Financial Audit: Significant Internal Control Weaknesses Remain  
in Preparing the Consolidated Financial Statements of the U.S.	 
Government (21-APR-06, GAO-06-415).				 
                                                                 
For the past 9 years, since our first audit of the consolidated  
financial statements of the U.S. government (CFS), certain	 
material weaknesses in internal control and in selected 	 
accounting and financial reporting practices have resulted in	 
conditions that prevented GAO from expressing an opinion on the  
CFS. Specifically, GAO has reported that the U.S. government did 
not have adequate systems, controls, and procedures to properly  
prepare the CFS. Included with GAO's December 2005 disclaimer of 
opinion on the fiscal year 2005 CFS was its discussion of	 
continuing weaknesses relating to the Department of the 	 
Treasury's (Treasury) preparation of the CFS. The purpose of this
report is to (1) provide details of those additional weaknesses, 
(2) recommend improvements, and (3) describe the status of	 
corrective actions on GAO's previous 154 recommendations.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-415 					        
    ACCNO:   A52219						        
  TITLE:     Financial Audit: Significant Internal Control Weaknesses 
Remain in Preparing the Consolidated Financial Statements of the 
U.S. Government 						 
     DATE:   04/21/2006 
  SUBJECT:   Accounting 					 
	     Accounting procedures				 
	     Accounting standards				 
	     Financial management				 
	     Financial records					 
	     Financial statement audits 			 
	     Financial statements				 
	     Internal controls					 
	     Regulatory agencies				 
	     Reporting requirements				 
	     Reports management 				 
	     Corrective action					 
	     Financial reporting				 

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GAO-06-415

     

     * Report to the Secretary of the Treasury and the Director of the Office
       of Management and Budget
          * April 2006
     * FINANCIAL AUDIT
          * Significant Internal Control Weaknesses Remain in Preparing the
            Consolidated Financial Statements of the U.S. Government
     * Contents
          * Results in Brief
          * Scope and Methodology
          * Directly Linking Audited Federal Agency Financial Statements to
            the CFS
          * Comparability of Financial Statements
               * Recommendation for Executive Action
          * Audit Assurance over Certain Federal Agencies' Closing Packages
               * Recommendation for Executive Action
          * Internal Control Monitoring
               * Recommendation for Executive Action
          * Consolidated Reporting Guidance to Federal Agencies
               * Recommendations for Executive Action
          * Reconciling of Intragovernmental Activity and Balances
               * Recommendation for Executive Action
          * Agency Comments and Our Evaluation
               * OMB Comments
               * Treasury Comments
     * Status of Treasury's and OMB's Progress in Addressing GAO's Prior Year
       Recommendations for Preparing the CFS
     * Comments from the Department of the Treasury
     * GAO Contacts and Staff Acknowledgments

Report to the Secretary of the Treasury and the Director of the Office of
Management and Budget

April 2006

FINANCIAL AUDIT

Significant Internal Control Weaknesses Remain in Preparing the
Consolidated Financial Statements of the U.S. Government

Contents

Table

April 21, 2006Letter

The Honorable John W. Snow The Secretary of the Treasury

The Honorable Clay Johnson III Acting Director, Office of Management and
Budget

In our report dated December 2, 2005, we disclaimed an opinion on the
consolidated financial statements of the U.S. government (CFS) for the
fiscal years ended September 30, 2005, and 2004.1 For the past 9 years,
certain material weaknesses in internal control and in selected accounting
and financial reporting practices resulted in conditions that prevented us
from expressing an opinion on the CFS. Specifically, we have reported that
the federal government did not have adequate systems, controls, and
procedures to properly prepare its consolidated financial statements. Many
of these weaknesses in internal control that contributed to our continuing
disclaimers of opinion were identified by agency financial statement
auditors during their audits of federal agencies' financial statements and
were reported in detail with recommendations to the agencies in separate
reports. However, some of the internal control weaknesses were identified
during our tests of the Department of the Treasury's (Treasury) process
for preparing the CFS.

The purpose of this report is to (1) discuss the details of the additional
weaknesses we identified during our audit of the fiscal year 2005 CFS
regarding financial reporting procedures and internal control over the
process for preparing the CFS, (2) recommend improvements to address those
weaknesses, and (3) provide the status of corrective actions on the
recommendations detailed in our prior reports and listed in appendix I. We
have discussed each of the new weaknesses identified during our fiscal
year 2005 audit with your staff and have incorporated their comments as
appropriate. We also assessed Treasury's ongoing effort to develop and
implement the Governmentwide Financial Report System (GFRS) and are

providing the results of our assessment along with our recommendations in
a separate report.2

Results in Brief

We identified weaknesses in the compilation and reporting processes during
our audit of the fiscal year 2005 CFS. Such weaknesses impair the federal
government's ability to ensure that the CFS are consistent with the
underlying audited agency financial statements, balanced, and in
conformity with U.S. generally accepted accounting principles (GAAP).
Consequently, these weaknesses also contributed to our inability to render
an opinion on the CFS. Specifically, we found that

o Treasury's process for compiling the CFS does not yet fully ensure that
financial information from federal agencies' audited financial statements
and other financial data directly link to amounts reported in the CFS.

o Treasury lacked a process to ensure that fiscal years 2005 and 2004
consolidated financial statements and notes were comparable.

o Treasury and the Office of Management and Budget (OMB) did not have
audit assurance on closing packages received from 4 of the 35 agencies
that they have identified as significant to the CFS.

o Treasury, in coordination with OMB, had not developed policies and
procedures for monitoring internal control or provided us with adequate
documentation evidencing an executable plan of action and milestones for
short-term and long-range solutions for certain internal control
weaknesses we have previously reported regarding the process for preparing
the CFS, which may result in the findings of audits not being properly and
timely resolved and internal control weaknesses continuing to exist.

o Treasury did not provide clear guidance to federal agencies about
certain financial information that agencies were required to provide in
the closing package and as a result agencies reported certain financial
information inconsistently, which increased the risk of incomplete and
inaccurate summarization of data in the CFS.

o As part of the intragovernmental reconciliation reporting process,
Treasury and OMB have not provided sufficiently clear guidance for
selecting the "confirmed reporting" category of the intragovernmental
reconciliation report and do not have an effective process to obtain
clarification for inconsistent explanations provided by federal agencies
in this category. Also, Treasury and OMB did not require federal agencies'
Inspectors General (IGs) to complete and report on the results of
intragovernmental agreed-upon procedures until over 2 weeks after federal
agencies' audited financial statements were required to be issued to OMB,
which did not optimize their value to the preparation of the agencies'
financial statements or the CFS.

o Various other internal control weaknesses identified in previous years'
audits still existed during fiscal year 2005 (see app. I).

This report includes 12 new recommendations to address the additional
weaknesses we identified during our audit of the fiscal year 2005 CFS.
Appendix I of this report reflects the status of actions taken as of
December 2, 2005, the date of completion of our fieldwork on our audit of
the fiscal year 2005 CFS, to address the recommendations from our previous
reports. Our work showed that 131 recommendations contained in our prior
reports remained open and 23 were closed. Of the 131 open recommendations,
76 relate to specific disclosures required under GAAP. Treasury has
submitted a proposal to the Federal Accounting Standards Advisory Board
(FASAB) seeking to amend previously issued standards and eliminate or
lessen the disclosure requirements for the consolidated financial
statements so that GAAP would no longer require certain of the information
Treasury has not been reporting. Comments on the exposure draft of a
proposed FASAB standard, based on the Treasury proposal, were due March 1,
2006. Treasury stated that it is waiting for FASAB approval and issuance
of this proposed standard to determine the disclosures that will be
required in future consolidated financial statements. We will continue to
determine the status of corrective actions on our open recommendations
during our fiscal year 2006 audit of the CFS.

In commenting on a draft of this report, OMB stated that it generally
agreed with the new findings and related recommendations in this report.
Treasury stated that it concurs with all of the new recommendations in
this report except for the recommendation to accelerate the due date for
IGs to complete the agreed-upon procedures on the intragovernmental
activity and balances. For fiscal year 2006, Treasury does not plan to
accelerate the due date for completing these intragovernmental agreed-upon
procedures. However, Treasury stated that for fiscal year 2006, it plans
to expand the audit coverage for intragovernmental activity and balances
by requiring the IGs to opine on such information in their audit of the
closing package, which is due to Treasury by November 17, 2006. This is an
appropriate alternative solution to accelerating the due date for the IGs
to complete the intragovernmental agreed-upon procedures. We have modified
our recommendation to also include developing an alternative solution to
address this finding.

Scope and Methodology

As part of our audit of the fiscal years 2005 and 2004 CFS, we evaluated
Treasury's financial reporting procedures and related internal control,
and we followed up on the status of Treasury and OMB corrective actions to
address open recommendations regarding the process for preparing the CFS
that were in our prior years' reports. In our disclaimer of opinion on the
fiscal year 2005 CFS, which is included in the fiscal year 2005 Financial
Report of the United States Government, we discussed material deficiencies
relating to Treasury's preparation of the CFS. These material deficiencies
contributed to our disclaimer of opinion on the CFS and also constitute a
material weakness in internal control, which contributed to our adverse
opinion on internal control. We performed sufficient audit procedures to
provide the disclaimer of opinion in accordance with U.S. generally
accepted government auditing standards. This report provides the details
of the additional weaknesses we identified in performing our fiscal year
2005 audit procedures related to the process for preparing the CFS and our
recommendations to correct those weaknesses, as well as the status of
corrective actions taken by Treasury and OMB to address recommendations in
our prior reports.

We requested comments on a draft of this report from the Director of OMB
and the Secretary of the Treasury or their designees. OMB provided oral
comments, which are discussed in the Agency Comments and Our Evaluation
section of this report. Treasury's comments are reprinted in appendix II
and are also discussed in the Agency Comments and Our Evaluation section.

Directly Linking Audited Federal Agency Financial Statements to the CFS

As discussed in our fiscal year 2005 audit report, fiscal year 2005 was
the second year that Treasury used GFRS to collect agency financial
statement information taken directly from federal agencies' audited
financial statements. The goal of GFRS is to be able to directly link
information from federal agencies' audited financial statements to amounts
reported in the consolidated financial statements and resolve many of the
weaknesses we previously identified in the process for preparing the
consolidated financial statements, a goal we strongly support. For both
the fiscal year 2005 and 2004 reporting processes, GFRS was able to
capture agency financial information submitted to Treasury, but GFRS is
still under development and not at the stage that it could be used to
fully compile the consolidated financial statements from the information
captured.

As we have reported in the past, Treasury's process for compiling the CFS
does not yet fully ensure that financial information from federal
agencies' audited financial statements and other financial data directly
link to amounts reported in the CFS. In our fiscal year 2005 audit report,
we noted that Treasury made progress in demonstrating amounts in the
Balance Sheet and the Statement of Net Cost were consistent with federal
agencies' audited financial statements prior to eliminating
intragovernmental activity and balances. However, about 25 percent of the
significant3 federal agencies' auditors reported internal control
weaknesses related to the processes the agencies perform to provide
financial statement information to Treasury for preparing the consolidated
financial statements.

In our prior report,4 we recommended that as Treasury continues to design
and further implement its new process for compiling the CFS, the Secretary
of the Treasury should direct the Fiscal Assistant Secretary, in
coordination with the Controller of OMB, to modify Treasury's closing
package to (1) require federal agencies to directly link their audited
financial statement notes to the CFS notes and (2) provide the necessary
information to demonstrate that all of the five principal consolidated
financial statements are consistent with the underlying information in
federal agencies' audited financial statements and other financial data.

Progress was made during fiscal year 2005. Treasury has been continuing to
design and further implement its new process for compiling the CFS with
the development of GFRS. We continue, though, to be concerned that the
disciplined processes necessary to reduce risks to acceptable levels have
not yet been effectively implemented. For example, Treasury moved forward
with the project before ensuring that certain key elements, such as a
concept of operations, were developed or even defining and documenting the
financial reporting weaknesses that were expected to be addressed by the
system. Not effectively implementing such disciplined processes creates an
unnecessary risk that the system will cost more and take longer than
expected to deploy, while not providing all of the intended system
functionality. The implementation of any major system, such as GFRS, is
not without risk; however, organizations that follow and effectively
implement accepted best practices in systems development and
implementation have been shown to reduce these risks to acceptable levels.
A more detailed discussion of our assessment of Treasury's ongoing effort
to develop and implement GFRS, along with recommendations to reduce the
risk noted above, can be found in a separate report.5

Comparability of Financial Statements

The CFS includes 2 years of financial information. Because comparative
financial statements are intended to furnish useful data about the
differences in activity and balances between the 2 years shown,
consistency in how amounts are reported for the 2 years is a major factor
in creating comparability. We found that Treasury lacked a process to
ensure that consolidated financial statements and notes for fiscal years
2005 and 2004 were consistently reported and therefore comparable. During
fiscal year 2005, Treasury requested that agencies resubmit fiscal year
2004 financial information along with their fiscal year 2005 financial
information. Some agencies resubmitted fiscal year 2004 amounts in fiscal
year 2005 that differed from what Treasury published in fiscal year 2004.
Also, certain information reported for fiscal 2004 may have required
reclassification to be comparable to the fiscal year 2005 amounts.
Treasury did not analyze the fiscal year 2004 information submitted in
fiscal year 2005 or reclassify amounts within various financial statement
line items and notes to achieve comparability and chose to continue to
report what was published for fiscal year 2004. For example, the
Reconciliations of Net Operating Cost and Unified Budget Deficit showed
$47.8 billion and $.2 billion for property, plant, and equipment disposals
and revaluations for fiscal years 2005 and 2004, respectively. However,
based on the audited financial information provided by agencies to
Treasury in GFRS in fiscal year 2005, the fiscal year 2004 amount should
be $25.4 billion, rather than $.2 billion. The difference should have been
reclassified from the Net Amount of All Other Differences line item on the
Reconciliations of Net Operating Cost and Unified Budget Deficit.

Recommendation for Executive Action

We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary to develop a process to help ensure that, for each
reporting year, the 2 years of consolidated financial statements and note
information presented are consistently and comparably reported, in all
material respects.

Audit Assurance over Certain Federal Agencies' Closing Packages

Treasury and OMB did not require closing packages from 4 of the 35
verifying agencies to be audited. Specifically, the Treasury Financial
Manual (TFM) states that the Inspector General or a contracted independent
public accountant for each federal verifying agency-except those agencies
whose fiscal year ends on a date other than September 30-must opine on the
closing package data entered by the Chief Financial Officer into GFRS.
Because of these year-end differences, the TFM does not require the
Federal Deposit Insurance Corporation's Funds, National Credit Union
Administration, and Farm Credit System Insurance Corporation-all of which
have a year end other than September 30-to have their closing package data
be audited. In addition, for fiscal years 2004 and 2005, OMB waived the
closing package audit requirement for the Tennessee Valley Authority
(TVA), which does have a September 30 fiscal year end.6 In these four
cases, Treasury and OMB did not develop any alternative solutions that
include the requirement for adequate audit procedures to be performed over
significant information included in the CFS. As a result, unaudited
September 30 information was included in the CFS for 4 agencies that
Treasury and OMB consider to be significant. Treasury, therefore, has less
assurance that the information included in the CFS for these agencies is
fairly stated and directly links to the agencies' audited financial
statements.

Recommendation for Executive Action

We recommend that the Director of OMB direct the Controller of the Office
of Federal Financial Management, in coordination with the Treasury Fiscal
Assistant Secretary, to develop an alternative solution for obtaining
audit assurance related to the Federal Deposit Insurance Corporation's
Funds, National Credit Union Administration, and Farm Credit System
Insurance Corporation, which includes the requirement for adequate audit
procedures to be performed over significant information included in the
CFS for these agencies.

We also recommend that the Director of OMB direct the Controller of the
Office of Federal Financial Management to consider not waiving the closing
package audit requirement for any verifying agency in future years, such
as TVA.

Internal Control Monitoring

GAO's Standards for Internal Control in the Federal Government states that
internal control is a major part of managing an organization and should
include monitoring.7 Monitoring of internal control should include
assessing the quality of performance over time and implementing policies
and procedures for the timely follow-up and resolution of findings of
audits and other reviews. The goal of these policies and procedures is to
ensure that managers (1) promptly evaluate findings from audits and other
reviews, including those showing deficiencies and recommendations reported
by auditors and others who evaluate agencies' operations; (2) determine
proper actions in response to findings and recommendations from audits and
reviews; and (3) complete, within established time frames, all actions
that correct or otherwise resolve the matters brought to management's
attention. However, Treasury, in coordination with OMB, had not developed
policies and procedures for monitoring internal control or provided us
with adequate documentation evidencing an executable plan of action and
milestones for short-term and long-range solutions for certain internal
control weaknesses we have previously reported regarding the process for
preparing the CFS. Without effective monitoring of internal control,
findings of audits may not be resolved timely and properly.

Recommendation for Executive Action

We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary, in coordination with the Controller of OMB, to
develop

o policies and procedures for monitoring internal control to help ensure
that (1) audit findings are promptly evaluated, (2) proper actions are
determined in response to audit findings and recommendations such as a
documented plan of action with milestones for short-term and long-range
solutions, and (3) all actions that correct or otherwise resolve the audit
findings are completed within established time frames; and

o an executable plan of action and milestones for short-term and
long-range solutions for certain internal control weaknesses we have
previously reported regarding the process for preparing the CFS.

Consolidated Reporting Guidance to Federal Agencies

The TFM prescribes how federal agencies are to submit financial
information to Treasury to be used in compiling the CFS. While our planned
audit procedures were not to review the entire TFM to determine if its
guidance to agencies was clear, we found several areas where the TFM did
not give clear guidance to federal agencies about the information that
they were required to provide to Treasury, GAO, and OMB. Specifically, we
found that the TFM did not give clear guidance for (1) reporting note
disclosures for restricted cash, (2) reporting note disclosures for
accounts payable, (3) preparing summaries of unadjusted misstatements to
be included with federal agencies' closing package management
representation letters, and (4) certain information to be reported by OPM
to Treasury that is used to allocate costs on the Statement of Net Cost.
For example, the TFM defines restricted cash as "amounts of cash that an
entity holds and does not have authority to spend" and cash that is not
restricted as "amounts of cash that an entity holds for which it has the
authority to spend." Although these definitions are accurate at the agency
level, these definitions are not accurate at the CFS level. For example,
an agency may hold cash that it does not have the authority to spend
because of a certain law or regulation, but when this cash is consolidated
at the governmentwide level, the federal government as a whole may have
the authority to spend the cash. Therefore, this cash would appropriately
be restricted at the agency level, but not at the governmentwide level. As
a result of the unclear guidance, agencies reported certain financial
information inconsistently. This increases the risk of incomplete and
inaccurate summarization of data in the CFS.

Recommendations for Executive Action

We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary to ensure that the TFM and any other guidance to
federal agencies provide clear instructions for providing reliable data to
Treasury in the following specific areas:

o restricted cash,

o accounts payable,

o summaries of unadjusted misstatements, and

o certain information reported by OPM that is used to allocate costs on
the Statement of Net Cost.

Reconciling of Intragovernmental Activity and Balances

OMB and Treasury require federal agencies to reconcile selected
intragovernmental activity and balances with their "trading partners"8 and
report on the extent and results of the reconciliation efforts to
Treasury. As part of the reconciliation report, federal agencies were
required to categorize any material differences, as determined by
Treasury, with their trading partners at fiscal year end within five
categories: (1) confirmed reporting; (2) accounting methodology
differences; (3) accounting or reporting errors; (4) timing
difference-current year, timing difference-prior year; and (5)
unknown/unreconciled. According to Treasury, confirmed reporting, the
first category listed above, is intended to indicate that the agency has
verified that the amount it has reported is accurate. The TFM requires a
federal agency that selects the category "confirmed reporting" to provide
a detailed explanation to support its response. However, we found that in
many cases where a federal agency selected the "confirmed reporting"
category, the agency did not provide detailed explanations. We also found
cases where both trading partners selected "confirmed reporting" for the
same material difference and the agencies did not provide detailed
explanations for how both trading partners' amounts could be accurate when
the material difference remained. When this situation occurs, we found
that Treasury and OMB do not have an effective process to obtain
clarification for inconsistent explanations provided and that agencies may
be unclear as to when to select this category. Incorrect use of the
confirmed reporting category and lack of detailed explanations may hinder
efforts to identify and correct problems that federal agencies are
experiencing in reconciling with their trading partners.

Further, Treasury received the closing packages that contained each
agency's intragovernmental activity and balances amounts on November 18,
2005, and provided agencies with reconciliation reports that showed
material differences with their trading partners on November 21, 2005.
Treasury and OMB also require federal agencies' IGs to annually perform
agreed-upon procedures on the intragovernmental activity and balances
reported in the closing package. For fiscal year 2005, Treasury required
agency IGs for the 35 verifying agencies to complete and report on these
agreed-upon procedures by December 2, 2005. The timing of these procedures
did not optimize their value because (1) this reporting date is over 2
weeks after federal agencies' audited financial statements were required
to be issued to OMB, and (2) did not allow Treasury sufficient time to
review the results and make any necessary adjustments to the CFS.

Recommendation for Executive Action

We recommend that the Secretary of the Treasury direct the Fiscal
Assistant Secretary, working in coordination with the Controller of OMB,
to

o provide clear guidance to federal agencies as to when the "confirmed
reporting" category in the intragovernmental reconciliation report should
be selected,

o develop an effective process for obtaining clarification from federal
agencies for inconsistent or incomplete explanations provided in all
material difference categories, and

o accelerate the due date for IGs to complete and report on the results of
agreed-upon procedures on the intragovernmental activity and balances or
develop an alternative solution that would allow Treasury sufficient time
to review the results and make any necessary adjustments to the CFS.

Agency Comments and Our Evaluation

OMB Comments

In oral comments on a draft of this report, OMB stated that it generally
agreed with the new findings and related recommendations in this report.
In addition, OMB provided some technical comments, which we have
incorporated as appropriate.

Treasury Comments

In written comments on a draft of this report, which are reprinted in
appendix II, Treasury stated that it agrees that the preparation process
still needs improvement and that it is addressing many of the
recommendations in our previous reports. Treasury also stated that it
concurs with all of the new recommendations in this report except for the
recommendation to accelerate the due date for IGs to complete the
agreed-upon procedures on the intragovernmental activity and balances. For
fiscal year 2006, Treasury does not plan to accelerate the due date for
completing these intragovernmental agreed-upon procedures. However,
Treasury stated that for fiscal year 2006, it plans to expand the audit
coverage for intragovernmental activity and balances by requiring the IGs
to opine on such information in their audit of the closing package, which
is due to Treasury by November 17, 2006. This is an appropriate
alternative solution to accelerating the due date for the IGs to complete
the intragovernmental agreed-upon procedures. We have modified our
recommendation to also include developing an alternative solution to
address this finding.

This report contains recommendations to the Secretary of the Treasury and
the Director of OMB. The head of a federal agency is required by 31 U.S.C.
720 to submit a written statement on actions taken on these
recommendations. You should submit your statement to the Senate Committee
on Homeland Security and Governmental Affairs and the House Committee on
Government Reform within 60 days of the date of this report. A written
statement must also be sent to the House and Senate Committees on
Appropriations with the agency's first request for appropriations made
more than 60 days after the date of the report.

We are sending copies of this report to the Chairmen and Ranking Minority
Members of the Senate Committee on Homeland Security and Governmental
Affairs; the Subcommittee on Federal Financial Management, Government
Information, and International Security, Senate Committee on Homeland
Security and Governmental Affairs; the House Committee on Government
Reform; and the Subcommittee on Government Management, Finance, and
Accountability, House Committee on Government Reform. In addition, we are
sending copies to the Fiscal Assistant Secretary of the Treasury and the
Deputy Director for Management of OMB. Copies will be made available to
others upon request. This report is also available at no charge on GAO's
Web site at http://www.gao.gov .

We acknowledge and appreciate the cooperation and assistance provided by
Treasury and OMB during our audit. If you or your staff have any questions
or wish to discuss this report, please contact Jeffrey C. Steinhoff,
Managing Director, Financial Management and Assurance, on (202) 512-2600,
or Gary T. Engel, Director, Financial Management and Assurance, on (202)
512-3406. Staff contacts and other key contributors to this report are
listed in appendix II.

David M. Walker Comptroller General of the United States

Status of Treasury's and OMB's Progress in Addressing GAO's Prior Year
Recommendations for Preparing the CFS Appendix I

This appendix includes open recommendations from three of our prior
reports: Financial Audit: Process for Preparing the Consolidated Financial
Statements of the U.S. Government Needs Improvement, GAO-04-45
(Washington, D.C.: Oct. 30, 2003); Financial Audit: Process for Preparing
the Consolidated Financial Statements of the U.S. Government Needs Further
Improvement, GAO-04-866 (Washington, D.C.: Sept. 10, 2004); and Financial
Audit: Process for Preparing the Consolidated Financial Statements of the
U.S. Government Continues to Need Improvement, GAO-05-407 (Washington,
D.C.: May 4, 2005). Recommendations that were closed in prior reports are
not included in this appendix. This appendix includes the status of the
recommendations according to the Department of the Treasury (Treasury) and
the Office of Management and Budget (OMB) as well as our own assessments.
Explanations are included in the status of recommendations per GAO when
Treasury and OMB disagreed with our recommendation.

Of the 154 recommendations regarding the process for preparing the CFS
that are listed in this appendix, 131 remained open as of December 2,
2005, the end of GAO's fieldwork for the audit of the fiscal year 2005
CFS. Of these 131 recommendations, 76 relate to specific disclosures
required under U.S. generally accepted accounting principles (GAAP).
Treasury has submitted a proposal to the Federal Accounting Standards
Advisory Board (FASAB) seeking to amend previously issued standards and
eliminate or lessen the disclosure requirements for the consolidated
financial statements so that GAAP would no longer require certain of the
information Treasury has not been reporting. Comments on the exposure
draft of a proposed FASAB standard, based on the Treasury proposal, are
due March 1, 2006. Treasury stated that it is waiting for FASAB approval
and issuance of this proposed standard to determine the disclosures that
will be required in future consolidated financial statements.

Table 1: Status of Treasury's and OMB's Progress in Addressing GAO's Prior
Year Recommendations for Preparing the CFS

                                        

                                                 Status of     
                                              recommendation   
     Count     No.       Recommendation      Per Treasury and       Per GAO      
                                                    OMB        
GAO-04-45  
(results   
of the     
fiscal     
year 2002  
audit)     
1          02-2   The Secretary of the    Treasury further  Open. Treasury    
                     Treasury should direct  revised and       needs to further  
                     the Fiscal Assistant    documented all of document its      
                     Secretary, in           its major         policies and      
                     connection with         policies and      procedures.       
                     Treasury's current      procedures for    
                     compilation process and the fiscal year   
                     the development of      2005 compilation  
                     Treasury's new          process to ensure 
                     compilation system and  the propriety,    
                     process, to develop and accuracy, and     
                     fully document policies consistency of    
                     and procedures for the  application.      
                     CFS preparation process                   
                     so that they are                          
                     proper, complete, and                     
                     consistently applied by                   
                     staff members.                            
2          02-4   As Treasury is          To eliminate or   Open.             
                     designing its new       explain           
                     financial statement     adjustments       
                     compilation process to  (plugs) to net    
                     begin with the fiscal   position,         
                     year 2004 CFS, the      Treasury designed 
                     Secretary of the        a process to      
                     Treasury should direct  eliminate, at the 
                     the Fiscal Assistant    consolidated      
                     Secretary, in           level,            
                     coordination with the   intragovernmental 
                     Controller of OMB, to   activity and      
                     develop reconciliation  balances using    
                     procedures that will    formal balanced   
                     aid in understanding    accounting        
                     and controlling the net entries and       
                     position balance as     developed a model 
                     well as eliminate the   to analyze        
                     plugs previously        unreconciled      
                     associated with         transactions that 
                     compiling the CFS.      affected net      
                                             position (i.e.,   
                                             contributed to    
                                             the plug). Based  
                                             on fiscal year    
                                             2005 data, the    
                                             model disclosed   
                                             the magnitude of  
                                             the               
                                             intragovernmental 
                                             elimination       
                                             differences, by   
                                             reciprocal        
                                             category that     
                                             contributed to    
                                             the net position  
                                             elimination plug. 
                                             In fiscal         
                                             year 2005,        
                                             Treasury also     
                                             started an        
                                             analysis to       
                                             establish the     
                                             reciprocal        
                                             category for the  
                                             General Fund.     
3          02-5   As Treasury is          See status of     Open.             
                     designing its new       recommendation    
                     financial statement                       
                     compilation process to  No. 02-4.         
                     begin with the fiscal                     
                     year 2004 CFS, the                        
                     Secretary of the                          
                     Treasury should direct                    
                     the Fiscal Assistant                      
                     Secretary, in                             
                     coordination with the                     
                     Controller of OMB, to                     
                     use balanced accounting                   
                     entries to account for                    
                     the change in net                         
                     position rather than                      
                     simple subtraction of                     
                     liabilities from                          
                     assets.                                   
4          02-6   As OMB continues to     OMB, Treasury,    Open.             
                     make strides to address and the Chief     
                     issues related to       Financial         
                     intragovernmental       Officers' Council 
                     transactions, the       are reviewing the 
                     Director of OMB should  business rules    
                     direct the Controller   and are also      
                     of OMB to develop       performing        
                     policies and procedures additional        
                     that document how OMB   analysis on       
                     will enforce the        several groupings 
                     business rules provided of                
                     in OMB Memorandum       intragovernmental 
                     M-03-01, Business Rules transactions.     
                     for Intragovernmental   Upon the          
                     Transactions.           conclusion of the 
                                             review and        
                                             analysis, a       
                                             determination     
                                             will be made how  
                                             best to proceed   
                                             with and enforce  
                                             the business      
                                             rules.            
5          02-7   As OMB continues to     OMB will continue Open.             
                     make strides to address to work with      
                     issues related to       individual        
                     intragovernmental       agencies to       
                     transactions, the       resolve           
                     Director of OMB should  imbalances that   
                     direct the Controller   are referred to   
                     of OMB to require that  OMB on a          
                     significant differences case-by-case      
                     noted between business  basis. As part of 
                     partners be resolved    OMB's standard    
                     and the resolution be   practice,         
                     documented.             resolutions       
                                             reached will be   
                                             communicated to   
                                             all parties.      
6          02-8   The Secretary of the    Beginning in      Closed.           
                     Treasury should direct  fiscal year 2004, 
                     the Fiscal Assistant    Treasury has      
                     Secretary, in           continued to      
                     coordination with the   identify material 
                     Controller of OMB, to   differences on a  
                     implement the plan to   quarterly basis   
                     require federal         and work with OMB 
                     agencies to report in   and the agencies  
                     Treasury's new closing  to resolve        
                     package, beginning with differences.      
                     fiscal year 2004,       Treasury has      
                     intragovernmental       provided and      
                     activity and balances   discussed with    
                     by trading partner and  OMB a list of     
                     to indicate amounts     items in dispute. 
                     that have not been      Treasury is       
                     reconciled with trading working with the  
                     partners and amounts,   agencies to       
                     if any, that are in     resolve these     
                     dispute.                differences.      
                                             Also, the Chief   
                                             Financial         
                                             Officers Council  
                                             Intragovernmental 
                                             Subcommittee has  
                                             begun efforts to  
                                             identify and      
                                             resolve or        
                                             mitigate issues   
                                             or practices that 
                                             result in         
                                             significant       
                                             differences.      
7          02-9   The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant                      
                     Secretary, in           No. 02-4.         
                     coordination with the                     
                     Controller of OMB, to                     
                     design procedures that                    
                     will account for the                      
                     difference in                             
                     intragovernmental                         
                     assets and liabilities                    
                     throughout the                            
                     compilation process by                    
                     means of formal                           
                     consolidating and                         
                     elimination accounting                    
                     entries.                                  
8          02-10  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant                      
                     Secretary, in           No. 02-4.         
                     coordination with the                     
                     Controller of OMB, to                     
                     develop solutions for                     
                     intragovernmental                         
                     activity and balance                      
                     issues relating to                        
                     federal agencies'                         
                     accounting,                               
                     reconciling, and                          
                     reporting in areas                        
                     other than those OMB                      
                     now requires be                           
                     reconciled, primarily                     
                     areas relating to                         
                     appropriations.                           
9          02-11  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant                      
                     Secretary, in           No. 02-4.         
                     coordination with the                     
                     Controller of OMB, to                     
                     reconcile the change in                   
                     intragovernmental                         
                     assets and liabilities                    
                     for the fiscal year,                      
                     including the amount                      
                     and nature of all                         
                     changes in                                
                     intragovernmental                         
                     assets or liabilities                     
                     not attributable to                       
                     cost and revenue                          
                     activity recognized                       
                     during the fiscal year.                   
                     Examples of these                         
                     differences would                         
                     include capitalized                       
                     purchases, such as                        
                     inventory or equipment,                   
                     and deferred revenue.                     
10         02-12  The Secretary of the    Treasury          Open. Treasury    
                     Treasury should direct  disagrees with    currently reports 
                     the Fiscal Assistant    this              on the Statement  
                     Secretary to develop    recommendation.   of Operations and 
                     and implement a process Treasury's        Changes in Net    
                     that adequately         position is that  Position the plug 
                     identifies and reports  the unknown       as part of net    
                     items needed to         nature of the     operating cost,   
                     reconcile net operating plug argues for   not as a separate 
                     cost and unified budget placement in net  component of net  
                     surplus (or deficit).   position, not net position. In      
                     Treasury should report  cost. Treasury    addition, the     
                     "net unreconciled       also does not     reconciliation    
                     differences" included   believe that      statement begins  
                     in the net operating    these             with the net      
                     results line item as a  unreconciled      operating cost    
                     separate reconciling    transactions      amount and ends   
                     activity in the         affecting the     with the budget   
                     reconciliation          change in net     deficit amount.   
                     statement.              position are also As such, unless   
                                             differences       the plug is also  
                                             between the two   part of the       
                                             (accrual and      unified budget    
                                             budget) bases of  deficit, then the 
                                             accounting being  plug amount       
                                             reconciled in     should be         
                                             this statement.   included as a     
                                             Therefore, the    reconciling item  
                                             "net unreconciled on the            
                                             differences" plug reconciliation    
                                             should not be     statement.        
                                             included as a     
                                             separate          
                                             reconciling item  
                                             on this           
                                             statement.        
11         02-13  The Secretary of the    Treasury will     Open.             
                     Treasury should direct  continue to       
                     the Fiscal Assistant    improve the       
                     Secretary to develop    completeness and  
                     and implement a process consistency of    
                     that adequately         the information   
                     identifies and reports  in this           
                     items needed to         reconciliation    
                     reconcile net operating statement and     
                     cost and unified budget will continue to  
                     surplus (or deficit).   resolve           
                     Treasury should develop significant       
                     policies and procedures inconsistencies,  
                     to ensure completeness  if any, to the    
                     of reporting and        applicable and    
                     document how all the    related           
                     applicable components   components        
                     reported in the other   reported in the   
                     consolidated financial  other basic       
                     statements (and related financial         
                     note disclosures        statements, and   
                     included in the CFS)    in the related    
                     were properly reflected note disclosures, 
                     in the reconciliation   included in the   
                     statement.              CFS.              
12         02-14  The Secretary of the    Treasury          Open. Treasury    
                     Treasury should direct  communicated its  disagrees with    
                     the Fiscal Assistant    disagreement with all of our        
                     Secretary to develop    GAO on the need   recommendations   
                     and implement a process to report items   regarding the     
                     that adequately         at a lower level  Statement of      
                     identifies and reports  of detail.        Changes in Cash   
                     items needed to         However, Treasury Balance from      
                     reconcile net operating will consider the Unified Budget    
                     cost and unified budget need for          and Other         
                     surplus (or deficit).   establishing a    Activities and    
                     Treasury should         materiality       the               
                     establish reporting     threshold related Reconciliations   
                     materiality thresholds  to this statement of Net Operating  
                     for determining which   as part of the    Cost and Unified  
                     agency financial        overall process   Budget Deficit    
                     statement activities to to eventually     even though these 
                     collect and report at   eliminate the     statements        
                     the governmentwide      "net amount of    include some      
                     level to assist in      all other         amounts that      
                     ensuring that the       differences       Treasury cannot   
                     reconciliation          (plug)" included  explain or fully  
                     statement is useful and in this           support or for    
                     conveys meaningful      statement.        which Treasury    
                     information.                              cannot            
                                                               demonstrate that  
                                                               the amounts       
                                                               clearly link to   
                                                               agencies' audited 
                                                               financial         
                                                               statements.       
                                                               Treasury has not  
                                                               developed any     
                                                               alternative       
                                                               solutions. We     
                                                               continue to       
                                                               believe that      
                                                               implementation of 
                                                               our               
                                                               recommendations   
                                                               would result in   
                                                               the most          
                                                               efficient and     
                                                               effective manner  
                                                               for Treasury, as  
                                                               the preparer of   
                                                               the CFS, to       
                                                               obtain and        
                                                               demonstrate the   
                                                               necessary         
                                                               assurance on the  
                                                               significant       
                                                               amounts reported  
                                                               in the Statement  
                                                               of Changes in     
                                                               Cash Balance from 
                                                               Unified Budget    
                                                               and Other         
                                                               Activities and    
                                                               the               
                                                               Reconciliation of 
                                                               Net Operating     
                                                               Cost and Unified  
                                                               Budget Deficit.   
                                                               Consistent        
                                                               reporting         
                                                               throughout the    
                                                               federal           
                                                               government is an  
                                                               important goal.   
13         02-15  If Treasury chooses to  Treasury has      Open. See status  
                     continue using          previously        of recommendation 
                     information from both   communicated its  No. 02-14.        
                     federal agencies'       disagreement with 
                     financial statements    GAO on the need   
                     and the Central         for this          
                     Accounting and          reconciliation.   
                     Reporting System        Treasury does not 
                     (STAR), Treasury should use agency        
                     demonstrate how the     results in        
                     amounts from STAR       preparing this    
                     reconcile to federal    statement.        
                     agencies' financial                       
                     statements.                               
14         02-16  If Treasury chooses to  Treasury has      Open. See status  
                     continue using          previously        of recommendation 
                     information from both   communicated its  No. 02-14.        
                     federal agencies'       disagreement with 
                     financial statements    GAO on the need   
                     and from STAR, Treasury for this          
                     should identify and     reconciliation.   
                     document the cause of   Treasury does not 
                     any significant         use agency        
                     differences, if any are results in        
                     noted.                  preparing this    
                                             statement.        
15         02-17  The Secretary of the    Treasury has      Open. GAO's       
                     Treasury should direct  previously        recommendation    
                     the Fiscal Assistant    communicated its  does not dictate  
                     Secretary, in           disagreement with the source of     
                     coordination with the   GAO related to    data Treasury     
                     Controller of OMB, to   the use of data   should use to     
                     develop and implement a other than from   compile the       
                     process to ensure that  STAR in the       Statement of      
                     the Statement of        preparation of    Changes in Cash   
                     Changes in Cash Balance this statement.   Balance from      
                     from Unified Budget and There are no      Unified Budget    
                     Other Activities        material          and Other         
                     properly reflects the   differences       Activities, but   
                     activities reported in  between outlays   does recommend    
                     federal agencies'       reported by us    Treasury ensure   
                     audited financial       and those         consistency in    
                     statements. Treasury    included in the   reporting between 
                     should document the     President's       significant line  
                     consistency of the      Budget, nor is    items on the      
                     significant line items  there a need to   statement to      
                     on this statement to    reconcile to      agencies' audited 
                     agencies' audited       agency financial  financial         
                     financial statements.   statements. Also, statements. We    
                                             GAAP does not     agree that GAAP   
                                             require the       does not          
                                             disclosure of     specifically      
                                             either receipts   require the       
                                             or outlays in     disclosure of     
                                             this statement.   receipts and      
                                                               outlays in the    
                                                               Statement of      
                                                               Changes in Cash   
                                                               Balance from      
                                                               Unified Budget or 
                                                               Other Activities. 
                                                               In previous       
                                                               years, this       
                                                               statement         
                                                               reported budget   
                                                               outlays and       
                                                               budget receipts.  
                                                               However,          
                                                               beginning in      
                                                               fiscal year 2004, 
                                                               the federal       
                                                               government chose  
                                                               not to disclose   
                                                               budget outlays    
                                                               and budget        
                                                               receipts in this  
                                                               financial         
                                                               statement and     
                                                               only included the 
                                                               budget deficit.   
                                                               As we have        
                                                               reported since    
                                                               fiscal year 2003, 
                                                               we found material 
                                                               differences       
                                                               between the total 
                                                               net outlays       
                                                               reported in       
                                                               selected federal  
                                                               agencies'         
                                                               Statements of     
                                                               Budgetary         
                                                               Resources (SBR)   
                                                               and Treasury's    
                                                               central           
                                                               accounting        
                                                               record, which     
                                                               Treasury uses to  
                                                               prepare the       
                                                               Statement of      
                                                               Changes in Cash   
                                                               Balance from      
                                                               Unified Budget    
                                                               and Other         
                                                               Activities.       
                                                               Consistent        
                                                               reporting         
                                                               throughout the    
                                                               federal           
                                                               government is an  
                                                               important goal.   
16         02-18  The Secretary of the    Treasury          Open. See status  
                     Treasury should direct  disagrees with    of recommendation 
                     the Fiscal Assistant    GAO's                               
                     Secretary, in           recommendation to No.'s 02-14 and   
                     coordination with the   collect the       02-17.            
                     Controller of OMB, to   agency SBR outlay 
                     develop and implement a data through the  
                     process to ensure that  closing package   
                     the Statement of        process because   
                     Changes in Cash Balance Treasury already  
                     from Unified Budget and collects agency   
                     Other Activities        outlay data for   
                     properly reflects the   budgetary         
                     activities reported in  reporting         
                     federal agencies'       purposes. In      
                     audited financial       addition, there   
                     statements. Treasury    is no requirement 
                     should request, through to disclose       
                     its closing package,    outlays in this   
                     that federal agencies   statement.        
                     provide the net outlays Treasury and OMB  
                     reported in their       are working       
                     Combined Statement of   closely with the  
                     Budgetary Resources and agencies to       
                     explanations for any    assure that the   
                     significant differences outlays reported  
                     between net outlay      in agency SBRs    
                     amounts reported in the match the outlays 
                     Combined Statement of   reported to       
                     Budgetary Resources and Treasury for      
                     the budget of the U.S.  budgetary         
                     government.             reporting         
                                             purposes.         
17         02-19  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No.'s 02-17 and                     
                     Secretary, in           02-18.            No.'s 02-14 and   
                     coordination with the                     02-17.            
                     Controller of OMB, to                     
                     develop and implement a                   
                     process to ensure that                    
                     the Statement of                          
                     Changes in Cash Balance                   
                     from Unified Budget and                   
                     Other Activities                          
                     properly reflects the                     
                     activities reported in                    
                     federal agencies'                         
                     audited financial                         
                     statements. Treasury                      
                     should investigate the                    
                     differences between net                   
                     outlays reported in                       
                     federal agencies'                         
                     Combined Statement of                     
                     Budgetary Resources and                   
                     Treasury's records in                     
                     STAR to ensure that the                   
                     proper amounts are                        
                     reported in the                           
                     Statement of Changes in                   
                     Cash Balance from                         
                     Unified Budget and                        
                     Other Activities.                         
18         02-20  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No.'s 02-17 and                     
                     Secretary, in           02-18.            No.'s 02-14 and   
                     coordination with the                     02-17.            
                     Controller of OMB, to                     
                     develop and implement a                   
                     process to ensure that                    
                     the Statement of                          
                     Changes in Cash Balance                   
                     from Unified Budget and                   
                     Other Activities                          
                     properly reflects the                     
                     activities reported in                    
                     federal agencies'                         
                     audited financial                         
                     statements. Treasury                      
                     should explain and                        
                     document the                              
                     differences between the                   
                     operating revenue                         
                     amount reported on the                    
                     Statement of Operations                   
                     and Changes in Net                        
                     Position and unified                      
                     budget receipts                           
                     reported on the                           
                     Statement of Changes in                   
                     Cash Balance from                         
                     Unified Budget and                        
                     Other Activities.                         
19         02-21  The Secretary of the    Treasury          Open. See status  
                     Treasury should direct  disagrees with    of recommendation 
                     the Fiscal Assistant    GAO as to the                       
                     Secretary, in           need to link all  No.'s 02-14 and   
                     coordination with the   the items in the  02-17.            
                     Controller of OMB, to   "other            
                     develop and implement a activities"       
                     process to ensure that  section of this   
                     the Statement of        statement to      
                     Changes in Cash Balance other components  
                     from Unified Budget and of the CFS. With  
                     Other Activities        the exception of  
                     properly reflects the   loan-related      
                     activities reported in  items and total   
                     federal agencies'       operating cash,   
                     audited financial       the source for    
                     statements. Treasury    these items is    
                     should provide support  STAR, and         
                     for how the line items  Treasury believes 
                     in the "other           that the use of   
                     activities" section of  any other data    
                     this statement relate   would be less     
                     to either the           accurate.         
                     underlying Balance                        
                     Sheet or related notes                    
                     accompanying the CFS.                     
20         02-22  The Secretary of the    Treasury defined  Open.             
                     Treasury should direct  and documented    Documentation was 
                     the Fiscal Assistant    the reporting     not provided to   
                     Secretary, in           entity for fiscal GAO as part of    
                     coordination with the   year 2005.        the fiscal year   
                     Controller of OMB, to                     2005 audit. GAO   
                     perform an assessment                     plans to review   
                     to define the reporting                   such              
                     entity, including its                     documentation     
                     specific components, in                   during its audit  
                     conformity with the                       of the fiscal     
                     criteria issued by the                    year 2006 CFS.    
                     Federal Accounting                        
                     Standards Advisory                        
                     Board (FASAB). Key                        
                     decisions made in this                    
                     assessment should be                      
                     documented, including                     
                     the reason for                            
                     including or excluding                    
                     components and the                        
                     basis for concluding on                   
                     any issue. Particular                     
                     emphasis should be                        
                     placed on demonstrating                   
                     that any financial                        
                     information that should                   
                     be included but is not                    
                     included is immaterial.                   
21         02-23  The Secretary of the    Treasury will     Open.             
                     Treasury should direct  implement changes 
                     the Fiscal Assistant    to the reporting  
                     Secretary, in           entity. See       
                     coordination with the   status of         
                     Controller of OMB, to   recommendation    
                     provide in the          No. 02-22.        
                     financial statements                      
                     all the financial                         
                     information relevant to                   
                     the defined reporting                     
                     entity, in all material                   
                     respects. Such                            
                     information would                         
                     include, for example,                     
                     the reporting entity's                    
                     assets, liabilities,                      
                     and revenues.                             
22         02-24  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant                      
                     Secretary, in           No. 02-23.        
                     coordination with the                     
                     Controller of OMB, to                     
                     disclose in the                           
                     financial statements                      
                     all information that is                   
                     necessary to inform                       
                     users adequately about                    
                     the reporting entity.                     
                     Such disclosures should                   
                     clearly describe the                      
                     reporting entity and                      
                     explain the reason for                    
                     excluding any                             
                     components that are not                   
                     included in the defined                   
                     reporting entity.                         
23         02-25  The Secretary of the    Treasury          Open. Treasury's  
                     Treasury should direct  established a     fiscal year 2005  
                     the Fiscal Assistant    formal process    process did not   
                     Secretary to establish  and completed an  completely        
                     a formal process that   analysis of       analyze the       
                     will allow the          fiscal year 2005  fiscal year 2005  
                     financial statements,   required agency   disclosures.      
                     related notes, and      financial         Treasury stated   
                     stewardship and         statement and     that they planned 
                     supplemental            note disclosures  no further action 
                     information in the CFS  and made the      pending the       
                     to be presented in      appropriate       outcome of a      
                     conformity with GAAP.   disclosures in    proposed FASAB    
                     The process should      the fiscal        standard.         
                     timely identify GAAP    year 2005 CFS.    
                     requirements.           For items not     
                                             disclosed,        
                                             Treasury will     
                                             discuss with      
                                             agency personnel  
                                             and GAO any       
                                             additional data   
                                             needed to         
                                             finalize the      
                                             required          
                                             disclosures. In   
                                             addition, in      
                                             October 2005,     
                                             FASAB issued an   
                                             exposure draft    
                                             specific to the   
                                             CFS that would    
                                             result in the     
                                             elimination or    
                                             reduction for     
                                             certain           
                                             disclosures.      
                                             Treasury plans no 
                                             further action on 
                                             these specific    
                                             disclosures       
                                             pending the       
                                             outcome of this   
                                             proposed          
                                             standard.         
24         02-26  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25.                          
                     Secretary to establish                    No. 02-25.        
                     a formal process that                     
                     will allow the                            
                     financial statements,                     
                     related notes, and                        
                     stewardship and                           
                     supplemental                              
                     information in the CFS                    
                     to be presented in                        
                     conformity with GAAP.                     
                     The process should make                   
                     timely modifications to                   
                     Treasury's closing                        
                     package requirements to                   
                     obtain information                        
                     needed.                                   
25         02-27  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25.                          
                     Secretary to establish                    No. 02-25.        
                     a formal process that                     
                     will allow the                            
                     financial statements,                     
                     related notes, and                        
                     stewardship and                           
                     supplemental                              
                     information in the CFS                    
                     to be presented in                        
                     conformity with GAAP.                     
                     The process should                        
                     assess, qualitatively                     
                     and quantitatively, the                   
                     impact of the omitted                     
                     disclosures.                              
26         02-28  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25.                          
                     Secretary to establish                    No. 02-25.        
                     a formal process that                     
                     will allow the                            
                     financial statements,                     
                     related notes, and                        
                     stewardship and                           
                     supplemental                              
                     information in the CFS                    
                     to be presented in                        
                     conformity with GAAP.                     
                     The process should                        
                     document decisions                        
                     reached and the                           
                     rationale for such                        
                     decisions.                                
27         02-29  The Secretary of the    Treasury and      Open. Treasury's  
                     Treasury should direct  OMB's policy and  policies and      
                     the Fiscal Assistant    procedures        procedures are    
                     Secretary, in           include an        not adequate to   
                     coordination with the   analysis of the   identify all      
                     Controller of OMB, to   agency management possible          
                     establish written       representations   discrepancies     
                     policies and procedures to determine if   between the       
                     for preparing the       discrepancies     agencies'         
                     governmentwide          exist between     management        
                     management              what the agency   representation    
                     representation letter   auditor reported  letters and the   
                     to help ensure that it  and the           auditors'         
                     is properly prepared    representations   findings.         
                     and contains sufficient made by the       Specifically, the 
                     representations.        agency. Any       policies and      
                     Specifically, these     discrepancies     procedures only   
                     policies and procedures found are listed  identify and      
                     should require an       as exceptions on  report            
                     analysis of the agency  an enclosure that discrepancies     
                     management              is submitted with that relate to    
                     representations to      the               material          
                     determine if            governmentwide    weaknesses. In    
                     discrepancies exist     management        addition,         
                     between what the agency representation    Treasury's        
                     auditor reported and    letter.           policies and      
                     the representations                       procedures state  
                     made by the agency,                       that items that   
                     including the                             resulted in an    
                     resolution of such                        agency disclaimer 
                     discrepancies.                            of opinion or     
                                                               qualification     
                                                               will be included  
                                                               in an enclosure   
                                                               to the CFS        
                                                               management        
                                                               representation    
                                                               letter. However,  
                                                               the               
                                                               governmentwide    
                                                               representation    
                                                               letter prepared   
                                                               by Treasury is    
                                                               based primarily   
                                                               on the individual 
                                                               federal agency    
                                                               representation    
                                                               letters. Any      
                                                               identified        
                                                               discrepancies at  
                                                               the agency level, 
                                                               whether they      
                                                               affected the      
                                                               opinion or not,   
                                                               need to be        
                                                               considered so     
                                                               that Treasury and 
                                                               OMB can           
                                                               adequately        
                                                               provide us        
                                                               representations   
                                                               at the            
                                                               governmentwide    
                                                               level.            
28         02-30  The Secretary of the    OMB Bulletin No.  Open. The         
                     Treasury should direct  01-02, Audit      policies and      
                     the Fiscal Assistant    Requirements for  procedures        
                     Secretary, in           Federal Financial discuss           
                     coordination with the   Statements        signatures on     
                     Controller of OMB, to   references the    agency management 
                     establish written       audit guidance on representation    
                     policies and procedures management        letters, but do   
                     for preparing the       representation    not include steps 
                     governmentwide          letters provided  for Treasury's    
                     management              in the AICPA      review of the     
                     representation letter   auditing standard signatures to     
                     to help ensure that it  AU S: 333,        determine if the  
                     is properly prepared    Management        letters have been 
                     and contains sufficient Representations;  signed by the     
                     representations.        these are         highest-level     
                     Specifically, these     authoritative for agency officials  
                     policies and procedures audits of federal who are           
                     should require a        financial         responsible for   
                     determination that the  statements. The   and knowledgeable 
                     agency management       AU S: 333.09      about the matters 
                     representation letters  instructs that    included in the   
                     have been signed by the the management    agency management 
                     highest-level agency    representation    representation    
                     officials who are       letters should be letters. Letters  
                     responsible for and     signed by         that have not     
                     knowledgeable about the management with   been              
                     matters included in the the overall       appropriately     
                     agency management       responsibility    signed impair     
                     representation letters. and knowledge     Treasury's and    
                                             about the items   OMB's ability to  
                                             covered by the    provide           
                                             representations.  representation at 
                                             Unless explicitly the               
                                             noted by an       governmentwide    
                                             agency's auditor, level. In         
                                             Treasury and OMB  connection with   
                                             infer from the    our audit of the  
                                             auditors'         fiscal year 2004  
                                             acceptance of     CFS, we issued    
                                             agencies'         reports to 24     
                                             management        federal agencies  
                                             representation    discussing areas, 
                                             letters that the  including         
                                             proper signatures signatures, where 
                                             are included.     the agencies'     
                                             Treasury and      fiscal year 2004  
                                             OMB's policy is   management        
                                             to rely on the    representation    
                                             integrity of the  letters did not   
                                             agency audits,    provide all the   
                                             including the     information       
                                             determination of  necessary to      
                                             the adequacy of   support           
                                             the agencies'     Treasury's and    
                                             signatories.      OMB's preparation 
                                                               of the CFS        
                                                               management        
                                                               representation    
                                                               letter. For       
                                                               example, in the   
                                                               report we issued  
                                                               to one of the     
                                                               significant       
                                                               agencies, we made 
                                                               a recommendation  
                                                               regarding         
                                                               signatures. In    
                                                               this agency's     
                                                               response to the   
                                                               report, it        
                                                               represented that  
                                                               it would include  
                                                               the appropriate   
                                                               signatures on     
                                                               future letters.   
                                                               However, the      
                                                               agency's fiscal   
                                                               year 2005         
                                                               management        
                                                               representation    
                                                               letter did not    
                                                               include such      
                                                               signatures.       
29         02-31  The Secretary of the    Neither OMB       Open. In          
                     Treasury should direct  Bulletin No.      preparing the     
                     the Fiscal Assistant    01-02, Audit      governmentwide    
                     Secretary, in           Requirements for  management        
                     coordination with the   Federal Financial representation    
                     Controller of OMB, to   Statements, nor   letter, Treasury  
                     establish written       OMB Circular      and OMB limit     
                     policies and procedures A-136, Financial  certain           
                     for preparing the       Reporting         representations   
                     governmentwide          Requirements,     in the letter to  
                     management              Part B, requires  matters that are  
                     representation letter   agencies to       considered to be  
                     to help ensure that it  quantitatively    material. In      
                     is properly prepared    disclose its      doing so, OMB,    
                     and contains sufficient materiality in    Treasury, and GAO 
                     representations.        the management    should confer on  
                     Specifically, these     representation    the materiality   
                     policies and procedures letters; these    level to be used  
                     should require an       are authoritative at the            
                     assessment of the       for audits of     governmentwide    
                     materiality thresholds  federal financial level. Treasury   
                     used by federal         statements. This  and OMB need the  
                     agencies in their       practice is       agency thresholds 
                     respective management   consistent with   in providing a    
                     representation letters. the AICPA         materiality       
                                             auditing standard threshold for the 
                                             AU S: 333         governmentwide    
                                             Management        management        
                                             Representations.  representation    
                                             Treasury          letter to         
                                             continues to      represent that    
                                             calculate the     all matters       
                                             materiality       material to the   
                                             threshold for the CFS were properly 
                                             governmentwide    considered and    
                                             management        included. This    
                                             representation    situation         
                                             letter using the  contributed to    
                                             guidance provided our scope         
                                             in the PCIE/GAO   limitation        
                                             Financial Audit   relating to the   
                                             Manual (FAM).     fiscal year 2005  
                                             This guidance     governmentwide    
                                             does not include  management        
                                             consideration of  representation    
                                             component         letter.           
                                             entities'         Specifically, one 
                                             materiality       of the            
                                             thresholds.       significant       
                                                               federal entities  
                                                               used a            
                                                               materiality       
                                                               threshold in its  
                                                               management        
                                                               representation    
                                                               letter that far   
                                                               exceeded what     
                                                               would be in       
                                                               conformity with   
                                                               the FAM, which in 
                                                               turn negatively   
                                                               impacted          
                                                               Treasury's and    
                                                               OMB's ability to  
                                                               provide us with   
                                                               representations   
                                                               at the            
                                                               governmentwide    
                                                               level within the  
                                                               materiality       
                                                               threshold we had  
                                                               established for   
                                                               the               
                                                               governmentwide    
                                                               letter.           
30         02-32  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-31.        No. 02-31.        
                     Secretary, in                             
                     coordination with the                     
                     Controller of OMB, to                     
                     establish written                         
                     policies and procedures                   
                     for preparing the                         
                     governmentwide                            
                     management                                
                     representation letter                     
                     to help ensure that it                    
                     is properly prepared                      
                     and contains sufficient                   
                     representations.                          
                     Specifically, these                       
                     policies and procedures                   
                     should require an                         
                     assessment of the                         
                     impact, if any, of                        
                     federal agencies'                         
                     materiality thresholds                    
                     on the management                         
                     representations made at                   
                     the governmentwide                        
                     level.                                    
31         02-33  The Secretary of the    OMB Bulletin No.  Open. Treasury's  
                     Treasury should direct  01-02, Audit      policies and      
                     the Fiscal Assistant    Requirements for  procedures do not 
                     Secretary, in           Federal Financial include steps to  
                     coordination with the   Statements        review the        
                     Controller of OMB, to   references the    agencies'         
                     establish written       audit guidance on management        
                     policies and procedures management        representation    
                     for preparing the       representation    letters for       
                     governmentwide          letters provided  omitted or        
                     management              in the AICPA      incomplete        
                     representation letter   auditing standard representations.  
                     to help ensure that it  AU S: 333,        In addition, the  
                     is properly prepared    Management        policies and      
                     and contains sufficient Representations;  procedures do not 
                     representations.        these are         include steps to  
                     Specifically, these     authoritative for assess the impact 
                     policies and procedures audits of federal of omitted or     
                     should require an       financial         incomplete        
                     evaluation and          statements. The   representations   
                     assessment of the       AU S: 333.08      on the            
                     omission of             allows for the    governmentwide    
                     representations         management        management        
                     ordinarily included in  representations   representation    
                     agency management       to be limited to  letter. When      
                     representation letters. items that are    agencies do not   
                                             material to the   provide all       
                                             financial         representations   
                                             statements, with  or include        
                                             noted exceptions, incomplete        
                                             provided that     representations   
                                             management has    in their          
                                             reached an        management        
                                             understanding     representation    
                                             with its auditors letter, it        
                                             on materiality.   impairs GAO's     
                                             Unless explicitly ability to audit  
                                             noted by an       the CFS and       
                                             agency's auditor, Treasury's and    
                                             Treasury and OMB  OMB's ability to  
                                             infer from the    make these types  
                                             auditors'         of                
                                             acceptance of     representations   
                                             agencies'         in the            
                                             management        governmentwide    
                                             representation    management        
                                             letters that the  representation    
                                             representations   letter. As noted  
                                             omitted from the  above, we issued  
                                             agencies' letters reports to 24     
                                             are not material  federal agencies  
                                             to the respective in which we cited 
                                             agencies'         issues with such  
                                             financial         agencies' fiscal  
                                             statements. It is year 2004         
                                             Treasury and      management        
                                             OMB's policy to   representation    
                                             rely on the       letters. These    
                                             integrity of the  issues included   
                                             agency audits,    omitted or        
                                             including the     incomplete        
                                             determination of  representations.  
                                             the adequacy of   
                                             the agencies'     
                                             management        
                                             representation    
                                             letters.          
32         02-34  The Secretary of the    In fiscal year    Open. Although    
                     Treasury should direct  2005, Treasury    Treasury did      
                     the Fiscal Assistant    updated the       update its SOP,   
                     Secretary, in           standard          it was not clear  
                     coordination with the   operating         that these        
                     Controller of OMB, to   procedure (SOP)   procedures called 
                     establish written       for the summaries for Treasury to   
                     policies and procedures of unadjusted     review both the   
                     for preparing the       misstatements.    summaries of      
                     governmentwide                            unadjusted        
                     management                                misstatements     
                     representation letter                     included with     
                     to help ensure that it                    agencies'         
                     is properly prepared                      management        
                     and contains sufficient                   representation    
                     representations.                          letters and the   
                     Specifically, these                       summaries of      
                     policies and procedures                   unadjusted        
                     should require an                         misstatements     
                     analysis and                              submitted with    
                     aggregation of the                        the agencies'     
                     agencies' summary of                      closing packages. 
                     unadjusted                                This analysis is  
                     misstatements to                          necessary to      
                     determine the                             ensure that all   
                     completeness of the                       unadjusted        
                     summaries and to                          misstatements     
                     ascertain the                             applicable to the 
                     materiality, both                         CFS are           
                     individually and in the                   aggregated. In    
                     aggregate, of such                        addition,         
                     unadjusted                                Treasury did not  
                     misstatements to the                      include           
                     CFS taken as a whole.                     unadjusted        
                                                               misstatements for 
                                                               three significant 
                                                               agencies in its   
                                                               fiscal year 2005  
                                                               analysis.         
33         02-35  The Secretary of the    OMB and Treasury  Open.             
                     Treasury should direct  will work with    
                     the Fiscal Assistant    agencies to       
                     Secretary, in           ensure that       
                     coordination with the   adequate          
                     Controller of OMB, to   information is    
                     help ensure that        provided in the   
                     agencies provide        legal             
                     adequate information in representation    
                     their legal             letters regarding 
                     representation letters  the expected      
                     regarding the expected  outcome of the    
                     outcome of the cases.   cases.            
34         02-36  The Secretary of the    OMB and Treasury  Open.             
                     Treasury should direct  will follow up    
                     the Fiscal Assistant    with agencies     
                     Secretary, in           that have not     
                     coordination with the   provided their    
                     Controller of OMB, to   management        
                     help ensure that        schedules to      
                     agencies provide        ensure they do    
                     related management      so.               
                     schedules.                                
35         02-37  The Secretary of the    To ensure a       Open.             
                     Treasury should direct  reasonable        
                     the Fiscal Assistant    approach, OMB     
                     Secretary, in           will analyze the  
                     coordination with the   appropriateness   
                     Controller of OMB, to   of reporting      
                     establish written       "treaties" before 
                     policies and procedures developing        
                     to help ensure that     specific          
                     major treaty and other  corrective        
                     international agreement actions.          
                     information is properly                   
                     identified and reported                   
                     in the CFS.                               
                     Specifically, these                       
                     policies and procedures                   
                     should require that                       
                     agencies develop a                        
                     detailed schedule of                      
                     all major treaties and                    
                     other international                       
                     agreements that                           
                     obligate the U.S.                         
                     government to provide                     
                     cash, goods, or                           
                     services, or that                         
                     create other financial                    
                     arrangements that are                     
                     contingent on the                         
                     occurrence or                             
                     nonoccurrence of future                   
                     events (a starting                        
                     point for compiling                       
                     these data could be the                   
                     State Department's                        
                     Treaties in Force).                       
36         02-38  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-37.        
                     Secretary, in                             
                     coordination with the                     
                     Controller of OMB, to                     
                     establish written                         
                     policies and procedures                   
                     to help ensure that                       
                     major treaty and other                    
                     international agreement                   
                     information is properly                   
                     identified and reported                   
                     in the CFS.                               
                     Specifically, these                       
                     policies and procedures                   
                     should require that                       
                     agencies classify all                     
                     such scheduled major                      
                     treaties and other                        
                     international                             
                     agreements as                             
                     commitments or                            
                     contingencies.                            
37         02-39  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-37.        
                     Secretary, in                             
                     coordination with the                     
                     Controller of OMB, to                     
                     establish written                         
                     policies and procedures                   
                     to help ensure that                       
                     major treaty and other                    
                     international agreement                   
                     information is properly                   
                     identified and reported                   
                     in the CFS.                               
                     Specifically, these                       
                     policies and procedures                   
                     should require that                       
                     agencies disclose in                      
                     the notes to the CFS                      
                     amounts for major                         
                     treaties and other                        
                     international                             
                     agreements that have a                    
                     reasonably possible                       
                     chance of resulting in                    
                     a loss or claim as a                      
                     contingency.                              
38         02-40  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-37.        
                     Secretary, in                             
                     coordination with the                     
                     Controller of OMB, to                     
                     establish written                         
                     policies and procedures                   
                     to help ensure that                       
                     major treaty and other                    
                     international agreement                   
                     information is properly                   
                     identified and reported                   
                     in the CFS.                               
                     Specifically, these                       
                     policies and procedures                   
                     should require that                       
                     agencies disclose in                      
                     the notes to the CFS                      
                     amounts for major                         
                     treaties and other                        
                     international                             
                     agreements that are                       
                     classified as                             
                     commitments and that                      
                     may require measurable                    
                     future financial                          
                     obligations.                              
39         02-41  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-37.        
                     Secretary, in                             
                     coordination with the                     
                     Controller of OMB, to                     
                     establish written                         
                     policies and procedures                   
                     to help ensure that                       
                     major treaty and other                    
                     international agreement                   
                     information is properly                   
                     identified and reported                   
                     in the CFS.                               
                     Specifically, these                       
                     policies and procedures                   
                     should require that                       
                     agencies take steps to                    
                     prevent major treaties                    
                     and other international                   
                     agreements that are                       
                     classified as remote                      
                     from being recorded or                    
                     disclosed as probable                     
                     or reasonably possible                    
                     in the CFS.                               
40         02-42  As Treasury is          Treasury used its Open. Treasury's  
                     designing its new       revised CFS       process for       
                     compilation process,    compilation       compiling the     
                     which it expects to     process, first    consolidated      
                     implement beginning     implemented in    financial         
                     with the fiscal year    fiscal year 2004, statements did    
                     2004 CFS, the Secretary to directly link  not ensure that   
                     of the Treasury should  agency audited    the information   
                     direct the Fiscal       financial         in all of the     
                     Assistant Secretary, in statements to     five principal    
                     coordination with the   three of the five financial         
                     Controller of OMB, to   CFS principal     statements and    
                     design the new          statements. The   notes were fully  
                     compilation process to  exceptions are    consistent with   
                     directly link           the               the underlying    
                     information from        Reconciliation of information in    
                     federal agencies'       Net Operating     federal agencies' 
                     audited financial       Cost and Unified  audited financial 
                     statements to amounts   Budget Deficit    statements and    
                     reported in all the     (or Surplus) and  other financial   
                     applicable consolidated the Statement of  data. Treasury    
                     financial statements    Changes in Cash   made progress in  
                     and related footnotes.  Balance, which    demonstrating     
                                             Treasury does not amounts in the    
                                             plan to link to   Balance Sheet and 
                                             agency financial  the Statement of  
                                             statements. With  Net Cost were     
                                             regard to note    consistent with   
                                             disclosures, the  federal agencies' 
                                             revised           audited financial 
                                             compilation       statements prior  
                                             process included  to eliminating    
                                             direct linkage    intragovernmental 
                                             between the CFS   activity and      
                                             note disclosures  balances.         
                                             and the related   
                                             agencies' audited 
                                             note disclosures. 
41         02-43  As Treasury is          Treasury will     Open.             
                     designing its new       continue to       
                     compilation process,    consider          
                     which it expects to     applicable        
                     implement beginning     recommendations   
                     with the fiscal year    as the current    
                     2004 CFS, the Secretary CFS compilation   
                     of the Treasury should  system is revised 
                     direct the Fiscal       and enhanced.     
                     Assistant Secretary, in                   
                     coordination with the                     
                     Controller of OMB, to                     
                     consider the other                        
                     applicable                                
                     recommendations in this                   
                     report when designing                     
                     and implementing the                      
                     new compilation                           
                     process.                                  
42         02-44  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of Statement of Federal exposure draft    
                     Financial Accounting    mentioned in the  
                     Standards (SFFAS) No.   status of         
                     3, Accounting for       recommendation    
                     Inventory and Related   No.               
                     Property, paragraph 91,                   
                     which requires the      02-25.            
                     reporting entity to                       
                     disclose the valuation                    
                     basis for foreclosed                      
                     property.                                 
43         02-45  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 3,         exposure draft    
                     Accounting for          mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraph 91, recommendation    
                     which requires the      No.               
                     reporting entity to                       
                     disclose the changes    02-25.            
                     from the prior year's                     
                     accounting methods, if                    
                     any.                                      
44         02-46  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 3,         exposure draft    
                     Accounting for          mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraph 91, recommendation    
                     which requires the      No.               
                     reporting entity to                       
                     disclose the            02-25.            
                     restrictions on the                       
                     use/disposal of                           
                     property.                                 
45         02-47  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 3,         exposure draft    
                     Accounting for          mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraph 91, recommendation    
                     which requires the      No.               
                     reporting entity to                       
                     disclose the balances   02-25.            
                     by categories (i.e.,                      
                     pre-1992 and post-1991                    
                     foreclosed property).                     
46         02-48  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 3,         exposure draft    
                     Accounting for          mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraph 91, recommendation    
                     which requires the      No.               
                     reporting entity to                       
                     disclose the number of  02-25.            
                     properties held and                       
                     average holding period                    
                     by type or category.                      
47         02-49  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 3,         exposure draft    
                     Accounting for          mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraph 91, recommendation    
                     which requires the      No.               
                     reporting entity to                       
                     disclose the number of  02-25.            
                     properties for which                      
                     foreclosure proceedings                   
                     are in process at the                     
                     end of the period for                     
                     foreclosed assets                         
                     acquired in full or                       
                     partial settlement of a                   
                     direct or guaranteed                      
                     loan.                                     
48         02-50  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 18,        exposure draft    
                     Amendments to           mentioned in the  
                     Accounting Standards    status of         
                     for Direct Loans and    recommendation    
                     Loan Guarantees,        No.               
                     paragraph 9, which                        
                     requires credit         02-25.            
                     programs to reestimate                    
                     the subsidy cost                          
                     allowance for                             
                     outstanding direct                        
                     loans and the liability                   
                     for outstanding loan                      
                     guarantees. There are                     
                     two kinds of                              
                     reestimates: (1)                          
                     interest rate                             
                     reestimates and (2)                       
                     technical/default                         
                     reestimates. Entities                     
                     should measure and                        
                     disclose each program's                   
                     reestimates in these                      
                     two components                            
                     separately.                               
49         02-51  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 18,        exposure draft    
                     Amendments to           mentioned in the  
                     Accounting Standards    status of         
                     for Direct Loans and    recommendation    
                     Loan Guarantees,        No. 02-25.        
                     paragraph 10, which                       
                     requires the reporting                    
                     entity to display in                      
                     the notes to the                          
                     financial statements a                    
                     reconciliation between                    
                     the beginning and                         
                     ending balances of the                    
                     subsidy cost allowance                    
                     for outstanding direct                    
                     loans and the liability                   
                     for outstanding loan                      
                     guarantees reported on                    
                     the entity's balance                      
                     sheet.                                    
50         02-52  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 18,        exposure draft    
                     Amendments to           mentioned in the  
                     Accounting Standards    status of         
                     for Direct Loans and    recommendation    
                     Loan Guarantees,        No. 02-25.        
                     paragraph 11, which                       
                     requires disclosure of                    
                     the total amount of                       
                     direct or guaranteed                      
                     loans disbursed for the                   
                     current reporting year                    
                     and the preceding                         
                     reporting year.                           
51         02-53  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 18,        exposure draft    
                     Amendments to           mentioned in the  
                     Accounting Standards    status of         
                     for Direct Loans and    recommendation    
                     Loan Guarantees,        No. 02-25.        
                     paragraph 11, which                       
                     requires disclosure of                    
                     the subsidy expense by                    
                     components, recognized                    
                     for the direct or                         
                     guaranteed loans                          
                     disbursed in the                          
                     current reporting year                    
                     and the preceding                         
                     reporting year.                           
52         02-54  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 18,        exposure draft    
                     Amendments to           mentioned in the  
                     Accounting Standards    status of         
                     for Direct Loans and    recommendation    
                     Loan Guarantees,        No. 02-25.        
                     paragraph 11, which                       
                     requires disclosure of                    
                     the subsidy reestimates                   
                     by components for the                     
                     current reporting year                    
                     and the preceding                         
                     reporting year.                           
53         02-55  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 18,        exposure draft    
                     Amendments to           mentioned in the  
                     Accounting Standards    status of         
                     for Direct Loans and    recommendation    
                     Loan Guarantees,        No. 02-25.        
                     paragraph 11, which                       
                     requires disclosure, at                   
                     the program level, of                     
                     the subsidy rates for                     
                     the total subsidy cost                    
                     and its components for                    
                     the interest subsidy                      
                     costs, default costs                      
                     (net of recoveries),                      
                     fees and other                            
                     collections, and other                    
                     costs estimated for                       
                     direct loans and loan                     
                     guarantees in the                         
                     current year's budget                     
                     for the current year's                    
                     cohorts.                                  
54         02-56  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for loans    be directly       
                     receivable and loan     affected by the   
                     guarantee liabilities   implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 18,        exposure draft    
                     Amendments to           mentioned in the  
                     Accounting Standards    status of         
                     for Direct Loans and    recommendation    
                     Loan Guarantees,        No. 02-25.        
                     paragraph 11, which                       
                     requires the reporting                    
                     entity to disclose,                       
                     discuss, and explain                      
                     events and changes in                     
                     economic conditions,                      
                     other risk factors,                       
                     legislation, credit                       
                     policies, and subsidy                     
                     estimation                                
                     methodologies and                         
                     assumptions that have                     
                     had a significant and                     
                     measurable effect on                      
                     subsidy rates, subsidy                    
                     expense, and subsidy                      
                     reestimates.                              
55         02-57  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     inventories and         affected by the   
                     operating materials and implementation of 
                     supplies meets the      the FASAB         
                     requirements of SFFAS   exposure draft    
                     No. 3, Accounting for   mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraph 30, recommendation    
                     which requires the      No. 02-25.        
                     difference between the                    
                     carrying amount and the                   
                     expected net realizable                   
                     value to be recognized                    
                     as a loss or gain and                     
                     either separately                         
                     reported or disclosed                     
                     when inventory or                         
                     operating materials and                   
                     supplies are declared                     
                     excess, obsolete, or                      
                     unserviceable.                            
56         02-58  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     inventories and         affected by the   
                     operating materials and implementation of 
                     supplies meets the      the FASAB         
                     requirements of SFFAS   exposure draft    
                     No. 3, Accounting for   mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraphs 35 recommendation    
                     and 50, which require   No. 02-25.        
                     disclosure of inventory                   
                     and operating materials                   
                     and supplies general                      
                     composition.                              
57         02-59  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     inventories and         affected by the   
                     operating materials and implementation of 
                     supplies meets the      the FASAB         
                     requirements of SFFAS   exposure draft    
                     No. 3, Accounting for   mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraphs 35 recommendation    
                     and 50, that require    No. 02-25.        
                     disclosure of any                         
                     changes from the prior                    
                     year in accounting                        
                     methods for inventory                     
                     and operating materials                   
                     and supplies.                             
58         02-60  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     inventories and         affected by the   
                     operating materials and implementation of 
                     supplies meets the      the FASAB         
                     requirements of SFFAS   exposure draft    
                     No. 3, Accounting for   mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraphs 35 recommendation    
                     and 50, which require   No. 02-25.        
                     the disclosure of any                     
                     restrictions on the                       
                     sale of inventory and                     
                     the use of operating                      
                     materials and supplies.                   
59         02-61  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     inventories and         affected by the   
                     operating materials and implementation of 
                     supplies meets the      the FASAB         
                     requirements of SFFAS   exposure draft    
                     No. 3, Accounting for   mentioned in the  
                     Inventory and Related   status of         
                     Property, paragraphs 35 recommendation    
                     and 50, which requires  No. 02-25.        
                     disclosure of any                         
                     changes in the criteria                   
                     for categorizing                          
                     inventory and operating                   
                     materials and supplies.                   
60         02-62  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     stockpile material      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 56, status of         
                     which requires          recommendation    
                     disclosure of the basis No. 02-25.        
                     for valuing stockpile                     
                     material, including                       
                     valuation method and                      
                     any cost flow                             
                     assumptions.                              
61         02-63  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     stockpile material      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 56, status of         
                     which requires          recommendation    
                     disclosure of any       No. 02-25.        
                     changes from the prior                    
                     year's accounting                         
                     methods.                                  
62         02-64  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     stockpile material      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 56, status of         
                     which requires          recommendation    
                     disclosure of           No. 02-25.        
                     restrictions on the use                   
                     of stockpile material.                    
63         02-65  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     5, Inventories    
                     that the note           and Related       
                     disclosure for          Property, Net, in 
                     stockpile material      the fiscal year   
                     meets the requirements  2005 CFS.         
                     of SFFAS No. 3,                           
                     Accounting for                            
                     Inventory and Related                     
                     Property, paragraph 56,                   
                     which requires                            
                     disclosure of the                         
                     balances in each                          
                     category of stockpile                     
                     material (i.e.,                           
                     stockpile material held                   
                     and held for sale).                       
64         02-66  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     stockpile material      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 56, status of         
                     which requires          recommendation    
                     disclosure of the       No. 02-25.        
                     criteria for grouping                     
                     stockpile material held                   
                     for sale.                                 
65         02-67  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     stockpile material      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 56, status of         
                     which requires          recommendation    
                     disclosure of changes   No. 02-25.        
                     in criteria for                           
                     categorizing stockpile                    
                     material held for sale.                   
66         02-68  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     stockpile material      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 55, status of         
                     which requires          recommendation    
                     disclosure of any       No. 02-25.        
                     difference between the                    
                     carrying amount (i.e.,                    
                     purchase price or cost)                   
                     of stockpile material                     
                     held for sale and the                     
                     estimated selling price                   
                     of such assets.                           
67         02-69  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for seized   be directly       
                     material meets the      affected by the   
                     requirements of SFFAS   implementation of 
                     No. 3, Accounting for   the FASAB         
                     Inventory and Related   exposure draft    
                     Property, paragraph 66, mentioned in the  
                     which requires          status of         
                     disclosure of the       recommendation    
                     valuation method.       No. 02-25.        
68         02-70  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for seized   be directly       
                     material meets the      affected by the   
                     requirements of SFFAS   implementation of 
                     No. 3, Accounting for   the FASAB         
                     Inventory and Related   exposure draft    
                     Property, paragraph 66, mentioned in the  
                     which requires          status of         
                     disclosure of any       recommendation    
                     changes from the prior  No. 02-25.        
                     year's accounting                         
                     methods.                                  
69         02-71  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for seized   be directly       
                     material meets the      affected by the   
                     requirements of SFFAS   implementation of 
                     No. 3, Accounting for   the FASAB         
                     Inventory and Related   exposure draft    
                     Property, paragraph 66, mentioned in the  
                     which requires          status of         
                     disclosure of the       recommendation    
                     analysis of change in   No. 02-25.        
                     seized property                           
                     (including dollar value                   
                     and number of seized                      
                     properties) that is on                    
                     hand at the beginning                     
                     of the year, seized                       
                     during the year,                          
                     disposed of during the                    
                     year, and on hand at                      
                     the end of the year, as                   
                     well as known liens or                    
                     other claims against                      
                     the property. This                        
                     information should be                     
                     presented by type of                      
                     seizure and method of                     
                     disposition, when                         
                     material.                                 
70         02-72  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     forfeited property      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 78, status of         
                     which requires          recommendation    
                     disclosure of the       No. 02-25.        
                     valuation method.                         
71         02-73  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     forfeited property      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 78, status of         
                     which requires          recommendation    
                     disclosure of the       No. 02-25.        
                     analysis of the changes                   
                     in forfeited property                     
                     by type and dollar                        
                     amount that includes                      
                     (1) number of                             
                     forfeitures on hand at                    
                     the beginning of the                      
                     year, (2) additions,                      
                     (3) disposals and                         
                     method of disposition,                    
                     and (4) end-of-year                       
                     balances.                                 
72         02-74  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     forfeited property      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 78, status of         
                     which requires          recommendation    
                     disclosure of any       No. 02-25.        
                     restriction on the use                    
                     or disposition of the                     
                     property.                                 
73         02-75  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     forfeited property      affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 3,         the FASAB         
                     Accounting for          exposure draft    
                     Inventory and Related   mentioned in the  
                     Property, paragraph 78, status of         
                     which requires          recommendation    
                     disclosure, if          No. 02-25.        
                     available, of an                          
                     estimate of the value                     
                     of property to be                         
                     distributed to other                      
                     federal, state, and                       
                     local agencies in                         
                     future reporting                          
                     periods.                                  
74         02-76  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           required          
                     disclosure for goods    information was   
                     held under price        requested from    
                     support and             the agencies for  
                     stabilization programs  inclusion in Note 
                     meets the requirements  19,               
                     of SFFAS No. 3,         Contingencies, in 
                     Accounting for          the fiscal year   
                     Inventory and Related   2005 CFS.         
                     Property, paragraph 98, However, no       
                     which requires that if  related data were 
                     a contingent loss is    received in       
                     not recognized because  fiscal year 2005; 
                     it is less than         therefore, there  
                     probable or it is not   is no disclosure  
                     reasonably measurable,  related to this   
                     disclosure of the       requirement.      
                     contingency shall be                      
                     made if it is at least                    
                     reasonably possible                       
                     that a loss may occur.                    
75         02-77  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for goods    be directly       
                     held under price        affected by the   
                     support and             implementation of 
                     stabilization programs  the FASAB         
                     meets the requirements  exposure draft    
                     of SFFAS No. 3,         mentioned in the  
                     Accounting for          status of         
                     Inventory and Related   recommendation    
                     Property, paragraph     No. 02-25.        
                     109, which requires                       
                     disclosure of the basis                   
                     for valuing                               
                     commodities, including                    
                     valuation method and                      
                     cost flow assumptions.                    
76         02-78  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for goods    be directly       
                     held under price        affected by the   
                     support and             implementation of 
                     stabilization programs  the FASAB         
                     meets the requirements  exposure draft    
                     of SFFAS No. 3,         mentioned in the  
                     Accounting for          status of         
                     Inventory and Related   recommendation    
                     Property, paragraph     No. 02-25.        
                     109, which requires                       
                     disclosure of any                         
                     changes from the prior                    
                     year's accounting                         
                     methods.                                  
77         02-79  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for goods    be directly       
                     held under price        affected by the   
                     support and             implementation of 
                     stabilization programs  the FASAB         
                     meets the requirements  exposure draft    
                     of SFFAS No. 3,         mentioned in the  
                     Accounting for          status of         
                     Inventory and Related   recommendation    
                     Property, paragraph     No. 02-25.        
                     109, which requires                       
                     disclosure of any                         
                     restrictions on the                       
                     use, disposal, or sale                    
                     of commodities.                           
78         02-80  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for goods    be directly       
                     held under price        affected by the   
                     support and             implementation of 
                     stabilization programs  the FASAB         
                     meets the requirements  exposure draft    
                     of SFFAS No. 3,         mentioned in the  
                     Accounting for          status of         
                     Inventory and Related   recommendation    
                     Property, paragraph     No. 02-25.        
                     109, which requires                       
                     disclosure of the                         
                     analysis of the change                    
                     in dollar amount and                      
                     volume of commodities,                    
                     including those (1) on                    
                     hand at the beginning                     
                     of the year, (2)                          
                     acquired during the                       
                     year, (3) disposed of                     
                     during the year listed                    
                     by method of                              
                     disposition, (4) on                       
                     hand at the end of the                    
                     year, (5) on hand at                      
                     year-end and estimated                    
                     to be donated or                          
                     transferred during the                    
                     coming period, and (6)                    
                     received as a result of                   
                     surrender of collateral                   
                     related to nonrecourse                    
                     loans outstanding. The                    
                     analysis should also                      
                     show the dollar value                     
                     and volume of purchase                    
                     agreement commitments.                    
79         02-81  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for          be directly       
                     property, plant, and    affected by the   
                     equipment (PP&E) meets  implementation of 
                     the disclosure          the FASAB         
                     requirements of SFFAS   exposure draft    
                     No. 6, Accounting for   mentioned in the  
                     Property, Plant, and    status of         
                     Equipment, paragraph    recommendation    
                     45, which requires      No. 02-25.        
                     disclosure of the                         
                     estimated useful lives                    
                     for each major class of                   
                     PP&E.                                     
80         02-82  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for PP&E     be directly       
                     meets the disclosure    affected by the   
                     requirements of SFFAS   implementation of 
                     No. 6, Accounting for   the FASAB         
                     Property, Plant, and    exposure draft    
                     Equipment, paragraph    mentioned in the  
                     45, which requires      status of         
                     disclosure of           recommendation    
                     capitalization          No. 02-25.        
                     thresholds, including                     
                     any changes in                            
                     thresholds during the                     
                     period.                                   
81         02-83  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for PP&E     be directly       
                     meets the disclosure    affected by the   
                     requirements of SFFAS   implementation of 
                     No. 6, Accounting for   the FASAB         
                     Property, Plant, and    exposure draft    
                     Equipment, paragraph    mentioned in the  
                     45, which requires      status of         
                     disclosure of           recommendation    
                     restrictions on the use No. 02-25.        
                     or convertibility of                      
                     general PP&E.                             
82         02-85  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In                       
                     Secretary to ensure     addition, this    No. 02-25.        
                     that the note           disclosure would  
                     disclosure for PP&E     be directly       
                     meets the disclosure    affected by the   
                     requirements of SFFAS   implementation of 
                     No. 10, Accounting for  the FASAB         
                     Internal Use Software,  exposure draft    
                     paragraph 35, which     mentioned in the  
                     requires disclosure of  status of         
                     the estimated useful    recommendation    
                     life for each major     No. 02-25.        
                     class of software for                     
                     internal use software.                    
83         02-86  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     6, Property,      
                     that the note           Plant, and        
                     disclosure for PP&E     Equipment, Net,   
                     meets the disclosure    in the fiscal     
                     requirements of SFFAS   year 2005 CFS.    
                     No. 10, Accounting for                    
                     Internal Use Software,                    
                     paragraph 35, which                       
                     requires disclosure of                    
                     the method of                             
                     amortization for                          
                     internal use software.                    
84         02-87  The Secretary of the    This information  Closed.           
                     Treasury should direct  was disclosed in  
                     the Fiscal Assistant    the required      
                     Secretary to ensure     supplementary     
                     that the note           stewardship       
                     disclosure for PP&E     information       
                     meets the disclosure    section of the    
                     requirements of SFFAS   fiscal year 2005  
                     No. 16, Amendments to   CFS.              
                     Accounting for                            
                     Property, Plant, and                      
                     Equipment, paragraph 9,                   
                     which requires an                         
                     appropriate PP&E note                     
                     disclosure to explain                     
                     that "physical                            
                     quantity" information                     
                     for the multiuse                          
                     heritage assets is                        
                     included in                               
                     supplemental                              
                     stewardship reporting                     
                     for heritage assets.                      
85         02-88  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     11, Federal       
                     that the note           Employee and      
                     disclosure for federal  Veteran Benefits  
                     employee and veteran    Payable, in the   
                     benefits payable is     fiscal year 2005  
                     completely and properly CFS.              
                     reported, specifically,                   
                     that (1) it include a                     
                     line for the valuation                    
                     of plan amendments that                   
                     occurred during the                       
                     year and (2) the                          
                     liability for military                    
                     pensions and note                         
                     disclosure related to                     
                     the "change in                            
                     actuarial accrued                         
                     pension liability and                     
                     components of related                     
                     expenses" agree with                      
                     the information                           
                     presented in the                          
                     Department of Defense's                   
                     financial statements.                     
86         02-89  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25. In     
                     Secretary to ensure     addition, this    
                     that the note           required          
                     disclosure for          information was   
                     environmental and       requested from    
                     disposal liabilities    the agencies for  
                     meets the requirements  inclusion in Note 
                     of SFFAS No. 6,         12, Environmental 
                     Accounting for          and Disposal      
                     Property, Plant, and    Liabilities, in   
                     Equipment, which        the fiscal year   
                     requires (1) estimation 2005 CFS.         
                     and recognition of      However, further  
                     cleanup costs           data are needed   
                     associated with general from one agency   
                     PP&E at the time the    with significant  
                     PP&E is placed in       environmental and 
                     service and (2)         disposal          
                     recognition of a        liabilities as of 
                     liability for the       September 30,     
                     portion of the          2005, to fully    
                     estimated total cleanup comply with this  
                     cost attributable to    specific          
                     that portion of the     disclosure        
                     physical capacity used  requirement.      
                     or that portion of the                    
                     estimated useful life                     
                     that has passed since                     
                     the general PP&E was                      
                     placed in service.                        
87         02-90  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for          be directly       
                     environmental and       affected by the   
                     disposal liabilities    implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 6,         exposure draft    
                     Accounting for          mentioned in the  
                     Property, Plant, and    status of         
                     Equipment, which        recommendation    
                     requires inclusion of   No. 02-25.        
                     material changes in                       
                     total estimated cleanup                   
                     costs due to changes in                   
                     laws, technology, or                      
                     plans.                                    
88         02-91  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for capital                    
                     leases meets the                          
                     requirements of Federal                   
                     Accounting Standards                      
                     Board (FASB), Statement                   
                     of Financial Accounting                   
                     Standards (SFAS) No.                      
                     13, Accounting for                        
                     Leases, paragraph 16,                     
                     which requires future                     
                     minimum lease payments                    
                     as of the date of the                     
                     latest balance sheet                      
                     presented, in the                         
                     aggregate and for each                    
                     of the 5 succeeding                       
                     fiscal years, with                        
                     separate deductions                       
                     from the total for the                    
                     amount representing                       
                     executory costs,                          
                     including any profit                      
                     thereon, included in                      
                     the minimum lease                         
                     payments, and for the                     
                     amount of the imputed                     
                     interest necessary to                     
                     reduce the net minimum                    
                     lease payments to                         
                     present value.                            
89         02-92  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for capital                    
                     leases meets the                          
                     requirements of FASB,                     
                     SFAS No. 13, Accounting                   
                     for Leases, paragraph                     
                     16, which requires a                      
                     summary of assets under                   
                     capital lease by major                    
                     asset category and the                    
                     related total                             
                     accumulated                               
                     amortization.                             
90         02-93  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for capital                    
                     leases meets the                          
                     requirements of FASB,                     
                     SFAS No. 13, Accounting                   
                     for Leases, paragraph                     
                     16, which requires a                      
                     general description of                    
                     the lessee's leasing                      
                     arrangements, including                   
                     but not limited to (1)                    
                     the basis on which                        
                     contingent rental                         
                     payments are                              
                     determined; (2) the                       
                     existence and terms of                    
                     renewal or purchase                       
                     options and escalation                    
                     clauses; and (3)                          
                     restrictions imposed by                   
                     lease agreements, such                    
                     as those concerning                       
                     dividends, additional                     
                     debt, and further                         
                     leasing.                                  
91         02-94  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for life     be directly       
                     insurance liabilities   affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 5,         the FASAB         
                     Accounting for          exposure draft    
                     Liabilities of the      mentioned in the  
                     Federal Government,     status of         
                     paragraph 117, which    recommendation    
                     requires all federal    No. 02-25.        
                     reporting entities with                   
                     whole life insurance                      
                     programs to follow                        
                     applicable standards as                   
                     prescribed in the                         
                     private sector                            
                     standards when                            
                     reporting the liability                   
                     for future policy                         
                     benefits: FASB SFAS No.                   
                     60, Accounting and                        
                     Reporting by Insurance                    
                     Enterprises; SFAS No.                     
                     97, Accounting and                        
                     Reporting by Insurance                    
                     Enterprises for Certain                   
                     Long-Duration Contracts                   
                     and for Realized Gains                    
                     and Losses from the                       
                     Sale of Investments;                      
                     SFAS No. 120,                             
                     Accounting and                            
                     Reporting by Mutual                       
                     Life Insurance                            
                     Enterprises and by                        
                     Insurance Enterprises                     
                     for Certain                               
                     Long-Duration                             
                     Participating                             
                     Contracts; and American                   
                     Institute of Certified                    
                     Public Accountants                        
                     Statement of Position                     
                     95-1, Accounting for                      
                     Certain Insurance                         
                     Activities of Mutual                      
                     Life Insurance                            
                     Enterprises.                              
92         02-95  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for life     be directly       
                     insurance liabilities   affected by the   
                     meets the requirements  implementation of 
                     of SFFAS No. 5,         the FASAB         
                     Accounting for          exposure draft    
                     Liabilities of the      mentioned in the  
                     Federal Government,     status of         
                     paragraph 121, which    recommendation    
                     requires all components No. 02-25.        
                     of the liability for                      
                     future policy benefits                    
                     (i.e., the net-level                      
                     premium reserve for                       
                     death and endowment                       
                     policies and the                          
                     liability for terminal                    
                     dividends) to be                          
                     separately disclosed in                   
                     a footnote with a                         
                     description of each                       
                     amount and an                             
                     explanation of its                        
                     projected use and any                     
                     other potential uses                      
                     (e.g., reducing                           
                     premiums, determining                     
                     and declaring dividends                   
                     available, and reducing                   
                     federal support in the                    
                     form of appropriations                    
                     related to                                
                     administrative cost or                    
                     subsidies).                               
93         02-96  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No.'s 02-25 and   No.'s 02-25 and   
                     Secretary to ensure     02-42. In         02-42.            
                     that the note           addition, this    
                     disclosure on major     required          
                     commitments and         information was   
                     contingencies is        disclosed in Note 
                     consistent with         19,               
                     disclosed information   Contingencies,    
                     in individual agencies' and Note 20,      
                     financial statements.   Commitments, in   
                                             the fiscal year   
                                             2005 CFS.         
94         02-97  The Secretary of the    See status of     Closed.           
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-96.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure on major                       
                     commitments and                           
                     contingencies discloses                   
                     sufficient information                    
                     (detailed discussion)                     
                     regarding certain major                   
                     commitments and                           
                     contingencies.                            
95         02-99  The Secretary of the    This information  Closed.           
                     Treasury should direct  was disclosed in  
                     the Fiscal Assistant    the required      
                     Secretary to ensure     supplementary     
                     that the note           information       
                     disclosure for          section of the    
                     collections and refunds fiscal year 2005  
                     of federal revenue      CFS.              
                     meets the requirements                    
                     of SFFAS No. 7,                           
                     Concepts for                              
                     Reconciling Budgetary                     
                     and Financial                             
                     Accounting, paragraph                     
                     69.2, which requires                      
                     collecting entities to                    
                     provide in the other                      
                     accompanying                              
                     information any                           
                     relevant estimates of                     
                     the annual tax gap that                   
                     become available as a                     
                     result of federal                         
                     government surveys or                     
                     studies.                                  
96         02-100 The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     21, Dedicated     
                     that the note           Collections, in   
                     disclosure for          the fiscal year   
                     dedicated collections   2005 CFS.         
                     meets the requirements                    
                     of SFFAS No. 7, Part I,                   
                     Accounting for Revenue                    
                     and Other Financing                       
                     Sources, paragraph 85,                    
                     which requires                            
                     inclusion of condensed                    
                     information about                         
                     assets and liabilities                    
                     showing investments in                    
                     Treasury securities,                      
                     other assets,                             
                     liabilities due and                       
                     payable to                                
                     beneficiaries, other                      
                     liabilities, and fund                     
                     balance.                                  
97         02-101 The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     21, Dedicated     
                     that the note           Collections, in   
                     disclosure for          the fiscal year   
                     dedicated collections   2005 CFS.         
                     meets the requirements                    
                     of SFFAS No. 7, Part I,                   
                     Accounting for Revenue                    
                     and Other Financing                       
                     Sources, paragraph 85,                    
                     which requires                            
                     inclusion of condensed                    
                     information on net cost                   
                     and changes to fund                       
                     balance, showing                          
                     revenues by type                          
                     (exchange/nonexchange),                   
                     program expenses, other                   
                     expenses, other                           
                     financing sources, and                    
                     other changes in fund                     
                     balance.                                  
98         02-102 The Secretary of the    See status of     Open. Treasury    
                     Treasury should direct  recommendation    expected the      
                     the Fiscal Assistant    No. 02-25. In     required          
                     Secretary to ensure     addition, this    information from  
                     that the note           required          applicable        
                     disclosure for          information was   agencies as       
                     dedicated collections   requested from    requested in the  
                     meets the requirements  the agencies for  TFM. When no      
                     of SFFAS No. 7, Part I, inclusion in Note disclosure        
                     Accounting for Revenue  21, Dedicated     information was   
                     and Other Financing     Collections, in   provided by such  
                     Sources, paragraph 85,  the fiscal        agencies,         
                     which requires          year 2005 CFS.    Treasury did not  
                     inclusion of any        However, no data  have any policies 
                     revenues, other         were received in  and procedures    
                     financing sources, or   fiscal year 2005, for following up  
                     costs attributable to   and therefore, no with agencies to  
                     the fund under          disclosure was    determine why the 
                     accounting standards    needed related to information was   
                     but not legally         this requirement. not provided.     
                     allowable as credits or                   
                     charges to the fund.                      
99         02-103 The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for Indian                     
                     trust funds meets the                     
                     requirements of SFFAS                     
                     No. 7, Part I,                            
                     Accounting for Revenue                    
                     and Other Financing                       
                     Sources, paragraph 85,                    
                     which requires a                          
                     description of each                       
                     fund's purpose, how the                   
                     administrative entity                     
                     accounts for and                          
                     reports the fund, and                     
                     its authority to use                      
                     those collections.                        
100        02-104 The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for Indian                     
                     trust funds meets the                     
                     requirements of SFFAS                     
                     No. 7, Part I,                            
                     Accounting for Revenue                    
                     and Other Financing                       
                     Sources, paragraph 85,                    
                     which requires                            
                     disclosure of 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.                                    
101        02-105 The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     22, Indian Trust  
                     that the note           Funds, in the     
                     disclosure for Indian   fiscal year 2005  
                     trust funds meets the   CFS.              
                     requirements of SFFAS                     
                     No. 7, Part I,                            
                     Accounting for Revenue                    
                     and Other Financing                       
                     Sources, paragraph 85,                    
                     which requires                            
                     condensed information                     
                     about assets and                          
                     liabilities showing                       
                     investments in Treasury                   
                     securities, other                         
                     assets, liabilities due                   
                     and payable to                            
                     beneficiaries, and                        
                     other liabilities.                        
102        02-106 The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for Indian                     
                     trust funds meets the                     
                     requirements of SFFAS                     
                     No. 7, Part I,                            
                     Accounting for Revenue                    
                     and Other Financing                       
                     Sources, paragraph 85,                    
                     which requires                            
                     condensed information                     
                     on net cost and changes                   
                     to fund balance,                          
                     showing revenues by                       
                     type                                      
                     (exchange/nonexchange),                   
                     program expenses, other                   
                     expenses, other                           
                     financing sources, and                    
                     other changes in fund                     
                     balance.                                  
103        02-107 The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for Indian                     
                     trust funds meets the                     
                     requirements of SFFAS                     
                     No. 7, Part I,                            
                     Accounting for Revenue                    
                     and Other Financing                       
                     Sources, paragraph 85,                    
                     which requires                            
                     disclosure of any                         
                     revenues, other                           
                     financing sources, or                     
                     costs attributable to                     
                     the fund under                            
                     accounting standards,                     
                     but not legally                           
                     allowable as credits or                   
                     charges to the fund.                      
104        02-114 The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for social                     
                     insurance meets the                       
                     requirements of SFFAS                     
                     No. 17, Accounting for                    
                     Social Insurance,                         
                     paragraph 32(4), which                    
                     requires individual                       
                     program sensitivity                       
                     analyses for projection                   
                     period cash flow in                       
                     present value dollars                     
                     and annual cash flow in                   
                     nominal dollars. The                      
                     CFS includes only                         
                     present value                             
                     sensitivity analyses                      
                     for Social Security and                   
                     Hospital Insurance.                       
                     Paragraph 32(4) states                    
                     that at a minimum the                     
                     summary should present                    
                     Social Security,                          
                     Hospital Insurance, and                   
                     Supplementary Medical                     
                     Insurance separately.                     
105        02-115 The Secretary of the    This information  Closed.           
                     Treasury should direct  was disclosed in  
                     the Fiscal Assistant    the required      
                     Secretary to ensure     supplementary     
                     that the note           stewardship       
                     disclosure for social   information       
                     insurance meets the     section of the    
                     requirements of SFFAS   fiscal year 2005  
                     No. 17, Accounting for  CFS.              
                     Social Insurance,                         
                     paragraph 27(4)(a),                       
                     which requires the                        
                     individual program                        
                     sensitivity analyses                      
                     for Social Security and                   
                     Hospital Insurance to                     
                     include an analysis of                    
                     assumptions regarding                     
                     net immigration.                          
106        02-118 The Secretary of the    Treasury reports  Open. SFFAS No.   
                     Treasury should direct  stewardship       8, paragraph 39   
                     the Fiscal Assistant    assets and        also states that  
                     Secretary to ensure     stewardship       until further     
                     that the note           investments in    FASAB             
                     disclosure for          accordance with   deliberations,    
                     nonfederal physical     SFFAS No. 8,      the CFS should    
                     property included in    paragraph 39      include such      
                     stewardship information which requires    summary or        
                     meets the requirements  the disclosure in selected          
                     of SFFAS No. 8,         the CFS of such   information as is 
                     Supplementary           "summary          feasible and that 
                     Stewardship Reporting,  (stewardship)     experimentation   
                     paragraph 87, which     information or    is encouraged, as 
                     requires disclosure of  selected          is the reporting  
                     the annual investment,  information as is of such           
                     including a description feasible."        additional        
                     of federally owned      Therefore, the    information as    
                     physical property       component entity  will enhance the  
                     transferred to state    required          CFS. Treasury has 
                     and local governments.  reporting for     not documented in 
                     This information should stewardship       its policies or   
                     be provided for the     assets and        procedures how    
                     year ended on the       stewardship       stewardship       
                     balance sheet date as   investments is    information       
                     well as for each of the not applicable to should be         
                     4 preceding years. If   the CFS and the   reported in the   
                     data for additional     current CFS       CFS or the basis  
                     years would provide a   reporting of this for its           
                     better indication of    stewardship       determination     
                     investment, reporting   information is in that the          
                     of the additional       accordance with   disclosure of the 
                     years' data is          GAAP.             stewardship       
                     encouraged. Reporting                     information in    
                     should be at a          Furthermore,      accordance with   
                     meaningful category or  SFFAS No. 24,     the related       
                     level.                  Selected          paragraph in      
                                             Standards for the SFFAS No. 8 is    
                                             Consolidated      not feasible. In  
                                             Financial Report  addition,         
                                             of the United     Treasury requests 
                                             States            information on    
                                             Government, did   stewardship       
                                             not change this   investments in    
                                             situation since   the TFM and       
                                             SFFAS No. 24,     certain agencies  
                                             paragraph 8       report such       
                                             indicates that    information in    
                                             provisions for    their Performance 
                                             different         and               
                                             accounting        Accountability    
                                             treatments made   Reports.          
                                             in current or     
                                             subsequent SFFAS  
                                             override the      
                                             general rule of   
                                             universal         
                                             applicability.    
                                             For example,      
                                             until SFFAS No    
                                             29, Heritage      
                                             Assets and        
                                             Stewardship Land, 
                                             becomes           
                                             effective, CFS    
                                             reporting for     
                                             stewardship       
                                             heritage assets   
                                             will be done in   
                                             accordance with   
                                             the requirements  
                                             of SFFAS No. 8,   
                                             paragraph 39.     
                                             Similarly, until  
                                             FASAB provides    
                                             specific CFS      
                                             disclosure        
                                             requirements for  
                                             stewardship       
                                             investments, CFR  
                                             reporting for     
                                             stewardship       
                                             investments will  
                                             be done in        
                                             accordance with   
                                             the requirements  
                                             of SFFAS No. 8,   
                                             paragraph 39.     
                                                               
                                             As Treasury has   
                                             disclosed the     
                                             stewardship       
                                             information       
                                             deemed feasible   
                                             to present, no    
                                             further related   
                                             disclosure is     
                                             required.         
107        02-119 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-118.       No. 02-118.       
                     Secretary to ensure                       
                     that the note                             
                     disclosure for                            
                     nonfederal physical                       
                     property included in                      
                     stewardship information                   
                     meets the requirements                    
                     of SFFAS No. 8,                           
                     Supplementary                             
                     Stewardship Reporting,                    
                     paragraph 87, which                       
                     requires a description                    
                     of major programs                         
                     involving federal                         
                     investments in                            
                     nonfederal physical                       
                     property, including a                     
                     description of programs                   
                     or policies under which                   
                     noncash assets are                        
                     transferred to state                      
                     and local governments.                    
108        02-120 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-118.       No. 02-118.       
                     Secretary to ensure                       
                     that the note                             
                     disclosure for human                      
                     capital included in                       
                     stewardship information                   
                     meets the requirements                    
                     of SFFAS No. 8,                           
                     Supplementary                             
                     Stewardship Reporting,                    
                     paragraph 94, which                       
                     requires a narrative                      
                     description and the                       
                     full cost of the                          
                     investment in human                       
                     capital for the year                      
                     being reported on as                      
                     well as the preceding 4                   
                     years (if full cost                       
                     data are not available,                   
                     outlay data can be                        
                     reported).                                
109        02-121 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-118.       No. 02-118.       
                     Secretary to ensure                       
                     that the note                             
                     disclosure for human                      
                     capital included in                       
                     stewardship information                   
                     meets the requirements                    
                     of SFFAS No. 8,                           
                     Supplementary                             
                     Stewardship Reporting,                    
                     paragraph 94, which                       
                     requires the full cost                    
                     or outlay data for                        
                     investments in human                      
                     capital at a meaningful                   
                     category or level                         
                     (e.g., by major                           
                     program, agency, or                       
                     department).                              
110        02-122 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-118.       No. 02-118.       
                     Secretary to ensure                       
                     that the note                             
                     disclosure for human                      
                     capital included in                       
                     stewardship information                   
                     meets the requirements                    
                     of SFFAS No. 8,                           
                     Supplementary                             
                     Stewardship Reporting,                    
                     paragraph 94, which                       
                     requires a narrative                      
                     description of major                      
                     education and training                    
                     programs considered                       
                     federal investments in                    
                     human capital.                            
111        02-123 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-118.       No. 02-118.       
                     Secretary to ensure                       
                     that the note                             
                     disclosure for research                   
                     and development                           
                     included in stewardship                   
                     information meets the                     
                     requirements of SFFAS                     
                     No. 8, Supplementary                      
                     Stewardship Reporting,                    
                     paragraph 100, which                      
                     requires reporting of                     
                     the annual investment                     
                     made in the year ended                    
                     on the balance sheet                      
                     date as well as in each                   
                     of the 4 years                            
                     preceding that year.                      
                     (As defined in this                       
                     standard, "annual                         
                     investment" includes                      
                     more than the annual                      
                     expenditure reported by                   
                     character class for                       
                     budget execution. Full                    
                     cost shall be measured                    
                     and accounted for in                      
                     accordance with SFFAS                     
                     No. 4, Managerial Cost                    
                     Accounting Standards                      
                     for the Federal                           
                     Government.) If data                      
                     for additional years                      
                     would provide a better                    
                     indication of                             
                     investment, reporting                     
                     of the additional                         
                     years' data is                            
                     encouraged. In those                      
                     unusual instances when                    
                     entities have no                          
                     historical data, only                     
                     current reporting year                    
                     data need be reported.                    
                     Reporting must be at a                    
                     meaningful category or                    
                     level, for example, a                     
                     major program or                          
                     department.                               
112        02-124 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-118.       No. 02-118.       
                     Secretary to ensure                       
                     that the note                             
                     disclosure for research                   
                     and development                           
                     included in stewardship                   
                     information meets the                     
                     requirements of SFFAS                     
                     No. 8, Supplementary                      
                     Stewardship Reporting,                    
                     paragraph 100, which                      
                     requires a narrative                      
                     description of major                      
                     research and                              
                     development programs.                     
113        02-125 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for deferred be directly       
                     maintenance meets the   affected by the   
                     requirements of SFFAS   implementation of 
                     No. 6, Accounting for   the FASAB         
                     Property, Plant, and    exposure draft    
                     Equipment, paragraphs   mentioned in the  
                     83 and 84, which        status of         
                     requires inclusion of   recommendation    
                     the method of measuring No. 02-25.        
                     deferred maintenance                      
                     for each major class of                   
                     PP&E.                                     
114        02-126 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for deferred be directly       
                     maintenance meets the   affected by the   
                     requirements of SFFAS   implementation of 
                     No. 6, Accounting for   the FASAB         
                     Property, Plant, and    exposure draft    
                     Equipment, paragraphs   mentioned in the  
                     83 and 84, which        status of         
                     requires that if the    recommendation    
                     condition assessment    No. 02-25.        
                     survey method of                          
                     measuring deferred                        
                     maintenance is used,                      
                     the following should be                   
                     presented for each                        
                     major class of PP&E:                      
                     (1) description of                        
                     requirements or                           
                     standards for                             
                     acceptable operating                      
                     condition, (2) any                        
                     changes in the                            
                     condition requirements                    
                     or standards, and (3)                     
                     asset condition and a                     
                     range estimate of the                     
                     dollar amount of                          
                     maintenance needed to                     
                     return the asset to its                   
                     acceptable operating                      
                     condition.                                
115        02-127 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for deferred be directly       
                     maintenance meets the   affected by the   
                     requirements of SFFAS   implementation of 
                     No. 6, Accounting for   the FASAB         
                     Property, Plant, and    exposure draft    
                     Equipment, paragraphs   mentioned in the  
                     83 and 84, which        status of         
                     requires that if the    recommendation    
                     total life-cycle cost   No. 02-25.        
                     method is used, the                       
                     following should be                       
                     presented for each                        
                     major class of PP&E:                      
                     (1) the original date                     
                     of the maintenance                        
                     forecast and an                           
                     explanation for any                       
                     changes to the                            
                     forecast; (2) prior                       
                     year balance of the                       
                     cumulative deferred                       
                     maintenance amount; (3)                   
                     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; (4) the dollar                    
                     amount of maintenance                     
                     actually performed                        
                     during the period; (5)                    
                     the difference between                    
                     the forecast and actual                   
                     maintenance; (6) any                      
                     adjustments to the                        
                     scheduled amounts                         
                     deemed necessary by the                   
                     managers of the PP&E                     
                     and (7) the ending                        
                     cumulative balance for                    
                     the reporting period                      
                     for each major class of                   
                     asset experiencing                        
                     deferred maintenance.                     
116        02-128 The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary, to ensure    addition, this    
                     that the note           disclosure would  
                     disclosure for deferred be directly       
                     maintenance meets the   affected by the   
                     requirements of SFFAS   implementation of 
                     No. 6, Accounting for   the FASAB         
                     Property, Plant, and    exposure draft    
                     Equipment, paragraphs   mentioned in the  
                     83 and 84, which        status of         
                     requires that if        recommendation    
                     management elects to    No. 02-25.        
                     disclose critical and                     
                     noncritical amounts,                      
                     the disclosure is to                      
                     include management's                      
                     definition of these                       
                     categories.                               
117        02-129 The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25.        
                     Secretary to ensure                       
                     that the note                             
                     disclosure for                            
                     stewardship                               
                     responsibilities                          
                     related to the risk                       
                     assumed for federal                       
                     insurance and guarantee                   
                     programs meets the                        
                     requirements of SFFAS                     
                     No. 5, Accounting for                     
                     Liabilities of the                        
                     Federal Government,                       
                     paragraph 106, which                      
                     requires that when                        
                     financial information                     
                     pursuant to FASB                          
                     standards on federal                      
                     insurance and guarantee                   
                     programs conducted by                     
                     government corporations                   
                     is incorporated in                        
                     general purpose                           
                     financial reports of a                    
                     larger federal                            
                     reporting entity, the                     
                     entity should report as                   
                     required supplementary                    
                     information what                          
                     amounts and periodic                      
                     change in those amounts                   
                     would be reported under                   
                     the "risk assumed"                        
                     approach.                                 
GAO-04-866 
(results   
of the     
fiscal     
year 2003  
audit)     
118        03-4   The Director of OMB     See status of     Open. See status  
                     should direct the       recommendation    of recommendation 
                     Controller of OMB, in   No. 02-18.        No.'s 02-14 and   
                     coordination with                         02-17.            
                     Treasury's Fiscal                         
                     Assistant Secretary, to                   
                     work with the federal                     
                     agencies so that the                      
                     differences between net                   
                     outlays the agencies                      
                     report in their                           
                     Statement of Budgetary                    
                     Resources and the net                     
                     outlay records Treasury                   
                     uses to prepare the                       
                     Statement of Changes in                   
                     Cash Balance are                          
                     reconciled.                               
119        03-5   The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-18.        No.'s 02-14 and   
                     Secretary to determine                    02-17.            
                     and address the effects                   
                     that any of the                           
                     differences between net                   
                     outlays the agencies                      
                     report in their                           
                     Statement of Budgetary                    
                     Resources and                             
                     Treasury's net outlay                     
                     records may have on the                   
                     CFS.                                      
120        03-6   The Secretary of the    Treasury          Open. We agree    
                     Treasury should direct  disagrees with    that SFFAS No. 24 
                     the Fiscal Assistant    this              requires the      
                     Secretary to develop a  recommendation.   reconciliation of 
                     process that will allow Total operating   the federal       
                     full reporting of the   cash reported in  government's cash 
                     changes in cash balance the fiscal year   balance. However, 
                     of the U.S. government. 2005 CFS was      the Statement of  
                     Specifically, the       linked to amounts Changes in Cash   
                     process should provide  reported in       Balance           
                     for reporting on the    agencies' audited reconciles to     
                     change in cash reported financial         operating cash of 
                     on the consolidated     statements. The   $28.3 billion     
                     balance sheet, which    Statement of      rather than the   
                     should be linked to     Changes in Cash   cash reported on  
                     cash balances reported  Balance           the Balance Sheet 
                     in federal agencies'    reconciles to     of $85.8 billion, 
                     audited financial       Operating Cash.   as of September   
                     statements.             SFFAS No. 24,     30, 2005.         
                                             paragraphs 12 and 
                                             13, require       
                                             reconciliation to 
                                             the government's  
                                             cash balance. It  
                                             also references   
                                             an illustration   
                                             that is not       
                                             prescriptive.     
121        03-7   The Secretary of the    Treasury          Open. See status  
                     Treasury should direct  disagrees with    of recommendation 
                     the Fiscal Assistant    this              No. 02-14.        
                     Secretary to report     recommendation.   
                     gross amounts for       SFFAS No. 24      
                     receipts and            shows gross       
                     disbursements of cash   receipt and       
                     related to direct loans disbursement      
                     and loan guarantees.    amounts as an     
                                             illustration, but 
                                             does not require  
                                             their disclosure. 
122        03-8   The Director of OMB     An interagency    Open.             
                     should direct the       task force has    
                     Controller of OMB, in   been established  
                     coordination with       under the         
                     Treasury's Fiscal       direction of the  
                     Assistant Secretary, to Attorney General  
                     work with Justice and   and has developed 
                     certain other executive a strategic plan  
                     branch agencies to      for improving     
                     ensure that these       criminal debt     
                     agencies report or      collection and    
                     disclose relevant       has provided the  
                     criminal debt           plan to Congress. 
                     information in          The task force    
                     conformity with GAAP in includes          
                     their financial         representatives   
                     statements and have     from DOJ,         
                     such information        Treasury, OMB,    
                     subjected to audit.     and the           
                                             Administrative    
                                             Office of the     
                                             U.S. Courts. The  
                                             task force        
                                             continues to make 
                                             progress in       
                                             implementing new  
                                             policies and      
                                             procedures.       
123        03-9   The Secretary of the    Treasury will     Open.             
                     Treasury should direct  include criminal  
                     the Fiscal Assistant    debt information  
                     Secretary to include    as it becomes     
                     relevant criminal debt  available. See    
                     information in the CFS  status of         
                     or document the         recommendation    
                     specific rationale for  No. 03-08.        
                     excluding such                            
                     information.                              
124        03-10  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to include in 19,               
                     the new system a        Contingencies, in 
                     request for federal     the fiscal year   
                     agencies to provide     2005 CFS.         
                     contingency loss                          
                     information to assist                     
                     Treasury in disclosing                    
                     contingencies in the                      
                     CFS in accordance with                    
                     GAAP.                                     
125        03-11  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-42.        No. 02-42.        
                     Secretary, in                             
                     coordination with the                     
                     Controller of OMB, to                     
                     modify Treasury's plans                   
                     for the new closing                       
                     package to (1) require                    
                     federal agencies to                       
                     directly link their                       
                     audited financial                         
                     statement notes to the                    
                     CFS notes and (2)                         
                     provide the necessary                     
                     information to                            
                     demonstrate that all of                   
                     the five principal                        
                     consolidated financial                    
                     statements are                            
                     consistent with the                       
                     underlying information                    
                     in federal agencies'                      
                     audited financial                         
                     statements and other                      
                     financial data.                           
126        03-15  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     11, Federal       
                     that the note           Employee and      
                     disclosure for federal  Veteran Benefits  
                     employees and veterans  Payable, in the   
                     benefits payable meets  fiscal year 2005  
                     the requirements of     CFS.              
                     SFFAS No. 5, Accounting                   
                     for Liabilities of the                    
                     Federal Government,                       
                     paragraph 83, which                       
                     requires the reporting                    
                     entity to disclose the                    
                     assumptions used for                      
                     veterans compensation                     
                     and burial benefits.                      
127        03-16  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     11, Federal       
                     that the note           Employee and      
                     disclosure for federal  Veteran Benefits  
                     employees and veterans  Payable, in the   
                     benefits payable meets  fiscal year 2005  
                     the requirements of     CFS.              
                     SFFAS No. 5, Accounting                   
                     for Liabilities of the                    
                     Federal Government,                       
                     paragraph 72, which                       
                     requires the reporting                    
                     entity to disclose                        
                     prior service costs                       
                     from plan amendments as                   
                     a separate component.                     
128        03-17  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     11, Federal       
                     that the note           Employee and      
                     disclosure for federal  Veteran Benefits  
                     employees and veterans  Payable, in the   
                     benefits payable meets  fiscal year 2005  
                     the requirements of     CFS.              
                     SFFAS No. 5, Accounting                   
                     for Liabilities of the                    
                     Federal Government,                       
                     paragraph 88, which                       
                     requires the reporting                    
                     entity to disclose                        
                     gains or losses due to                    
                     a change in the medical                   
                     inflation rate                            
                     assumption for health                     
                     benefits as a separate                    
                     component.                                
129        03-18  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for          be directly       
                     environmental and       affected by the   
                     disposal liabilities    implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 6,         exposure draft    
                     Accounting for          mentioned in the  
                     Property, Plant, and    status of         
                     Equipment, which        recommendation    
                     requires the reporting  No. 02-25.        
                     entity to disclose the                    
                     method for assigning                      
                     estimated total cleanup                   
                     costs to current                          
                     operating periods.                        
130        03-19  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25. In     
                     Secretary to ensure     addition, this    
                     that the note           required          
                     disclosure for          information was   
                     environmental and       requested from    
                     disposal liabilities    the agencies for  
                     meets the requirements  inclusion in Note 
                     of SFFAS No. 6,         12, Environmental 
                     Accounting for          and Disposal      
                     Property, Plant, and    Liabilities, in   
                     Equipment, which        the fiscal year   
                     requires the reporting  2005 CFS.         
                     entity to disclose, for However, further  
                     cleanup costs           data are needed   
                     associated with general from one agency   
                     property, plant, and    with significant  
                     equipment, the          environmental and 
                     unrecognized portion of disposal          
                     estimated total cleanup liabilities as of 
                     costs be disclosed.     September 30,     
                                             2005, to fully    
                                             comply with this  
                                             specific          
                                             disclosure        
                                             requirement.      
131        03-20  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for          be directly       
                     environmental and       affected by the   
                     disposal liabilities    implementation of 
                     meets the requirements  the FASAB         
                     of SFFAS No. 6,         exposure draft    
                     Accounting for          mentioned in the  
                     Property, Plant, and    status of         
                     Equipment, which        recommendation    
                     requires the reporting  No. 02-25.        
                     entity to disclose the                    
                     nature of estimates and                   
                     information regarding                     
                     possible changes to the                   
                     estimates resulting                       
                     from inflation,                           
                     deflation, technology,                    
                     or applicable laws and                    
                     regulations.                              
132        03-21  The Secretary of the    See status of     Open. Treasury    
                     Treasury should direct  recommendation    expected the      
                     the Fiscal Assistant    No. 02-25. In     required          
                     Secretary to consider   addition, this    information from  
                     whether the reader      required          applicable        
                     would be interested in  information was   agencies as       
                     understanding why the   requested from    requested in the  
                     environmental and       the agencies for  TFM. When no      
                     disposal liabilities    inclusion in Note disclosure        
                     amount significantly    12, Environmental information was   
                     changed during the year and Disposal      provided by such  
                     and include the         Liabilities, in   agencies,         
                     explanation for the     the fiscal year   Treasury did not  
                     change in the note      2005 CFS.         have any policies 
                     disclosure.             However, no data  and procedures    
                                             were received in  for following up  
                                             fiscal year 2005, with agencies to  
                                             and therefore,    determine why the 
                                             there was no      information was   
                                             disclosure        not provided.     
                                             related to this   
                                             requirement.      
133        03-22  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-118.       No. 02-118.       
                     Secretary to ensure                       
                     that the information in                   
                     stewardship information                   
                     for research and                          
                     development meets the                     
                     requirements of SFFAS                     
                     No. 8, Supplementary                      
                     Stewardship Reporting,                    
                     paragraph 99, which                       
                     requires the reporting                    
                     entity to include a                       
                     narrative discussion of                   
                     the major results                         
                     achieved by the program                   
                     along the lines of                        
                     basic research, applied                   
                     research, and                             
                     development.                              
134        03-24  The Secretary of the    This information  Closed.           
                     Treasury should direct  was disclosed in  
                     the Fiscal Assistant    the required      
                     Secretary to ensure     supplementary     
                     that the required       information       
                     supplemental            section of the    
                     information for         fiscal year 2005  
                     deferred maintenance    CFS.              
                     meets the requirements                    
                     of SFFAS No. 6,                           
                     Accounting for                            
                     Property, Plant, and                      
                     Equipment, paragraph                      
                     83, which requires the                    
                     reporting entity to                       
                     disclose the                              
                     identification of each                    
                     major class of asset                      
                     (i.e., building and                       
                     structures, furniture                     
                     and fixtures,                             
                     equipment, vehicles,                      
                     and land) for which                       
                     maintenance has been                      
                     deferred.                                 
GAO-05-407 
(results   
of the     
fiscal     
year 2004  
audit)     
135        04-1   The Secretary of the    Treasury further  Open. Treasury's  
                     Treasury should direct  revised and       procedures were   
                     the Fiscal Assistant    documented its    not effective for 
                     Secretary to segregate  major procedures  fiscal year 2005. 
                     the duties of           in fiscal year    Treasury was      
                     individuals performing  2005 related to   unable to explain 
                     key functions in        the CFS           why numerous GFRS 
                     Treasury's processes    compilation       users appeared to 
                     for preparing           process,          have              
                     governmentwide          including those   inappropriate     
                     adjustments to the      related to the    access to GFRS    
                     financial statements,   duties of the     agency            
                     making changes to Excel individuals with  information or    
                     spreadsheets that       the capability to demonstrate that  
                     contain audited agency  enter, change,    the appropriate   
                     financial information,  and delete data   segregation of    
                     and accessing federal   within the GFRS   duties exists.    
                     agencies' closing       database and the  
                     package data in         posting of        
                     Treasury's new system.  adjustments to    
                                             the CFS to        
                                             address           
                                             segregation of    
                                             duties.           
136        04-2   The Secretary of the    Treasury will     Open. Treasury    
                     Treasury should direct  follow its        did not have      
                     the Fiscal Assistant    standard          appropriate       
                     Secretary to require    operating         supporting        
                     and maintain            procedure that    documentation for 
                     appropriate supporting  includes          all transactions  
                     documentation for all   maintaining       recorded in the   
                     journal vouchers        documentation for CFS. Recording    
                     recorded in the CFS.    all recorded      transactions in   
                                             journal vouchers, the financial     
                                             except in certain statements        
                                             circumstances     without adequate  
                                             described in the  underlying        
                                             status of         support increases 
                                             recommendation    the risk that     
                                                               inappropriate     
                                             04-3.             adjustments to    
                                                               balances in the   
                                                               financial         
                                                               statements could  
                                                               be made.          
137        04-3   The Secretary of the    Treasury policy   Open. We believe  
                     Treasury should direct  is to notify      that Treasury     
                     the Fiscal Assistant    agencies before   should contact    
                     Secretary to require    making needed     agencies to       
                     that Treasury employees data changes.     resolve any       
                     contact and document    However, due to   discrepancies     
                     communications with     time constraints, between agencies' 
                     agencies before         Treasury needs    audited closing   
                     recording journal       the flexibility   packages and      
                     vouchers to change      to make changes   audited financial 
                     agency audited closing  without prior     statements and    
                     package data.           agency contact.   discuss any other 
                                             Nevertheless, as  situations that   
                                             time permits,     require           
                                             Treasury will     adjustments to    
                                             make an effort to agencies' audited 
                                             contact the       closing package   
                                             agencies prior to data because      
                                             making changes.   Treasury could    
                                             Treasury believes incorrectly       
                                             that agency       adjust agencies'  
                                             approval is not   audited           
                                             needed when       information.      
                                             making the        
                                             following types   
                                             of changes: (1)   
                                             adjustments to    
                                             agree closing     
                                             packages to       
                                             financial         
                                             statements, (2)   
                                             adjustments to    
                                             ensure            
                                             consistency of    
                                             GAAP between      
                                             agencies, and (3) 
                                             adjustments to    
                                             conform an agency 
                                             to GAAP.          
138        04-4   The Secretary of the    Treasury further  Open. Treasury's  
                     Treasury should direct  revised its       procedures were   
                     the Fiscal Assistant    procedures to     not effective for 
                     Secretary to require    ensure management fiscal year 2005. 
                     and document management reviews of data   Undetected errors 
                     reviews of all          changes to the    occurred in key   
                     procedures that result  CFS. Also, see    templates used to 
                     in data changes to the  status of         compile the CFS.  
                     CFS.                    recommendation    
                                             No. 04-1.         
139        04-5   The Secretary of the    Treasury revised  Open. Information 
                     Treasury should direct  its automated     system weaknesses 
                     the Fiscal Assistant    processes in      existed within    
                     Secretary to configure  fiscal year 2005  the segments of   
                     the GFRS database to    to prevent        GFRS that were    
                     prevent Treasury        unauthorized      used during the   
                     personnel from altering changes to        fiscal years 2005 
                     data submitted by       agency-submitted  and 2004          
                     federal agencies and to data.             reporting         
                     use separate GFRS                         processes. We     
                     databases for testing                     found that the    
                     and production.                           GFRS database (1) 
                                                               was not           
                                                               configured to     
                                                               prevent the       
                                                               alteration of     
                                                               data submitted by 
                                                               federal agencies  
                                                               and (2) was used  
                                                               for both          
                                                               production and    
                                                               testing during    
                                                               the reporting     
                                                               processes.        
                                                               Therefore,        
                                                               information       
                                                               submitted by      
                                                               federal agencies  
                                                               within GFRS is    
                                                               not adequately    
                                                               protected against 
                                                               unauthorized      
                                                               modification or   
                                                               loss.             
140        04-6   The Secretary of the    Treasury has      Open.             
                     Treasury should direct  recruited and is  
                     the Fiscal Assistant    currently         
                     Secretary to assess the recruiting highly 
                     infrastructure          qualified         
                     associated with the     personnel to be   
                     compilation process and trained in the    
                     modify it as necessary  CFS compilation   
                     to achieve a sound      process and in    
                     internal control        the associated    
                     environment.            internal controls 
                                             related to the    
                                             CFS compilation.  
141        04-7   The Secretary of the    Treasury updated  Closed.           
                     Treasury should direct  the TFM in fiscal 
                     the Fiscal Assistant    year 2005 related 
                     Secretary to review the to the required   
                     TFM and any other       GAAP disclosures  
                     guidance to federal     to ensure         
                     agencies to ensure that accurate          
                     they provide clear      financial data    
                     instructions for        reporting by      
                     reporting accurate data federal agencies. 
                     to Treasury in the area                   
                     of loans receivable and                   
                     loan guarantees.                          
142        04-8   The Secretary of the    See status of     Closed.           
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 04-7.         
                     Secretary to review the                   
                     TFM and any other                         
                     guidance to federal                       
                     agencies to ensure that                   
                     they provide clear                        
                     instructions for                          
                     reporting accurate data                   
                     to Treasury in the area                   
                     of property, plant, and                   
                     equipment.                                
143        04-9   The Secretary of the    See status of     Open. The TFM     
                     Treasury should direct  recommendation    continues to need 
                     the Fiscal Assistant    No. 04-7.         updates in this   
                     Secretary to review the                   area.             
                     TFM and any other                         
                     guidance to federal                       
                     agencies to ensure that                   
                     they provide clear                        
                     instructions for                          
                     reporting accurate data                   
                     to Treasury in the area                   
                     of federal employee and                   
                     veteran benefits                          
                     payable.                                  
144        04-10  The Secretary of the    See status of     Closed.           
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 04-7.         
                     Secretary to review the                   
                     TFM and any other                         
                     guidance to federal                       
                     agencies to ensure that                   
                     they provide clear                        
                     instructions for                          
                     reporting accurate data                   
                     to Treasury in the area                   
                     of contingencies.                         
145        04-11  The Secretary of the    See status of     Closed.           
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 04-7.         
                     Secretary to review the                   
                     TFM and any other                         
                     guidance to federal                       
                     agencies to ensure that                   
                     they provide clear                        
                     instructions for                          
                     reporting accurate                        
                     debit and credit                          
                     amounts to Treasury.                      
146        04-12  The Director of OMB     Treasury updated  Closed.           
                     should direct the       the TFM           
                     Controller of the       instructions      
                     Office of Federal       requiring         
                     Financial Management,   agencies to       
                     in coordination with    submit a complete 
                     the Fiscal Assistant    closing package   
                     Secretary, to ensure    to GAO. OMB also  
                     that federal agencies   referenced the    
                     submit to GAO a         TFM, in OMB       
                     complete closing        Circular A-136,   
                     package, as required by Part B, for a     
                     the TFM as part of the  listing of the    
                     consolidation process,  required          
                     consisting of the (1)   documents to be   
                     special purpose audit   submitted with    
                     opinion, (2) management the closing       
                     representation letter   package.          
                     for the closing                           
                     package, (3) audit                        
                     trail report                              
                     (reclassification                         
                     journal voucher                           
                     report), (4) closing                      
                     package financial                         
                     statement reports, (5)                    
                     trading partner summary                   
                     reports, (6) notes                        
                     reports, and (7) other                    
                     data reports.                             
147        04-13  As Treasury continues   Treasury updated  Closed.           
                     to make strides to      the TFM with      
                     address issues related  instructions      
                     to intragovernmental    requiring         
                     transactions, the       agencies to       
                     Secretary of the        provide detailed  
                     Treasury should direct  explanations for  
                     the Fiscal Assistant    material          
                     Secretary, working in   differences.      
                     coordination with the                     
                     Controller of OMB, to                     
                     require that federal                      
                     agencies provide                          
                     detailed explanations                     
                     for all material                          
                     differences identified                    
                     in the                                    
                     intragovernmental                         
                     reconciliations.                          
148        04-14  The Secretary of the    OMB and Treasury  Open.             
                     Treasury should direct  will work with    
                     the Fiscal Assistant    Department of     
                     Secretary, working in   Justice to        
                     coordination with the   discuss possible  
                     Controller of OMB's     solutions to this 
                     Office of Federal       issue.            
                     Financial Management,                     
                     to develop policies and                   
                     procedures to determine                   
                     the proper resolution                     
                     and the appropriate                       
                     legal representations                     
                     to GAO at the                             
                     governmentwide level                      
                     when Justice's legal                      
                     counsel and agencies'                     
                     legal counsel provide                     
                     inconsistent opinions.                    
149        04-15  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25. In     
                     Secretary to ensure     addition, this    
                     that the note           required          
                     disclosure for federal  information was   
                     employee and veteran    requested from    
                     benefits payable meets  the agencies for  
                     the requirements of     inclusion in Note 
                     SFFAS No. 5, Accounting 11, Federal       
                     for Liabilities of the  Employee and      
                     Federal Government,     Veteran Benefits  
                     paragraph 110, table 9, Payable, in the   
                     which states that all   fiscal year 2005  
                     components of the       CFS. However, no  
                     liability for future    data were         
                     policy benefits should  received in       
                     be separately disclosed fiscal year 2005, 
                     in a footnote with a    and therefore,    
                     description of each     there was no      
                     amount and an           disclosure        
                     explanation of its      related to this   
                     projected use and any   requirement.      
                     other potential uses.   Treasury plans to 
                                             discuss these     
                                             disclosure        
                                             requirements      
                                             further with the  
                                             agencies and with 
                                             GAO during fiscal 
                                             year 2006 to      
                                             ensure that all   
                                             relevant data are 
                                             being received    
                                             from the          
                                             agencies.         
150        04-16  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for federal  be directly       
                     employee and veteran    affected by the   
                     benefits payable meets  implementation of 
                     the requirements of     the FASAB         
                     SFFAS No. 5, Accounting exposure draft    
                     for Liabilities of the  mentioned in the  
                     Federal Government,     status of         
                     paragraphs 117 and 118, recommendation    
                     which states that all   No. 02-25.        
                     federal reporting                         
                     entities with whole                       
                     life insurance programs                   
                     should follow the                         
                     standards as prescribed                   
                     in the private sector                     
                     standards when                            
                     reporting the liability                   
                     for future policy                         
                     benefits, in addition                     
                     to the following                          
                     required disclosures:                     
                     liability for future                      
                     policy benefits                           
                     relating to                               
                     participating life                        
                     insurance contracts                       
                     should be equal to the                    
                     sum of (1) the net                        
                     level premium reserve                     
                     for death and endowment                   
                     policy benefits, (2)                      
                     the liability for                         
                     terminal dividends, and                   
                     (3) any premium                           
                     deficiency.                               
151        04-17  The Secretary of the    See status of     Open. See status  
                     Treasury should direct  recommendation    of recommendation 
                     the Fiscal Assistant    No. 02-25. In     No. 02-25.        
                     Secretary to ensure     addition, this    
                     that the note           disclosure would  
                     disclosure for federal  be directly       
                     employee and veteran    affected by the   
                     benefits payable meets  implementation of 
                     the requirements of     the FASAB         
                     SFFAS No. 5, Accounting exposure draft    
                     for Liabilities of the  mentioned in the  
                     Federal Government,     status of         
                     paragraph 121, which    recommendation    
                     states that all         No. 02-25.        
                     components of the                         
                     liability for future                      
                     policy benefits (i.e.,                    
                     the net-level premium                     
                     reserve for death and                     
                     endowment policy and                      
                     the liability for                         
                     terminal dividends)                       
                     should be separately                      
                     disclosed in a footnote                   
                     with a description of                     
                     each amount and an                        
                     explanation of its                        
                     projected use and any                     
                     other potential uses                      
                     (e.g., reducing                           
                     premiums, determining                     
                     and declaring dividends                   
                     available, or reducing                    
                     federal support in the                    
                     form of appropriations                    
                     related to                                
                     administrative cost or                    
                     subsidies).                               
152        04-18  The Secretary of the    This required     Closed.           
                     Treasury should direct  information was   
                     the Fiscal Assistant    disclosed in Note 
                     Secretary to ensure     2, Cash and Other 
                     that the note           Monetary Assets,  
                     disclosure for cash and in the fiscal     
                     other monetary assets   year 2005 CFS.    
                     meets the requirements                    
                     of SFFAS No. 1,                           
                     Accounting for Selected                   
                     Assets and Liabilities,                   
                     paragraph 30, which                       
                     requires that financial                   
                     reports disclose the                      
                     reasons for and nature                    
                     of restricted cash.                       
                     SFFAS No. 1 defines                       
                     restricted cash as                        
                     restrictions usually                      
                     imposed on cash                           
                     deposits (in escrow or                    
                     other special accounts)                   
                     by law, regulation, or                    
                     agreement.                                
153        04-19  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25. In     
                     Secretary to ensure     addition, this    
                     that agencies designate required          
                     in the note disclosure  information was   
                     for cash and other      requested from    
                     monetary assets any     the agencies for  
                     amounts reported for    inclusion in Note 
                     the "other cash" line   2, Cash and Other 
                     items that are          Monetary Assets,  
                     restricted with respect in the fiscal     
                     to the federal          year 2005 CFS.    
                     government taken as a   Treasury plans to 
                     whole.                  discuss these     
                                             disclosure        
                                             requirements      
                                             further with the  
                                             agencies and with 
                                             GAO during fiscal 
                                             year 2006 to      
                                             ensure that all   
                                             relevant data are 
                                             being received    
                                             from the          
                                             agencies.         
154        04-20  The Secretary of the    See status of     Open.             
                     Treasury should direct  recommendation    
                     the Fiscal Assistant    No. 02-25. In     
                     Secretary to ensure     addition, this    
                     that the note           required          
                     disclosure for other    information was   
                     liabilities meets the   requested from    
                     requirements of SFFAS   the agencies for  
                     No. 5, paragraph 114,   inclusion in Note 
                     which requires the      15, Other         
                     reporting of indicators Liabilities, in   
                     of the range of         the fiscal year   
                     uncertainty around      2005 CFS.         
                     insurance-related       However, no data  
                     estimates and the       were received in  
                     sensitivity of the      fiscal year 2005, 
                     estimates to changes in and therefore,    
                     major assumptions.      there was no      
                                             disclosure        
                                             related to this   
                                             requirement.      
                                             Treasury plans to 
                                             discuss these     
                                             disclosure        
                                             requirements      
                                             further with the  
                                             agencies and with 
                                             GAO during fiscal 
                                             year 2006 to      
                                             ensure that all   
                                             relevant data are 
                                             being received    
                                             from the          
                                             agencies.         

Source: GAO.

Comments from the Department of the Treasury Appendix II

1.See "Agency Comments and Our Evaluation" section.

2.We continue to believe that our recommendations relating to the
Statement of Changes in Cash Balance from Unified Budget and Other
Activities, Reconciliations of Net Operating Cost and Unified Budget
Deficit, and the adjustment process are sound. Our recommendations are
intended to allow flexibility in developing viable solutions to address
the issues. We will consider any alternative action that Treasury may take
to satisfactorily address the recommendations with which it has disagreed.
See appendix I for the status of related recommendations.

GAO Contacts and Staff Acknowledgments Appendix III

Gary Engel, (202) 512-3406, [email protected]

In addition to the above contact, the following individuals made key
contributions to this report: Lynda Downing, Assistant Director; Keith
Kronin; Katherine Schirano; and Taya Tasse.

(198414)

www.gao.gov/cgi-bin/getrpt? GAO-06-415 .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Gary T. Engel at (202) 512-3406 or
[email protected].

Highlights of GAO-06-415 , a report to the Secretary of the Treasury and
the Director of the Office of Management and Budget

April 2006

FINANCIAL AUDIT

Significant Internal Control Weaknesses Remain in Preparing the
Consolidated Financial Statements of the U.S. Government

For the past 9 years, since our first audit of the consolidated financial
statements of the U.S. government (CFS), certain material weaknesses in
internal control and in selected accounting and financial reporting
practices have resulted in conditions that prevented GAO from expressing
an opinion on the CFS. Specifically, GAO has reported that the U.S.
government did not have adequate systems, controls, and procedures to
properly prepare the CFS. Included with GAO's December 2005 disclaimer of
opinion on the fiscal year 2005 CFS was its discussion of continuing
weaknesses relating to the Department of the Treasury's (Treasury)
preparation of the CFS. The purpose of this report is to

(1) provide details of those additional weaknesses,

(2) recommend improvements, and

(3) describe the status of corrective actions on GAO's previous 154
recommendations.

What GAO Recommends

GAO is making 12 new recommendations to address compilation and reporting
weaknesses identified during the fiscal year 2005 CFS audit. The Office of
Management and Budget stated that it generally agreed with the new
findings in this report. Treasury stated that it concurs with 11 of our
recommendations. For the twelfth recommendation, Treasury offered an
alternative solution that we believe should address our concern if it is
effectively implemented.

GAO identified weaknesses during its tests of Treasury's process for
preparing the fiscal year 2005 CFS. Such weaknesses in the CFS preparation
process impair the U.S. government's ability to ensure that the CFS is
consistent with the underlying audited agency financial statements,
properly balanced, and in conformity with U.S. generally accepted
accounting principles.

The weaknesses GAO identified during the fiscal year 2005 CFS audit
involved the following areas:

           o  directly linking audited federal agency financial statements to
           the CFS,
           o  comparability of financial statements,
           o  audit assurance over certain federal agencies' closing
           packages,
           o  internal control monitoring,
           o  consolidated reporting guidance to federal agencies,
           o  reconciling of intragovernmental activity and balances, and
           o  various other internal control weaknesses that were identified
           in previous years' audits but remained in fiscal year 2005 (see
           app. I).

Of the 154 recommendations GAO reported in May 2005 regarding the process
for preparing the CFS, 131 remained open as of December 2, 2005, when GAO
completed its fieldwork for the audit of the fiscal year 2005 CFS.
However, 76 of these 131 recommendations relate to specific disclosures
required under U.S. generally accepted accounting principles. Treasury has
submitted a proposal to the Federal Accounting Standards Advisory Board
(FASAB) seeking to amend previously issued standards and eliminate or
lessen the disclosure requirements for the consolidated financial
statements so that U.S. generally accepted accounting principles would no
longer require certain of the information Treasury has not been reporting.
Comments on the exposure draft of a proposed FASAB standard, based on the
Treasury proposal, were due March 1, 2006. GAO will continue to monitor
the status of corrective actions to address open recommendations during
its fiscal year 2006 audit of the CFS.
*** End of document. ***