAS 10, par. 18)
240. Does the entity capitalize material internal
costs incurred to implement the COTS or
contractordeveloped software and otherwise make it
ready for use? (SFFAS 10, par. 18)
241. Does the entity expense as incurred all data
conversion costs for internally developed,
contractor-developed, or COTS software as well as
the cost to develop or obtain software that allows
for access or conversion of existing data to the
new software? (SFFAS 10, par. 19)

31Examples of costs for new software are salaries of programmers, systems
analysts, project managers, and administrative personnel; associated
employee benefits; outside consultants' fees; rent; and supplies.

Assets Software (234- 262) Yes, No or N/A Explanation
242. Does the entity expense costs incurred
after the completion of final acceptance
testing? (SFFAS 10, par. 20)
243. Does the entity treat software that serves
both internal uses and stewardship purposes 32
as internal use software and capitalize it to
the extent such software meets criteria for
general PP&E? (SFFAS 10, par. 21)
244. Is computer software that is integrated
into and necessary to operate general PP&E,33
rather than perform an application, considered
part of the PP&E of which it is an integral
part, and is it capitalized and depreciated
accordingly? (SFFAS 10, par. 22)
245. If the entity purchased software as part
of a package of products and services, does it
use a reasonable estimate of the relative fair
value of the individual elements in allocating
the cost as capitalizable or noncapitalizable
(i.e., expense) elements? (SFFAS 10, par. 23)
246. If the entity purchased software as part
of a package of products and services, does it
expense software costs that are not susceptible
to allocation between maintenance and
relatively minor enhancements? (SFFAS 10, par.
23)
247. Has the entity established capitalization
thresholds for its internal-use software
including bulk purchases of software programs
and modules or components of a total software
system? (SFFAS 10, par. 24)

32Software that serves both internal uses and stewardship purposes is
referred to as multiuse software. An example is a global positioning
system used in connection with national defense activities and general
operating activities and services. 33For example, such software could
include software necessary to operate airport radar and computer operated
lathes.

34
SFFAS 10 provides that material expenditures to add software
capability/functionality would be capitalized but that expenditures that
result in extending useful life or capacity would be expensed. (SFFAS 10,
par. 42 & 43)
252. If
impaired
software is
to remain in
use, is the
loss due to
impairment
248. Does the measured as
entity 249. Does 250. Are the
capitalize the entity costs difference
the expense, in incurred between the
acquisition the period solely to 251. Does the entity recognize book value
cost of incurred, repair a a loss upon impairment of and either
enhancements the cost of design flaw computer software if either of of the
to existing minor or to these following
internal-use enhancements perform postimplementation/operational amounts? a.
software, as resulting minor conditions apply? a. the the cost to
Assets Yes, well as from ongoing upgrades software is no longer expected acquire
Software No Explanation related systems that may to provide substantive service software
(234- or modules, when maintenance extend the potential and will be removed that would
262) N/A it is more as well as useful life from service b. a significant perform
likely than the purchase of the reduction occurs in the similar
not that they of enhanced software capabilities, functions, or remaining
will result versions of without uses of the software (or functions
in software for adding module thereof) (SFFAS 10, (i.e.,
significant a minimal capabilities par. 28 & 29) unimpaired
additional charge? expensed?34 functions)
capabilities? (SFFAS 10, (SFFAS 10, b. the
(SFFAS 10, par. 26) par. 27) portion of
par. 25) book value
attributable
to the
remaining
functional
elements of
the software
(SFFAS 10,
par. 29)

Assets Software (234- 262) Yes, No or N/A Explanation
253. If the loss due to impairment cannot be
determined, is the book value of the software
amortized over the remaining useful life of the
software? (SFFAS 10, par. 29)
254. If impaired software is to be removed from
use, is the loss due to impairment measured as
the difference between the book value and any
net realizable value (NRV)? (SFFAS 10, par. 30)
255. In situations of impaired software to be
removed from use, does the entity transfer the
NRV, if any, to an appropriate asset account
until such time as the software is disposed of
and the NRV realized? (SFFAS 10, par. 30)
256. If the entity's managers conclude that it
is no longer "more likely than not" that
developmental software or a module thereof will
be completed and placed in service, is the
accumulated book value or the balance in a work
in process account, if applicable, reduced to
reflect the expected NRV and a loss recognized?
(SFFAS 10, par. 31)
257. Does the entity amortize capitalized
internal use software systematically and
rationally over the estimated useful life of
the software? (SFFAS 10, par. 32)
258. Does amortization of each module or
component of a software project begin when that
module or component has been successfully
tested? (SFFAS 10, par. 33)
259. If the use of a module is dependent on the
completion of another module(s), does the
amortization begin only when both that module
and the other module(s) have successfully
completed testing? (SFFAS 10, par. 33)

Assets Software (234- 262) Yes, No or N/A Explanation
260. Are additions to the book value or changes
in useful life of capitalized software treated
prospectively (i.e., during the period of
change and future periods only) when the
software is amortized? (SFFAS 10, par. 34)
261. When the entity replaces existing
internal-use software with new software, is the
unamortized cost of the old software expensed
when the new software has successfully
completed testing? (SFFAS 10, par. 34)
262. Does the entity disclose, if material, the
following information regarding its capitalized
software? a. the cost, associated amortization,
and book value b. the estimated useful life for
each major class of software c. the method(s)
of amortization (SFFAS 10, par. 35; SFFAS 6,
par. 45)

Assets Other Assets (263- 268) Yes, No or N/A Explanation
263. Does the entity include under the
"other" assets category assets that are
not reported in a separate category on
the face of the balance sheet? (OMB
Bulletin 01-09, p. 23, section 3.3)
264. Are other assets listed and
described in a note to the financial
statements and broken out by major
homogenous components and
intragovernmental versus other
(nonfederal) entity assets)? (OMB
Bulletin 01-09, p. 78, section 9.11)
Advances are cash outlays made by a federal entity to its employees,
contractors, grantees, or others to cover the recipient's anticipated
expenses or as advance payments for the costs of goods and services
acquired by an entity. (SFFAS 1, par. 57 & OMB Bulletin 01-09, p. 23,
section 3.3) Prepayments are payments made by a federal entity to cover
certain periodic expenses before those expenses are incurred (SFFAS 1,
par. 58; OMB Bulletin 01-09, p. 23, section 3.3) Progress payments on work
in progress are not included in advances and prepayments (OMB Bulletin
01-09, p. 23, section 3.3)
265. Are advances and prepayments
recorded as assets and disclosed in the
notes to the financial statements? (SFFAS
1, par. 59; OMB Bulletin 01-09, p. 23,
section 3.3)
266. Are amounts of advances or
prepayments that are subject to a refund
transferred to accounts receivable?
(SFFAS 1, par. 59)
267. Are advances and prepayments paid
out reported separately as assets and not
netted against the liability for advances
and prepayments that the entity received?
(SFFAS 1, par. 60)
268. Are advances and prepayments that
are made to federal entities accounted
for and reported separately from those
made to nonfederal entities? (SFFAS 1,
par. 61)

Liabilities Liabilities in General Yes, No or N/A Explanation
(269- 272)
Liabilities of the federal agencies are reported under two major
categories: (1) liabilities covered by budgetary resources 35 and (2)
liabilities not covered by budgetary resources. 36 Within each of these
two categories, liabilities are classified as (1) intragovernmental
liabilities, which are amounts owed to other federal entities or (2)
governmental liabilities, which are amounts owed to nonfederal entities by
the federal government or an entity within the federal government. (SFFAS
1, par. 21; SFFAS 5, footnote 1 in summary; OMB Bulletin 01-09, p. 24,
section 3.4 & pp. 78 & 79, section 9.12)
269. Are liabilities covered by
budgetary resources and liabilities not
covered by budgetary resources combined
on the face of the balance sheet? (OMB
Bulletin 01-09, p. 17, section 3.1, p.
24, section 3.4 & pp. 78 & 79, section
9.12)
270. Are the amounts and types of
liabilities not covered by budgetary
resources disclosed? (SFFAS1, par. 80 &
86; OMB Bulletin 01-09, p. 17, section
3.1 & p. 24, section 3.4)

35Liabilities covered by budgetary resources are liabilities covered by
realized budgetary resources as of the balance sheet date.
Budgetary resources include (1) new budget authority, (2) unobligated
balances of budgetary resources at the beginning of the
year or net transfers of prior year balances during the year, (3) spending
authority from offsetting collections (credited to an
appropriation or fund account), (4) recoveries of unexpired budget
authority through downward adjustments of prior year
obligations, and (5) permanent indefinite appropriations or borrowing
authority, which have been enacted and signed into law
as of the balance sheet date, provided that the resources may be
apportioned by OMB without further action by the Congress
and without a contingency having to be met.
36Liabilities not covered by budgetary resources are liabilities for which
congressional action is needed before budgetary
resources can be provided.

Liabilities Liabilities in General (269- 272) Yes, No or Explanation
N/A
271. Does the federal entity recognize a liability
for probable 37 and measurable 38 future outflows
or other sacrifices of resources arising from one
or more of the following events? a. past exchange
transactions b. government-related events, such as
a federal entity accidentally causing damage to
private property c. government-acknowledged events,
such as natural disasters, for which the government
has taken formal responsibility for the related
costs d. nonexchange transactions that, according
to current law and applicable policy, are unpaid
amounts due as of the reporting date (SFFAS 5, par.
19-34; OMB Bulletin 01-09, p. 23, section 3.4)
272. Are liabilities recognized when incurred
regardless of whether they are covered by available
budgetary resources (including those liabilities
related to appropriations canceled under subchapter
IV of chapter 15 of title 31, United States Code
(closing accounts)? (OMB Bulletin 01-09, p. 24,
section 3.4)

37Probable refers to that which can be reasonably expected or is believed
to be more likely than not on the basis of available
evidence or logic. However, in the context of assessing the outcome of
matters of pending or threatened litigation and
unasserted claims and recognizing an associated liability, "probable"
refers to that which is likely, not to that which is "more
likely than not."
38Measurable refers to that which can be quantified in monetary units with
sufficient reliability to be reasonably estimable.

Liabilities Accounts Payable and Interest Payable Yes, No or Explanation
(273- 280) N/A
Accounts payable are amounts owed by a federal entity for goods and
services received from, progress in contract performance made by, and
rents due to other entities. (SFFAS 1, par. 74; OMB Bulletin 01-09, p. 24,
section 3.4)
273. Do accounts payable exclude amounts related
to ongoing continuous expenses, such as salary and
related benefits expense, which are classified as
other current liabilities? (SFFAS 1, par. 75)
274. Are (intragovernmental) accounts payable owed
to other federal agencies reported separately from
those owed to the public? (SFFAS 1, par. 76; OMB
Bulletin 01-09, p. 18, section 3.2 & p. 24,
section 3.4)
275. When an entity accepts title to goods,
whether the goods are delivered or in transit,
does the entity recognize a liability for the
unpaid cost of goods? (SFFAS 1, par. 77)
276. If invoices for goods, for which the entity
has accepted the title, are not available, does
the entity estimate the amount owed? (SFFAS 1,
par. 77)
277. For facilities or equipment constructed or
manufactured by contractors or grantees according
to agreements or contract specifications, are
amounts recorded as payable based on an estimate
of work completed under the contract or the
agreement in accordance with the federal entity's
engineering and management evaluation of actual
performance progress and incurred costs? (SFFAS 1,
par. 78 & 79)
278. Does the entity disclose accounts payable not
covered by budgetary resources? (SFFAS 1, par. 80;
OMB Bulletin 01-09, p. 24, section 3.4; p. 78,
section 9.12)
279. Is interest incurred but unpaid on borrowed
funds, late payments, and refunds recognized as
interest payable and reported as a liability at
the end of each period? (SFFAS 1, par. 81; OMB
Bulletin 01-09, p. 24, section 3.4)

Liabilities Accounts Payable and Interest Yes, No or N/A Explanation
Payable (273- 280)
280. Is interest payable to federal entities
reported separately from interest payable to
the public? (SFFAS 1, par. 82)

Liabilities Liabilities for Loan Yes, No or N/A Explanation
Guarantees (281- 294)
A loan guarantee is any guarantee, insurance (but not deposit insurance),
or other pledge with respect to the payment of all or part of the
principal or interest on any debt obligation of a nonfederal borrower to a
nonfederal lender. (SFFAS 2, app. C) The Federal Credit Reform Act of 1990
requires federal entities to estimate and budget for the costs arising
from default of guaranteed loans made after fiscal year (FY) 1991 (i.e.,
post 1991). (SFFAS 2, par. 7)
281. Is the present value of estimated
net cash outflows from post-1991 (i.e.,
committed after September 30, 1991) loan
guarantees recognized as a liability?
(SFFAS 2, par. 7 & 23)
282. Does the entity disclose by loan
program the face value of guaranteed
loans outstanding and the amount of
outstanding principal guaranteed? (SFFAS
2, par. 23; OMB Bulletin 01-09, pp. 60,
65, & 72, section 9.8, item J)
283. Does the entity disclose by loan
program the estimated liabilities39
arising from post-1991 loan guarantees?
(OMB Bulletin 01-09, pp. 60, 61, 65, &
72, section 9.8, item K)
284. Is a liability for a pre-1992
(i.e., committed before October 1, 1991)
loan guarantee recognized when it is
more likely than not that the loan
guarantee will require a future cash
outflow to pay a default claim? (SFFAS
2, par. 39 & app. B, part IV A)
285. Does the entity disclose by loan
program the estimated liabilities
arising from pre-1992 loan guarantees?
(OMB Bulletin 01-09, p. 25, section 3.4;
pp. 60 & 72, section 9.8, item K)
286. Are the liabilities for the
pre-1992 loan guarantees reestimated
each year as of the date of the
financial statements? (SFFAS 2, par. 39)

39The present value of the estimated net cash flows (outflows less
inflows) to be paid by the entity arising from loan guarantees.

Liabilities Liabilities for Loan Guarantees (281- Yes, No or Explanation
294) N/A
287. Does the entity disclose, by loan program,
whether pre-1992 loan guarantees are reported on a
presentvalue basis40 or under the
allowance-for-loss method?41 (OMB Bulletin 01-09,
p. 68, section 9.8, item A, 4th par.)
288. When the total loan guarantee liability for
all of the credit programs is negative, is this
reported as an asset? (OMB Bulletin 01-09, p. 25,
section 3.4)
289. If loan guarantee liability is the result of
both positive and negative amounts of the various
components, is the total shown as a liability, and
are the negative components (of the loan guarantee
liability) disclosed? (OMB Bulletin 01-09, p. 25,
section 3.4)
290. When post-1991 loan guarantees are modified,
is the existing book value of the related liability
changed to an amount equal to the present value of
net cash outflows that are projected under the
modified terms from the time of the modification to
the loan's maturity, and discounted at the original
discount rate?42 (SFFAS 2, par. 50 & app. B, part
III D(4); SFFAS 19, par. 7(d))

40Under the present-value method, the liability for loan guarantees is the
present value of the expected net cash outflows due to
the loan guarantees.
41Under the allowance-for-loss method, the liability for loan guarantees
is the amount the agency estimates will more likely than
not require future cash outflow to pay default claims.
42The original discount rate is the rate that was originally used to
calculate the present value of the liability when the guaranteed
loans were disbursed, after adjusting for the interest rate reestimate.

Liabilities Liabilities for Loan Guarantees Yes, No or N/A Explanation
(281- 294)
291. When pre-1992 loan guarantees are directly
modified, does the following occur? a. the loan
guarantees are transferred from the liquidating
account to a financing account b. the existing
book value of the liability of the modified
loan guarantees is changed to an amount equal
to their postmodification liability (i.e., the
present value of the net cash outflows under
postmodification terms discounted at the
current Treasury rate) (SFFAS 2, par. 51 & app.
B, part IV B (2) & (4))
292. When pre-1992 loan guarantees are
indirectly modified, does the following occur?
a. The loan guarantees are kept in a
liquidating account. b. The related liability
is reassessed and adjusted to reflect any
change in the liability resulting from the
modification. (SFFAS 2, par. 51)
293. Are subsequent modifications of pre-1992
loan guarantees treated as modifications of
post-1991 loan guarantees? (SFFAS 2, par. 51)
294. If a post-1991 or pre-1992 loan is sold
with a recourse provision, is the present value
(discounted at the Treasury rate in effect at
the time of the sale) of the estimated losses
recognized as a subsidy expense and a loan
guarantee liability? (SFFAS 2, par. 54 & app.
B, part I F(3))

Liabilities Lease Liabilities (295- 300) Yes, No or N/A Explanation
Capital leases are leases that transfer substantially all of the benefits
and risks of ownership to the lessee. (SFFAS 5, par. 43)
295. Is the amount recorded by the lessee as a
liability under a capital lease arrangement the
present value of rental and other minimum lease
payments (excluding executory costs) during the
lease term? (SFFAS 5, par. 44)
296. If the present value of the rental and
other minimum lease payments during the lease
term exceeds the fair value of the leased
property, is the liability recorded as the fair
value43 of the property at the inception of the
lease? (SFFAS 5, par. 44)
297. Does the entity use the applicable
Treasury borrowing rate to determine the
discount rate charged on a capital lease unless
both of the following apply? a. It is
practicable for the lessee to learn the
implicit rate computed by the lessor. b. The
implicit rate is less than the Treasury
borrowing rate. (SFFAS 5, par. 45)
298. During the lease term, is each minimum
lease payment allocated between a reduction of
the obligation and interest expense so as to
produce a constant periodic rate of interest on
the remaining balance of the liability? (SFFAS
5, par. 46)

43Fair value is the price for which an asset could be bought or sold in an
arm's-length transaction between unrelated parties. Roman L. Well and
Patrick C. O'Brien, Accounting: The Language of Business, 9th ed. (Sun
Lakes, Arizona: Thomas Horton and Daughters, 1994).

Liabilities Lease Liabilities (295- 300) Yes, No or N/A Explanation
299. Does the entity disclose, in a note to the
financial statements, the following information
about its capital leases? a. gross amounts of
assets under capital lease by major asset
category and the related total accumulated
amortization b. description of the lease
arrangements, for example, future funding
commitments, lease terms, renewal options,
escalation clauses, restrictions, amortization
periods c. future payments due, by major asset
category, and deductions for imputed interest
and executory costs for all noncancelable
leases with terms longer than 1 year d. a
breakout of portions of the capital lease
liability covered by budgetary resources and
not covered by budgetary resources (OMB
Bulletin 01-09, p. 84-85, section 9.17)
300. For operating leases, does the entity
disclose the following information in a note to
the financial statements? a. description of the
lease arrangements, such as future funding
commitments, lease terms, renewal options,
escalation clauses, restriction, amortization
periods b. future payments due, by major asset
category, for all noncancelable leases with
terms longer than 1 year (OMB Bulletin 01-09,
p. 84-85, section 9.17)

Liabilities Federal Debt and Related Interest Yes, No or N/A Explanation
(301- 311)
Debts are amounts borrowed from the Treasury, the Federal Financing Bank,
other federal agencies, or the public under general or special financing
authority such as Treasury bills, notes, bonds, and Federal Housing
Administration (FHA) debentures. (SFFAS 5, par. 47; OMB Bulletin 01-09, p.
25, section 3.4)
301. Does the entity accounting for federal
debt identify the amount of the outstanding
debt liability at any given time and the
related interest cost for each accounting
period? (SFFAS 5, par. 48)
302. Are fixed-value securities with known
redemption or maturity amounts at time of issue
valued at their original face (par) value net
of any unamortized discount or premium? (SFFAS
5, par. 50)
303. For fixed-value securities, is either the
straight line or interest method44 of discount
or premium amortization used in the following
cases? a. short-term securities with a maturity
of 1 year or less b. longer term securities,
where the difference between the amount of
amortization under the interest and
straight-line methods is immaterial (SFFAS 5,
par. 50)
304. For fixed-value securities, is the
interest method used for amortizing any
discount or premium on all cases other than
those described in the previous question?
(SFFAS 5, par. 51)
305. If the entity has issued variable value
securities of unknown redemption or maturity
values, are they appraised at their original
value and periodically revalued on the basis of
the regulations or offering language? (SFFAS 5,
par. 52)
306. Are old currencies issued by the federal
government and not yet redeemed or written off
identified as a noninterest bearing federal
debt liability at face value? (SFFAS 5, par.
55)

44The interest method for amortizing a bond premium or discount reduces
the discount or premium by the difference between the effective interest
and stated interest on the bond. (SFFAS 1, app B, tables 1 & 2)

Liabilities Federal Debt and Related Interest Yes, No or N/A Explanation
(301- 311)
307. Is all debt owed to Treasury, the Federal
Financing Bank, or other federal agencies
reported under intragovernmental liabilities on
the balance sheet and disclosed by category?
(OMB Bulletin 01-09, p. 18 & pp. 79-80, section
9.13)
308. Are the beginning balances, net
borrowings, and ending balances of debt
disclosed by the following categories? a. total
Treasury debt (reported by the Treasury
Department only) broken out by government
accounts and debt held by the public b. total
agency debt issued under special financing
authority (e.g., Federal Housing Administration
(FHA) debentures and Tennessee Valley Authority
(TVA) bonds) broken out by debt held by
government accounts and debt held by the public
c. other debt broken out by debt owed to the
Treasury, debt owed to the Federal Financing
Bank, and debt owed to other federal agencies
(OMB Bulletin 01-09, pp. 79 & 80, section 9.13)
309. Is all debt owed to the public reported
and disclosed as such? (OMB Bulletin 01-09, p.
18 & pp. 79-80, section 9.13)
310. Are the names of the agencies disclosed,
other than Treasury or the Federal Financing
Bank, to which intragovernmental debt is owed,
and are the amounts disclosed? (OMB Bulletin
01-09, p. 80, section 9.13)
311. Is other information relative to debt
disclosed (e.g., redemption or call of debt
owed to the public before maturity dates,
write-offs of debts owed to Treasury or the
Federal Financing Bank)? (OMB Bulletin 01-09,
p. 80, section 9.13)

Liabilities Pensions, Other Retirement
Benefits, and Postemployment Benefits Yes, No or N/A Explanation
(312 - 319)
Federal employee and veterans benefits include the actuarial portion of
pensions, other retirement benefits, and other postemployment benefits.
They do not include liabilities related to ongoing continuous expenses
such as employees' accrued salary, accrued annual leave, unpaid portions
of employee benefits, and other benefits that are currently due. These
items are reported under the "other liabilities" line item. (SFFAS 1, par.
83 & 84; SFFAS 5, par. 56; OMB Bulletin 01-09, p. 25, section 3.4) In the
context of accounting for pensions, other retirement benefits (ORB), and
other postemployment benefits, the "administrative entity" manages and
accounts for the pension or other employee plan, while the "employer
entity" employs federal workers and generates employee costs, for which it
would typically receive a salary and expense appropriation. (SFFAS 5, par.
57, footnote 38) The "aggregate entry age normal" actuarial cost method is
one under which the expenses or liabilities arising from the actuarial
present value of projected pension benefits are allocated on a level basis
over the earnings or the service of the group between entry age and
assumed exit ages. The portion of the actuarial present value allocated to
a valuation year is called "normal cost." (SFFAS 5, par. 64)
312. Is the aggregate entry age normal
actuarial cost method used to
calculate, for the administrative
entity financial statements, the
liabilities arising from pension and
ORB expenses? (SFFAS 5, par. 64 & 82)
313. If other actuarial cost methods
are used because the results are not
materially different, does the entity
provide an explanation why aggregate
entry age normal is not used? (SFFAS
5, par. 64 & 82)
314. Does the administrative entity
disclose the assumptions used to
calculate the liability for pensions,
other retirement benefits, and other
postemployment benefits? (SFFAS 5,
par. 67 & 83; OMB Bulletin 01-09, p.
25, section 3.4; p. 80, section 9.14)

Liabilities Pensions, Other Retirement
Benefits, and Postemployment Benefits (312 - Yes, No or N/A Explanation
319)
315. If the assumptions for a pension plan
differ from the assumptions used by the three
primary plans-Civil Service Retirement System
(CSRS), Federal Employees Retirement System
(FERS), and Military Retirement System
(MRS)-does the administrative entity disclose
how and why the assumptions differ from those
of the primary plans? (SFFAS 5, par. 67; OMB
Bulletin 01-09, p. 80, section 9.14)
316. Does the administrative entity report
pension and ORB assets separately from
liabilities as opposed to netting them out?
(SFFAS 5, par. 68 & 85)
317. Does the administrative entity carry
pension and ORB assets at their acquisition
cost, adjusted for amortization, if
appropriate? (SFFAS 5, par. 68 & 85)
318. Does the administrative entity disclose
the market value of pension and ORB investments
in marketbased and marketable securities?
(SFFAS 5, par. 68 & 85)
319. Does the employer entity recognize the
long-term other postemployment benefits
liability as the present value of future
payments discounted at the Treasury borrowing
rate for securities of similar maturity? (SFFAS
5, par. 95)

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
Unless they are reported separately, other liabilities cover liabilities
not recognized in other categories. They may include, but are not limited
to: capital leases, insurance, advances and prepayments, deposit funds
held in escrow, accrued liabilities related to ongoing continuous expenses
such as federal employee salaries and accrued employee annual leave, and
estimated losses for claims and other contingencies. Claims and other
contingencies include indemnity agreements, adjudicated claims, and
commitments to international institutions. (SFFAS 1, par. 83-86; OMB
Bulletin 01-09, p. 26, section 3.4)
320. Does the entity separately report
items within other liabilities if the
amounts are material? (OMB Bulletin 01-09,
p. 26, section 3.4)
321. Do all federal insurance and
guarantee programs (except social
insurance and loan guarantee programs)
recognize a liability for unpaid claims
incurred resulting from insured events
that have occurred as of the reporting
date? (SFFAS 5, par. 104; OMB Bulletin
01-09, p. 26, section 3.4)
322. Do federal insurance programs accrue
a contingent liability when an existing
condition, situation, or set of
circumstances involving uncertainty as to
possible loss exists, and when the
following conditions apply? a. the
uncertainty will be resolved when one or
more probable future events occur or fail
to occur. b. future outflow or other
sacrifice of resources is probable and
measurable. (SFFAS 5, par. 104 & 108; OMB
Bulletin 01-09, pp. 26 & 27, section 3.4)
323. Does the entity also recognize a
liability for future life insurance policy
benefits (such as death or disability)?
(SFFAS 5, par. 104; OMB Bulletin 01-09, p.
27, section 3.4)
324. When insurance payments and losses
extend beyond the current year, does the
liability at the end of the year represent
net losses calculated on a present-value
basis to reflect the time value of money?
(SFFAS 5, par. 109)

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
325. Does the entity report under "required
supplementary information" (RSI) the major
assumptions and "risks assumed" (i.e., the
present value of unpaid expected losses net of
associated premiums based on risk inherent in
the insurance or guarantee coverage) for all
sponsored insurance programs (except for social
insurance, life insurance, and loan guarantee
programs)? (SFFAS 5, par. 105 & 106; SFFAS 25,
par. 4)
326. Does the entity also report under RSI the
indicators of the range of uncertainty around
insurance-related estimates and sensitivity of
the estimates to changes in major assumptions?
(SFFAS 5, par. 114; SFFAS 25, par.4)

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
The liability for future policy benefits is the present value of future
outflows to be paid to (or on behalf of) policyholders, less the present
value of future related premiums. In general, for whole life policies, the
liability for future policy benefits should be no less than the cash
surrender value that accrues to the benefit of the policyholder. (SFFAS 5,
par. 116)
327. Are liabilities for future benefits of
whole life insurance policies reported and
disclosed in accordance with private sector
standards (i.e., Financial Accounting Standards
Board (FASB) Statement of Accounting Standards
(SFAS) 60, 97, & 120; American Institute of
Certified Public Accountants (AICPA) Statement
of Position (SOP) 95-1)? (SFFAS 5, par. 117;
OMB Bulletin 01-09, p. 85, section 9.18)
328. Does the liability for future benefits
relating to participating life insurance
contracts equal the sum of the following
amounts? a. the net level premium reserve for
death and endowment policy benefits b.
liability for terminal dividends and c. any
premium deficiency 45 (SFFAS 5, par. 118 & 120)

45A premium deficiency occurs if the liability for future policy benefits
using current conditions exceeds the liability for future policy benefits
using contract conditions.

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
329. Has the entity made an assessment to
compare the liability for future policy
benefits using actuarial assumptions applicable
at the time the contract was made (contract
assumptions) with the liability for future
policy benefits using assumptions that consider
the following factors? a. current economic
conditions (i.e., current and expected
investments and expected long-term yields) b.
experience (i.e., mortality, morbidity, and
termination rates) (SFFAS 5, par. 119)
330. Does the entity separately disclose the
components46 of the liability for future policy
benefits of whole life insurance contracts
along with a description of each amount and
explanation of its projected use and any other
potential uses? (SFFAS 5, par. 121; OMB
Bulletin 01-09, p. 85, section 9.18)
331. Does the reporting entity disclose and
break out the following items? a. the portion
of other liabilities covered by budgetary
resources and the portion not covered by
budgetary resources b. the portion of other
liabilities payable to federal entities (i.e.,
intragovernmental liabilities) and the portion
payable to nonfederal entities c. the portion
of other liabilities that are noncurrent and
the portion that are current (SFFAS 1, par. 85
& 86; OMB Bulletin 01-09, pp. 78 & 79, section
9.l2 & pp. 81 & 82, section 9.16)

46The net-level premium reserve for a death and endowment policy and the
liability for terminal dividends.

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
332. Does the agency record "unearned revenue"
as a liability if it requests advances or
progress payments prior to receipt of cash, and
it records the amounts? (SFFAS 7, par. 37)
333. Are amounts payable for refunds, refund
offsets, 47 and drawbacks48 recognized as
liabilities when measurable and legally payable
under established processes of the collecting
entity? (SFFAS 7, par. 57)
334. Do amounts payable for refunds include
refund claims filed by the taxpayer when the
government has determined the amount refundable
and identified the payee? (SFFAS 7, par. 57)
335. Are amounts payable for refunds with
respect to returns or claims filed as of the
end of the reporting period included in
accounts payable for refunds if they do not
require specific approval before payment?
(SFFAS 7, par. 57)
336. For claims filed for refunds where
specific administrative actions are required
before payments can be made, are the amounts
excluded from being recognized as a liability
if the required administrative actions are not
yet complete as of the close of the reporting
period, even if reasonably estimable? (SFFAS 7,
par. 58.1)
337. Are unasserted claims for refunds by
taxpayers or importers, such as unfiled claims
for refunds or drawbacks for which no claim has
been filed, excluded from being recognized as a
liability, even if reasonably estimable? (SFFAS
7, par. 58.2)

47Refund offsets are amounts withheld from refunds on behalf of other
agencies. (OMB Circular No. A-129 (revised), app. A, Part
V, section 2.c.i. (1))
48Drawbacks are refunds payable on all or part of duties paid on imported
goods that are subsequently exported or destroyed.
(SFFAS 7, app. C, glossary)

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
338. Are amounts voluntarily made as deposits,
such as those made to stop the accrual of
interest or those made pending settlements and
judgments, separately recognized as deposit
liabilities? (SFFAS 7, par. 59)
A loss contingency is an existing condition, situation, or set of
circumstances involving uncertainty as to possible loss to an entity. The
uncertainty should ultimately be resolved when one or more future events
occur or fail to occur. (SFFAS 5, par. 35; OMB Bulletin 0109, pp. 85 & 86,
section 9.19)
339. Does the entity recognize estimated losses
for claims or other contingencies if all of the
following conditions apply? a. a past event or
exchange transaction has occurred b. a future
outflow or other sacrifice of resources is
probable 49 c. the future outflow or sacrifice
of resources is measurable (e.g., the federal
entity's management determines an estimated
settlement amount) (SFFAS 5, par. 38; SFFAS 6,
par. 91; SFFAS 12, par. 10 & 11; OMB Bulletin
01-09, p. 26, section 3.4)
340. When determining an estimated contingent
liability, if some amount within a range of
amounts is a better estimate than any other
amount within the range, is that amount
recognized? (SFFAS 5, par. 39)

49In the context of pending or threatened litigation, "probable" is taken
to mean "likely;" otherwise, "probable" refers to that which is believed
to be more "likely than not" or can be reasonably expected.

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
341. When determining an estimated contingent
liability, if no amount within a range of
amounts is a better estimate than any other
amount, does the entity recognize a minimum
amount in the range and disclose a description
of the nature of the contingency? (SFFAS 5,
par. 39)
342. If any one of the conditions for
recognizing a contingent liability is not met
and there is at least a "reasonable
possibility" 50 that a loss or additional loss
may be incurred, does the entity disclose the
nature of the contingency51 and one of the
following? a. an estimate of the possible
liability b. an estimate of the range of the
possible liability c. a statement that such an
estimate cannot be made (SFFAS 5, par. 36, 38,
40, & 41)
343. If information about remote contingencies,
or related to remote contingencies, is included
in general purpose federal financial reports,
52 is the information labeled to avoid the
misleading implication that there is more than
a remote chance of a loss of that amount?
(SFFAS 5, par. 42)

50The chance of a future event occurring is less than "probable" but more
than "remote."
51Examples of claims or other contingencies include (1) indemnity
agreements-reimbursements due to licenses or contractors
for losses incurred in support of federal activities; (2) adjudicated
claims (i.e., claims against the federal government that are in
the process of judicial proceedings); and (3) commitments to international
institutions-payment due to international
institutions.
52An example of information related to a remote contingency would be the
total face amount of insurance and guarantees in
force.

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
344. Does the entity disclose the following
related to commitments and contingencies? a. an
estimate of obligations related to canceled
appropriations for which the reporting entity
has a contractual commitment for payment b.
amounts for contractual arrangements that may
require future financial obligations (OMB
Bulletin 01-09, p. 27, section 3.4 & pp. 85 &
86, section 9.19)
345. If material, does the entity separately
recognize a contingent liability for
environmental clean-up costs53 for PP&E if the
following criteria apply? a. they are related
to a past transaction or event b. the related
costs are probable and measurable (SFFAS 5,
par. 38 & SFFAS 6, par. 91-93; OMB Bulletin
01-09, pp. 25 & 26, section 3.4)
346. When clean-up costs are paid, are the
payments recognized as a reduction in the
liability for cleanup costs? (SFFAS 6, par.
100)
347. If clean-up costs have not been previously
recognized, is a liability recognized for the
portion of the estimated total clean-up cost
that is attributable to either the portion of
the physical capacity used or the portion of
the estimated useful life that has passed since
the PP&E was placed into service? (SFFAS 6,
par. 104-106)
348. Are any subsequent changes (made in
periods following implementation) in estimated
total cleanup cost immediately expensed (if
costs are to be recovered though user charges)
and reflected in the related liability balance?
(SFFAS 6, par. 104)

53Clean-up costs are the costs of removing, containing, and/ or disposing
of (1) hazardous waste from property, or (2) material and/or property that
consists of hazardous waste at permanent or temporary closure or shutdown
of associated PP&E. (SFFAS 6, par. 85)

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
349. When clean-up costs are recognized for the
first time, is the offsetting charge for any
liability for clean-up costs shown as a
"prior-period adjustment?" (SFFAS 6, par. 105;
SFFAS 21, par. 13)
350. Are the amounts of prior-period
adjustments arising from belated recognition of
clean-up costs and liabilities disclosed and,
if possible, are amounts associated with
current and prior periods noted? (SFFAS 6, par.
105; SFFAS 21, par. 13)
351. Does the entity also disclose the
following information related to clean-up
costs? a. the sources (i.e., applicable laws
and regulations) of clean-up requirements b.
the method for assigning estimated total
cleanup costs to current operating periods
(e.g., physical capacity versus passage of
time) c. the unrecognized portion of estimated
total clean-up costs associated with PP&E d.
the material changes in total estimated
clean-up costs due to changes in laws,
technology, or plans e. the portion of change
in an estimate that relates to prior-period
operations f. the nature of estimates and the
disclosure of information regarding possible
changes due to inflation, deflation,
technology, or applicable laws and regulations
(SFFAS 6, par. 107-111; OMB Bulletin 01-09, p.
81, section 9.15)

Liabilities Other Liabilities (320 - 353) Yes, No or N/A Explanation
Social insurance programs provide for the maintenance and distribution of
incomes and medical benefits during periods of unemployment, disability,
and retirement. These programs are Social Security, Medicare, Railroad
Retirement Benefits, Black Lung Benefits, and Unemployment Insurance.
Expense and liability recognition for these programs is the same for both
the consolidated governmentwide entity and for the component entities.
(SFFAS 17, par. 2, 4, 14, 15, 19, 30, & app. D, glossary)
352. Does the entity recognize a liability for
social insurance benefits due and payable
including claims incurred but not reported?
(SFFAS 17, par. 22)
353. Does the liability for unemployment
insurance include the following amounts? a.
amounts due to states and territories for
benefits they have paid to beneficiaries but
for which they have not withdrawn funds from
the federal unemployment trust fund (UTF) as of
the fiscal year end b. estimated amounts to be
withdrawn from UTF and benefits paid by states
and territories after fiscal year end for
compensatory days occurring prior to fiscal
year end (SFFAS 17, par. 23)

Net Position Unexpended Appropriations & Yes, No or N/A Explanation
Cumulative Results of Operations (354 - 355)
354. Does the line item "unexpended
appropriations" include both the portion of the
entity's appropriation represented by
undelivered orders and unobligated balances?
(OMB Bulletin 01-09, p. 27, section 3.5)
355. Does the line item "cumulative results of
operations" include the following items? a. the
net results of operations since inception b.
the cumulative amount of prior-period
adjustments c. the cumulative amount of
donations and transfers of assets in and out
without reimbursement (OMB Bulletin 01-09, p.
27, section 3.5)

The questions related to the Statement of Net Cost are presented under
three general captions and 12 sections. The question numbers related to
each caption and section are identified below.

Cost Accounting in General

1. Overall Requirements

2. Responsibility Segments

3. Full Cost

4. Interentity Costs

5. Costing Methodology

Revenues

Costs

Question Numbers

1 -13 14 -18 19 -26 27 -33 34 -40

41 -63

6. Pensions and Other Retirement and
Postemployement Benefits 64 -91

7. Inventory, Materials, Supplies, and Commodities 92 - 100

8. Property, Plant, and Equipment 101 -117

9. Clean-up Costs 118 -126

10. Interest 127 -128

11. Insurance and Subsidies 129 -132

12. Credit Programs 133 -180

Cost Accounting in General Overall Yes, No or N/A Explanation
Requirements (1 - 13)
The Statement of Net Cost is designed to show separately the components of
the net cost of the reporting entity's operations for the period. The
statement and any related supporting schedules classify revenue and cost
information by suborganization or responsibility segment. (OMB Bulletin
01-09, p. 28, section 4.1) Managerial cost accounting is the process of
accumulating, measuring, analyzing, interpreting, and reporting cost
information useful to both internal and external groups concerned with the
way in which the organization uses, accounts for, safeguards, and controls
its resources to meet its objectives. (SFFAS 4, par. 42) A cost accounting
"system" is a continuous and systematic cost accounting process that may
be designed to accumulate and assign costs to a variety of objects
routinely or as desired by management. (SFFAS 4, par. 74) Cost finding is
a method for determining the cost of producing goods or services using
appropriate procedures, for example, special cost studies or analyses.
(SFFAS 4, par. 76)
1. Are net costs reported for the
entity as a whole and for its
suborganizations 54 and major programs?
(OMB Bulletin 01-09, p. 28, section
4.1)
2. Does the entity present
responsibility segments that align
directly with the major goals and
outputs described in the entity's
strategic and performance plans,
required by the Government Performance
and Results Act of 1993 (GPRA)? (SFFAS
4, par. 69; OMB Bulletin 01-09, p. 28,
section 4.1)

54Suborganizations are considered to be generally equivalent to
responsibility segments

Cost Accounting in General Overall Requirements (1 Yes, No or Explanation
- 13) N/A
3. In its Statement of Net Cost, does the entity
show the following? a. the gross cost of goods and
services provided to federal government agencies
(intragovernmental) b. the gross cost of goods,
services, transfers, and grants provided to the
public c. related exchange revenues d. excess of
costs over exchange revenues (net program costs) e.
costs that cannot be assigned to specific programs
or outputs f. the exchange revenues that cannot be
attributed to specific programs and outputs (SFFAS
7, par. 43 & 44; OMB Bulletin 01-09, pp. 28 & 29,
section 4.1 & p. 30, section 4.2)
4. Are the costs related to the production of goods
and services provided to other programs
(intragovernmental) reported separately from the
costs of goods, services, transfers, and grants
provided to the public? (OMB Bulletin 01-09, p. 31,
section 4.3)
5. Are costs related to the production of outputs
reported separately from costs that are not related
to the production outputs (i.e., nonproduction
costs)? (OMB Bulletin 01-09, p. 31, section 4.3)
6. Are costs that cannot be directly traced or
assigned on a cause-and-effect basis, or reasonably
allocated to segments and their outputs and
programs reported on the Statement of Net Cost as
"Costs not assigned to programs?" (SFFAS 4, par.
92; OMB Bulletin 01-09, p. 32, section 4.6)

Cost Accounting in General Overall Requirements Yes, No or N/A Explanation
(1 - 13)
7. Has the entity established appropriate
procedures and practices to enable the
consistent and regular collection, measurement,
accumulation, analysis, interpretation, and
communication of cost information? (SFFAS 4,
par. 68-70)
8. As a means of providing cost information in
an efficient and reliable manner on a
continuing basis, does the reporting entity
regularly accumulate and report the costs of
its activities either by means of cost
accounting systems or cost finding techniques?
(SFFAS 4, par. 68-70)

Cost Accounting in General Overall Requirements Yes, No or N/A Explanation
(1 - 13)
9. Does the reporting entity's cost accounting
system or cost finding technique, at a minimum,
do the following? a. collect cost information
by responsibility segments identified by
management b. define outputs for each
responsibility segment c. measure the full cost
(including the cost of goods or services
provided by other entities) of outputs so that
total operational costs and total unit costs of
outputs can be determined d. use a costing
methodology (e.g., activity-based, job order,
standard costing) that is appropriate for
management's needs and the operating
environment e. provide information needed to
determine and report service efforts and
accomplishments and information necessary to
meet the requirements of GPRA (or interface
with a system that provides such information)
f. report cost information in a timely manner
and on a regular basis consistent with the
needs of management and budgetary and financial
reporting requirements g. rely on the United
States Standard General Ledger as a basis for
integrating its cost information with its
general financial accounting capability h.
supply cost data precise enough to provide
reliable and useful information to internal and
external users in making evaluations or
decisions but also avoid unnecessary precision
and refinement of data i. accommodate
management's special cost information needs
(SFFAS 4, par. 71)

Cost Accounting in General Overall Requirements Yes, No or N/A Explanation
(1 - 13)
10. Are all managerial cost accounting
activities, processes, and procedures
documented? (SFFAS 4, par. 71)
11. In determining the appropriate detail for
its cost accounting processes and procedures,
has the reporting entity considered the
following? a. nature of its operations b. the
precision desired and needed in cost
information c. the practicality of data
collection and processing d. the availability
of electronic data-handling facilities e. the
cost of installing, operating, and maintaining
the cost accounting processes f. any specific
information needs of management (SFFAS 4, par.
72)
12. Has the entity used similar or compatible
cost accounting processes throughout its
component units? (SFFAS 4, par. 73)
13. Does the line item "net cost of
operations," as reported on the Statement of
Net Cost, agree with the line items of the same
name that are reported on the Statement of
Changes in Net Position and Statement of
Financing? (OMB Bulletin 01-09, p. 38, section
5.6 & p. 51, section 7.7)

Cost Accounting in General Responsibility Yes, No or N/A Explanation
Segments (14 - 18)
A responsibility segment is a component of a reporting entity that is
responsible for carrying out a mission, conducting a major line of
activity, or producing one or a group of related products or services.
(SFFAS 4, par. 78)
14. Has the management of the reporting entity
defined and established responsibility
segments? (SFFAS 4, par. 77)
15. Does management designate or establish
responsibility segments based on the following?
a. the entity's organizational structure b. its
lines of responsibility and missions c. its
output (goods or services it delivers) d.
budget accounts and funding authorities (SFFAS
4, par. 86)
16. For each responsibility segment, does the
entity do the following? a. define and
accumulate outputs and, if feasible, quantify
each type of output in units b. accumulate
costs and quantitative units of resources
consumed in producing the outputs c. assign
costs to outputs and calculate the cost per
unit of each type of output d. establish cost
centers within responsibility segments, as
needed (SFFAS 4, par. 79 & 88)

Cost Accounting in General Responsibility Yes, No or N/A Explanation
Segments (14 - 18)
17. Does the reporting entity include
supporting schedules in the notes to the
financial statements if the suborganization's
summary information provided in the Statement
of Net Cost does not fully display the
suborganization's major programs and
activities? (OMB Bulletin 01-09, pp. 88-90,
section 9.21)
18. Does the reporting entity disclose gross
cost and earned revenue,55 by budget functional
classification? (OMB Bulletin 01-09, p. 91,
section 9.25)

55Gross cost and earned revenue should be net of intra-entity transactions
(consolidated).

Cost Accounting in General Full Cost Yes, No or N/A Explanation
(19 - 26)
Full cost is the sum of all costs that contribute to an output and
includes direct and indirect costs regardless of funding sources. It also
includes the costs of supporting services provided by other responsibility
segments or entities. (SFFAS 4, par. 89) Output is any product or service
generated from the consumption of resources. (SFFAS 4, par. 89) Direct
costs are costs that can be specifically identified with an output. (SFFAS
4, par. 90) Indirect costs are costs of resources that are jointly or
commonly used to produce two or more types of outputs, but are not
specifically identifiable with any of the outputs. (SFFAS 4, par. 91)
19. Does the reporting entity include
all direct costs in the full cost of
outputs? (SFFAS 4, par. 90)
20. Does the reporting entity also
include the following in the full cost
of outputs? a. indirect costs incurred
within a responsibility segment b. the
costs of support services that a
responsibility segment receives from
other segments or entities (SFFAS 4,
par. 91, 122, & 123)
21. Are the costs of employee
benefits56 included as part of the cost
of outputs? (SFFAS 4, par. 93-97)
22. Are the costs of other
postemployment benefits reported as
expenses for the period during which a
future outflow or other sacrifice of
resources is probable and measurable on
the basis of an event occurring on or
before the accounting date? (SFFAS 4,
par. 96-97)
23. Are the full costs of transfer
payments for welfare, insurance,
grants, and other public assistance
programs separately identified from the
costs of operating such programs?
(SFFAS 4, par. 98-101; OMB Bulletin
01-09, pp. 30-32, section 4.3)

56These include health and life insurance, pension, and other retirement
benefits, but not other postemployment benefits.

Cost Accounting in General Full Cost (19 - 26) Yes, No or N/A Explanation
24. Is depreciation expense incurred by
responsibility segments on general PP&E
included in the full costs of the goods and
services that the segments produce? (SFFAS 4,
par. 102)
25. Are the costs of acquiring or constructing
heritage assets excluded from the full cost of
goods and services and treated as a program
cost57 or period expense? (SFFAS 4, par. 103)
26. Are nonproduction costs incurred by
responsibility segments, such as reorganization
costs and nonrecurring clean-up costs resulting
from facility abandonment, excluded from the
full cost of outputs and treated as
current-period expenses? (SFFAS 4, par. 104)

57Acquisition costs of heritage assets are part of the costs of the entity or
the program that makes the property acquisitions.

Cost Accounting in General Interentity Costs Yes, No or N/A Explanation
(27 - 33)
Within the federal government, some reporting entities rely on other
federal entities to help them achieve their missions. Often, this involves
support services, but may include the provision of goods. The reporting
entity generally must account for the full cost of goods or services
provided to or received from other federal entities. (SFFAS 4, par.
105-108) Costs between reporting entities that are part of the same
department or larger reporting entity (such as bureaus, components or
responsibility segments within a department) are considered
intradepartmental costs. Reporting entities should account for imputed
intradepartmental costs in accordance with the full cost provisions of
SFFAS 4. (FASAB Interpretation Number 6, par. 4 & 8)
27. Does the reporting entity include in its
Statement of Net Cost the full costs of
goods and services received from other
federal entities whether or not the
providing entity is fully reimbursed? (SFFAS
4, par. 105; OMB Bulletin 01-09, p. 31,
section 4.3)
28. Does the reporting entity recognize the
following costs, including the portions that
are funded through the Office of Personnel
Management, the Department of Defense, the
Department of the Treasury, the Department
of Labor, or other agencies: a. employee
pension, postretirement health, and life
insurance benefits b. other postemployment
benefits for retired, terminated, and
inactive employees, which included
unemployment and workers compensation under
the Federal Employees' Compensation Act c.
losses in litigation proceedings?58 (SFFAS
4, par. 110; OMB Bulletin 01-09, p. 31,
section 4.3)
29. Does the entity providing goods or
services to another reporting entity
recognize in its accounting records, as well
as disclose to the receiving entity, the
full cost of goods and services provided?
(SFFAS 4, par. 108)

58See FASAB Interpretation Number 2, Accounting for Treasury Judgment Fund
Transactions.

Cost Accounting in General Interentity Costs Yes, No or N/A Explanation
(27 - 33)
30. Is recognition of interentity costs that
are not fully reimbursed limited to material
items based on an assessment of the importance
of the individual interentity transaction in
light of the following factors? a. significance
to the entity b. directness of relationship to
the entity's operations c. identifiability
(SFFAS 4, par. 112)
31. Are the costs of broad, general support
services provided by a federal entity to other
federal entities excluded from the costs of the
recipient entity unless such services are
integral to the receiving entity (e.g.,
Treasury check-writing services provided for
the Social Security Administration)? (SFFAS 4,
par. 112)
32. If the receiving entity cannot get complete
information on the full cost of goods or
services provided by another reporting entity,
does the receiving entity use a reasonable
estimate of the cost of the goods or services
received or the market value of the goods or
services received if an estimate of the cost
cannot be made? (SFFAS 4, par. 109)
33. Are interentity expenses and financing
sources eliminated for any consolidated
financial statements covering both entities?
(SFFAS 4, par. 109)

Cost Accounting in General Costing Yes, No or N/A Explanation
Methodology (34 - 40)
Cost accumulation is the process of collecting cost data in an organized
way by responsibility segment. (SFFAS 4, par. 117) Cost assignment is a
process that identifies accumulated costs with reporting periods and cost
objects. Three methods of cost assignment are direct tracing, cause and
effect, and allocating costs on a reasonable and consistent basis. (SFFAS
4, par. 120) Cost object or cost objective is an activity, output, or item
the cost of which is to be measured. (SFFAS 4, par. 121) Entities are not
required to use a particular costing system or costing methodology, but
the costing system or methodology used should be appropriate to the
entity's operating environment and used consistently. Four examples of
acceptable (but not necessarily mutually exclusive) costing methodologies
are activity-based costing, job order costing, process costing, and
standard costing. (SFFAS 4, par. 144-147)
34. Is the entity's accounting system
capable of identifying costs with
responsibility segments? (SFFAS 4, par.
118)
35. Are the costs of resources consumed
by responsibility segments classified
by type of resource, such as costs of
employees, materials, capital,
utilities, and rent? (SFFAS 4, par.
119)
36. Are data on the quantity of units
(e.g., staff days, gallons of gasoline
consumed) related to the various cost
categories maintained, when appropriate
and feasible? (SFFAS 4, par. 119)
37. Are costs assigned to outputs using
the methods in the following order of
preference? a. directly tracing costs
used in the production of an output,
wherever economically feasible59 b.
assigning costs on a cause-and-effect
basis c. allocating costs on a
reasonable and consistent basis (SFFAS
4, par. 124)

59A method is economically feasible if the benefits resulting from
implementing the method outweigh its costs.

Cost Accounting in General Costing Methodology Yes, No or N/A Explanation
(34 - 40)
38. For cost allocation purposes, do indirect
costs assigned to a given cost pool have
similar characteristics? (SFFAS 4, par. 136)
39. Are common costs60 assigned to activities
either on a cause-and-effect basis, if
feasible, or through reasonable allocations?
(SFFAS 4, par. 140)
40. Are the full costing methodologies that are
most appropriate to a segment's operating
environment used and consistently followed, and
any changes made documented and explained?
(SFFAS 4, par. 145 & 146)

60Common costs refers to the costs of maintaining and operating facilities
and other resources that cannot be directly traced to any of the
activities or outputs that share resources.

Revenues (41 - 63) Yes, No or N/A Explanation
Revenues are inflows of resources that the government demands, earns, or
receives by donation. Revenue comes from two sources: exchange
transactions and nonexchange transactions. (SFFAS 7, par. 30) Exchange (or
earned) revenues arise when a government entity provides goods or services
to the public or to another government entity for a price. (SFFAS 7, par.
30; OMB Bulletin 01-09, p. 32, section 4.4) Nonexchange revenues arise
primarily from the government's power to demand payments from the public
(e.g., taxes, duties, fines), and also include donations. (SFFAS 7, par.
30) The net cost of a program is the difference between its gross costs
and related exchange revenues. (OMB Bulletin 01-09, p. 32, section 4.5)
The net cost of operations by a reporting entity consists of gross cost
incurred by the reporting entity less any exchange revenue earned from its
activities. (OMB Bulletin 01-09, p. 28, section 4.1 & p. 33, section 4.8)
41. Are earned revenues deducted
from the full cost of outputs or
outcomes, if practical, to determine
their net costs? (SFFAS 7, par. 43;
OMB Bulletin 01-09, p. 32, section
4.4)
42. Is the net amount of gains (or
losses) subtracted from (or added
to) the gross cost to determine net
cost of operations and programs?
(SFFAS 7, par. 44; OMB Bulletin
01-09, p. 28, section 4.1)
43. Is earned revenue that is
insignificant or cannot be
attributed to particular outputs or
programs reported separately as a
deduction in arriving at the net
cost of operations of the
suborganization or reporting entity
as a whole? (SFFAS 7, par. 44; OMB
Bulletin 01-09, p. 30, section 4.2 &
p. 33, section 4.7)
44. Are nonexchange revenues and
other financing sources excluded
from calculating net cost of
operations for the reporting entity?
(SFFAS 7, par. 44)

Revenues (41 - 63) Yes, No or Explanation
N/A
45. If the entity incurs virtually no cost in
connection with earning exchange revenue, is such
revenue not recognized in the Statement of Net
Cost, but shown as a financing source on the
Statement of Changes in Net Position or (if
appropriate) Statement of Custodial Activity?
(SFFAS 7, par. 45)
46. Is any portion of exchange revenue that cannot
be retained by the entity reported as a
transfer-out on the Statement of Changes in Net
Position? (OMB Bulletin 01-09, p. 32, section 4.4)
47. Does a reporting entity that provides goods or
services to the public or other government entity
disclose the following in a note or narrative? a.
a pricing policy that differs from the full cost
or market pricing guidance set forth in OMB
Circular No. A-25 and the possible effect on
demand and revenue if prices were raised to
reflect the market or full cost b. exchange
transactions with the public in which prices are
set by law or executive order and are not based on
full cost or market price, or the possible effect
on demand and revenue if prices were raised to
reflect the market or full cost c. the nature of
intragovernmental exchange transactions in which
goods or services are provided free or at less
than full cost and the reasons for disparities
between billing (if any) and full cost d. the full
amount of any expected loss when specific goods or
services are provided or made to order under a
contract and a loss is both probable and
measurable (SFFAS 7, par. 46 & 47)

Revenues (41 - 63) Yes, No or N/A Explanation
48. Is collected custodial nonexchange revenue
that is legally retained by the collecting
entity as reimbursement for the cost of
collection, recognized as exchange revenue in
determining the collecting entity's net cost
of operations? (SFFAS 7, par. 60.3; OMB
Bulletin 01-09, p. 52, section 8.1)
49. Is revenue received from the public or
other government entity in return for
providing goods or services recognized and
reported in the Statement of Net Cost as
exchange revenue? (SFFAS 7, par. 34; OMB
Bulletin 01-09, p. 32, section 4.4)
50. If an exchange transaction is likely to be
unusual or nonrecurring for a particular
entity, is a gain or loss recognized rather
than a revenue or expense? (SFFAS 7, par. 35)
51. Is exchange revenue recognized when
services are performed for transactions in
which services are provided to the public or
another government entity? (SFFAS 7, par. 34 &
36(a))
52. If specific goods or services are made to
order under terms of a contract, is exchange
revenue (and any probable loss) recognized in
proportion to estimated total cost when goods
and services are acquired to fulfill the
contract? (SFFAS 7, par. 36(b))
53. When goods are kept in inventory so that
they are available to customers when ordered,
is exchange revenue recognized when the goods
are delivered to the customer? (SFFAS 7, par.
36(c))
54. If services are rendered continuously or
the right to use an asset extends continually
over time, is exchange revenue recognized in
proportion to the passage of time or the use
of the asset? (SFFAS 7, par. 36(d))

Revenues (41 - 63) Yes, No or Explanation
N/A
55. Is interest received on intragovernmental
loans recognized as exchange revenue if the source
of borrowed funds is predominately exchange
revenue? (SFFAS 7, par. 36(d))
56. When an asset other than inventory is sold, is
any gain (or loss) recognized when the asset is
delivered to the purchaser? (SFFAS 7, par. 36(e))
57. When advance fees or payments are received,
such as for large-scale, long-term projects, is
revenue recognized only as the cost of providing
the corresponding goods and services is incurred?
(SFFAS 7, par. 37)
58. Is the measurement of revenue from exchange
transactions based on the actual price received or
receivable under established pricing arrangements?
(SFFAS 7, par. 38)
59. To the extent that realization of the full
amount of exchange revenue is not probable due to
credit losses (caused by the failure of the debtor
to pay the established or negotiated price), is an
expense recognized and the allowance for bad debts
increased, if the bad debts can be reasonably
estimated? (SFFAS 7, par. 40)
60. If the realization of the full amount of
exchange revenue is not probable for reasons apart
from credit losses (e.g., returns and allowances),
is a provision made to reduce the recognized
revenue (if amounts can be reasonably estimated),
with the provision recognized as a revenue
adjustment? (SFFAS 7, par. 41)
61. Is exchange revenue recognized regardless of
whether the entity retains the revenue for its own
use or transfers it to other entities? (SFFAS 7,
par. 43)

Revenues (41 - 63) Yes, No or N/A Explanation
62. Is exchange revenue broken out by major
category and linked, where possible, to the
net costs of related outputs, programs,
organizations, or suborganizations in the
Statement of Net Cost? (SFFAS 7, par. 43; OMB
Bulletin 01-09, p. 32, section 4.4)
63. As the lessor in any lease arrangements,
does the entity disclose the following in a
note to the financial statements? a. any
information necessary to disclose the
commitment of the entity's assets including
but not limited to the major asset category
and lease terms b. future lease revenues, by
major asset category, for all noncancelable
leases with terms longer than one year c.
other information necessary for understanding
leases not disclosed in the above categories.
(OMB Bulletin 01-09, p. 85, section 9.17B)

Costs Pensions and Other Retirement Yes, No or N/A Explanation
and Post Employment Benefits (64 - 91)
Pension benefits include all retirement, disability, and survivor benefits
financed through a pension plan, including unfunded pension plans.
Required federal payments to social insurance plans (i.e., Social Security
and Medicare) and matching federal payments to defined contribution
pension plans are also considered to be plan expenses. (SFFAS 5, par. 61)
Costs of pensions and other retirement benefits (ORB), whether they are
paid for in part or in total by other governmental entities, are included
in the costs of program outputs. (SFFAS 4, par. 95)) Recognition of other
postemployment benefits (OPEB) is linked to the occurrence of an OPEB
event rather than the production of an output. OPEB costs are generally
treated as period expenses. Special-purpose cost studies may distribute
OPEB costs over a number of prior years to determine the cost of outputs
OPEB recipients helped produce. (SFFAS 4, par. 96 & 97) In accounting for
pensions, ORB, and OPEB, the "administrative entity," typically manages
and accounts for the related assets and liabilities. The "employer entity"
accounts for the related costs of pensions, ORB, and OPEB. For these costs
the employer entity receives a salary and expense appropriation, imputes a
financing source, or both. (SFFAS 5, par. 57, footnote 38) The "aggregate
entry age normal" actuarial cost method is one under which the expenses or
liabilities arising from the actuarial present value of projected pension
benefits are allocated on a level basis over the earnings or the service
of the group between entry age and assumed exit ages. The portion of the
actuarial present value of pension plan and benefits and expenses that is
allocated to a valuation year is called "normal cost." (SFFAS 5, par. 64)
64. Are pensions and ORB recognized as
expenses at the time the employee's
services are rendered? (SFFAS 5, par.
59)
65. Are postemployment benefits
recognized as expenses at the time the
accountable event occurs? (SFFAS 5,
par. 59)
66. Is the "aggregate entry age
normal" actuarial cost method (or
other actuarial cost method, if the
results are not materially different
and an explanation is provided) used
to calculate pension expense, the
liability for the administrative
entity financial statements, and the
expense for the employer entity
financial statements? (SFFAS 5, par.
64)

Costs Pensions and Other Retirement and Post Yes, No or N/A Explanation
Employment Benefits (64 - 91)
67. When using the "aggregate entry age normal"
actuarial cost method, does the entity allocate
pension expenses on the basis of a level
percentage of earnings? (SFFAS 5, par. 64)
68. Does the administrative entity base its
actuarial assumptions for pension plans on the
experience of the covered groups, long-term
trends, and guidance of the Actuarial Standards
Board? (SFFAS 5, par. 65)
69. Does the administrative entity base its
interest rate assumptions on the estimated
long-term investment yield for the pension plan
or, if the plan is not being funded, on some
other appropriate long-term assumption (e.g.,
the federal long-term borrowing rate)? (SFFAS
5, par. 66)
70. Does the administrative entity disclose the
assumptions used to calculate pension benefit
expenses? (SFFAS 5, par. 67)
71. When a new pension plan is initiated or
current one amended, does the administrative
entity recognize all past and prior service
costs61 or gains immediately, without
amortization? (SFFAS 5, par. 69 & 70)
72. Does the administrative entity recognize
actuarial gains and losses 62 immediately,
without amortization? (SFFAS 5, par. 69 & 70)

61Past service costs result from retroactive benefits granted when a new
plan is initiated. Prior service costs result from
retroactive benefits granted in a plan amendment.
62Actuarial gains and losses are changes in the balance of the pension
liability that result from (1) deviations between actual
experience and the actuarial assumptions used or (2) changes in actuarial
assumptions.

Costs Pensions and Other Retirement and Post Yes, No or N/A Explanation
Employment Benefits (64 - 91)
73. Does the administrative entity report a
pension expense for the net of the following
components, with disclosure of the individual
components? a. normal cost b. interest on
pension liability during the period c. prior
(and past) service cost from plan amendments
(or the initiation of a new plan) during the
period, if any d. actuarial gains or losses
(including any gains or losses due to a change
in the medical inflation rate assumption)
during the period, if any (SFFAS 5, par. 72;
OMB Bulletin 01-09, p. 80, section 9.14)
74. Does the administrative entity report
pension plan revenue for the sum of
contributions from the following entities? a.
the employer b. its employees 63 c. interest on
the plan's investments (SFFAS 5, par. 73 & 78)
75. Does the employer entity recognize a
pension expense that equals the service cost
(normal cost) for its employees for the
accounting period, less the amount contributed
by the employees, if any? (SFFAS 5, par. 74)

63The administrative entity may also receive financing from the general
fund to cover prior service or other costs for which contributions were
not provided by the employer or employee.

Costs Pensions and Other Retirement and Post Yes, No or Explanation
Employment Benefits (64 - 91) N/A
76. Is the employer entity's pension expense
balanced by (1) a decrease to its "fund balance
with Treasury" for the amount of its contribution
to the pension plan, if any; and if this does not
equal the full pension expense, by (2) an increase
to an account representing an intragovernmental
financing source (e.g., "imputed financing-expenses
paid by other agencies." (SFFAS 5, par. 75)
77. If the employer entity is also the
administrative entity, does it also report the
liability64 and recognize the expense for all
components of the pension plan's cost? (SFFAS 5,
par. 71 & 76)
ORB includes all retirement benefits other than pension benefits. The
predominant ORB expense in the federal government is retirement health
benefits. (SFFAS 5, par. 58 & 79)
78. Is the "aggregate entry age normal" actuarial
cost method (or other actuarial cost method, if the
results are not materially different and an
explanation is provided) used to calculate the ORB
expense and liability for the administrative entity
financial statements and the expense for the
employer entity financial statements? (SFFAS 5,
par. 82)
79. Are expenses and other liabilities attributable
to ORB expenses allocated based on the service
rendered by each employee? (SFFAS 5, par. 82)
80. Do the amounts calculated for financial reports
prepared for ORB plans reflect the following? a.
general actuarial and economic assumptions that are
consistent with those used for pensions b. a health
care cost trend assumption that is consistent with
Medicare projections or other authoritative sources
appropriate for the population covered by the plan
(SFFAS 5, par. 83)

64The liability is the actuarial present value of all future benefits,
based on projected salaries and total projected service, less the
actuarial present value of future normal cost contributions that would be
made for and by the employees under the plan.

Costs Pensions and Other Retirement and Post Yes, No or N/A Explanation
Employment Benefits (64 - 91)
81. Does the administrative entity discount the
projected ORB costs at the rate of expected
return of plan assets, if the plan is being
funded, or on some other long-term assumptions
(e.g., the longterm federal government
borrowing rate) for unfunded plans? (SFFAS 5,
par. 83
82. Does the administrative entity disclose the
assumptions used to calculate projected ORB
costs? (SFFAS 5, par. 83)
83. Is the accrual period for ORB based on the
expected retirement age rather than the age
when the employee first becomes eligible for
retirement benefits? (SFFAS 5, par. 84)
84. When a new ORB plan is initiated or current
one amended, does the administrative entity
recognize all past and prior service costs or
gains immediately, without amortization? (SFFAS
5, par. 86 & 87)
85. Does the administrative entity recognize
all actuarial gains and losses from changes in
the ORB liability immediately, without
amortization? (SFFAS 5, par. 86 & 87)

Costs Pensions and Other Retirement and Post Yes, No or N/A Explanation
Employment Benefits (64 - 91)
86. Does the administrative entity report an
ORB expense (e.g., health insurance) for the
net of the following components with disclosure
of the individual components? a. normal cost b.
interest on the ORB liability during the period
c. prior (and past) service cost from plan
amendments (or the initiation of a new plan)
during the period, if any d. any gains/losses
due to a change in the medical inflation rate
assumption e. other actuarial gains or losses
during the period, if any (SFFAS 5, par. 88;
OMB Bulletin 01-09, p. 80, section 9.14)
87. Does the administrative entity report ORB
revenue for the sum of contributions from the
employer entity and its employees? (SFFAS 5,
par. 89)
88. In the financial report, does the employer
entity recognize ORB expenses equal to the
service cost (normal cost) for its employees
for the accounting period, less the amount
contributed by the employees, if any? (SFFAS 5,
par. 90)

Costs Pensions and Other Retirement and Post Yes, No or Explanation
Employment Benefits (64 - 91) N/A
89. Is the employer entity's ORB expense
balanced by either of the following? a. a
decrease to its "fund balance with Treasury"
for the amount of its contribution to the ORB
plan, if any b. an increase to an account
representing an intragovernmental imputed
financing source (e.g., "imputed
financing-expenses paid by other entities")
(SFFAS 5, par. 91)
90. If the employer entity is also the
administrative entity, does it also report
the liability65 and recognize the expense for
all components of the ORB's cost? (SFFAS 5,
par. 88 & 92)
OPEB are provided to former or inactive employees, beneficiaries, and
covered dependents outside pension or ORB plans. Postemployment benefits
can include salary continuation, severance benefits, counseling and
training, continuation of health care or other benefits, unemployment
workers' compensation, and veterans' disability compensation benefits paid
by the employer. (SFFAS 4, par. 96; SFFAS 5, par. 57 & 94)
91. Does the employer recognize an expense
and a liability for OPEB when a future
outflow or other sacrifice of resources is
probable (i.e., more likely than not) and
measurable? (SFFAS 5, par. 95)

65The liability is the actuarial present value of all future benefits less
the actuarial present value of future normal cost contributions that would
be made for and by the employees under the plan. (SFFAS 5, par. 88)

Costs Inventory, Materials, Supplies, and Yes, No or N/A Explanation
Commmodities (92 - 100)
92. Upon sale or use of inventory, is the
related expense recognized and the cost of
those goods removed from the inventory asset
account? (SFFAS 3, par. 19)
93. To arrive at the historical cost of ending
inventory and cost of goods sold, is one of the
following cost flow assumptions used? a.
first-in, first-out b. weighted average c.
moving average d. any other valuation method
(such as a standard cost system) whose results
reasonably approximate one of the above
historical cost methods (SFFAS 3, par. 22)
94. Are operating materials and supplies
expensed using the consumption method (i.e.,
reported as an operating expense as they are
issued to the end user for consumption in
normal operations)? (SFFAS 3, par. 38 & 39)
95. Are operating materials and supplies
expensed upon purchase (purchase method) if
they meet one of the following attributes? a.
they are of insignificant amounts b. they are
in the hands of the end user for use in normal
operations c. it is not cost beneficial to
apply the consumption method (SFFAS 3, par. 40
& 41)
96. Are inventory and operating materials and
supplies acquired through a nonmonetary
exchange valued at the fair value of the items
received at the time of the exchange, and is
the difference between the fair value of the
acquired items and the recorded amount
surrendered reported as a gain or loss? (SFFAS
3, par. 21 & 43)

Costs Inventory, Materials, Supplies, and Yes, No or N/A Explanation
Commmodities (92 - 100)
97. Are abnormal costs associated with
inventory and operating materials and supplies,
such as excessive handling or rework costs,
charged to operations of the period? (SFFAS 3,
par. 21 & 43)
98. Are any unrealized gains or losses
resulting from periodic revaluations of
inventory captured in a designated allowance
account? (SFFAS 3, par. 23 & 24)
99. Is the cost of stockpile materials removed
from the corresponding asset account and
reported as an operating expense when issued
for use or sale? (SFFAS 3, par. 52)
100. Are abnormal costs of stockpile materials,
such as excessive handling and rework costs,
expensed in current operations? (SFFAS 3, par.
53)

Costs Property, Plant, and Equipment Yes, No or N/A Explanation
(101 - 117)
A common expense related to PP&E that is included in the Statement of Net
Cost is depreciation. Other PP&E-related expenses that are reported in the
Statement of Net Cost include all current cost of acquiring and
maintaining stewardship land and heritage assets (other than multiuse
heritage assets.) (SFFAS 6, par. 35, & 69; SFFAS 16, par. 8) Depreciation
expense is calculated through systematic and rational allocation of the
cost of PP&E, less its estimated salvage or residual value, over its
estimated useful life. A composite or group methodology, 66 whereby the
costs of PP&E are allocated using the same allocation rate, is
permissible. (SFFAS 6, par. 35; SFFAS 23, par. 9, item f)
101. Is depreciation expense recognized
on all general PP&E? (SFFAS 6, par. 35)
102. If historical cost information has
not been maintained for existing PP&E,
does the entity depreciate or amortize
the estimated net remaining cost over
its remaining useful life in a
systematic and rational manner? (SFFAS
6, par. 35, 40, & 41)
103. In an exchange transaction with a
nonfederal entity, is the difference
between the book value (i.e., cost less
accumulated depreciation) of PP&E
surrendered and the cost of PP&E
acquired67 recognized as either a gain
or a loss? (SFFAS 6, par. 32)
104. In the event that cash
consideration is included in the
exchange transaction with a non federal
entity, is the cost of PP&E acquired
either increased by the amount of cash
consideration surrendered or decreased
by the amount of cash consideration
received? (SFFAS 6, par. 32)
105. When assets have been removed from
PP&E in anticipation of disposal,
retirement, or removal from service,
has the entity stopped recording
depreciation and amortization expenses
for such assets? (SFFAS 6, par. 38 &
39)

66The composite methodology is a method of calculating depreciation that
applies a single average rate to a number of
heterogeneous assets that have dissimilar characteristics and service
lives. The group methodology is a method of calculating
depreciation that applies a single, average rate to a number of
homogeneous assets having similar characteristics and service
lives.
67The cost of the PP&E acquired is recorded at the cost of the PP&E
surrendered net of any accumulated depreciation or
amortization when the fair value of the PP&E surrendered or acquired is
not determinable.

Costs Property, Plant, and Equipment (101 - Yes, No or N/A Explanation
117)
106. For general PP&E that is disposed of,
retired or removed from service, is any
difference between the book value of the PP&E
and amounts realized recognized as a gain or a
loss in the period of disposal, retirement, or
removal from service? (SFFAS 6, par. 38)
107. For PP&E assets removed from general PP&E
accounts prior to disposal, retirement or
removal from service, is the expected net
realizable value of these assets adjusted at
the end of each accounting period, and is any
adjustment made recognized as either a gain or
loss? (SFFAS 6, par. 39)
108. Are costs to acquire, improve,
reconstruct, or renovate heritage assets, other
than multiuse heritage assets, recognized and
reported separately on the Statement of Net
Cost for the period in which the costs are
incurred? (SFFAS 16, par. 8; OMB Bulletin
01-09, pp. 31 & 32, section 4.3 & p. 91,
section 9.22)
109. Do the recognized costs of heritage assets
also include all costs incurred during the
period to bring the items to their current
condition at its initial location? (SFFAS 16,
par. 8)
110. Are amounts for heritage assets or
stewardship land acquired through donation or
devise excluded from the calculation of net
cost? (SFFAS 8, par.79; SFFAS 16, par. 10; OMB
Bulletin 01-09, p. 91, section 9.23)
111. Is the fair value, if known and material,
of heritage assets acquired through donation or
devise disclosed in notes to the financial
statements in the year received? (SFFAS 16,
par. 10; OMB Bulletin 01-09, p. 91, section
9.23)

Costs Property, Plant, and Equipment (101 - Yes, No or N/A Explanation
117)
112. If the fair value of donated or bequeathed
heritage assets is not known or reasonably
estimable, is information as to the type and
quantity of assets received disclosed in the
notes to the financial statements in the year
received? (SFFAS 16, par. 10; OMB Bulletin
01-09, p. 91, section 9.23)
113. Are costs to acquire, as well as costs
incurred to bring the stewardship land to its
current condition or prepare it for its
intended use, recognized as a cost of the
period incurred and disclosed as "Cost of
Stewardship Land?" (SFFAS 6, par. 69 & 73;
SFFAS 8, par. 77 & 119; OMB Bulletin 01-09, p.
91, section 9.22)
114. Is the fair value, if known and material,
of stewardship land acquired through donation
or devise disclosed in notes to the Statement
of Net Cost in the year received? (SFFAS 6,
par. 71; OMB Bulletin 01-09, p. 91, section
9.23)
115. If the fair value of donated or willed
stewardship land is not estimable, is
information as to the type and quantity of
assets received disclosed in notes to the
Statement of Net Cost in the year received, if
material? (SFFAS 6, par. 71; OMB Bulletin
01-09, p. 91, section 9.23)
116. If land included in PP&E is transferred to
another federal entity to be used as
stewardship land, is the cost to the receiving
entity of the transferred land recognized at
the book value on the transferring entity's
books? (SFFAS 6, par. 72)
117. If the receiving entity does not know the
book value of the transferred land, is the
transfer disclosed in the notes to the
Statement of Net Cost, if material? (SFFAS 6,
par. 72)

Costs Clean-up Costs (118 - 126) Yes, No or N/A Explanation
Clean-up costs are the costs of removing, containing, and/or disposing of
(1) hazardous waste from property or (2) material and/or property that
consists of hazardous waste upon permanent or temporary closure or
shutdown of associated PP&E. Clean-up costs may include, but are not
limited to, decontamination, decommissioning, site restoration, site
monitoring, closure, and postclosure costs. (SFFAS 6, par. 85 & 87)
118. When PP&E is placed into service, does the
entity estimate the associated clean-up costs?
(SFFAS 6, par. 94)
119. In estimating clean-up costs and
liability, has the entity considered the
following? a. the level of restoration to be
performed b. current legal and regulatory
requirements c. current technology d. current
costs (i.e., amount that would be paid if all
goods and services included in the clean-up
estimate were acquired in the current period)
(SFFAS 6, par. 95)
120. Are estimated clean-up costs periodically
revised to account for material changes due to
inflation or deflation and changes in
regulations, plans, and/or technology? (SFFAS
6, par. 96)
121. When PP&E is placed into service, does the
entity recognize cleanup costs during each
period that general PP&E is in operation, in a
systematic and rational manner based on one of
the following methods? a. based on the physical
capacity of the PP&E, (e.g., expected usable
landfill area) b. if physical capacity is not
applicable or estimable, based on the estimated
useful life of the associated PP&E (SFFAS 6,
par. 97)

Costs Clean-up Costs (118 - 126) Yes, No or N/A Explanation
122. Does recognition of the cleanup costs and
the accumulation of the related liability begin
on the date that the associated PP&E is placed
into service, continue in each period that
operation continues, and end when the PP&E
ceases operation? (SFFAS 6, par. 98)
123. If clean-up costs are reestimated, are the
cumulative effects of changes in total
estimated cleanup costs related to current and
past operations of PP&E immediately recognized
as an expense and is the corresponding
liability adjusted? (SFFAS 6, par. 99)
124. When stewardship PP&E is placed into
service, does the entity expense the total
estimated clean-up costs and establish a
liability in the period the asset is placed
into service? (SFFAS 6, par. 101)
125. If clean-up costs for stewardship PP&E are
reestimated, are any adjustments to the
liability associated with clean-up costs
expensed in the period of the change in
estimate? (SFFAS 6, par. 102)

Costs Clean-up Costs (118 - 126) Yes, No or N/A Explanation
126. Does the entity disclose the following
related to cleanup costs? a. the applicable
laws and regulations covering clean-up
requirements b. the method for assigning
estimated total cleanup costs to current
operating periods (e.g., physical capacity
versus passage of time) c. the unrecognized
portion of estimated total clean-up costs for
clean-up costs associated with PP&E d. material
changes in total estimated clean-up costs due
to changes in laws, technology, or plans, as
well as the portion of the change in clean-up
cost estimates that relates to priorperiod
operations e. the nature of estimates and
information regarding possible changes due to
inflation, deflation, technology, or applicable
laws and regulations (SFFAS 6, par. 107-111)

Costs Interest (127 - 128) Yes, No or N/A Explanation
Interest incurred results from borrowing funds from Treasury, Federal
Financing Bank, other federal entities, or the public. Interest also
should be recorded on late payment of bills by the federal entity and on
refunds. (SFFAS 1, par. 81) Interest costs are generally related to
securities and other debt instruments issued by the U.S. Treasury or other
federal agencies. (SFFAS 5, par. 47-48)
127. Does the related interest cost of federal
debt include the following? a. the accrued
(prorated) share of the nominal interest
incurred during the accounting period b. the
amortized discounts or premiums for each
accounting period for fixed value securities c.
the amount of change in the current value for
the accounting period for variable value
securities (SFFAS 5, par. 53)
128. If securities are retired before maturity,
is the difference between the reacquisition
price and net carrying value of the
extinguished debt recognized in the period of
extinguishment as a gain or loss? (SFFAS 5,
par. 54)

Costs Insurance and Subsidies (129 - 132) Yes, No or Explanation
N/A
Federal insurance and guarantee programs are established to assume risks
that private sector entities are unwilling or unable to assume or to
subsidize the provision of insurance to achieve social objectives. For
life insurance, a premium deficiency occurs if the liability for future
policy benefits using current conditions exceeds the liability for future
policy benefits using contract conditions. (SFFAS 5, par. 97 & 120)
129. If an insured event has occurred as of
the financial statement reporting date, has
the federal entity recognized an expense for
all claims incurred during the period,
including, when appropriate, those incurred
but not reported and contingencies that meet
the criteria for recognition? (SFFAS 5, par.
104 & 109)
130. Are changes in estimates of claim cost
resulting from (1) the present value
calculations, (2) the continuous review
process, and (3) differences between the
estimates and actual payments for claims,
recognized as charges against operations of
the period in which the estimates are changed
or payments are made? (SFFAS 5, par. 109)
131. If the liability for future [life
insurance] policy benefits using current
conditions exceeds the liability for future
policy benefits under contract conditions
(resulting in a premium deficiency), is the
difference recognized as a charge to
operations in the current period? (SFFAS 5,
par. 120)
132. Does the entity recognize an expense for
social insurance 68 benefits paid during the
reporting period plus any increase (or less
any decrease) in the liability for social
insurance benefits due and payable to or on
behalf of beneficiaries, from the end of the
prior period to the end of the current
period? (SFFAS 17, par. 22)

68Social insurance programs include Social Security, Medicare, Railroad
Retirement, Black Lung Benefits, and Unemployment Insurance (SFFAS 17,
par. 14).

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
In accordance with the Federal Credit Reform Act of 1990, as amended, a
subsidy expense is recognized for direct or guaranteed loans disbursed
during the fiscal year. The amount of the subsidy expense equals the
present value of estimated cash outflows over the life of the loans minus
the present value of the estimated cash inflows. The discount rate used to
calculate the present value is the average interest rate on marketable
Treasury securities of similar maturity to the cash flows of the direct
loan or loan guarantee for which the estimate is being made. (SFFAS 2,
par. 6, 7, 24, 30, & 31; SFFAS 19, par. 6 & 7)
133. For post-1991 direct or loan
guarantee programs, is the present
value of estimated cash outflows over
the life of the loans minus the present
value of estimated cash inflows
discounted at the interest rate of
marketable Treasury securities with
similar maturity to the cash flows?
(SFFAS 2, par. 24; SFFAS 19, par. 6)
134. For post-1991 direct or loan
guarantee programs, are the net present
values recognized as expense in the
year the loan is disbursed? (SFFAS 2,
par. 24; SFFAS 19, par. 6)
135. Are the following components of
estimated subsidy costs (and offsetting
receipts) of post-1991 loans and
guarantees separately recognized? a.
interest subsidy costs 69 b. default
costs 70 c. present value of fees and
other collections d. other subsidy
costs (SFFAS 2, par. 25-29)

69The interest subsidy cost of direct loans is the excess of the amount of
the loans disbursed over the present value of the
interest and principal payments required by loan contracts discounted at
the applicable Treasury rate; for loan guarantees it is
the present value of estimated interest supplement payments.
70The default cost of direct loans or loan guarantees is measured at the
present value of projected payment delinquencies and
omissions minus projected net recoveries.

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
136. Is the subsidy cost allowance for
post-1991 direct loans amortized using the
interest method? 71 (SFFAS 2, par. 30, 31, and
app. B, part I B (2); SFFAS 19, par. 7(a))
137. If the effective interest for post-1991
direct loans is less than the nominal interest,
is the subsidy cost allowance increased by the
difference and recognized as a reduction in
interest income? (SFFAS 2, par. 30 & app. B,
part I B (2); SFFAS 19, par. 7(a))
138. If the effective interest for post-1991
direct loans is greater than the nominal
interest, is the subsidy cost allowance
decreased by the difference and recognized as
an increase in interest income? (SFFAS 2, par.
30 & app. B, part I B (2); SFFAS 19, par. 7(a))
139. Is interest accrued and compounded on the
liabilities of post-1991 loan guarantees at the
interest rate that was originally used to
calculate the present value of the loan
guarantee liabilities when the guaranteed loans
were disbursed, after adjusting for the
interest reestimate? (SFFAS 2, par. 31 & app.
B, part III B (2); SFFAS 19, par. 7(b))
140. Is the interest accrued and compounded on
the liabilities of post-1991 loan guarantees
recognized as an interest expense? (SFFAS 2,
par. 31 & app. B, part III B (2))

71Under the interest method, the amortized amount is the difference
between the nominal interest (face amount of loan times stated interest)
and effective interest (present value of loan times discount rate). The
effective interest rate is the average interest rate of marketable
Treasury securities with similar maturity that was used to calculate the
present value of the direct loans when the direct loans were disbursed,
after adjusting for the interest rate reestimate.

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
Two kinds of reestimates for the subsidy cost allowance for outstanding
direct loans and the liability for outstanding loan guarantees are (1)
interest rate reestimates and (2) technical/default reestimates. An
interest rate reestimate is due to a change in the interest rates from
those that were assumed in budget preparation and used in calculating the
subsidy expense to the interest rates that are prevailing during the
periods in which the direct or guaranteed loans are disbursed. A
technical/default reestimate is due to changes in projected cash flows of
outstanding direct loans and loan guarantees after reevaluating the
underlying assumptions and other factors (except for interest rate
reestimates) that affect cash flow projections as of the financial
statement date. (SFFAS 18, par. 9)
141. Does the entity measure and disclose
reestimates of allowances for subsidy
costs of post-1991 loans and liabilities
for guarantees in two components
separately, specifically: the interest
rate reestimate and the technical/default
reestimate? (SFFAS 18, par. 9)
142. Is any increase (or decrease) in the
subsidy cost allowance of post-1991 direct
loans or loan guarantee liabilities
resulting from the interest rate and
technical /default reestimates recognized
as a subsidy expense (or a reduction in
subsidy expense) and disclosed separately
by component? (SFFAS 2, par. 32; SFFAS 18,
par. 9; OMB Bulletin 01-09, pp. 62 & 71,
section 9.8, item E2 & pp. 66 & 73,
section 9.8, item L2)
143. If the assumed interest rates used in
calculating the subsidy expenses for
cohorts 72 from which direct or guaranteed
loans are disbursed differ from the rates
prevailing at the time of the loan
disbursement, is an interest rate
reestimate for those cohorts made as of
the date of the financial statements?
(SFFAS 18, par. 9 (A))
144. Do technical/default reestimates take
into consideration all factors that may
have affected various components of
projected cash flows, including defaults,
delinquencies, recoveries, and
prepayments? (SFFAS 18, par. 9 (B))

72Cohort, as it is used here, is a budget term that refers to all direct
loans or loan guarantees of a program for which a subsidy appropriation is
provided for a given fiscal year, even if disbursements occur in
subsequent years.

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
145. Are technical/default reestimates made
each year as of the date of the financial
statements? (SFFAS 18, par. 9 (B))
146. In a note to the financial statement, does
the entity display a reconciliation between the
beginning and ending balances of the following?
a. the subsidy cost allowances for outstanding
direct loans b. the liability for outstanding
loan guarantees reported in the entity's
balance sheet (SFFAS 18, par. 10)
147. Does the reconciliation of beginning and
ending subsidy cost allowances and loan
guarantee liability balances include changes in
the following? a. interest subsidy costs,
default costs, fees and other collections, and
other subsidy costs b. interest rate and
technical/default reestimates c. other
adjustments (SFFAS 2, par. 25-29; SFFAS 18,
par. 10)
148. For direct loans, do other adjustments
include loan modifications, fees received,
loans written off, foreclosed property or other
recoveries acquired, and subsidy allowance
amortization? (SFFAS 18, par. 10)
149. For loan guarantees, do other adjustments
include loan guarantee modifications, fees
received, interest supplements paid, claim
payments made to lenders, foreclosed property
or other recoveries acquired, and interest
accumulated on the loan guarantee liability?
(SFFAS 18, par. 10)

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
150. In its notes to the financial statements,
does the entity include a description of the
characteristics of the program it administers,
including the following? a. the total amount of
direct or guaranteed loans disbursed for the
current and preceding reporting years b.
interest subsidy costs, default costs, fees and
other collections, and other subsidy costs c.
interest rate and technical/default reestimates
(SFFAS 18, par. 11 (A))
151. Does the reporting entity disclose, at the
program level, the subsidy rates73 for direct
loans and loan guarantees in the current year's
budget for the current year's cohorts, the
following items? a. total subsidy cost b.
interest subsidy costs c. default costs (net of
recoveries) d. fees and other collections e.
other costs (SFFAS 18, par. 11 (B))
152. If the entity uses trend data to display
significant fluctuations in subsidy rates, are
these data accompanied by an analysis that
explains the underlying causes for the
fluctuations? (SFFAS 18, par. 11 (B))

73The subsidy rate is the dollar amount of the subsidy component as a
percentage of the direct loans or loan guarantees obligated in the cohort.

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
153. Does the reporting entity disclose,
discuss, and explain events and changes in
economic conditions, other risk factors,
legislation, credit policies, 74 and subsidy
estimation methodologies and assumptions that
have had a significant and measurable effect on
subsidy rates, subsidy expenses, and subsidy
reestimates? (SFFAS 18, par. 11 (C))
154. Does the disclosure and discussion also
include events and changes that have occurred
and are more likely than not to have a
significant impact, but whose effects are not
measurable at the reporting date? (SFFAS 18,
par. 11 (C))
155. Are default costs estimated and
periodically reestimated for each post-1991
loan and loan guarantee program on the basis of
separate cohorts and risk categories? (SFFAS 2,
par. 33)
156. In estimating default costs, has the
entity considered the following factors? a.
loan performance experience b. the current and
forecasted international, national, or regional
economic conditions that may affect the
performance of the loans c. financial and other
relevant characteristics of borrowers d. the
value of collateral to loan balance e. changes
in recoverable value of collateral f. newly
developed events that could affect the loans'
performance g. improvements in methods to
reestimate defaults (SFFAS 2, par. 34)

74Changes in legislation or credit policies include, for example, changes
in borrowers' eligibility, the levels of fees or interest rates charged to
borrowers, the maturity terms of loans, and the percentage of private
loans that are guaranteed.

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
157. In estimating and reestimating future
default costs for each group, cohort, and risk
category of loan and guarantee, has the agency
used a systematic methodology based on actual
historical experience? (SFFAS 2, par. 35 & 36)
158. Is interest (at the discount rate in
effect when the loans were first disbursed)
accrued on post-1991 direct loans, including
amortized interest, recognized as interest
income? (SFFAS 2, par. 37 & app. B, part I B
(2) & C)
159. Is interest (at the original discount
rate) accrued on debt to the Treasury arising
from post-1991 direct loans recognized as
interest expense? (SFFAS 2, par. 37 & app. B,
part I B (2) & C)
160. Is interest (at the discount rate in
effect when the loans were first disbursed)
accrued on liability of post-1991 loan
guarantees recognized as interest expense?
(SFFAS 2, par. 37 & app. B, part III B (2) & C)
161. Is interest (at the original discount
rate) due from the Treasury on uninvested funds
associated with post-1991 loan guarantee
liabilities recognized as interest income?
(SFFAS 2, par. 37 & app. B, part III B (2) & C)
162. Are costs for administering credit
activities (such as salaries, legal fees, and
servicing) incurred in support of direct loan
and guaranteed loan programs recognized as
administrative expenses and not included in
direct loan and loan guarantee subsidy costs?
(SFFAS 2, par. 38)
163. Are administrative expenses for loans and
guarantees broken out and disclosed by program,
if material? (OMB Bulletin 01-09, p. 67 & 74,
section 9.8, item O)

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
164. Are losses (as well as valuation
allowances and corresponding liabilities)
of direct loans obligated and loan
guarantees committed before October 1,
1991, recognized when it is more likely
than not that the direct loans will not
be totally collected or that the loan
guarantees will require a future cash
outflow to pay default claims? (SFFAS 2,
par. 39)
Foreclosed properties are assets received in satisfaction of a loan
receivable or as a result of payment of a claim under a guaranteed or
insured loan (excluding commodities acquired under price support
programs.) All properties included in foreclosed property are assumed to
be held for sale. Pre-1992 foreclosed property refers to property
associated with direct loans obligated or loan guarantees committed before
October 1, 1991. Post-1991 foreclosed property refers to property
associated with direct loans obligated or loan guarantees committed after
September 30, 1991. (SFFAS 3, par. 79 & 80)
165. If, at the time of the foreclosure,
the expected net realizable value of
pre-1992 foreclosed property is less than
the cost (i.e., the carrying amount of
the loan, or for a loan guarantee, the
amount of the claim paid), is the loss
charged to operations and tracked in a
valuation allowance account? (SFFAS 3,
par. 86)
166. If the pre-1992 foreclosed asset's
net realizable value subsequently
increases or decreases, does the entity
credit or charge this amount to results
of operations and adjust the valuation
allowance? (SFFAS 3, par. 86)
167. Upon sale of foreclosed property, is
any difference between the net carrying
amount of foreclosed property and the net
proceeds of the sale recognized as a
component of operating results? (SFFAS 3,
par. 89)
168. For post-1991 foreclosed property,
is interest income accrued from the
previous periodic adjustment in the
carrying amount up to the sale date?
(SFFAS 3, par. 89)

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
169. For post-1991 foreclosed
property, is the resulting difference
between the adjusted carrying amount
and the net sales proceeds recognized
as a reestimate of "subsidy expense?"
(SFFAS 3, par. 89)
170. For pre-1992 foreclosed property,
is the difference between the adjusted
carrying amount and net sales proceeds
recognized as a gain or a loss on the
sale of foreclosed property? (SFFAS 3,
par. 89)
The term modification, as it applies to direct loans and loan guarantees,
means a federal government action, including new legislation or
administrative action that directly or indirectly alters the estimated
subsidy cost and the present value of outstanding direct loans, or the
liability of loan guarantees. The cost of the modification is the excess
of the premodification value of a direct loan (or postmodification
liability of loan guarantees) over the postmodification value of a direct
loan (or premodification liability of loan guarantees), both of which have
been discounted at the Treasury rate in effect when the modification
occurred. (SFFAS 2, par. 41; SFFAS 2, par. 45, notes 3 & 4 & par. 49,
notes 6 & 7; SFFAS 19, par. 6) The book value of the loan or guarantee is
discounted at the Treasury rate originally used to calculate the present
value of the direct loan or loan guarantee liability when the loan was
originally disbursed. (SFFAS 2, par. 48 & 50, app. B parts I D (4 & 5), II
B (4), III B (4), & IV B (4)) The sale of post-1991 and pre-1992 direct
loans is treated as a direct modification of the loans sold if the sale
proceeds were not included in the cash flows estimates for the initial
subsidy calculation. The cost of modification is determined on the basis
of the premodification value of the loans sold. However, if sale proceeds
were included in the cash flow estimates for the initial subsidy
calculation, the effect of the loan sale on the cost of the program is
recognized in the reestimates. (SFFAS 2, par. 53, Appendix B. par 1F)
171. If pre-1992 or post-1991 direct
loans are modified, is the excess of
the premodification value75 over the
postmodification value 76 recognized
as a modification expense? (SFFAS 2,
par. 45 & app. B, parts I D (1-3) & II
B (1-3))

75This is the present value of the net cash inflows estimated under
premodification terms discounted at the current Treasury
rate.
76This is the present value of the net cash inflows estimated under
postmodification terms discounted at the current Treasury
rate.

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
172. If the cost of modifying pre-1992 or
post-1991 loans is greater than the decrease in
the loans' book value, is the difference
recognized as a gain?77 (SFFAS 2, par. 48 &
app. B, parts I D (4 & 5) & II B (4 & 5))
173. If the cost of modifying pre-1992 or
post-1991 loans is less than the decrease in
the loans' book value, is the difference
recognized as a loss?78 (SFFAS 2, par. 48 &
app. B, parts I D (4 & 5), & part II B (4 & 5))
174. If pre-1992 or post-1991 loan guarantees
are modified, is the excess of the
postmodification liability79 over the
premodification liability 80 recognized as a
modification expense? (SFFAS 2, par. 49 & app.
B, parts III D (1-3), & IV B (1-3))
175. If the cost of modifying pre-1992 or
post-1991 loan guarantees is greater than the
increase in the book value of the related loan
guarantee liabilities, is the difference
recognized as a gain? (SFFAS 2, par. 52 & app.
B, parts III D (4 & 5), & IV B (5))
176. If the cost of modifying pre-1992 or
post-1991 loan guarantees is less than the
increase of the related loan guarantee
liabilities, is the difference recognized as a
loss? (SFFAS 2, par. 52 & app. B, parts III D
(4 & 5) & IV B (5))
177. If the premodification value of post-1991
and pre1992 loans sold81 exceeds the net
proceeds from the sale, is the excess treated
as the cost of modification and recognized as a
modification expense? (SFFAS 2, par. 45 & 53 &
app. B, part I F (1))

77A gain from a modification occurs when the cost of a modification is
greater than the decrease in book value of a direct loan
(or increase in the liability of a loan guarantee). (SFFAS 2, par. 46, 48
note 5, 50, & 52 note 8; SFFAS 19, par. 7)
78A loss from a modification occurs when the cost of a modification is
less than the decrease in book value of a direct loan (or
increase in the liability of a loan guarantee) that was discounted at the
Treasury rate in effect when the loan was made. (SFFAS
2, par. 46, 48 note 5, 50, & 52 note 8; SFFAS 19, par. 17)
79This is the present value of the net cash flows under postmodification
terms discounted at the current Treasury rate.
80This is the present value of the net cash flows under premodification
terms discounted at the current Treasury rate.
81This is the present value of the loans' net cash inflows discounted at
the current discount rate.

Costs Credit Programs (133 - 180) Yes, No or N/A Explanation
178. If a loan is sold with recourse, is the
present value of estimated losses under the
recourse or guarantee obligations recognized as
a subsidy expense and as a loan guarantee
liability? (SFFAS 2, par. 54)
179. If the modification expense arising from a
loan sale is greater than the book value loss,
is the difference recognized as a gain? (SFFAS
2, par. 55 & app. B, part I F (2))
180. If the modification expense arising from a
loan sale is less than the book value loss, is
the difference recognized as a loss? (SFFAS 2,
par. 55 & app. B, part I F (2))

The 39 questions in this section are related to the Statement of Changes
in Net Position

Question Numbers

1. General 1 -5

2. Budgetary Financing Sources 6 - 22

3. Other Financing Sources 23 -39

General (1 - 5) Yes, No or N/A Explanation
The Statement of Changes in Net Position reports the change in net
position during the reporting period. Net position is affected by changes
to its two components: Cumulative Results of Operations and Unexpended
Appropriations. They are broken out into two separate columns in the
Statement of Changes in Net Position. (OMB Bulletin 01-09, pp. 34 & 35,
sections 5.1 & 5.2)
1. Do beginning balances of Cumulative
Results of Operations and Unexpended
Appropriations agree with the amounts
reported as net position on the prior
year's balance sheet? (OMB Bulletin
01-09, p. 35, section 5.3)

General (1 - 5) Yes, No or N/A Explanation
2. Are "beginning balances, as adjusted," equal
to the sum of the beginning balances of net
position as reported on the prior year's
balance sheet, and prior period adjustments?
(OMB Bulletin 01-09, p. 36, section 5.3)
3. When errors 82 are discovered after the
issuance of financial statements, and if the
financial statements would be materially
misstated absent correction of the errors, are
the corrections made as follows in the
statement of changes in net position? a. If
only the current period statement is presented,
the cumulative effect of correcting the error
is reported as a prior period adjustment to the
beginning balance of the cumulative results of
operations. b. If comparative financial
statements are presented, individual amounts on
the financial statements are corrected in the
earliest affected period presented. c. If the
earliest period presented in the comparative
financial statements is not the period in which
the error occurred and the cumulative effect is
attributable to prior periods, the cumulative
effect is reported as a prior period adjustment
to the beginning balance of cumulative results
of operations in the statement of net position
for the earliest period presented. (SFFAS 21,
par. 10 & 11)

82Errors in financial statements result from mathematical mistakes,
mistakes in the application of accounting principles, or oversight or
misuse of facts that existed at the time the financial statements were
prepared.

General (1 - 5) Yes, No or N/A Explanation
4. Is the nature of an error in previously
issued financial statements and the effect of
its correction on relevant balances disclosed?
(SFFAS 21, par. 10 (c))
5. If changes in accounting principles 83 would
have resulted in a change to prior period
financial statements, are they handled in the
following manner? a. the cumulative effect of
the change on prior periods is reported as a
"change in accounting principle" and reported
as an adjustment to the beginning balance of
the cumulative results of operations in the
Statement of Changes in Net Position for the
period that the change is made b. prior period
financial statements presented for comparative
purposes are presented as previously reported
c. the nature of the changes in accounting
principle and its effect on relevant balances
are disclosed in the current period84 (SFFAS
21, par. 12 & 13; SFFAS 23, par. 17 & 18)

83A change in accounting principle is a change from one generally accepted
accounting principle to another one that can be justified as preferable;
this would also include changes occasioned by the adoption of new federal
accounting standards. 84Financial statements of subsequent periods need
not repeat the disclosure.

Budgetary Financing Sources (6 - 22) Yes, No or N/A Explanation
The section, "Budgetary Financing Sources," displays financing sources and
nonexchange revenue that are also budgetary resources, or adjustments to
these resources, as reported on the Statement of Budgetary Resources and
defined as such by OMB Circular No. A-11, Part 485 "Instructions on Budget
Execution," as amended. (OMB Bulletin 01-09, p. 36, section 5.4)
6. Do budgetary "appropriations received"86
reported under "Budgetary Financing
Sources" agree with the amount reported on
the line item "appropriations received" in
the Statement of Budgetary Resources? (OMB
Bulletin 01-09, p. 36, section 5.4)
7. Are unexpended appropriations reduced as
appropriations are used? (SFFAS 7, par. 71)
8. Are unexpended appropriations adjusted
for other changes in budgetary resources,
such as rescissions and transfers? (SFFAS
7, par. 71)
9. Do "appropriations transferred in/out
(+/-)" equal the amount of appropriations
received in the current or prior year(s)
that have been transferred in or out during
the current reporting year? (OMB Bulletin
01-09, p. 36, section 5.4)
10. Do "other adjustments87 (rescissions,
etc.) (+/-)" include adjustments to either
cumulative results of operations or
unexpended appropriations? (OMB Bulletin
01-09, p. 36, section 5.4)
11. Are appropriations used by collecting
entities to provide refunds of monies
deposited to Treasury and trust funds
reported under "other adjustments
(rescissions, etc. (+/-))" rather than as
an "appropriations used?" (OMB Bulletin
01-09, p. 36, section 5.4)

85OMB Circular No. A-11 superceded OMB Circular No. A-34 in June 2002 and
was revised on July 25, 2003.
86Appropriations received do not include appropriated dedicated and
earmarked receipts. Dedicated and earmarked receipts are
accounted for as either exchange or nonexchange revenue in accordance with
SFFAS No. 7)
87Some examples of adjustments include rescissions of appropriations and
cancellations of expired appropriation expenditure
accounts, which would also be included in line 6, "Permanently not
Available" on the Statement of Budgetary Resources.

Budgetary Financing Sources (6 - 22) Yes, No or N/A Explanation
12. Are "appropriations used" recognized as a
financing source when goods and services are
received or when benefits and grants are
provided?88 (SFFAS 7, par. 72; OMB Bulletin
01-09, p. 36, section 5.4)
13. Is the amount of appropriations used
subtracted from unexpended appropriations and
added to cumulative results of operations for a
net zero effect on net position as a whole?
(OMB Bulletin 01-09, p. 36, section 5.4)
14. Do "appropriations 89 used" exclude the
following? a. undelivered orders b. unobligated
appropriations c. dedicated tax receipts,
earmarked receipts, and donations 90 (OMB
Bulletin 01-09, p. 36, section 5.4)
15. Is nonexchange revenue recognized as a
financing source (and not as a deduction in
determining the net cost of operations)? (SFFAS
7, par. 60)
16. Does the entity recognize nonexchange
revenues, such as taxes, if it is legally
entitled to the revenue? (SFFAS 7, par. 48 &
49)

88This is true whether the goods, services, and benefits are payable or
paid as of the reporting date and whether the
appropriations are used for items that are expensed or capitalized.
89Appropriations used does not increase net position. It is subtracted
from "unexpended appropriations" and added to
"cumulative results of operations," which are line items on the balance
sheet.
90Those financing sources are reported as either exchange or nonexchange
revenue.

Budgetary Financing Sources (6 - 22) Yes, No or N/A Explanation
17. Is nonexchange revenue recognized when the
government's claim to resources can be
characterized as follows? a. specifically
identifiable b. legally enforceable c.
reasonably estimable d. more likely than not
collectable (SFFAS 7, par. 48)
18. Is revenue recognized by the recipient
entities the sum of the following? a. cash or
cash equivalents transferred to them by the
collecting entities b. the net change in any
related interentity balances between the
collecting and the receiving entities (i.e.,
the amount to be transferred to the recipient
entities from the collecting entity or vice
versa) (SFFAS 7, par. 60)
19. Do "donations and forfeitures of cash and
cash equivalents" include voluntary gifts and
involuntary forfeitures of resources to the
federal government by nonfederal entities? (OMB
Bulletin 01-09, p. 37, section 5.4)
20. Do "transfers-in/out without reimbursement
(+/-)" under "budgetary financing sources"
include intragovernmental nonappropriated91
balance transfers in or out during the current
reporting year? (OMB Bulletin 01-09, p. 37,
section 5.4)
21. Is exchange revenue (included in
calculating an entity's net cost of operations)
required to be transferred to the Treasury or
another federal entity recognized as a transfer
out? (OMB Bulletin 01-09, p. 37, section 5.4)

91Nonappropriated balances include financing sources and revenue not
reported as unexpended appropriations.

Budgetary Financing Sources (6 - 22) Yes, No or N/A Explanation
22. Do "other budgetary financing sources"
include other financing sources that affect
budgetary resources that have not been covered
by the preceding questions? (OMB Bulletin
01-09, p. 37, section 5.4)

Other Financing Sources (23 - 39) Yes, No or N/A Explanation
"Other financing sources," displays financing sources and nonexchange
revenue that do not represent budgetary resources as reported on the
Statement of Budgetary Resources and defined as such by OMB Circular No.
A-11, Part 4 (OMB Bulletin 01-09, p. 37, section 5.5)
23. Do the items reported in the "other
financing sources" section equal the amounts
reported as similar line items in the "other
resources"92 section on the Statement of
Financing? (OMB Bulletin 01-09, p. 35, section
5.2, pp. 37 & 38, section 5.5, p. 46, section
7.2 & p. 48, section 7.3)
24. Is revenue arising from donations of
property measured at the estimated fair value
of the contribution at the time of the
donation? (SFFAS 6, par. 30; SFFAS 7, par. 62,
OMB Bulletin 01-09, p. 37, section 5.5)
25. Are transferred assets recorded at the book
value of the transferring entity, or, if the
receiving entity does not know the book value,
is the asset recorded at its estimated fair
value as of the date of the transfer? 93 (SFFAS
7, par. 74; OMB Bulletin 01-09, p. 37, section
5.5)
26. When assets 94 are transferred in or out by
entities without reimbursement: a. Does the
receiving entity recognize the transferin as an
increase in financing sources in its statement
of net position? b. Does the transferring
entity recognize the transfer out as a decrease
in financing sources in its statement of
changes in net position? (SFFAS 7, par. 74, OMB
Bulletin 01-09, p. 37, section 5.5)

92Other resources increase net position but are not budgetary resources as
reported on the "Statement of Budgetary Resources"
or defined as such in OMB Circular No. A-11, Part 4. OMB Circular No. A-11
superceded OMB Circular No. A-34 in June 2002
and was revised on July 25, 2003.
93FASAB Technical Bulletin 2003-1 offers specific guidance dealing with
transfers arising from the creation of the Department of
Homeland Security and other transfers of operations between federal
entities directed by the Homeland Security Act of 2002.
94This amount includes intragovernmental transfers in to or out of
capitalized assets during the current reporting year.

Other Financing Sources (23 - 39) Yes, No or N/A Explanation
27. Does the reporting entity recognize an
imputed financing source for costs funded
through other federal entities as well as
nonreimbursed costs of goods and services
provided by other federal entities? (SFFAS 4,
par. 109; SFFAS 7, par. 73; OMB Bulletin 01-09,
p. 37, section 5.5)
28. Do imputed financing costs reported on the
Statement of Changes in Net Position equal the
amount of imputed financing costs as reported
on the statement of net cost? (OMB Bulletin
01-09, p. 37, section 5.5)
29. Do "other financing sources" include other
financing sources that do not represent
budgetary resources and that have not been
covered by the preceding questions (i.e., nos.
23-28)? (OMB Bulletin 01-09, p. 38, section
5.5)
30. Is exchange revenue transferred to another
government entity or to the Treasury recognized
as a "transfer out" in determining the net
results of operations? (SFFAS 7, par. 75)
31. Is a gain95 from the modification96 of
post-1991 loans reported as a reduction in
financing source and paid to the Treasury as a
"modification adjustment transfer?" (SFFAS 2,
par. 48, & app. B, part I D (5))
32. Is a loss97 from the modification of
post-1991 loans reported as a financing source
when the reporting entity receives from the
Treasury a "modification adjustment transfer?"
(SFFAS 2, par. 48 & app. B, part I D (5))

95The excess of the cost of the modification over the decrease in loan
book value discounted at the Treasury rate.
96A modification means a federal government action, including new
legislation or administration action, which directly or
indirectly alters the estimated subsidy cost and present value of
outstanding loans or the liability of loan guarantees. (SFFAS 2,
par. 41)
97The excess of the decrease in loan book value, discounted at the
Treasury rate, over the cost of the modification.

Other Financing Sources (23 - 39) Yes, No or N/A Explanation
33. Is a gain98 resulting from a modification
of post-1991 loan guarantees reported as a
reduction in financing source and paid to the
Treasury as a "modification adjustment
transfer?" (SFFAS 2, par. 52 & app. B, part III
D (5))
34. Is a loss99 resulting from a modification
of post-1991 loan guarantees reported as a
financing source when the reporting entity
receives from the Treasury a "modification
adjustment transfer" to offset the difference?
(SFFAS 2, par. 52 & app. B, part III D (5))
35. Is a gain on the sale of a post-1991 loan
reported as a reduction in financing source and
paid to the Treasury as a "modification
adjustment transfer?" (SFFAS 2, par. 55 & app.
B, part I F (2))
36. Is a loss on the sale of a post-1991 loan
reported as a financing source when the
reporting entity receives from the Treasury a
"modification adjustment transfer?" (SFFAS 2,
par. 55 & app. B, part I F (2))
37. Does the amount "net cost of operations"
reported under cumulative results of operations
agree with "net cost of operations" as reported
on the Statement of Net Cost and Statement of
Financing? (OMB Bulletin 01-09, p. 38, section
5.6 & p. 51, section 7.7)
38. Is the difference between the net cost of
operations and the sum of the financing sources
(i.e., budgetary and other) equal to the ending
balance of net position as it relates to the
cumulative results of operations? (OMB Bulletin
01-09, p. 38, section 5.6)

98The excess of the cost of the modification over the increase in
liability discounted at the Treasury rate. 99The excess of the increase in
liability, discounted at the Treasury rate, over the cost of the
modification.

Other Financing Sources (23 - 39) Yes, No or N/A Explanation
39. Do the ending balances of the cumulative
results of operations and unexpended
appropriations agree with the amounts reported
as net position on the current year's balance
sheet? (OMB Bulletin 01-09, p. 38, section 5.7)

The 27 questions in this section concern the Statement of Budgetary
Resources.

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
The budget is the primary financial planning and control tool of the
government. The Statement of Budgetary Resources and the related
disclosures provide information about how budgetary resources were made
available as well as their status at the end of the period. It is the only
financial statement exclusively derived from an entity's budgetary general
ledger, prepared in accordance with budgetary accounting rules, which are
incorporated into Generally Accepted Accounting Principles (GAAP) for the
federal government. (SFFAS 7, par. 77; OMB Bulletin 01-09, p. 39, section
6.1)
1. Is the recognition and measurement of
budgetary information reported on the
Statement of Budgetary Resources (SBR)
based on budget terminology, definitions,
and guidance in OMB Circular No. A11,100
Preparation, Submission and Execution of
the Budget, (July 2003)? (SFFAS 7, par.
78; OMB Bulletin 01-09, p. 39, section
6.1)
2. Is information on the SBR consistent
with budget execution information
reported on the Report on Budget
Execution and Budgetary Resources (SF
133) and with information reported in the
Budget of the United States Government?
(OMB Bulletin 01-09, p. 39, section 6.1)
3. Does the entity disclose and explain
any material differences between
comparable information contained in the
three reports (i.e., SBR, SF 133 and the
Budget of the United States Government)?
(OMB Bulletin 01-09, p. 6, section 1.7 &
p. 39, section 6.1)
4. Is budgetary information aggregated
for purposes of the Statement of
Budgetary Resources disaggregated101 for
each of the reporting entity's major
budget accounts and presented as required
supplementary information? (SFFAS 7, par.
78; OMB Bulletin 01-09, p. 112, section
11.4)

100OMB Circular No. A-11 superceded OMB Circular No. A-34 in June 2002 and
was revised on July 25, 2003. 101Small budgetary accounts may be
aggregated.

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
5. Do the major accounts and the aggregate of
small budget accounts agree, in total, with the
amounts reported on the face of the Statement
of Budgetary Resources? (OMB Bulletin 01-09, p.
112, section 11.4)
6. Is the budgetary information in the SBR
presented on a combined basis that is
consistent with the aggregate of the
account-level information presented on the SF
133s? (OMB Bulletin 01-09, p. 39, section 6.2)
7. Are nonbudgetary credit financing accounts
reported separately from the budgetary
accounts? (OMB Bulletin 01-09, p. 40, section
6.3)

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
8. Does the entity include in its SBR the
following under "Budgetary Resources"? a.
budget authority, including if applicable i.
appropriations received ii. borrowing authority
iii. contract authority iv. net transfers (+/-)
v. other b. unobligated balances, including if
applicable i. beginning of period balances ii.
net transfers, actual (+/-) iii. anticipated
transfer balances c. spending authority from
offsetting collections, including, if
applicable i. earned authority that is
collected and/or receivable from federal
services ii. changes in unfilled customer
orders that are advance(s) received, and/or
without advance(s) from federal sources iii.
anticipated collections for the rest of the
year without advances iv. transfers from trust
funds d. recoveries of prior year obligations
e. budgetary resources temporarily not
available pursuant to public law f. budgetary
resources permanently not available (OMB
Bulletin 01-09, p. 41, section, 6.4; SFFAS 7,
par. 77)

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
9. Do the budgetary resources reported in this
section agree with the total budgetary
resources reported for all of the budget
accounts on the year-end SF 133? (OMB Bulletin
01-09, p. 42, section 6.5)
10. Does the line item "appropriations
received"102 reported on the SBR equal the
amount reported as "appropriations received" on
the Statement of Changes in Net Position? (OMB
Bulletin 01-09, p. 36, section 5.4 & p. 43,
section 6.5)
11. Does the line item entitled "permanently
not available" on the SBR include items
reported under "other adjustments (rescissions,
etc.)" on the Statement of Changes in Net
Position? (OMB Bulletin 01-09, p. 36, section
5.4 & p. 43, section 6.5)
12. Does the entity include the following under
"Status of Budgetary Resources" on the SBR? a.
obligations incurred that are i. direct and/or
ii. reimbursable b. unobligated balance(s) that
are i. apportioned ii. exempt from
apportionment iii. otherwise available c.
unobligated balance(s) not available (OMB
Bulletin 01-09, p. 42, section 6.4; SFFAS 7,
par. 77)

102Appropriations received do not include appropriated, dedicated and
earmarked receipts. Dedicated and earmarked receipts, typically in special
and nonrevolving trust funds, are accounted for as either exchange or
nonexchange revenue in accordance with SFFAS No. 7.

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
13. Does the total amount displayed for the
"status of budgetary resources" section of the
SBR equal "total budgetary resources" available
to the reporting entity as of the reporting
date? (OMB Bulletin 01-09, p. 43, section 6.6)
14. Does the status of budgetary resources
reported on the SBR agree with the total status
reported for each budget account on the
year-end SF 133? (OMB Bulletin 01-09, p. 43,
section 6.6)
15. Does the entity's SBR include the following
under "Relationship of Obligations to Outlays?"
a. obligated balance, net, beginning of period
b. obligated balance transferred, net (+/-) c.
obligated balance, net, end of period that are
i. accounts receivable ii. unfilled customer
orders from federal sources iii. undelivered
orders iv. accounts payable d. outlays that are
i. disbursements ii. collections e. less, if
applicable, offsetting receipts103 (OMB
Bulletin 01-09, p. 40, section 6.3 & p. 42,
section 6.4)

103Offsetting receipts offset budget authority and outlays at the agency
level in the Budget of the United States Government, but are not reflected
in budget execution reports (SF 133s), which provide account-level
information only. Since the SBR is an agencywide report, offsetting
receipts must be included to reconcile to information in the Budget of the
United States Government.

Statement of Budgetary Resources (1 - Yes, No or N/A Explanation
27)
16. Do the outlays104 reported in
"Relationship of Obligations to
Outlays" section agree with the agency
outlay totals reported in the Budget of
the United States Government?105 (OMB
Bulletin 01-09, p. 43, section 6.7)
17. Do the outlays also agree with the
aggregate of outlays reported on the
year-end SF 133 for all budget
accounts, including nonbudgetary
financing accounts and the
disbursements and collections reported
to Treasury on a monthly basis106 as
per OMB Circular No. A-11?107 (OMB
Bulletin 01-09, p. 43, section 6.7)
Offsetting receipts are collections that are credited to general fund,
special fund, or trust fund receipt accounts and that offset gross
outlays. Unlike offsetting collections, which are credited to expenditure
accounts and offset outlays at the account level, offsetting receipts are
credited to receipt accounts and offset outlays at the agency or
governmentwide level. Offsetting receipts may be distributed or
undistributed to agencies. Distributed offsetting receipts offset the
outlays of the agency, while undistributed offsetting receipts offset
governmentwide outlays. Distributed offsetting receipts typically offset
the outlays of the agency that conducts the activity, generating the
receipts and the subfunction to which the activity is assigned. Offsetting
receipts are composed of proprietary receipts from the public, receipts
from intragovernmental transactions, and offsetting governmental receipts.
(OMB Bulletin 01-09, pp. 43 & 44, section 6.7)
18. Does the line item "offsetting
receipts" on the SBR include all
distributed offsetting receipts for the
agency?108 (OMB Bulletin 01-09, p. 44,
section 6.7)

104Outlays consist of disbursements net of offsetting collections.
105That is, do the outlays agree with the aggregate of the outlays for
accounts within the Budget of the United States
Government?
106Agencies report their disbursements and collections using the SF 224,
Statement of Transactions; SF 1219, Statement of
Accountability; and SF 1220, Statement of Transactions.
107OMB Circular No. A-11 superceded OMB Circular No. A-34 in June 2002 and
was revised on July 25, 2003.
108A list of distributed offsetting receipt accounts can be found in the
Treasury Annual Report Appendix, Part 4, Other
Information.

Statement of Budgetary Resources (1 - 27) Yes, No or Explanation
N/A
19. Does the agency include the following receipt
accounts from the Treasury Annual Report Appendix,
Part 4, Other Information/Receipts by Department,
in the SBR? a. Proprietary Receipts from the Public
b. Intrabudgetary Receipts Deducted by Agencies c.
Offsetting Governmental Receipts (OMB Bulletin
01-09, p. 44, section 6.7)
20. Is the amount of distributed offsetting
receipts reported in SBR the aggregate of cash
collected in these receipt accounts and reported to
Treasury on a monthly basis?109 (OMB Bulletin
01-09, p. 44, section 6.7)
21. Does the amount of offsetting receipts that are
distributed to agencies and reported on the SBR
agree with the deductions for offsetting receipts
as reported in the Budget of the United States
Government, if available by the time the financial
statements must be finalized and submitted (OMB
Bulletin 01-09, p. 44, section 6.7)
22. Are undistributed offsetting receipts, which
are credited to governmentwide outlay totals,
excluded from the SBR? (OMB Bulletin 01-09, p. 44,
section 6.7)
23. Do the net outlays in the SBR agree with the
net outlays110 as reported in the Budget of the
United States Government, if available by the time
the financial statements must be finalized and
submitted? (OMB Bulletin 01-09, p. 44, section 6.7)

109Agencies use the SF 224, Statement of Transactions; SF 1219, Statement
of Accountability; and SF 1220, Statement of
Transactions.
110Net outlays are equal to gross outlays less offsetting collections and
receipts.

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
24. Does the entity disclose the amount of
direct and reimbursable obligations incurred
against amounts apportioned under category111
"A," "B," and "exempt from apportionment"? (OMB
Bulletin 01-09, p. 93, section 9.27)
25. Does the disclosure of the amount of direct
and reimbursable obligations incurred against
amounts apportioned under category112 "A," "B,"
and "exempt from apportionment" agree with the
aggregate of the related information as
reported on the agency's year-end SF 133, and
the amounts reported under direct and
reimbursable obligations incurred, reported on
the SBR? (OMB Bulletin 01-09, p. 93, section
9.27)

111Apportionment categories are to be determined in accordance with
guidance provided in OMB Circular No. A-11, Part 4,
Instructions on Budget Execution, which superceded Circular No. A-34.
112Apportionment categories are to be determined in accordance with
guidance provided in OMB Circular No. A-11, Part 4
Instructions on Budget Execution, which superceded Circular No. A-34.

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
26. Does the entity disclose the following
information related to the status of budgetary
resources? a. the amount of budgetary resources
obligated for undelivered orders at the end of
the period b. available borrowing and contract
authority at the end of the period c. repayment
requirements, financing sources for repayment,
and other terms of borrowing authority used d.
amounts adjusted to "budgetary resources
available at the beginning of the year," during
the reporting period, as well as an explanation
of the adjustments e. existence, purpose, and
availability of permanent, indefinite
appropriations f. information about legal
arrangements affecting the use of unobligated
balances of budget authority, such as time
limits, purpose, and obligation limitations g.
explanations of any material differences
between the budgetary resources reported in the
SBR and "actual" amounts in the Budget of the
United States Government113 h. the amount of
unfunded liabilities, and an explanation that
includes identification of balance sheet
components, when unfunded liabilities do not
equal the total financing sources yet to be
provided i. the amount of any capital infusion
received during the reporting period (SFFAS 7,
par. 79 & 209-212; OMB Bulletin 01-09, p. 93 &
94, sections 9.27-9.34)

113FASAB Technical Bulletin 2002-2 indicates what disclosures should be made
when the entity issues financial statements for a given year before the Budget
of the United States Government with actual budget numbers for the same fiscal
year is published.

Statement of Budgetary Resources (1 - 27) Yes, No or N/A Explanation
27. In order to ensure consistency between the
information presented in the SBR and the Budget
of the United States Government, does the
entity do the following? a. post all known
audit adjustments to the Federal Agencies
Centralized Trial-balance System II (FACTS II)
during the window of time specified for posting
corrections to the budget information b. post
all known audit adjustments to OMB's MAX A-11
budget preparation system during the time
frames provided by OMB (OMB Bulletin 01-09, pp.
5 & 6, section 1.7)

The 27 questions in this section are related to the Statement of
Financing.

Question Numbers

1. Resources Used to Finance Activities 1 - 8

2. Resources Used to Finance Items Not Part of 9 - 14
the Net Cost of Operations

3. Components of the Net Cost of Operations that 15 - 24
Will Not Require or Generate Resources in the
Current Period Resources

4. Disclosure Items 25 -27

Resources Used to Finance Activities Yes, No or N/A Explanation
(1 - 8)
The Statement of Financing is the bridge between an entity's budgetary and
financial (i.e., proprietary) accounting. The Statement of Financing
articulates the relationship between net obligations derived from an
entity's budgetary accounts and net cost of operations derived from the
entity's proprietary accounts by identifying and explaining key
differences between the two numbers. Most entity transactions are recorded
in both budgetary and proprietary accounts. However, because different
accounting bases are used for budgetary and proprietary accounting, some
transactions may appear in only one set of accounts (e.g., accrual of
environmental and disposal liabilities, which is recorded only in the
proprietary records). Furthermore, not all obligations or offsetting
collections may result in expenses or exchange revenue (e.g., purchase of
a building is capitalized on the balance sheet in the proprietary accounts
but obligated and outlayed in the budgetary accounts). The statement is
structured to first identify total resources used by an entity during the
period (budgetary and other) and then make adjustments to the resources
based upon how they were used to finance net obligations or net cost.
Budgetary resources reported in this statement are those resources as
defined in OMB Circular No. A-11114 and are also reported on the Statement
of Budgetary Resources. Other resources reported in this statement are
also reflected in the Statement of Changes in Net Position. (OMB Bulletin
01-09, p. 45, section 7.1; SFFAS 7, par. 80 & 95) The section "Resources
Used to Finance Activities" reflects the budgetary resources obligated and
other resources that are used to finance the activities of the agency. The
obligations of budgetary resources are net of offsetting collections,
recoveries, and offsetting receipts. The other resources are financing
sources that increase net position but are not budgetary resources. Every
line item in this section is mirrored on either the Statement of Budgetary
Resources or the Statement of Changes in Financial Position. (OMB Bulletin
01-09, p. 47, section 7.3)
1. Is the budgetary information used
to calculate net obligations115 in
the "Resources Used to Finance
Activities" section of the
Consolidated Statement of Financing,
presented on a combined basis116 to
enable agreement with similar amounts
reported on the Statement of
Budgetary Resources? (OMB Bulletin
01-09, p. 6, section 1.8 & p. 46,
section 7.1)

114OMB Circular No. A-11, Part 4, Instructions on Budget Execution, has
superceded OMB Circular No A-34. 115The budgetary information includes the
line items (1) " obligations incurred," (2) "Less: spending authority from
offsetting collections and recoveries," (3) "obligations net of offsetting
collections and recoveries," and 4) "less: offsetting receipts." 116A
combined basis means the aggregation of account-level information as
opposed to a consolidation that implies the elimination of inter-account
transactions.

Resources Used to Finance Activities (1 - 8) Yes, No or N/A Explanation
2. Does the amount reported as "obligations
incurred" equal the obligations incurred117
line item as reported on the Statement of
Budgetary Resources, and does this include all
budget accounts, including nonbudgetary
financing accounts? (OMB Bulletin 01-09,p. 47,
section 7.3)
3. Does the line item "less: spending authority
from offsetting118 collections and
recoveries"119 agree with the spending
authority from offsetting collections and
recoveries as reported on the Statement of
Budgetary Resources, and does this include all
budget accounts, including nonbudgetary
financing accounts? (OMB Bulletin 01-09, p. 47,
section 7.3)
4. Is "Obligations net of offsetting
collections and recoveries" equal to the
difference between "obligations incurred" and
"spending authority from offsetting collections
and recoveries?" (OMB Bulletin 01-09, p. 48,
section 7.3)
5. Does the amount reported as "less:
offsetting receipts" equal the offsetting
receipts120 line item as reported on the
Statement of Budgetary Resources? (OMB Bulletin
01-09, p. 48, section 7.3)
6. Do "net obligations"121 equal the difference
between "obligations net of offsetting
collections and recoveries" and "offsetting
receipts?" (OMB Bulletin 01-09, p. 48, section
7.3)

117This is not to be confused with total budgetary resources; e.g., with
total appropriations received and available, as the
statement of financing is not concerned with total resources or
restrictions on OMB's ability to apportion or the agency's ability
to allot total resources. (SFFAS 7 Implementation Guide (April 2002), par.
14)
118"Offsetting" in the term "offsetting collections" means that the
resources generated by the collecting activity are added to the
expenditure accounts and hence "offset" gross obligations. (SFFAS 7
Implementation Guide (April 2002), par. 22)
119Recoveries are budgetary resources that offset obligations on the
Statement of Budgetary Resources, but are not a proprietary
financing source used to offset costs on the Statement of Net Cost. (OMB
Bulletin 01-09, p. 49, section 7.4)
120Offsetting receipts differ from "offsetting collections." Offsetting
collections are included in the entity's expenditure account
and thus are usually available for spending for the purposes of the
account without further action by Congress. (SFFAS 7
Implementation Guide (April 2002), par. 23)
121Net obligations reflect obligations incurred net of offsetting
collections, recoveries, and offsetting receipts.

Resources Used to Finance Activities (1 - 8) Yes, No or N/A Explanation
7. Does the entity's Statement of Financing
include other nonbudgetary resources used to
finance activities, and do the line item
amounts as reported on the Statement of
Financing equal the following corresponding
line item amounts reported as "other financing
sources" on the Statement of Changes in Net
Position? a. donations and forfeitures of
property b. transfers in/out without
reimbursement c. imputed financing from costs
absorbed by others d. other (OMB Bulletin
01-09, p. 48, section 7.3)
8. Is "total resources used to finance
activities" equal to the sum of net obligations
122 and net other (nonbudgetary) resources used
to finance activities? (OMB Bulletin 01-09, p.
46, section 7.2)

122One of the reasons that net obligations does not equal the amount of
the net cost of operations is that there are resources that are not
reported in the Budget of the United States Government that may finance
the net cost of operations or other activities of the agency.

Resources Used to Finance Items Not
Part of the Net Cost of Operations (9 Yes, No or N/A Explanation
- 14)
The section, "Resources Used to Finance Items Not Part of the Net Cost of
Operations," in the Statement of Financing adjusts total resources used to
finance the activities of the entity to account for items that were
included in net obligations and other resources, but which were not part
of the net cost of operations. This section would include items in which
the expense was recognized in a prior period but the budgetary resource
and obligation are recognized in the current period (e.g., upward/downward
reestimates of subsidy expense accrued in the prior period but obligated
in the current period). It would also include budgetary resources and
obligations recognized in the current period that do not affect the net
cost of operations (e.g., the acquisition of assets reflected in net
obligations but not in net cost of operations for the period). (OMB
Bulletin 01-09, p. 48, section 7.4)
9. Does the line item, "change in
budgetary resources obligated for
goods, services, and benefits ordered
but not yet provided (+/-),"123
reflect undelivered orders, or
adjustments thereof, that are included
in net obligations, but which are not
part of the net cost of operations?
(OMB Bulletin 01-09, p. 48, section
7.4)

123This line item is used to explain the difference between the total
resources used to finance activities and the net cost of operations
because of the change in "budgetary resources obligated for goods,
services, and benefits ordered but not yet provided," i.e., "undelivered
orders." Undelivered orders are part of "obligations incurred," but they
do not affect the net cost of operations. Thus, for a transaction
involving the placing a $100 undelivered order, obligations incurred would
increase by $100 but would be shown as a negative or a reduction to total
resources used to finance activities. (SFFAS 7 Implementation Guide (April
2002), par. 53-55)

Resources Used to Finance Items Not Part of the Yes, No or N/A Explanation
Net Cost of Operations (9 - 14)
10. Does the line item, "resources that fund
expenses recognized in prior periods,"124
reflect the obligation of resources that were
part of the net cost of operations in a prior
period? (OMB Bulletin 01-09, p. 48, section
7.4)
11. Do the line items included under "budgetary
offsetting collections and receipts that do not
affect net cost of operations" reflect
offsetting collections and receipts125 that are
not reported as exchange revenue in the
Statement of Net Cost? (OMB Bulletin 01-09, pp.
48 & 49, section 7.4)

124This line item is used to explain differences in resources and net cost
of operations caused by expenses, which were accrued in previous periods
but paid in the current period. If, for example, the amount of annual
leave taken or obligated was worth $250 but the amount of annual leave
earned (i.e., expensed) for the period was $200, the difference of $50
between obligation and expense would be shown as a negative. (SFFAS 7
Implementation Guide (April 2002), par. 56-58) 125Examples of offsetting
collections and receipts that are not exchange revenue are (1) collections
of subsidy expenses for post -1991 credit programs, (2) collections of
exchange revenue receivable from the public, and (3) advances (i.e.,
unfilled customer orders) for work not performed, with the caveat that in
most cases, orders from the public without advances cannot be accepted.
This line item is usually shown as a positive, the opposite (i.e.,
negative) of what is included under the line item, "less: spending
authority from offsetting collections and recoveries," unless there is a
net decrease in unfilled customer orders. (SFFAS 7 Implementation Guide
(April 2002), par. 59-61)

Resources Used to Finance Items Not Part of the Yes, No or N/A Explanation
Net Cost of Operations (9 - 14)
12. Does the line item, "resources that finance
the acquisition of assets," reflect budgetary
resources obligated126 that are not expenses as
reported on the Statement of Net Cost? (OMB
Bulletin 01-09, p. 49, section 7.4)
13. Does the agency include under the line
item, "Other resources or adjustments to net
obligated resources that do not affect net cost
of operations," activities 127 not otherwise
classified under the line items in this section
of the Statement of Financing? (OMB Bulletin
01-09, p. 49, section 7.4)
14. Does the line item, "total resources used
to finance the net cost of operations," consist
of the difference between the line items "total
resources used to finance activities" and
"total resources used to finance items not part
of the net cost of operations?" (OMB Bulletin
01-09, p. 46, section 7.2 & p. 48, section 7.4)

126An example of this activity is the purchase of capital assets. (SFFAS 7
Implementation Guide (April 2002), par. 62) 127This activity may include
noncash recoveries of prior year obligations. Recoveries are budgetary
resources that offset obligations on the Statement of Budgetary Resources,
but which are not a proprietary financing source used to offset costs on
the Statement of Net Cost.

Components of the Net Cost of Operations
that Will Not Require or Generate Yes, No or N/A Explanation
Resources in the Current Period (15- 24)
The section, "Components of the Net Cost of Operations that will not
Require or Generate Resources in the Current Period," identifies (1) items
that are recognized as a component of the net cost of operations (i.e.,
current period expenses and exchange revenues) for which budgetary
resources (and related obligations) will not be provided (or incurred)
until a subsequent period and (2) items (i.e., current period expenses)
that are recognized as a part of the net cost of operations for the period
but will not generate or require the use of resources in the current
period. (OMB Bulletin 01-09, p. 49, section 7.5 & p. 50, section 7.6)
15. Does the line item, "increase in
annual leave liability," include the
expense related to the increase128 in
annual leave liability for which the
budgetary resources will be provided in a
subsequent period? (OMB Bulletin 01-09,
p. 50, section 7.5)
16. Does the line item, "increase in
environmental and disposal liability,"
include the expense related to the
increase in environmental and disposal
liability for which the budgetary
resources will be provided in a
subsequent period? (OMB Bulletin 01-09,
p. 50, section 7.5)
17. Does the line item "upward/downward
reestimates of credit subsidy expense
(+/-)," include the expense recognized as
a result of an upward(+) or downward(-)
reestimate of credit program subsidy cost
for which budgetary resources (or
obligations) will be provided (or
incurred) in a subsequent period?129 (OMB
Bulletin 01-09, p. 50, section 7.5)
18. Are these credit subsidy reestimates
reflected as liabilities covered by
budgetary resources?130 (OMB Bulletin
01-09, p. 50, section 7.5)

128An increase in annual leave liability has no effect on budgetary
accounts, because it is not funded on an accrual basis. It is
financed when it is taken and the amounts are paid to employees who took
the leave. Thus, budgetary resources are zero, but
the net cost of operations includes the amount of accrued leave. (SFFAS 7
Implementation Guide (April 2002), par. 40)
129The Credit Reform Act of 1990, as amended, provides that agencies will
receive subsidies to cover defaults and other
situations for direct loans and loan guarantees obligated after September
30, 1991. (SFFAS 7 Implementation Guide (April
2002), par. 66)
130Budget authority to fund reestimates is permanent and indefinite and no
further congressional action is needed to provide the
resources.

Components of the Net Cost of Operations that
Will Not Require or Generate Resources in the Yes, No or N/A Explanation
Current Period (15- 24)
19. Does the line item, "increase in exchange
revenue receivable from the public," include
exchange revenue recognized as a component131
of the net cost of operations for the period?
(OMB Bulletin 01-09, p. 50, section 7.5)
20. Does the entity report as "other" under the
section "Components Requiring or Generating
Resources in Future Periods," all other
expenses and exchange revenue not specifically
mentioned in the preceding questions that do
not require or generate resources in the
current period but will do so in a subsequent
period? (OMB Bulletin 01-09, p. 50, section
7.5)
21. Does the line item, "depreciation and
amortization," reflect the current period usage
of assets132 or amortization of liabilities133
for which budgetary resources were obligated in
a prior period? (OMB Bulletin 01-09, p. 50,
section 7.6)
22. Does the line item, "revaluation of assets
and liabilities," include gains and losses
recognized134 during the revaluation of assets
or liabilities? (OMB Bulletin 01-09, p. 50,
section 7.6;)

131Absent specific legislation to the contrary, public receivables do not
count as budgetary resources until they are collected.
Hence, the revenue related to accruals of those resources is not reflected
in offsetting collection activity at the time they are
accrued. (SFFAS 7 Implementation Guide (April 2002) par. 70)
132Budgetary resources are obligated when the asset is acquired, not when
it is depreciated or used up. No budgetary resources
are used when an asset is depreciated. (SFFAS Implementation Guide, par.
44)
133Budgetary resources are obligated when an allowance (i.e., liability or
contra-asset) for a subsidy is set up, and as the
estimated expenses are realized the allowance account is amortized. The
budgetary accounts, which have already recognized
the obligation and offsetting collection for subsidy expense, are not
affected by the transaction. (SFFAS 7 Implementation
Guide (April 2002), par. 92)
134Gains are shown as a negative; losses are shown as a positive.

Components of the Net Cost of Operations that
Will Not Require or Generate Resources in the Yes, No or N/A Explanation
Current Period (15- 24)
23. Does the entity report as "other" under the
section "components not requiring or generating
resources," all other expenses135 and exchange
revenue not specifically mentioned in the
preceding questions that will not require or
generate resources in the current or future
periods? (OMB Bulletin 01-09, p. 50, section
7.5)
24. Does the sum of the line items "total
resources used to finance net cost of
operations" and "total components of net cost
of operations that will not require or generate
resources in the current period" agree with the
net cost of operations as reported in the
Statement of Net Cost as well as the Statement
of Changes in Net Position? (OMB Bulletin
01-09, p. 51, section 7.7)

135An example of this would be default expenses of pre-credit reform (or
pre-1992) loans.

Disclosure Items (25- 27) Yes, No or N/A Explanation
25. Has the entity identified and
explained in a note to the financial
statements the relationship between
amounts reported as "liabilities not
covered by budgetary resources"
reported on the Balance Sheet and
amounts reported as "components
requiring or generating resources in
future periods" on the Statement of
Financing? (OMB Bulletin 01-09, p. 94,
section 9.35)
When budget authority and other resources are allocated to another agency
or bureau, 136 the parent (transferor of the appropriation) should report
the activity in its financial statements unless the allocation transfer is
material to the child's (recipient of the transfer) financial statements.
If the allocation transfer is material to the child's financial
statements, the child entity should report the activity relating to the
allocation in all of its financial statements, except the Statement of
Budgetary Resources (SBR). In this case, the parent entity should continue
to report the appropriation and the related budgetary activity in its SBR.
It is the responsibility of the parent to ensure that the reporting to
Treasury, through FACTS I, is consistent with the presentation in the
financial statements. (OMB Bulletin 01-09, p. 94, section 9.36)
26. When the child entity reports
material allocation transfers in its
Statement of Net Cost, do both the
parent and the child report a
reconciling item on their respective
Statements of Financing? (OMB Bulletin
01-09, p. 95, section 9.36)
27. Do both parent and child entities
provide a general description of the
funds transferred or received,
including the nature and purpose of the
transfer and any additional details
deemed necessary? (OMB Bulletin 01-09,
p. 95, section 9.36)

136See OMB Circular No. A-11, sections 20.4 (l) and 71.6

The 27 questions in this section are related to the Statement of Custodial
Activity.

Question Numbers

1. General 1 -2

2. Sources of Collections 3 - 10

3. Disposition of Collections 11 -15

4. Disclosures 16 -19

5. Dedicated Collections and
Other Accompanying Information 20 - 27

General (1- 2) Yes, No or N/A Explanation
Entities that collect nonexchange revenue for the General Fund of the
Treasury, a trust fund, or other recipient entities account for the
sources and disposition of these collections in a Statement of Custodial
Activity. An exception to requiring preparation of the Statement of
Custodial Activity is made when collecting entities have custodial
collections that are immaterial and incidental to their primary mission.
In these cases, the sources and disposition of the collections may be
disclosed in accompanying footnotes. (OMB Bulletin 01-09, p. 52, section
8.1)
1. If some of the nonexchange revenue is
transferred to others and some of the
nonexchange revenue is retained as a
reimbursement for the costs of collection,
are the transferred amounts reported on the
Statement of Custodial Activity, and are
the retained amounts reported on the
Statement of Net Cost? (OMB Bulletin 01-09,
p. 52, section 8.1)
2. If the entity collects exchange revenue
(e.g., rents and royalties) on behalf of
other entities and recognizes virtually no
costs in connection with earning that
revenue, does the entity account for it as
a custodial activity? (SFFAS 7, par. 45)

Sources of Collections (3- 10) Yes, No or N/A Explanation
3. Are the following transactions recognized as
taxes and other nonexchange revenues from the
public? a. individual and corporate income
taxes, social insurance taxes and
contributions, excise taxes, estate and gift
taxes, and customs duties b. social insurance
taxes and contributions paid by federal
employees c. deposits by states for
unemployment trust funds d. user fees and
harbor maintenance trust fund payments e.
customs service fees f. deposits of earnings
from the Federal Reserve System g. donations,
except types of PP&E that are expensed h. fines
and penalties i. penalties due to delinquent
taxes in connection with custodial activity j.
forfeitures (SFFAS 7, par. 49; SFFAS 7,
Appendix B, par. 242 - 264)
4. Does the collecting entity measure taxes and
duties on a cash basis and then modify that
with an accrual adjustment to determine the
amount of revenue to be recognized? (SFFAS 7,
par. 49 & 52; OMB Bulletin 01-09, p. 54,
section 8.3)
5. Except for deposits, are cash collections137
based on amounts actually received during the
fiscal period including withholdings, estimated
payments, final payments, and collections of
receivables? (SFFAS 7, par. 50 & 59)

137Cash collections include any amounts paid in advance of due dates
unless they are deposits. Deposits are amounts voluntarily paid to
reporting entities, such as those made to stop the accrual of interest or
those made pending settlements and judgments. Such Deposits are separately
recognized as deposit liabilities.

Sources of Collections (3- 10) Yes, No or N/A Explanation
6. Are the components of cash collections
classified by source and nature of collection,
such as by type of tax or duty? (OMB Bulletin
01-09, pp. 53 & 54, section 8.3)
7. Are cash refunds of nonexchange revenue
based on refunds of taxes and duties during the
period? (SFFAS 7, par. 51)
8. Do cash refunds of nonexchange revenue for
taxes and duties include refund offsets 138 and
drawbacks?139 (SFFAS 7, par. 51)
9. Are cash refunds, if material in relation to
gross collections, disclosed separately by
component in the notes to the financial
statement? (OMB Bulletin 01-09, p.54, section
8.3)
10. Are accrual adjustments,140 if material in
relation to gross collections, disclosed
separately in the notes to the financial
statement? (SFFAS 7, par. 52; OMB Bulletin
01-09, p. 54, section 8.3)

138Refund offsets are amounts withheld from refunds on behalf of other
agencies and paid to such agencies.
139Drawbacks are refunds of duties paid on imported goods that are
subsequently exported or destroyed.
140Accrual adjustments, which modify the net of cash collections and
refunds to determine the amount of revenue recognized,
are the net increases or decreases during the reporting period in accounts
receivable, allowance for uncollectable accounts, and
accounts payable for refunds.

Disposition of Collections (11- 15) Yes, No or N/A Explanation
11. Do the amounts transferred to others,
reported in the "disposition of collections"
section, identify the specific agencies to
which collections were transferred and the
amounts transferred? (OMB Bulletin 01-09, p.
53, section 8.2 & p. 54, section 8.4)
12. Does the collecting entity report the
change in liability for accrued and collected
revenue yet to be transferred? (OMB Bulletin
01-09, p. 53, section 8.2 & p. 54, section 8.4)
13. Are the amounts of refunds and other
payments made reported separately in the
"disposition of collections" section of the
Statement of Custodial Activity? (OMB Bulletin
01-09, p. 53, section 8.2 & p. 54, section 8.4)
14. Are collections retained by the entity
separately reported as exchange revenue in the
Statement of Net Cost and treated as a
disposition of collections revenue in the
statement of custodial activity? (OMB Bulletin
01-09, p. 52, section 8.1, p. 53, section 8.2.
& p. 54, section 8.4)
15. In the Statement of Custodial Activity, do
total sources of collections equal total
disposition of collections (revenue) so that
the net custodial activity is zero? (OMB
Bulletin 01-09, p. 54, section 8.5)

Disclosures (16- 19) Yes, No or N/A Explanation
16. If custodial revenues are immaterial and
incidental to the entity's primary mission and
are not reported separately on the Statement of
Custodial Activity, are the sources and amounts
of the collections and amounts to be
distributed to others disclosed? (OMB Bulletin
01-09, p. 52, section 8.1 & p. 95, section
9.37)
17. Does the collecting entity disclose and
explain the following information? a. the basis
of accounting when application of the general
rule for recognizing nonexchange revenue (i.e.,
specifically identifiable, legally enforceable,
and reasonably estimable) results in a modified
cash basis of accounting b. the specific
potential accruals that are not made as a
result of using the modified cash basis
accounting c. the practical and inherent
limitations affecting the accrual of taxes and
duties d. the use of accrual-based accounting,
if applicable (SFFAS 7, par.48 & 64)
18. Do entities that collect taxes and duties
disclose the following information in a note or
narrative? a. basis of accounting b. factors
affecting the collectibility and timing of
taxes and other nonexchange revenues c. cash
collections and refunds by tax year and type of
tax for the reporting period (SFFAS 7, par.
65.1 & 65.3; OMB Bulletin 01-09, p. 95, section
9.38)
19. If trust fund revenues are not recorded in
accordance with applicable law, do the
collecting and recipient entities disclose the
reasons? (SFFAS 7, par. 66)

Dedicated Collection and Other Yes, No or N/A Explanation
Accompanying Information (20- 27)
Dedicated collections are funds held with the expectation that they will
be held for and applied to the purposes for which the funds were
dedicated. Such funds include all funds within the budget classified as
trust funds, those funds within the budget that are classified as "special
funds" but that are similar in nature to trust funds, and those funds
within the federal universe (inside or outside the budget) that are
fiduciary in nature. (SFFAS 7, par. 83; OMB Bulletin 01-09, p. 95, section
9.39)
20. Does the management of a reporting
entity identify, track, and disclose the
receipts and expenditures of dedicated
trust funds, "special funds," and
fiduciary or deposit funds (both inside
and outside the budget) for which it is
responsible? (SFFAS 7, par. 83; OMB
Bulletin 01-09, pp. 95 & 96, section
9.39)
21. Does management provide separate
financial information about these
dedicated funds if they are material to
the reporting entity, the beneficiary, or
the contributors? (SFFAS 7, par. 84; OMB
Bulletin 01-09, pp. 95 & 96, section
9.39)

Dedicated Collection and Other Accompanying Yes, No or N/A Explanation
Information (20- 27)
22. Is the following information reported for
individual funds that account for dedicated
collections? a. a description of each fund's
purpose, how the administrative entity accounts
for and reports the fund, and its authority to
use those collections b. the sources of revenue
or other financing for the period and an
explanation of the extent to which they are
inflows of resources to the government or the
result of intragovernmental flows c. condensed
information about assets and liabilities
showing investments in Treasury securities,
other assets, liabilities due and payable to
beneficiaries, other liabilities, and fund
balance d. condensed information on net cost
and changes to fund balance showing revenues by
type (exchange or nonexchange), program
expenses, other expenses, other financing
sources, and other changes in fund balance e.
the amounts of any revenues-other financing
sources or costs attributable to the fund under
accounting standards-that are not legally
allowable as credits or charges to the fund
(SFFAS 7, par. 85; OMB Bulletin 01-09, pp. 95 &
96, section 9.39)
23. If revenues, other financing sources, or
costs (such as item "e" of the previous
question) are associated with but not legally
allowable to a fund, does the larger reporting
entity of which the fund is a component
recognize them? (SFFAS 7, par. 86; OMB Bulletin
01-09, p. 96, section 9.39)

Dedicated Collection and Other Accompanying Yes, No or N/A Explanation
Information (20- 27)
24. If more than one reporting entity is
responsible for carrying out a program financed
with dedicated collections, does the entity
with the largest share of the activity take
responsibility for reporting all revenues,
other financing sources, assets, liabilities,
and costs of the fund? (SFFAS 7, par. 87)
25. If information on actual collections is not
currently available from the collecting entity,
do the trust funds that are legally entitled to
receive only excise taxes that are actually
collected by the collecting entity recognize
revenue from excise taxes on the basis of
assessments in lieu of excise taxes actually
collected? (SFFAS 7, par. 60.1)
26. Is the amount of revenue accrued and
recognized by the social security trust fund
based on the best available information (i.e.,
on the basis of the higher of the amount of
Internal Revenue Service (IRS) assessments or
the amounts actually reported by employers to
Social Security)? (SFFAS 7, par. 60.2)

Dedicated Collection and Other Accompanying Yes, No or N/A Explanation
Information (20- 27)
27. Does the collecting entity report the
following as other accompanying information? a.
income tax burden borne by different classes of
taxpayers and the effects of tax rates,
deductions, credits, etc. (required of IRS) b.
available information on the size of the tax
gap, including i. explicit definitions of the
estimated amounts reported (e.g., whether the
tax gap includes estimates on illegally earned
income) ii. appropriate explanations of the
limited reliability of the estimates iii. cross
references to portions of the tax gap due from
identified noncompliant taxpayers and importers
c. appropriate explanations and qualifications,
if information about tax expenditures related
to entity programs is present d. a description
of the basis for the estimates and appropriate
cautionary language about reliability, if
information about estimated directed flows of
resources related to an entity's programs is
presented (SFFAS 7, par. 69.1 69.4; OMB
Bulletin 01-09, p. 114 section 12.3 & p. 115,
section 12.4)

The five questions in this section are related to the disclosure of significant
accounting policies.

Notes to Financial Statements (1- 5) Yes, No or N/A Explanation
1. Is a description of the reporting entity
presented in the disclosure of significant
accounting policies, along with identification
of the entity's major components? (OMB Bulletin
01-09, p. 55, section 9.1)
2. Does the entity identify and describe
accounting principles it follows, and methods
of applying those principles in a note to the
financial statements? (OMB Bulletin 01-09, p.
55, section 9.1)
3. Does the entity's disclosure of its
accounting policies include its rationale for
the valuation, recognition, and allocation of
assets, liabilities, expenses, revenues, and
other financing sources? (OMB Bulletin 01-09,
p. 55, section 9.1)
4. Does the entity disclose any significant
changes in its composition or manner in which
it aggregates information for financial
reporting purposes? (OMB Bulletin 01-09, p. 55,
section 9.1)
5. If changes in the composition of the
reporting entity or manner in which the
reporting entity aggregates information for
financial reporting purposes, in effect, result
in a new reporting entity, has the entity
restated financial statements for all prior
periods presented to correspond to the changes?
(OMB Bulletin 01-09, pp. 55 & 56, section 9.1)

The questions related to the Supplementary Information are organized in
the following eight categories.

Question Numbers

1. Required Supplementary Stewardship Information:
Property, Plant, & Equipment 1 - 14

2. Required Supplementary Stewardship Information:
Stewardship Investments 15 -42

3. Required Supplementary Information:
Risk-Assumed Information 43

4. Required Supplementary Information:
Custodial Activity 44 -45

5. Required Supplementary Information:
Segment Information 46 -47

6. Required Supplementary Information
Management's Discussion and Analysis 48 - 61

7. Required Supplementary Information: Deferred Maintenance 62 -65

8. Required Supplementary Information:
Intragovernmental Amounts 66 -78

See Section XI for Social Insurance Information

Required Supplementary Stewardship
Information: Property, Plant, & Yes, No or N/A Explanation
Equipment (1 - 14)
Stewardship reporting requires the federal government to report on its
stewardship over certain resources entrusted to it and certain
responsibilities assumed by it that cannot be measured in traditional
financial reports. These resources and responsibilities do not meet the
criteria for assets and liabilities that are required to be reported in
the financial statements, but are important to understanding the
operations and financial condition of the federal government at the date
of the financial statements and in subsequent periods. Stewardship PP&E
consists of items whose physical properties resemble those of general PP&E
traditionally capitalized in financial statements. However, because of the
nature of these assets, valuation may be difficult, and matching costs
with specific periods would not be meaningful. Stewardship PP&E includes:
- heritage assets, such as federal monuments and memorials, that are of
historical, natural, cultural, educational, architectural, or artistic
significance and - stewardship land, such as national forests and parks
that have not been acquired for or in connection with general PP&E. (SFFAS
8, par.7-11 & 17; OMB Bulletin 01-09, p. 97, section 10.1 and p. 98,
section, 10.2)
1. Except for multi-use heritage
assets in which the predominant use of
the asset is in general government
operations, are heritage assets
reported as Required Supplementary
Stewardship Information (RSSI)
accompanying the financial statements
rather than as asset amounts on the
balance sheet? (SFFAS 8, par.43; OMB
Bulletin 01-09, p. 23, section 3.3 &
p. 98, section 10.2A)
2. Are heritage assets (including
multiuse heritage assets) reported in
RSSI in terms of physical units rather
than in terms of cost, fair value, or
other monetary values? (SFFAS 8, par.
46; SFFAS 16, par.9; OMB Bulletin
01-09, p. 23, section 3.3 & p. 98,
section 10.2A)

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Property, Plant, & Equipment (1 - 14)
3. Does the reporting entity provide relevant
RSSI in the financial statements, such as the
following information about its heritage
assets? a. a description of each major category
of heritage asset and whether it is collectible
or noncollectible b. a description of the
methods of acquisition and withdrawal of
heritage assets c. an accounting for the
physical units by major category including: i.
beginning balances ii. additions iii.
withdrawals iv. ending balances d. a
description of the condition of the assets
unless it is already reported in deferred
maintenance information included elsewhere in
the report, in which case a reference to the
information will suffice e. a reference to
deferred maintenance information, if deferred
maintenance is reported for the assets (SFFAS
8, par. 50, SFFAS 14, par. 10-11; OMB Bulletin
01-09, pp. 99-100, section 10.2D)
4. Are federal land141 and land rights owned by
the federal government and not acquired for or
in connection with other general PP&E reported
as stewardship land in the RSSI of the
financial statements? (SFFAS 6, par. 66-68,
SFFAS 8, par. 74)

141Land is defined as the solid part of the surface of the earth. Excluded
from the definition of land are materials beneath the surface (i.e.,
depletable resources such as mineral deposits and petroleum), the space
above the surface (i.e., renewable resources such as timber), and the
outer-continental shelf resources.

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Property, Plant, & Equipment (1 - 14)
5. Is stewardship land quantified and reported
in terms of physical units (e.g., acres) in the
RSSI rather than in monetary values? (SFFAS 8,
par. 75; OMB Bulletin 01-09, p. 99, section
10.2C)
6. Is the cost of a structure acquired with
stewardship land that is to be used in
operations included in the acquisition cost of
the land if one of the following conditions
applies? a. the structure's value is
insignificant compared to the value of the land
b. the structure has little or no inherent
value c. the structure is merely a byproduct of
the acquisition of the land (SFFAS 6, par. 70)
7. If a significant structure acquired with
stewardship land has an operating use (e.g., a
recently constructed hotel or employee-housing
block), is its cost segregated from the cost of
the stewardship land acquired and capitalized
as general PP&E? (SFFAS 6, par. 70; SFFAS 8,
par. 78)
8. If the fair value of stewardship land
acquired through donation or devise is known
and material, is it disclosed in the notes to
the financial statements? (SFFAS 6, par. 71;
SFFAS 8, par. 79)
9. If the fair value of the stewardship land
acquired through donation or devise is not
estimable, is information as to the type and
quantity of the assets disclosed? (SFFAS 6,
par. 71; SFFAS 8, par. 79)
10. Is the cost of stewardship land transferred
from another federal entity recorded at the
book value of the land on the transferring
entity's books? (SFFAS 6, par. 72)

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Property, Plant, & Equipment (1 - 14)
11. If stewardship land is transferred from
another federal entity, and the receiving
entity does not know its book value, is the
transfer disclosed in the notes if material?
(SFFAS 6, par. 72)
12. Are all transfers of stewardship land
disclosed in the notes if material? (SFFAS 6,
par. 72)
13. Is acquisition cost of stewardship land
recorded in the following manner? a. recognized
as a cost in the period incurred b. include all
costs incurred to bring the stewardship land to
its intended use, current condition, and
location (including razing a building) c.
disclosed142 as "cost of stewardship land"
(SFFAS 6, par. 69 & 73; SFFAS 8, par. 80)

142Disclosure shall be either on the face of the statement of net cost or in
footnotes, depending on the materiality of the amounts and the need to
distinguish such amounts from other costs relating to measures of outputs or
outcomes of the reporting entity.

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Property, Plant, & Equipment (1 - 14)
14. With regard to stewardship land, does the
reporting entity include in its RSSI the
following information? a. a description, by
principal organization, significant holdings of
stewardship land by category of major use 143
b. a description of the methods of acquisition
and withdrawal of stewardship land c. an
accounting for physical units by major category
including: i. beginning balance ii. additions
iii. withdrawals iv. ending balance d. the
condition of the stewardship land, unless it is
already reported elsewhere in the report (in
which case a reference to the information will
suffice) e. a reference to the applicable
information if deferred maintenance is reported
for the assets. (SFFAS 6, par. 69 & 73; SFFAS
8, par. 80 & 81; SFFAS 14, par. 10 & 11; OMB
Bulletin 01-09, pp. 99 & 100, section 10.2D)

143Where parcels of stewardship land have more than one use, the
predominant use of the land shall be considered the major use.

Required Supplementary Stewardship
Information: Stewardship Investments Yes, No or N/A Explanation
(15 - 42)
Stewardship investments are substantial investments made by the federal
government for the benefit of the nation. When incurred, they are treated
as expenses in calculating net cost, but they are also separately reported
as RSSI to highlight the extent of investments that are made for long-term
benefit. (SFFAS 8, par. 12) Stewardship investments include: nonfederal
physical property: federally financed (but not federally owned) purchases,
construction, or major renovation of physical property owned by state and
local governments, including major additions, alterations, and
replacements, the purchase of major equipment; and the purchase or
improvement of other physical assets. 144 human capital: expenses incurred
for programs for education and training of the public145 that are intended
to increase or maintain national productive capacity and that produce
outputs and outcomes that provide evidence of maintaining or increasing
national productive capacity. research & development: expenses incurred to
support the search for new or refined knowledge and ideas and for the
application or use of such knowledge and ideas for the development of new
or improved products and processes with the expectation of maintaining or
increasing national productive capacity or yielding other future benefits.
(SFFAS 8, par. 12, 83, 89, 90, & 96; OMB Bulletin 01-09, p. 100, section
10.3)
15. Are nonfederal physical property
investments reported in nominal
dollars on the basis of "expenses
incurred" and measured on the same
basis of accounting used for financial
statement purposes, including
appropriate accrual adjustments,
general and administrative overhead,
and costs of facilities? (SFFAS 8,
par. 84)
16. Are investments in nonfederal
physical property and related cash
grants recognized and reported as
expenses in arriving at the net cost
of operations? (SFFAS 8, par. 85; OMB
Bulletin 01-09, p. 100, section 10.3A)

144Grants for maintenance and operations are not considered investments in
nonfederal physical property. 145The definition excludes education and
training expensed for federal civilian and military personnel.

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Stewardship Investments (15 - 42)
17. Are expenses incurred for nonfederal
physical property program costs, contracts, or
grants with split purposes 146 reported in RSSI
on the basis of a logical allocation? (SFFAS 8,
par. 86)
18. If an allocation of such program costs,
etc. is not feasible, is the investment
reported on the basis of the predominant
application of the expenses incurred? (SFFAS 8,
par. 86)
19. Does the reporting entity provide in its
RSSI a dollar amount and a narrative
description of its investment in nonfederal
physical property for the year being reported
on as well as at least the preceding 4 years?
(SFFAS 8, par. 87; OMB Bulletin 01-09, p. 100,
section 10.3A & p. 102, section 10.3D)
20. Is expense or outlay data for investments
in nonfederal physical property reported at a
meaningful category or level (e.g., by major
program or department)? (SFFAS 8, par. 87; OMB
Bulletin 01-09, p. 102, section 10.3D)
21. Does the reporting entity also include in
its RSSI a description of federally owned
physical property transferred to state and
local governments for the year being reported
on as well as at least the preceding 4 years?
(SFFAS 8, par. 87; OMB Bulletin 01-09, p. 102,
section 10.3D)
22. If expense data for the purchase of PP&E
for state and local governments for the year
being reported on and for the preceding 4 years
are not available, does the entity report
outlay data, if available? (SFFAS 8, par. 87;
OMB Bulletin 01-09, p. 102, section 10.3D)

146An example of an investment with a split purpose is a grant issued to a
state to construct segments of the National Highway System and to conduct
highway research.

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Stewardship Investments (15 - 42)
23. If neither historical expense nor outlay
data are available on stewardship investments
for the year being reported on and the
preceding 4 years, does the entity report
expense data for the current reporting year and
such other years, as available? (SFFAS 8, par.
87; OMB Bulletin 01-09, p. 102, section 10.3D)
24. Are investments in human capital reported
in nominal dollars on the basis of "expenses
incurred" and measured on the same basis of
accounting used for financial statement
purposes, including appropriate accrual
adjustments, general and administrative
overhead, and costs of facilities? (SFFAS 8,
par. 91)
25. Are expenses incurred for human capital
program costs, contracts, or grants with split
purposes 147 reported in RSSI on the basis of a
logical allocation? (SFFAS 8, par. 92)
26. If an allocation of such program costs,
etc. is not feasible, is the investment
reported on the basis of the predominant
application of the expenses incurred? (SFFAS 8,
par. 92)
27. Does the entity link its investments in
human capital to outcomes that can be described
in financial, economic, or quantitative terms?
(SFFAS 8, par. 93)
28. If outcome data are not available, does the
reporting entity report output data that best
provide indications of the intended program
outcomes? (SFFAS 8, par. 93)

147An example of an investment with a split purpose is a grant issued to a
teaching hospital for both medical education and medical research.

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Stewardship Investments (15 - 42)
29. Does the reporting entity include in its
RSSI the dollar amount and a narrative
description of its investment in human capital
for the year being reported on as well as the
preceding 4 years? (SFFAS 8, par. 94; OMB
Bulletin 01-09, p. 101, section 10.3B)
30. If expense data for the investments in
human capital for the year being reported and
for the preceding 4 years are not available,
does the entity report outlay data, if
available? (SFFAS 8, par. 94; OMB Bulletin
01-09, p. 102, section 10.3D)
31. If neither historical expense nor outlay
data for the investments in human capital are
available for the year being reported on and
the preceding 4 years, does the entity report
expense data for the current reporting year and
such other years, as available? (SFFAS 8, par.
94; OMB Bulletin 01-09, p. 102, section 10.3D)
32. Is expense or outlay data for investments
in human capital reported at a meaningful
category or level (e.g., by major program or
department)? (SFFAS 8, par. 94)
33. Is the investment in research and
development reported in nominal dollars on the
basis of "expenses incurred" and measured on
the same basis of accounting used for financial
statement purposes, including appropriate
accrual adjustments, general and administrative
overhead, and costs of facilities? (SFFAS 8,
par. 97)
34. Are expenses incurred for research and
development program costs, contracts, or grants
with split purposes 148 reported in RSSI on the
basis of a logical allocation? (SFFAS 8, par.
98)

148ibid.

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Stewardship Investments (15 - 42)
35. If an allocation of such program costs,
etc. is not feasible, is the investment
reported on the basis of the predominant
application of the expenses incurred? (SFFAS 8,
par. 98)
36. Does the entity link its investments in
research and development to program outcome
data via a narrative discussion of the major
results achieved by the program during the year
along the following lines? a. basic research,
which refers to an identification of any major
new discoveries that were made during the year
b. applied research, which refers to an
identification of any major new applications
that were developed during the year c.
development, which refers to the progress of
major developmental projects including the
results with respect to projects completed or
otherwise terminated during the year and the
status of projects that will continue (SFFAS 8,
par. 99)
37. If outcome data are not available, does the
reporting entity use output data 149 that best
provide indications of the intended program
outcomes? (SFFAS 8, par. 99)
38. Does the reporting entity include in its
RSSI the dollar amount and a narrative
description of its investment in major research
and development programs for the year being
reported on as well as the preceding 4 years?
(SFFAS 8, par. 100; OMB Bulletin 01-09, p. 101,
section 10.3C & p. 102, section 10.3D)

149In research and development programs, output data might consist of a
number of new projects initiated, or the number of projects continued,
completed, or terminated. It also might consist of quantitative measures
such as publication counts, citation counts, patent counts, or scientific
and engineering personnel funded.

Required Supplementary Stewardship Information: Yes, No or N/A Explanation
Stewardship Investments (15 - 42)
39. If expense data for the investments in
research and development for the year being
reported and for the preceding 4 years are not
available, does the entity report outlay data,
if available? (SFFAS 8, par. 100; OMB Bulletin
01-09, p. 102, section 10.3D)
40. If neither historical expense nor outlay
data are available for the year being reported
on and the preceding 4 years, does the entity
report expense data for the current year and
such other years as available? (SFFAS 8, par.
100; OMB Bulletin 01-09, p. 102, section 10.3D)
41. Is expense or outlay data for investments
in research and development reported at a
meaningful category or level (e.g., by major
program or department)? (SFFAS 8, par. 100; OMB
Bulletin 01-09, p. 102, section 10.3D)
42. Does the entity report in its RSSI the
amounts of significant contributions from
state, local, private, and other sources to its
investments in nonfederal physical property,
human capital, and research and development?150
(SFFAS 8, par. 88, 95, & 101)

150This reporting is encouraged, but is not required.

Required Supplementary Information: Risk Yes, No or N/A Explanation
Assumed Information (43)
Risk-assumed information is generally measured by the present value of
unpaid expected losses net of associated premiums based on the risk
inherent in the insurance or guarantee coverage in force. (SFFAS 5, par.
105 & 106; OMB Bulletin 01-09, p.103, section 10.4A)
43. Does the entity include as Required
Supplementary Information (RSI) the current
amount and periodic changes of "risk assumed"
arising from insurance and guarantee programs?
(SFFAS 5, par. 105, 106, 110; SFFAS 25, par. 2;
OMB Bulletin 01-09, p. 103, section 10.4A)

Required Supplementary Information: Custodial Yes, No or N/A Explanation
Activity (44 - 45)
44. Do entities that collect taxes and duties
provide the following supplementary information
relating to their potential revenue and
custodial responsibilities? a. the estimated
realizable value, as of the end of the
reporting period, of compliance assessments
and, if reasonably estimable, pre-assessment
work in process, based on management's best
estimate that is appropriately identified as to
their reliability b. if reasonably estimable,
other claims for refunds not yet accrued but
likely to be paid when administrative action is
complete, based on management's best estimates
c. amount of assessments defined as written-off
(i.e., no further collection potential) that
continues to be statutorily collectable d.
amounts by which trust funds may be overfunded
or underfunded in comparison with the
requirements of the law, if reasonably
estimable (SFFAS 7, par. 67.1-67.4; OMB
Bulletin 01-09, pp.112-113, section 11.5)
45. If the entity receiving funds from the
collecting entity is itself a trust fund, does
it provide as supplementary information amounts
by which related trust funds may be overfunded
or underfunded in comparison with the
requirements of the law, if reasonably
estimable? (SFFAS 7, par. 67.4, 68; OMB
Bulletin 01-09, p. 113, section 11.5)

Required Supplementary Information: Segment Yes, No or N/A Explanation
Information (46 - 47)
46. Do all franchise and other
intragovernmental support revolving funds
report the following supplementary information?
a. a brief description of the services provided
by the fund and the identity of the fund's
major customers (i.e., organizations that
account for more than 15 percent of the fund's
revenues) b. a summary for the reporting
period, by product or line of business,
including the following items i. the full cost
of goods and services provided ii. the related
exchange revenues iii. the excess of full costs
over exchange revenues (OMB Bulletin 01-09, p.
113, section 11.6)
47. If a franchise fund or other
intragovernmental support revolving fund is not
separately reported on the entity's principal
statements, does the entity report as
supplementary information a summary of the
fund's assets, liabilities, and net position
that includes the following items as of the
reporting date? a. fund balance b. accounts
receivable c. property, plant, and equipment d.
other assets e. liabilities due and payable for
goods and services received f. deferred
revenues g. other liabilities h. cumulative
results of operations (OMB Bulletin 01-09, p.
113, section 11.6)

Required Supplementary Information: Yes, No or N/A Explanation
Management's Discussion and Analysis (48 - 61)
48. Does the entity include as RSI a section
devoted to management discussion and analysis
(MD&A) of the financial statements and related
information? (SFFAS 15, par. 1; SFFAC 3, par. 1
& 2; OMB Bulletin 01-09, p. 105, section 11.1)
49. In general, does the MD&A provide a clear,
concise, and balanced description of the
reporting entity and its mission, activities,
program and financial performance, systems,
controls, legal compliance, financial position,
and financial condition? (SFFAS 15, par. 1;
SFFAC 3, par. 1; OMB Bulletin 01-09, p. 105,
section 11.1)
50. Does the MD&A, at a minimum, contain
sections that address the following items
concerning the entity? a. mission and
organizational structure b. performance goals,
objectives, and results c. financial statements
d. systems, controls, and legal compliance e.
forward-looking information, either as a
separate section of MD&A or incorporated with
the sections listed above f. important problems
that need to be addressed and action taken or
planned, either as a separate section of the
MD&A or incorporated with the sections listed
above (SFFAS 15, par. 2-4; OMB Bulletin 01-09,
pp. 105 & 106, section 11.1A)

Required Supplementary Information: Yes, No or N/A Explanation
Management's Discussion and Analysis (48 - 61)
51. Does the MD&A limit itself to the most
important matters that could, for example, have
the following impact? a. lead to significant
actions or proposals by top management of the
reporting unit b. be significant to the
managing, budgeting, and oversight functions of
Congress and the administration c.
significantly affect the judgment of citizens
about the efficiency and effectiveness of their
federal government (SFFAS 15, par. 5 & 6)
52. Does the MD&A section on the entity's
mission and organizational structure contain a
brief description of the mission(s) of the
entity and its related organizational
structure, that is consistent with the entity's
strategic plan? (OMB Bulletin 01-09, p. 106,
section 11.1B)
53. Are the entity's programs and financial
results expressed in terms of objective and
relevant measures that disclose the extent to
which its programs are achieving their intended
objectives? (OMB Bulletin 01-09, p. 106,
section 11.1C)
54. Has the entity attempted to develop and
report objective measures that provide
information about the cost effectiveness of
programs? (OMB Bulletin 01-09, pp. 106 & 107,
section 11.1C)
55. Are the performance measures presented in
the MD&A consistent with the measures
previously included in the budget and planning
documents? (OMB Bulletin 01-09, p. 107, section
11.1C)
56. Does the entity explain what needs to be
done and what is planned to improve financial
or program performance? (OMB Bulletin 01-09, p.
107, section 11.1C)

Required Supplementary Information: Yes, No or N/A Explanation
Management's Discussion and Analysis (48 - 61)
57. Does the entity's discussion of performance
goals, objectives, and results indicate the
extent to which its programs are achieving
their intended goals and objectives, and are
these clearly linked to cost categories
(responsibility segments) featured in the
Statement of Net Cost? (OMB Bulletin 01-09, p.
106, section 11.1C)
58. Does the MD&A section on the entity's
performance goals, objectives, and results also
provide the following information? a. a
discussion of the strategies and resources the
agency uses to achieve its performance goals b.
a clear picture of planned and actual
performance c. an explanation of the procedures
that management has designed and followed to
provide reasonable assurance that reported
performance information is relevant and
reliable d. an explanation of performance
trends e. an evaluation of the significance of
underlying factors that may have affected the
reported performance (OMB Bulletin 01-09, p.
106, section 11.1C)
59. In reporting on the status of systems and
internal controls that support preparation of
the financial statements, performance
information, and compliance with applicable
laws, does the entity describe material
problems revealed by audits or otherwise known
to management as well as corrective actions
taken or planned? (OMB Bulletin 01-09, p. 107,
section 11.1E)

Required Supplementary Information: Yes, No or N/A Explanation
Management's Discussion and Analysis (48 - 61)
60. Does the entity's discussion of the
possible future effects of existing events and
conditions include at least the following
information? a. demographic characteristics b.
claims c. deferred maintenance d. commitments
e. major unfunded liabilities (OMB Bulletin
01-09, p. 108, section 11.1F)
61. Does the entity note the following in the
section on limitations of the Financial
Statements? a. the principal financial
statements have been prepared to report the
financial position and results of operations of
the entity, pursuant to the requirements of 31
U.S.C. 3515(b) b. while the statements have
been prepared from the books and records of the
entity in accordance GAAP for federal entities
and the formats prescribed by OMB, the
statements are in addition to the financial
reports used to monitor and control budgetary
resources which are prepared from the same
books and records c. the statements should be
read with the realization that they are for a
component of the U.S. government (OMB Bulletin
01-09, p. 108, section 11.1G)

Required Supplementary Information: Yes, No or N/A Explanation
Deferred Maintenance (62 - 65)
Maintenance is the act of keeping fixed assets in acceptable condition.
Maintenance includes preventive maintenance, normal repairs, replacement
of parts and structural components, and other activities needed to
preserve the asset so that it continues to provide acceptable services and
achieves its expected life. Maintenance excludes activities aimed at
expanding the capacity of an asset or otherwise upgrading it to serve
needs different from, or significantly greater than, originally intended.
Deferred maintenance is maintenance that was not performed when it should
have been, or was scheduled to be, and that, therefore, is put off or
delayed for a future period. (SFFAS 6, par. 77 & 78)
62. Does the entity report under required
supplementary information the following
information for each major category of
its PP&E (i.e., general PP&E, heritage
assets, and stewardship land)? a. the
identity (e.g., building, equipment,
land) of each major class of asset for
which maintenance was deferred b. the
method of measuring deferred maintenance
(SFFAS 6, par. 83; SFFAS 14, par. 1; OMB
Bulletin 01-09, pp. 108-109, section
11.2)
Amounts reported for deferred maintenance may be measured using condition
assessment surveys or life-cycle cost forecasts. Condition assessment
surveys are periodic inspections of PP&E, based on generally accepted and
consistently applied methods, to determine PP&E's current condition and
the estimated cost to correct any deficiencies. (SFFAS 6, par. 81)
Life-cycle costing is an acquisition or procurement technique that
considers operating, maintenance, and other costs in addition to the
acquisition cost of assets. (SFFAS 6, par. 82)

Required Supplementary Information: Deferred Yes, No or N/A Explanation
Maintenance (62 - 65)
63. If the condition assessment survey method
is used to measure deferred maintenance, is the
following information presented for each major
class of PP&E in supplementary information? a.
a description of requirements or standards for
acceptable operating condition b. any changes
in the condition requirements or standards c.
asset condition and a range estimate of the
dollar amount of maintenance needed to return
it to its acceptable operating condition (SFFAS
6, par. 83)
64. If the total life cycle cost method is used
to measure deferred maintenance, is the
following information presented for each major
class of PP&E? a. the original date of the
maintenance forecast and an explanation for any
changes to the forecast b. prior-year balance
of the cumulative deferred maintenance amount
a. the dollar amount of maintenance that was
defined by the professionals who designed,
built, or managed the PP&E as required
maintenance for the reporting period b. the
dollar amount of maintenance actually performed
during the period c. the difference between the
forecast and actual maintenance d. any
adjustments to the scheduled amounts deemed
necessary by the managers of the PP&E e. the
ending cumulative balance for the reporting
period for each major class of asset
experiencing deferred maintenance (SFFAS 6,
par. 83)

Required Supplementary Information: Deferred Yes, No or N/A Explanation
Maintenance (62 - 65)
65. If management elects to break out deferred
maintenance by critical and noncritical amounts
needed to bring each class of asset to its
acceptable operating condition, does it also
include its definition of these categories?
(SFFAS 6, par. 84)

Required Supplementary Information: Yes, No or N/A Explanation
Intragovernmental Amounts (66 - 78)
Intragovernmental amounts represent transactions between federal entities
included in the Financial Report of the United States Government. These
transactions include activities with federal CFO Act and non-CFO Act
entities as identified in the Treasury Financial Manual. (OMB Bulletin
01-09, p.109, section 11.3)
66. Does the entity report, as required
supplementary information and intragovernmental
amounts, the following items? a. assets b.
liabilities c. nonexchange revenue d. for
certain reporting entities, earned revenue from
trade (buy/sell) transactions along with the
gross cost to generate such revenue (OMB
Bulletin 01-09, p. 109, section 11.3)
67. Does the entity report intragovernmental
assets, liabilities, and earned revenue from
trade transactions and nonexchange revenue by
trading partner (i.e., reciprocal federal
entity)? (OMB Bulletin 01-09, p. 109, section
11.3)
68. Does the entity report intragovernmental
gross cost to generate earned revenue from
trade transactions by budget functional
classification? (OMB Bulletin 01-09, p. 109,
section 11.3)
69. Do intragovernmental asset and liability
categories reported as required supplementary
information agree with the intragovernmental
asset and line items reported on the balance
sheet? (OMB Bulletin 01-09, p. 109, section
11.3)
70. Are transactions with components of federal
departments and agencies (e.g., Forest Service
of the USDA) not reported separately, but
included in the activity reported for the
federal department or agency? (OMB Bulletin
01-09, p. 109, section 11.3)

Required Supplementary Information: Yes, No or N/A Explanation
Intragovernmental Amounts (66 - 78)
71. Are all intragovernmental amounts net of
intraentity transactions? (OMB Bulletin 01-09,
p. 109, section 11.3)
72. Does the entity reconcile intragovernmental
asset, liability, and revenue amounts with its
trading partners at least quarterly? (OMB
Bulletin 01-09, pp. 109 & 110, section 11.3)
73. Do intragovernmental assets and liabilities
reported as required supplementary information
(RSI) agree with the intragovernmental asset
and liability line items and totals on the
reporting entity's consolidated agencywide
balance sheet? (OMB Bulletin 01-09, pp. 110 &
111, section 11.3)
74. For each intragovernmental asset and
liability line item on the consolidated
agencywide balance sheet, does the entity
identify in the supplementary information the
trading partner balances that make up the line
item?151 (OMB Bulletin 01-09, pp. 110 & 111,
section 11.3)
75. If intragovernmental transactions with a
trading partner are material in one asset or
liability category but immaterial in another
category, does the entity report transactions
with the trading partner for each category? OMB
Bulletin 01-09, pp. 110 & 111, section 11.3)
76. If the entity has total intragovernmental
earned revenues from trade transactions (net of
intra-entity activity) of greater than $500
million, does it report such intragovernmental
revenues by trading partner? (OMB Bulletin
01-09, p. 111, section 11.3)

151Reporting entities may aggregate trading partners whose individual
totals for a particular asset category collectively comprise less than 20
percent of the total asset line item category.

Required Supplementary Information: Yes, No or N/A Explanation
Intragovernmental Amounts (66 - 78)
77. If the entity reports intragovernmental
earned revenues, does it also report, by budget
functional classification, the gross cost of
goods, services, and other transactions that
generated the intragovernmental earned
revenues?152 (OMB Bulletin 01-09, p. 111,
section 11.3)
78. Does the entity report, by trading partner,
intragovernmental nonexchange revenues
transferred in and out? (OMB Bulletin 01-09, p.
112, section 11.3)

152The costs that generate intragovernmental earned revenues may not be
intragovernmental in and of themselves. For example, if the General
Services Administration (GSA) sells pencils to Agency A, GSA would report
the revenue earned by selling the pencils to Agency A (intragovernmental)
and report the cost of purchasing those pencils from Vendor B (public) by
budget functional classification.

The 24 questions in this section are related to social insurance programs
covered by SFFAS 17.

Social Insurance Programs (1 - Yes, No or N/A Explanation
24)
Social insurance programs covered by SFFAS 17, Accounting for Social
Insurance, have the following five common characteristics. a. financing
from participants or their employers b. eligibility from taxes or fees
paid and time worked in covered employment c. benefits not directly
related to taxes or fees paid d. benefits prescribed in law e. programs
intended for the general public The following social insurance programs
are specifically covered by SFFAS 17. a. Old-Age, Survivors, and
Disability Insurance (OASDI, i.e., Social Security) b. Hospital Insurance
(HI or Medicare Part A) and Supplementary Medical Insurance (SMI or
Medicare Part B) c. Railroad Retirement Benefits (RRB) d. Black Lung
Benefits e. Unemployment Insurance (UI) (SFFAS 17, par. 14 &, 15; OMB
Bulletin 01-09, pp.103 & 104, section 10.4B) On July 17, 2003, FASAB
issued SFFAS 25, Reclassification of Stewardship Responsibilities and
Eliminating the Current Services Assessment. For periods beginning after
September 30, 2004, the information required by paragraphs 27(3) and 32(3)
of SFFAS 17 (checklist questions 17-20 below) shall be presented as a
basic financial statement and other social insurance information shall be
presented as Required Supplementary Information (RSI), except to the
extent that the preparer elects to include some or all of that information
in notes that are presented as an integral part of the basic financial
statements. FASAB issued an exposure draft in March 2004, which would
amend SFFAS 25 to make the significant assumptions underlying projections
and estimates (other information required by SFFAS 17)153 required
disclosures to the social insurance basic financial statement. Although
earlier implementation is encouraged, for periods ending as of or before
September 30, 2004, all social insurance information required by SFFAS 17
can be presented as Required Supplementary Stewardship Information (RSSI).

153As discussed in checklist question 5 below.

Social Insurance Programs (1 - 24) Yes, No or N/A Explanation
1. In general, does the entity responsible for
a given social insurance program provide a
clear and concise description of the program
including its financing, calculation of
benefits, and actuarial status 154? (SFFAS 17,
par. 24; OMB Bulletin 01-09, p.104, section
10.B)
2. Does this description include the following
information? a. discussion of the long-term
sustainability and financial condition of the
program b. an illustration and explanation of
the long-term trends revealed in the data
(SFFAS 17, par. 24; OMB Bulletin 01-09, p.104,
section 10.B)
3. Does the reporting entity describe statutory
or other material changes, and implications
thereof, affecting the program after the
current fiscal year? (SFFAS 17, par. 24)
4. Are projections and estimates based on the
entity's best estimates of demographic and
economic assumptions? (SFFAS 17, par. 25)
5. Does the entity disclose significant
assumptions used in making estimates and
projections? (SFFAS 17, par. 25)
6. Are all projections and estimates made as of
a date (i.e., the valuation date) as close to
the end of the fiscal year (i.e., current year)
being reported on as possible and no more than
1 year prior to the end of the current year?
(SFFAS 17, par. 26)
7. Does the entity consistently follow this
valuation date from year to year? (SFFAS 17,
par. 26)

154This is the status of a program based on statistical calculations and
actuarial assumptions about future economic, demographic, and other
conditions and events.

Yes, No or Explanation
Social Insurance Programs (1 - 24) N/A
8. Does information on the financial and actuarial
status of the social insurance programs include
actuarial projections that are indicative of
long-term sustainability and show the annual cash
flows in nominal dollars for current and future
participants? (SFFAS 17, par. 27 (1))
9. Are the actuarial projections of cash flow
amounts reported for at least every fifth year in
the projection period? (SFFAS 17, par. 27 (1) (a))
10. Does the cash flow information show the
following amounts? a. total cash inflow from all
sources (i.e., by and on behalf of participants)
less net interest on intragovernmental borrowing
and lending b. total cash outflow (SFFAS 17, par.
27 (1) (a))
11. Does the narrative accompanying the cash flow
data include identification of any year or years
during the projection period when cash outflow
exceeds cash inflow, with and without interest on
intragovernmental borrowing or lending (the
"crossover points")? (SFFAS 17, par. 27 (1) (a))
12. Does the narrative provide an explanation of
the significance of the cash flow "cross-over
points" where cash outflows begin exceeding cash
inflows? (SFFAS 17, par. 27 (1) (a))
13. Do the cash flow projections (net of interest
on intragovernmental borrowing/lending) for Social
Security and Medicare Part A include an estimate of
cash flows as a percentage of taxable payroll?
(SFFAS 17, par. 27 (1) (b))
14. Do the cash flow projections (net of interest
on intragovernmental borrowing/lending) for Social
Security and Medicare (Parts A & B) include an
estimate of cash flows as a percentage of gross
domestic product? (SFFAS 17, par. 27 (1) (b))

Social Insurance Programs (1 - 24) Yes, No or N/A Explanation
15. For Social Security and Medicare, Part A
programs, does the entity's cash flow
information show its estimate of the ratio of
the number of contributors to the number of
beneficiaries during the same projection period
as for cash flow projections? (SFFAS 17, par.
27 (2))
16. At a minimum, is the ratio of contributors
to beneficiaries for Social Security and
Medicare, Part A reported for the beginning and
end of the projection period? (SFFAS 17, par.
27 (2))

Social Insurance Programs (1 - 24) Yes, No or N/A Explanation
17. For all enumerated social insurance
programs except Unemployment Insurance (UI),
does the responsible entity present a statement
of actuarial present values of the following
items?155 a. all future expenditures during the
projection period related to benefit payments
i. to or on behalf of current participants who
have not yet attained retirement age ii. to or
on behalf of current participants who have
attained retirement age iii. to or on behalf of
those who are expected to become plan
participants b. all future contributions and
tax income (from taxation of benefits) during
the projection period i. from or on behalf of
current participants who have not yet attained
retirement age ii. from or on behalf of current
participants who have attained retirement age
iii. from or on behalf of those who are
expected to become plan participants c. cash
flow during the projection period156 (SFFAS 17,
par. 27 (3) (a)-(g); OMB Bulletin 0109, p. 104,
section 10.4B)

155For periods beginning after September 30, 2004 this information shall
be presented as a basic financial statement rather than
as a component of RSSI (SFFAS 25, par. 6 & 7)
156Cash flow during the projection period is derived from subtracting the
actuarial present value of future contributions and tax
income during the projection period (17b above) from the actuarial present
value of future expenditures for the projection
period (17a above).

Social Insurance Programs (1 - 24) Yes, No or N/A Explanation
18. With the exception of Unemployment
Insurance (UI), does the entity disclose the
accumulated excess of all past cash receipts,
including interest on investments, over all
cash disbursements within the social insurance
program represented by the fund balance at the
valuation date?157 (SFFAS 17, par. 27 (3) (h))
19. Does the entity also disclose how it
calculated the actuarial net present value of
future benefits and contributions from or on
behalf of current participants of all social
insurance programs except UI?158 (SFFAS 17,
par. 27 (3) (i))
20. If available, does the entity provide
estimates of the actuarial present values and
fund balances of the social insurance programs
(except UI) under its purview for each of the 4
preceding years?159 (SFFAS 17, par. 27 (3) (j))
21. For all social insurance programs except
UI, does the responsible entity illustrate the
sensitivity of the projections of cash flows
and actuarial present values to changes in the
most significant individual assumptions? (SFFAS
17, par. 27 (4) (a))
22. At a minimum, do the Social Security and
Medicare programs analyze assumptions regarding
the following factors? a. birth and death rates
b. net immigration c. real wage differential d.
real interest rate (SFFAS 17, par. 27 (4) (a))

157For periods beginning after September 30, 2004 this information shall
be presented as a basic financial statement rather than
as a component of RSSI (SFFAS 25, par. 6 & 7)
158ibid.
159ibid.

Social Insurance Programs (1 - 24) Yes, No or N/A Explanation
23. Does the sensitivity analysis for UI
programs show the effects of increasing the
unemployment rate as follows? a. by
approximately one percentage point b. to a
level sufficient to put stress on the system
(e.g., to simulate the largest recession
occurring within the last 25 years) (SFFAS 17,
par. 27 (4) (b); OMB Bulletin 01-09, p. 104,
section 10.4B)
24. Does information on the UI program provide
a stateby-state analysis illustrating the
relative solvency of individual state programs,
including the ratio of each state's current
accumulated fund balance to a year's projected
benefit payments based on the highest level of
annual benefit payments experienced by that
state over the last 20 years? (SFFAS 17, par.
27 (5); OMB Bulletin 01-09, p.104, section
10.4B)
*** End of document. ***