    Financial Audit Manual: Volume Three, Exposure Draft, June 2007
    (29-JUN-07, GAO-07-313G).

    The U.S. Government Accountability Office (GAO) and the
    President's Council on Integrity and Efficiency (PCIE) maintain
    the GAO/PCIE Financial Audit Manual (FAM). The FAM provides
    guidance for performing financial statement audits of federal
    entities. The FAM is a key tool for enhancing accountability over
    taxpayer-provided resources.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-313G
        ACCNO:   A71709
      TITLE:     Financial Audit Manual: Volume Three, Exposure Draft,
    June 2007
         DATE:   06/29/2007
      SUBJECT:   Auditing procedures
    	     Auditing standards
    	     Auditors
    	     Audits
    	     Financial statement audits
    	     Internal auditors
    	     Internal audits

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    GAO-07-313G

         * [1]GAOHQ-1905050-v5-VOLUME_III_-_2010_CHECKLIST_.pdf

              * [2]Abbreviations
              * [3]2010 - Checklist for Federal Accounting

                   * [4]Section I - Overview

              * [5]Introduction
              * [6]Checklist Organization
              * [7]Authoritative Guidance

                   * [8]Section II - General Accounting Item

                        * [9]General Item (1)

                   * [10]Section III - Assets

                        * [11]Cash and Other Monetary Assets (30-31)
                        * [12]Inventory (32 - 53)
                        * [13]Operating Materials and Supplies
                        * [14](54 - 64)
                        * [15]Stockpile Materials (65 - 75)
                        * [16]Seized Property (76 - 82)
                        * [17]Forfeited Property (83 - 95)
                        * [18]Goods Held Under Price Support and Stabilization
                          Program (96
                        * [19]General Property, Plant, & Equipment (Net) (108 -
                          152)
                        * [20]Software (153 - 180)
                        * [21]Other Assets (181 - 183)

                   * [22]Section IV - Liabilities

                        * [23]Liabilities in General (1 - 2)
                        * [24]Accounts Payable and Interest Payable
                        * [25](3 - 8)

                   * [26]Section V - Net Position and Related Changes

                        * [27]Unexpended Appropriations & Cumulative Results of
                          Operations
                        * [28]Budgetary Financing Sources (3 - 18)
                        * [29]Other Financing Sources (19 - 27)

                   * [30]Section VI - Net Cost

                        * [31]Cost Accounting - Overall Requirements
                        * [32](1 - 7)
                        * [33]Cost Accounting - Responsibility Segments (8 - 10)
                        * [34]Cost Accounting - Full Cost
                        * [35](11 - 18)
                        * [36]Cost Accounting - Inter-entity Costs
                        * [37](19 - 23)
                        * [38]Cost Accounting - Costing Methodology
                        * [39](24 - 30)
                        * [40]Revenues (31 - 44)
                        * [41]Pensions, Other Retirement, and Post Employment
                          Benefit Cost
                        * [42]Inventory, Materials, Supplies, and Commodities
                          Costs (69 -
                        * [43]Property, Plant, and Equipment Costs
                        * [44](78 - 92)
                        * [45]Clean-up Costs (93 - 100)
                        * [46]Interest Costs (101 - 102)
                        * [47]Insurance and Subsidies Costs (103 - 106)

                   * [48]Section VII - Budgetary Resources

                        * [49]Budgetary Resources (1 - 5)

                   * [50]Section VIII - Custodial Activity

                        * [51]General (1)
                        * [52]Sources of Collections (2 - 7)
                        * [53]Dedicated Collection and Other Accompanying
                          Information (8 -

                   * [54]Section IX - Required Supplementary Stewardship
                     Information

                        * [55]Stewardship Investments (1 - 14)

                   * [56]Section X - Social Insurance
                   * [57]Section XI - Credit Reform

                        * [58]Credit Program Receivables (1 - 29)
                        * [59]Liabilities for Loan Guarantees (30 - 37)
                        * [60]Credit Programs Costs (38 - 75)

         * [61]GAOHQ-1887205-v5-VOLUME_III_-_2020_CHECKLIST.pdf

              * [62]Abbreviations
              * [63]2020 - Checklist for Federal Reporting and Disclosures
              * [64]Section I--Overview
              * [65]Introduction
              * [66]Checklist Organization
              * [67]Authoritative Guidance

                   * [68]Section II - Management Discussion and Analysis
                   * [69]Section III - Performance Reporting
                   * [70]Section IV - Financial Statements
                   * [71]Section V -- Note Disclosures

                        * [72]Direct Loans and Loan Guarantees (Items 42 - 73)
                        * [73]Inventory and Related Property, Net
                        * [74](Items 74 - 89)
                        * [75]General Property, Plant, & Equipment, Net (Items 90
                          - 94)
                        * [76]Stewardship PP&E (Items 95 - 100)
                        * [77]Other Assets (Items 101 - 104)
                        * [78]Liabilities Not Covered by Budgetary Resources
                          (Items 105-10
                        * [79]Yes, No, or N/A
                        * [80]Explanation
                        * [81]Federal Employee and Veteran's Benefits (Items 113
                          - 115)
                        * [82]Suborganization Program Costs/Program Costs by
                          Segment (Item
                        * [83]Cost of Stewardship PP&E (Items 141 - 14

                   * [84]Section VI - Required Supplementary Stewardship
                     Information
                   * [85]Section VII - Required Supplementary Information
                   * [86]Section VIII - Other Accompanying Information

         * [87]GAOHQ-1905050-v5-VOLUME_III_-_2010_CHECKLIST_.pdf

              * [88]Abbreviations
              * [89]2010 - Checklist for Federal Accounting

                   * [90]Section I - Overview

              * [91]Introduction
              * [92]Checklist Organization
              * [93]Authoritative Guidance

                   * [94]Section II - General Accounting Item

                        * [95]General Item (1)

                   * [96]Section III - Assets

                        * [97]Cash and Other Monetary Assets (30-31)
                        * [98]Inventory (32 - 53)
                        * [99]Operating Materials and Supplies
                        * [100](54 - 64)
                        * [101]Stockpile Materials (65 - 75)
                        * [102]Seized Property (76 - 82)
                        * [103]Forfeited Property (83 - 95)
                        * [104]Goods Held Under Price Support and Stabilization
                          Program (96
                        * [105]General Property, Plant, & Equipment (Net) (108 -
                          152)
                        * [106]Software (153 - 180)
                        * [107]Other Assets (181 - 183)

                   * [108]Section IV - Liabilities

                        * [109]Liabilities in General (1 - 2)
                        * [110]Accounts Payable and Interest Payable
                        * [111](3 - 8)

                   * [112]Section V - Net Position and Related Changes

                        * [113]Unexpended Appropriations & Cumulative Results of
                          Operations
                        * [114]Budgetary Financing Sources (3 - 18)
                        * [115]Other Financing Sources (19 - 27)

                   * [116]Section VI - Net Cost

                        * [117]Cost Accounting - Overall Requirements
                        * [118](1 - 7)
                        * [119]Cost Accounting - Responsibility Segments (8 - 10)
                        * [120]Cost Accounting - Full Cost
                        * [121](11 - 18)
                        * [122]Cost Accounting - Inter-entity Costs
                        * [123](19 - 23)
                        * [124]Cost Accounting - Costing Methodology
                        * [125](24 - 30)
                        * [126]Revenues (31 - 44)
                        * [127]Pensions, Other Retirement, and Post Employment
                          Benefit Cost
                        * [128]Inventory, Materials, Supplies, and Commodities
                          Costs (69 -
                        * [129]Property, Plant, and Equipment Costs
                        * [130](78 - 92)
                        * [131]Clean-up Costs (93 - 100)
                        * [132]Interest Costs (101 - 102)
                        * [133]Insurance and Subsidies Costs (103 - 106)

                   * [134]Section VII - Budgetary Resources

                        * [135]Budgetary Resources (1 - 5)

                   * [136]Section VIII - Custodial Activity

                        * [137]General (1)
                        * [138]Sources of Collections (2 - 7)
                        * [139]Dedicated Collection and Other Accompanying
                          Information (8 -

                   * [140]Section IX - Required Supplementary Stewardship
                     Information

                        * [141]Stewardship Investments (1 - 14)

                   * [142]Section X - Social Insurance
                   * [143]Section XI - Credit Reform

                        * [144]Credit Program Receivables (1 - 29)
                        * [145]Liabilities for Loan Guarantees (30 - 37)
                        * [146]Credit Programs Costs (38 - 75)

                                                           Financial Audit Manual

                                                                     Volume THREE

                                                       Exposure Draft - June 2007

    United States Government Accountability Office

    President's Council on Integrity & Efficiency

    Source: GAO

    GAO-07-313G

                     United States Government Accountability Office

                    President's Council on Integrity and Efficiency

                                 FINANCIAL AUDIT MANUAL

                                       Volume III

                 2020 - Checklist for Federal Reporting and Disclosures

    Contents

    Abbreviations.....................................................................................ii
    2020 - Checklist for Federal Reporting and Disclosures................1
    Section
    I--Overview......................................................................................1
    Section II - Management Discussion and
    Analysis..........................................................7
    Section III - Performance
    Reporting...............................................................................12
    Section IV - Financial Statement
    Requirements............................................................15
    Section V -- Note
    Disclosures.....................................................................................49
    Section VI - Required Supplementary Stewardship
    Information...............................121
    Section VII - Required Supplementary
    Information....................................................126
    Section VIII - Other Accompanying
    Information.........................................................138

    Abbreviations

    AcSEC   Accounting Standards Executive Committee
    AICPA   American Institute of Certified Public Accountants
    CFO Act Chief Financial Officers Act of 1990
    CSRS    Civil Service Retirement System
    FASAB   Federal Accounting Standards Advisory Board
    FASB    Financial Accounting Standards Board
    FDIC    Federal Deposit Insurance Corporation
    FERS    Federal Employees Retirement System
    FFMIA   Federal Financial Management Improvement Act of 1996
    FHA     Federal Housing Administration
    FIFO    First-In, First-Out (method of inventory valuation)
    FMFIA   Federal Managers' Financial Integrity Act of 1982
    GAAP    (U.S.) Generally Accepted Accounting Principles
    GAAS    (U.S.) Generally Accepted Auditing Standards
    GAGAS   (U.S.) Generally Accepted Government Auditing Standards
    GASB    Government Accounting Standards Board (state & local)
    GMRA    Government Management and Results Act of 1994
    GPRA    Government Performance and Results Act of 1993
    GSE     Government Sponsored Enterprise
    HI      Hospital Insurance (Medicare Part A)
    IMF     International Monetary Fund
    IPIA    Improper Payments Information Act
    MD&A    Management's Discussion and Analysis
    MRS     Military Retirement System
    OAI     Other Accompanying Information
    OASDI   Old Age, Survivors, and Disability Insurance
    OMB     Office of Management and Budget
    OPEB    Other Post Employment Benefits
    ORB     Other Retirement Benefits
    PP&E    Property, Plant, and Equipment
    RRB     Railroad Retirement Benefits
    RSI     Required Supplementary Information
    RSSI    Required Supplementary Stewardship Information
    SBR     Statement of Budgetary Resources
    SCNP    Statement of Change in Net Position
    SFAS    Statement of Financial Accounting Standards
    SFFAC   Statements of Federal Financial Accounting Concepts
    SFFAS   Statements of Federal Financial Accounting Standards
    SMI     Supplementary Medical Insurance (Medicare Part B & D)
    SNC     Statement of Net Cost
    SOP     Statement of Position
    SOSI    Statement of Social Insurance
    TVA     Tennessee Valley Authority
    UI      Unemployment insurance

    2020 - Checklist for Federal Reporting and Disclosures

    Section I--Overview

    Introduction

    The Chief Financial Officers (CFO) Act of 1990 and the Government
    Management Reform Act of 1994 (GMRA) require that agencies' chief
    financial officers submit annual reports to their agency heads and to the
    Office of Management and Budget (OMB). These annual reports are to contain
    audited financial statements of their agencies. The financial statements
    are to be presented in conformity with U. S. generally accepted accounting
    principles (U.S. GAAP).^1

    The previous checklist, FAM 1050, Checklist for Federal Accounting,
    Reporting, and Disclosures (July 2004), included guidance for accounting,
    reporting, and disclosures. This checklist has been revised and is
    separated into two separate checklists: FAM 2010, Checklist for Federal
    Accounting and FAM 2020, Checklist for Federal Reporting and Disclosures.
    FAM 2010 provides guidance for federal accounting that entities may
    complete during the year and auditors may review the completed checklist
    during interim audit work. FAM 2020 provides guidance for year end
    reporting and disclosure that entities may complete when they prepare
    their annual financial statements and auditors may review the completed
    checklist during the reporting phase of the audit.

    These checklists are designed to assist (i) federal entities in preparing
    their financial statements in accordance with U.S. GAAP, and (ii) auditors
    in auditing them in accordance with U.S. generally accepted government
    auditing standards (GAGAS). Neither the entities nor the auditors are
    required to use this checklist and may develop their own checklists.
    However, entities should document how they are satisfied that their
    financial statements conform with U.S. GAAP. Likewise, auditors should
    document the basis for accepting that the entity's financial statements
    are in conformity with U.S. GAAP if they do not use the checklist.

    The checklist provides a systematic, organized, and structured approach to
    preparing or reviewing federal entity financial statements. While the
    questions contained in the checklist are taken from authoritative sources,
    the checklist itself is not authoritative, nor is it comprehensive.
    Preparers and auditors may also consult financial management regulations
    and policies for their individual entity, as these regulations and
    policies may have guidance when standards allow alternatives or management
    flexibility, such as for property capitalization limits.

    Checklist Organization

    In order to facilitate the completion of the checklist, an index of
    relevant reporting and disclosure requirements is included in the
    following section. The preparer uses the index to determine those areas
    that apply to the entity. The checklist is divided into 7 sections as
    follows

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

    Section II - Management's Discussion and Analysis (MD&A)
    Section III - Performance Reporting
    Section IV - Financial Statements
    Section V - Note Disclosures
    Section VI - Required Supplementary Stewardship Information (RSSI)
    Section VII - Required Supplementary Information (RSI)
    Section VIII - Other Accompanying Information

    Authoritative Guidance

    Each question in this guide is referenced to a source. The sources cited
    are (1) Federal Accounting Standards Advisory Board (FASAB) Statements of
    Federal Financial Accounting Concepts (SFFAC), (2) FASAB Statements of
    Federal Financial Accounting Standards (SFFAS), and (3) OMB Circular No.
    A-136, Financial Reporting Requirements. Because this checklist is for the
    federal entity reporting level, and is not for the financial report of the
    U.S. government, certain sources are excluded.

    The four approved accounting concept statements and year they were issued
    are:

    SFFAC 1, Objectives of Federal Financial Reporting, 1993

    SFFAC 2, Entity and Display, 1995

    SFFAC 3, Management's Discussion and Analysis, 1999

    SFFAC 4, Intended Audience and Qualitative Characteristics for the
    Consolidated Financial Report of the United States Government, 2003 (Not
    covered by this checklist)

    The 32 SFFAS standards and year they were issued are:

    SFFAS 1, Accounting for Selected Assets and Liabilities, 1993

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

    SFFAS 3, Accounting for Inventory and Related Property, 1993

    SFFAS 4, Managerial Cost Accounting Standards and Concepts, 1995

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

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

    SFFAS 7, Accounting for Revenue and Other Financing Sources and Concepts
    for Reconciling Budgetary and Financial Accounting, 1996

    SFFAS 8, Supplementary Stewardship Reporting, 1996

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

    SFFAS 10, Accounting for Internal Use Software, 1998

    SFFAS 11, Amendments to Accounting for Property, Plant, and Equipment -
    Definitional Changes, 1998^2

    2 SFFAS 11 was rescinded in its entirety by SFFAS 23.

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

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

    SFFAS 14, Amendments to Deferred Maintenance Reporting, 1999

    SFFAS 15, Management's Discussion and Analysis, 1999

    SFFAS 16, Amendments to Accounting for Property, Plant, and Equipment -
    Measurement and Reporting for Multi-Use Heritage Assets, 1999^3

    SFFAS 17, Accounting for Social Insurance, 1999

    SFFAS 18, Amendments to Accounting Standards For Direct Loans and Loans
    Guarantees in SFFAS No. 2, 2000

    SFFAS 19, Technical Amendments to Accounting Standards for Direct Loans
    and Loan Guarantees in SFFAS No. 2, 2001

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

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

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

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

    SFFAS 24, Selected Standards for the Consolidated Report of the United
    States Government, 2003 (Not covered by this checklist)

    SFFAS 25, Reclassification of Stewardship Responsibilities and Eliminating
    the Current Services Assessment, 2003^4

    SFFAS 26, Presentation of Significant Assumptions for the Statement of
    Social Insurance, 2004

    SFFAS 27, Identifying and Reporting Earmarked Funds, 2004

    SFFAS 28, Deferral of the Effective Date of Reclassification of the
    Statement of Social Insurance, 2005

    SFFAS 29, Heritage Assets and Stewardship Land, 2005

    SFFAS 30, Inter-Entity Cost Implementation, 2005

    SFFAS 31, Accounting for Fiduciary Activities, 2006

    SFFAS 32, CFR of the U.S. Government Requirements, 2006 (Not covered by
    this checklist)

    ^3 SFFAS 16 was rescinded in its entirety by SFFAS 29.

    ^4 SFFAS 25 changes reporting requirements for social insurance
    information required by SFFAS 17.

    Also included in this checklist is FASAB's Implementation Guide to
    Accounting for Revenue and Other Financing Sources, (June 1996), and OMB
    Circular No. A-136, Financial Reporting Requirements, (July 24, 2006),
    that provides detailed requirements for the form and content of entity
    financial statements.

    FASAB interpretations and technical bulletins are not covered in this
    checklist; consult this material as necessary for guidance on specific
    situations. Furthermore, preparers and auditors should document how the
    entity complied with any new standards issued after SFFAS 32.

          How to Use the Index to the Checklist

    The preparer completes the following index to FAM 2020, Checklist for
    Federal Reporting and Disclosures before completing the detailed
    checklist. For each category of reporting and disclosure listed in the
    index on the next two pages, the preparer indicates whether it is
    applicable (Y) to the entity's financial statements, or is not applicable
    (NA). Complete only those sections of the detailed checklist that are
    applicable to the entity's financial statements. If the entity has an
    insignificant amount of transactions or balances for a section, it may
    decide not to complete that section. It may document that decision by
    indicating "not significant" (NS). Those areas that are not applicable or
    not significant are not considered further, thus eliminating the need to
    read and evaluate each individual question. For example, many federal
    agencies do not administer loan, loan guarantee, or loan insurance
    programs and, therefore, do not have credit program receivables and
    related property. Consequently, the questions on these receivables,
    property, and subsidies would not apply.

    How to Use the Detailed Checklist

    To the right of each question are two columns. The first column provides
    for a "yes," "no," or "N/A" (not applicable) answer to each question. The
    second column provides for an explanation of the answer to each question.

    A "yes" answer indicates that the financial statements contain the
    information asked by the question. This would include immaterial items if
    the entity elected to disclose them. For each "yes" answer, include in the
    explanation column the page number or location in the financial statements
    where the information is found. Also, provide any other information
    pertinent to the question and the response in the explanation column.

    A "no" answer indicates that the information asked for in the question is
    not included in the financial statements, notes, or supplementary
    information, respectively. This would include immaterial items that need
    not be disclosed. Describe in the explanation column or footnote why the
    information is not included and whether this causes the financial
    statements to not be in conformity with U.S. GAAP.

    An "N/A" answer indicates that the question does not apply to the federal
    entity. Describe in the explanation column or footnote why this
    information is not applicable.

    Completion and Review of the Checklists

    Preparers of entity financial statements may complete the checklists to
    document that applicable accounting, reporting, and disclosure items have
    been addressed, including those contained in OMB Circular No. A-136.
    Auditors generally should then review the checklists for completeness and
    accuracy.

    Index to the Checklist

                                                         Applicable (Y), Not
                                                       Applicable (NA), or Not
    Page No.      Disclosure Considerations            Significant (NS)
    7        Section II - Management Discussion
                & Analysis
    12       Section III - Performance Reporting
    15       Section IV - Financial Statements
    16       General
    21       Balance Sheet
    23       Statement of Net Cost
    26       Statement of Changes in Net
                Position
    31       Statement of Budgetary Resources
    37       Statement of Financing
    45       Statement of Custodial Activities
    47       Statement of Social Insurance
    49       Section V - Note Disclosures
    51       Significant Accounting Policies
    54       Non-entity Assets
    55       Fund Balance with Treasury
    57       Cash and Other Monetary Assets
    59       Investments
    61       Receivables (Net)
    63       Direct Loans and Loan Guarantees
    74       Inventory and Related Property
    83       General Property, Plant, and
                Equipment (Net)
    85       Stewardship Property
    87       Other Assets
    88       Liabilities Not Covered by
                Budgetary Resources
    89       Debt
    91       Federal Employee and Veterans'
                Benefits
    93       Environmental Liabilities
    94       Cleanup Cost Adjustments
    95       Other Liabilities
    96       Leases
    99       Life Insurance Liabilities
    100      Commitments and Contingencies
    102      Earmarked Funds
    104      Intragovernmental Costs and
                Exchange Revenue
    105      Suborganization Program
                Costs/Program Costs by Segment
    106      Stewardship PP&E
    107      Exchange Revenues
    108      Statement of Budgetary Resources
                Disclosures
    110      Statement of Financing Disclosures
    111      Statement of Custodial Activity
                Disclosures
    113      Statement of Social Insurance
                Disclosures
    114      Dedicated Collections
    116      Restatements
    118      Fiduciary Activities
    122      Section VI - Required Supplementary
                Stewardship Information
    123      Non-federal Physical Property
    124      Human Capital
    125      Research and Development
    126      Section VII - Required
                Supplementary Information
    127      Stewardship Property, Plant, &
                Equipment
    128      Deferred Maintenance
    131      Social Insurance
    135      Statement of Budgetary Resources
    136      Statement of Custodial Activity
    137      Risk-Assumed Information
    138      Section VIII - Other Accompanying
                Information
    139      Revenue Forgone
    139      Tax Burden/Tax Gap
    140      Tax Expenditures with Directed Flow
                of Resources
    140      Management Challenges
    141      Improper Payments Information Act
                (IPIA) Reporting
    143      Other Agency-specific Statutorily
                Required Reports

      Section II - Management Discussion and Analysis

         Management Discussion and Analysis (Items 1 - 8)    Yes, No, Explanation
                                                              or N/A
    Management's Discussion and Analysis (MD&A) is Section 1 of the entity's
    Performance and Accountability Report (PAR) and should follow the Entity
    Head's Message. The MD&A is intended for a non-technical audience and
    provides an overview of the entity's financial and performance results.
    (OMB Circular No. A-136 p. 13, section II.I.2)
          1) Does the MD&A provide a clear, concise, brief
          overview of the entire PAR that a non-technical
          audience can understand? (OMB Circular No. A-136,
          pp.13 &15, section II.1.2 & II.2.1)
          2) Is the MD&A limited to the most important
          matters that could

                  a) lead to significant actions or
                  proposals by top management of the
                  reporting unit,
                  b) be significant to the managing,
                  budgeting, and oversight functions of
                  Congress and the administration, and
                  c) significantly affect the judgment of
                  citizens about the efficiency and
                  effectiveness of the entity?

          (SFFAS 15, par. 5 & 6 and OMC Circular A-136, p16,
          section II.2.2)
          3) Does the MD&A provide information on

                  a) mission and organizational structure,
                  b) performance goals, objectives and
                  results,
                  c) analysis of the financial statements
                  and stewardship information,
                  d) analysis of systems, controls and legal
                  compliance,
          e) forward-looking information about the possible
          effects of the important existing and anticipated
          performance and financial demands, events,
          conditions and trends, and
          f) important problems that need to be addressed
          and corrective actions planned to address those
          problems?

    (SFFAS 15, par. 2-4; OMB Circular No. A-136, pp.16
    -20, sections II.2.3-II.2.8)
          4) Does the mission and organizational structure
          describe its related organizational structure
          consistent with the entity's strategic plan? (OMB
          Circular No. A-136, p.17, section II.2.5)
          5) Does the performance goals, objectives, and
          results section present highlights that provide

                  a) a clear, objective picture of the
                  entity's program results compared to its
                  goals and objectives,
                  b) the extent to which its programs are
                  achieving their intended goals and
                  objectives,
                  c) an explanation of performance trends,
                  d) a discussion of the strategies and
                  resources the entity uses to achieve its
                  performance goals,
                  e) an evaluation of underlying factors
                  that may have affected the reported
                  performance, including information on
                  factors that are substantially outside the
                  entity's control and factors over which
                  the entity has significant control,

                  f) an explanation of plans and timelines
                  to improve performance where targets were
                  not met,
                  g) summary procedures management has
                  designed and followed to provide
                  reasonable assurance that reported
                  performance information is relevant and
                  reliable,
                  h) a discussion of important limitations
                  and difficulties associated with
                  performance measurement and reporting,
                  and, if relevant, information relative to
                  the efficiency and effectiveness,
                  including cost effectiveness, of the
                  entity's programs/operations?

          (SFFAC 3, par. 11 & 13 & OMB Circular No. A-136,
          pp. 17 &18, section II.2.6)
          6) Does the analysis of the financial statements
          and stewardship information section include

                  a) comparisons of the current year to
                  prior year with an analysis of the
                  entity's overall financial position and
                  results of operations to assist users in
                  assessing whether the financial position
                  has improved or deteriorated as a result
                  of the year's activities,
                  b) major changes in types or amounts of
                  assets, liabilities, costs, revenues,
                  obligations, and outlays,
                  c) relevance of particular balances and
                  amounts shown in the principal financial
                  statements, particularly if relevant to
                  important financial management issues,
                  d) stewardship information, and
          e) discussion of key financial-related measures
          emphasizing financial trends and the assessment of
          financial operations?

    (OMB Circular No. A-136, p. 19, section II.2.7)
          7) Does the analysis of the systems, controls and
          legal compliance section include

                  a) management's assurances as to the
                  status and effectiveness of the internal
                  controls and financial management systems
                  that support the preparation of the
                  financial statements, and

                  b) a separate section entitled "Management
                  Assurances" that provides assurances
                  related to 31 U.S.C. 3512 (c), (d),
                  commonly known as the Federal Manager's
                  Financial Integrity Act (FMFIA), and its
                  compliance determinations required by the
                  Federal Financial Management Improvement
                  Act (FFMIA) and OMB Circular No. A-123,
                  Management's Responsibility for Internal
                  Control?

          (OMB Circular No. A-136, p. 19, section II.2.8)
          8) Does the MD&A include additional items for

                  a) a brief summary of what the entity has
                  accomplished and plans to accomplish with
                  regard to the Improper Payments
                  Information Act,
                  b) other management information,
                  initiatives and issues,
                  c) a section on the limitations of the
                  financial statements including:
          i) the principal financial statements have been
          prepared to report the financial position and
          results of operations of the entity, pursuant to
          the requirements of 31 U.S.C. 3515 (b). While the
          statements have been prepared from the books and
          records of the entity in accordance with GAAP for
          federal entities and the formats prescribed by
          OMB, the statements are in addition to the
          financial reports used to monitor and control
          budgetary resources which are prepared from the
          same books and records,
          ii) the statements are for a component of the U.S.
          Government, a sovereign entity?

    (OMB Circular A-136, pp. 20-21, sections II.2.9,
    II.2.10 & II.2.11)

      Section III - Performance Reporting

            Performance Reporting (Items 1 - 5)        Yes, No, or   Explanation
                                                           N/A
    Agencies prepare an annual performance report that is included in the PAR.
    If program performance data for the fiscal year is incomplete or estimated
    in that year's report, the agency may include updated information in the
    performance budget and the subsequent year's PAR. (OMB Circular No. A-136,
    p. 22, section II.3.1)
          1) Does the annual performance report
          include

                  a) a comparison of actual
                  performance with the projected
                  (target) levels of performance as
                  set out in the performance goals in
                  the entity's annual performance
                  budget,
                  b) actual performance information
                  for at least four fiscal years,
                  c) an explanation where a
                  performance goal was not achieved
                  and why the goal was not met,
                  d) a description of the plans and
                  schedules to meet an unmet goal in
                  the future, or alternatively,
                  recommended action regarding an
                  unmet goal where management
                  concluded it is impractical or
                  infeasible to achieve that goal,
                  e) an evaluation of the entity's
                  performance budget for the current
                  fiscal year, taking into account
                  the actual performance achieved,
                  and
                  f) an assessment of the reliability
                  and completeness of the performance
                  information included in the
                  performance report?

          (OMB Circular No. A-136, p. 23, section
          II.3.4)
          2) Does the comparison of actual
          performance to performance goals include

                  a) actual performance for every
                  performance goal in the entity's
                  annual performance budget, even if
                  the goal was discontinued after
                  that year, and
                  b) performance goals where actual
                  performance information is missing,
                  incomplete, preliminary, or
                  estimated?

                  For such goals, does the annual
                  performance report indicate the
                  approximate date when actual
                  performance information, sufficient
                  to make an accurate comparison with
                  performance goal target levels,
                  will be available?

          (OMB Circular No. A-136, pp. 23-24, section
          II.3.4.1)
          3) Is an explanation of why a performance
          goal or target was not met, either with

                  a) A specific reason why a
                  significant performance shortfall
                  occurred, the consequences, and
                  corrective actions to eliminate or
                  reduce future shortfalls for this
                  goal, or
                  b) a generic explanation if the
                  difference between the goal target
                  level and actual performance is
                  slight?

          (OMB Circular No. A-136, p. 24, section
          II.3.4.2)
          4) Does the PAR

                  a) include preliminary data only if
                  actual data is not available, and
                  b) disclose that actual data will
                  be included in subsequent reports
                  when available?

          (OMB Circular No. A-136, p. 24, section
          II.3.4.4)
          5) Are other elements included in the
          performance report such as

                  a) program evaluations, including a
                  summary of findings and
                  recommendations of evaluations
                  completed during the fiscal year or
                  a disclosure that no evaluations
                  were completed,
                  b) an acknowledgement of the role
                  and a brief description of any
                  significant contribution made by a
                  non-federal entity in preparing the
                  report,

                  c) classified appendices not
                  available to the public, and
                  d) budget information consistent
                  with obligation amounts shown in
                  the Budget Appendix?

          (OMB Circular No. A-136, p. 26, section
          II.3.7)

      Section IV - Financial Statements

    Caption                              Question Numbers
    General                                   1 - 16
    Balance Sheet                            17 - 22
    Statement of Net Cost                    23 - 35
    Statement of Changes in Net Position     36 - 55
    Statement of Budgetary Resources         56 - 73
    Statement of Financing                   74 - 97
    Statement of Custodial Activities        98 - 106
    Statement of Social Insurance           107 - 109

                    General (Items 1 - 16)              Yes, No, or  Explanation
                                                            N/A
    Reporting entities should ensure that information in the financial
    statements is presented in accordance with U.S. GAAP for federal entities
    and the requirements of OMB Circular No. A-136. Preparers of financial
    statements seeking additional guidance on matters involving the
    recognition, measurement, and disclosure requirements should refer to the
    specific FASAB standards governing those requirements. These standards are
    available at http://www.fasab.gov. Where the FASAB standards or
    instructions in Circular No. A-136 do not provide guidance, agencies shall
    follow the hierarchy of accounting principles described in Section II.4.2
    Q&A. (OMB Circular No. A-136, p. 27, section II.4.1)
          1) In the PAR, is there a dated transmittal
          letter from the agency head highlighting

                  a) the entity's mission with goals
                  and accomplishments, and
                  b) an assessment of whether financial
                  and performance data in the report is
                  reliable and complete, identifying
                  material internal control weaknesses
                  and corrective actions?

          (OMB Circular No. A-136, p.13, section
          II.1.2)
          2) Does the PAR consist of

                  a) an MD&A;
                  b) a performance section;
                  c) a financial section including:

                          i) a CFO letter,
                          ii) the auditor's report,
                          iii) basic statements and
                          notes,
                          iv) required supplementary
                          stewardship information
                          (RSSI),
                          v) required supplementary
                          information (RSI); and

                  d) other accompanying information
                  (OAI), that provides users of the
                  financial statements with a better
                  understanding of the entity's
                  programs and the extent to which
                  program objectives were achieved?

                  (OMB Circular No. A-136, pp. 13-14,
                  section II.1.2)
          3) Do the basic statements include

                  a) Balance Sheet,
                  b) Statement of Net Cost,
                  c) Statement of Changes in Net
                  Position,
                  d) Statement of Budgetary Resources,
                  e) Statement of Financing,
                  f) Statement of Custodial Activity
                  (when applicable), and
                  g) Statement of Social Insurance
                  (when applicable)?

          (OMB Circular No. A-136, p. 30, section
          II.4.2, item 2)
          4) Are the basic statements presented in
          accordance with U.S. GAAP? (OMB Circular No.
          A-136, p. 27, sec. II.4.1, item A)
          5) Is comparative information and the related
          footnote disclosures presented for the
          current year and prior year for the basic
          financial statements, except for the
          Statement of Social Insurance^5? (OMB
          Circular No. A-136, pp. 27 and 31, section
          II.4.1, item B, and section II.4.2, item 3)
          6) Is comparative information presented in
          the RSSI and RSI when the information would
          be meaningful to the user of the financial
          report? (OMB Circular No. A-136, p. 31,
          section II.4.2, item 3)
          7) When the entity presents disaggregated
          information for component organizations, does
          the total column for the entity as a whole
          show consolidated totals net of intra-entity
          transactions, except for the Statement of
          Budgetary Resources, which is presented on a
          combined basis? (OMB Circular No. A-136, p.
          27, sec. II.4.1, item C)
          8) If the entity aggregates line items in its
          departmental statements, is the composition
          of the aggregated line items disclosed? (OMB
          Circular No. A-136, p. 28 section II.4.1,
          item D)
          9) If the entity disaggregates line items in
          its departmental statements, is the total of
          the disaggregated line items provided either
          on the face of the statements or in a note?
          (OMB Circular No. A-136, p. 28 section
          II.4.1, item D)
          10) Do schedule totals presented in the
          footnotes, in support of amounts presented in
          financial statements, agree with the amounts
          presented in the body of the financial
          statements? (OMB Circular No. A-136, p. 28,
          section II.4.1, item G)
          11) When presenting dollar amounts in the
          statements and the footnotes, does the entity

                  a) round amounts to the nearest whole
                  dollar, thousand, million, or billion
                  based upon informative value to the
                  reader,
                  b) maintain the chosen rounding level
                  throughout the financial statements
                  and footnotes, and
                  c) adjust line items for the
                  differences created by the rounding
                  process rather than adjusting column
                  totals?

          (OMB Circular No. A-136, p. 28, section
          II.4.1, item H)
          12) Are statement line items, footnotes, and
          lines, or columns in footnotes that do not
          apply or are not informative for the
          reporting entity properly omitted? (OMB
          Circular No. A-136, p. 28, section II.4.1,
          item F)
          13) Are line numbers (i.e. 1.) used for
          reference purposes on illustrative statement
          formats properly omitted on the statements?
          (OMB Circular No. A-136, p. 28, sec. II.4.1,
          item I)
          14) Are footnotes sequentially numbered? (OMB
          Circular No. A-136, p. 28, section II.4.1,
          item J)
          15) Does the entity use the following
          hierarchy as the source of guidance in
          preparing its financial statements

                  a) FASAB Statements &
                  Interpretations, as well as AICPA and
                  FASB pronouncements if made
                  applicable to federal government
                  entities by a FASAB Statement or
                  Interpretation,
                  b) FASAB Technical Bulletins and, if
                  specifically made applicable to
                  federal government entities by AICPA
                  and cleared by FASAB, AICPA Industry
                  Audit and Accounting Guides and AICPA
                  Statements of Position,
                  c) AICPA Accounting Standards
                  Executive Committee (AcSEC) Practice
                  Bulletins if specifically made
                  applicable to federal government
                  entities and cleared by the FASAB, as
                  well as Technical Releases of the
                  Accounting and Auditing Policy
                  Committee of the FASAB,
                  d) implementation guides published by
                  the FASAB staff and practices that
                  are widely recognized and prevalent
                  in the federal government, and
                  e) other relevant accounting
                  literature?^6

          (OMB Circular No. A-136, pp. 28- 29, section
          II.4.2, item 1)
    While a department receives budget authority in accordance with law, the
    same law may require that department (the parent) to allocate some or even
    all of the budget authority to another federal entity. When a parent makes
    such a delegation, the Treasury Department establishes a subsidiary
    account called a "transfer appropriation account" (the child account). The
    transfer itself is referred to as an allocation transfer. In the child
    account, the receiving federal entity receives the budget authority, and
    then obligates and outlays sums up to the amount included in the
    allocation. (OMB Circular No. A-136, p. 32, section II.4.2, item 7)
          16) Are all budgetary and proprietary
          activity reported by the parent in its
          financial statements, whether material to the
          parent or not? (OMB Circular No. A-136, p.
          32, section II.4.2, item 7)

    ^5 The statement of social insurance has separate requirements for
    comparative data discussed in the section of this checklist specific to
    that statement.

    ^6 Other accounting literature includes for example, FASAB Concept
    Statements, Governmental Accounting Standards Board (GASB) Statements,
    Interpretations, Technical Bulletins, and Concept Statements, AICPA Issue
    Papers, International Accounting Standards of the International Accounting
    Standards Committee, pronouncements of other professional associations or
    regulatory agencies, AICPA Technical Practice Aids, and accounting
    textbooks, handbooks, and articles.

             Balance Sheet (Items 17 - 22)        Yes, No, or N/A   Explanation
    The Balance Sheet presents, as of a specific time, amounts of future
    economic benefits owned or managed by the reporting entity (assets),
    amounts owed by the entity (liabilities), and amounts that comprise the
    difference (net position). (SFFAC 2, par. 57; OMB Circular No. A-136, p.
    34, section II.4.3.1)
          17) Do "other" assets and liabilities
          include only items that are immaterial
          to the entity and do not warrant
          separate reporting? (OMB Circular No.
          A-136, p. 28 section II.4.1, Item E)
          18) Are entity and nonentity assets
          combined on the face of the balance
          sheet but nonentity assets are
          disclosed in a footnote? (OMB Circular
          No. A-136, p. 34, section II.4.3.1 and
          p. 36, section II.4.3.3)
          19) Is there a line item on the balance
          sheet with a footnote that discloses
          information about heritage assets and
          stewardship land^7? (SFFAS 29, par. 25
          & 40)
          20) Are unexpended appropriations and
          cumulative results of operations
          related to earmarked funds shown
          separately on the face of the balance
          sheet, if material? (SFFAS 27, par. 29,
          and OMB Circular No. A-136, p. 45,
          section II.4.3.5)
    Liabilities covered by budgetary resources are liabilities covered by
    realized budgetary resources as of the balance sheet date. Budgetary
    resources encompass not only new budget authority but also other resources
    available to cover liabilities for specified purposes in a given year.
    Available budgetary resources include (1) new budget authority, (2)
    unobligated balances of budgetary resources at the beginning of the year
    or net transfers of prior year balances during the year, (3) spending
    authority from offsetting collections (credited to an appropriation or
    fund account), and (4) recoveries of unexpired budget authority through
    downward adjustments of prior year obligations. Liabilities are covered by
    budgetary resources if they are to be funded by permanent indefinite
    appropriations or borrowing authority, which have been enacted and signed
    into law and are available for use as of the balance sheet date, provided
    that the resources may be apportioned by OMB without further action by the
    Congress and without a contingency having to be met first. (OMB Circular
    No. A-136, p. 41, section II.4.3.4)
          21) Are liabilities covered by
          budgetary resources and liabilities not
          covered by budgetary resources combined
          on the face of the balance sheet, but
          liabilities not covered by budgetary
          resources disclosed in a footnote? (OMB
          Circular No. A-136, p. 34, section
          II.4.3.1, p. 42, section II.4.3.4)
    Intragovernmental assets arise from transactions among federal entities.
    Intragovernmental assets represent claims of a federal entity against
    other federal entities. Intragovernmental liabilities are claims against
    the reporting entity by other federal entities. (OMB Circular No. A-136,
    p. 36, section II.4.3.3; p. 42, section II.4.3.4)
          22) Are intragovernmental assets and
          liabilities reported separately from
          assets and liabilities from non-federal
          entities? (The Federal Reserve system
          and government sponsored enterprises
          are considered non-federal entities.)^8
          (OMB Circular No. A-136, p. 36, section
          II.4.3.3, p. 42, section II.4.3.4)

    ^7 No asset dollar amount is shown, except for multi-use heritage assets,
    which are capitalized and reported as part of general PP&E.

    ^8 Government sponsored enterprises (GSE) are federally chartered but
    privately owned and operated entities.

             Statement of Net Cost (Items 23 - 35)       Yes, No, or  Explanation
                                                             N/A
    The Statement of Net Cost is designed to show separately the components of
    the net cost of the reporting entity's operations for the period. The
    statement and any related supporting schedules classify revenue and cost
    information by major program and by suborganization or responsibility
    segment. (OMB Circular No. A-136, p. 46, section II.4.4.1)

    Managerial cost accounting is the process of accumulating, measuring,
    analyzing, interpreting, and reporting cost information useful to both
    internal and external groups concerned with the way in which the
    organization uses, accounts for, safeguards, and controls its resources to
    meet its objectives. (SFFAS 4, par. 42)

    A cost accounting "system" is a continuous and systematic cost accounting
    process that may be designed to accumulate and assign costs to a variety
    of objects routinely or as desired by management. (SFFAS 4, par. 74)

    Cost finding is a method for determining the cost of producing goods or
    services using appropriate procedures, for example, special cost studies
    or analyses. (SFFAS 4, par. 76)
          23) Are net costs reported for the entity as a
          whole and for its suborganizations^9 and major
          programs? (OMB Circular No. A-136, p. 47,
          section II.4.4.1)
          24) Does the entity present responsibility
          segments that align directly with the major
          goals and outputs described in the entity's
          strategic and performance plans required by
          the Government Performance and Results Act of
          1993 (GPRA)? (SFFAS 4, par. 69; OMB Circular
          No. A-136, p. 46, section II.4.4.1)
          25) Does the Statement of Net Cost report by
          program

                  a) gross costs,
                  b) related exchange revenues,
                  c) excess of costs over exchange
                  revenues (net program costs),
                  d) costs that cannot be assigned to
                  specific programs or outputs, and
                  e) exchange revenues that cannot be
                  attributed to specific programs and
                  outputs?

          (SFFAS 7, par. 43 & 44; OMB Circular No.
          A-136, p. 47, section II.4.4.1)
          26) Are the full costs of goods and services
          received from other federal entities, whether
          or not the providing entity is fully
          reimbursed, included in the Statement of Net
          Cost? (SFFAS 4, par. 105; SFFAS 30, par. 5;
          OMB Circular No. A-136, p. 48, section
          II.4.4.3)
          27) Are inter-entity expenses and financing
          sources eliminated for any consolidated
          financial statements covering both entities?
          (SFFAS 4, par. 109)
          28) Are costs related to the production of
          outputs reported separately from costs that
          are not related to the production of outputs
          (i.e., nonproduction costs)? (OMB Circular No.
          A-136, p. 49, section II.4.4.3)
          29) Are general management and administrative
          support costs that cannot be directly traced,
          assigned on a cause-and-effect basis, or
          reasonably allocated to segments and their
          outputs reported as costs not assigned to
          programs on the Statement of Net Cost? (SFFAS
          4, par. 92; OMB Circular No. A-136, p. 50,
          section II.4.4.6)
          30) Are non-production costs that cannot be
          assigned to a particular program reported as
          costs not assigned to programs on the
          Statement of Net Cost? (SFFAS 4, par. 92; OMB
          Circular No. A-136, p. 50, section II.4.4.6)
          31) Is earned revenue reported on the
          Statement of Net Cost or in a supplementary
          schedule (regardless of whether the entity is
          permitted to retain the revenue in whole or in
          part)? OMB Circular No. A-136, pp. 49-50,
          section II.4.4.4)
          32) Are earned revenues deducted from the full
          cost of outputs or outcomes to determine their
          net program costs? (SFFAS 7, par. 43; OMB
          Circular No. A-136, p. 50, sections II.4.4.4
          and II.4.4.5)
          33) Is the net amount of gains (or losses)
          subtracted from (or added to) the gross cost
          to determine the net cost of operations and
          programs? (SFFAS 7, par. 44)
          34) Are earned revenues that are insignificant
          or cannot be attributed to particular outputs
          or programs reported separately as a deduction
          to determine the net cost of operations of the
          reporting entity as a whole? (OMB Circular No.
          A-136, p. 50, section II.4.4.7)
          35) Are nonexchange revenues and other
          financing sources excluded from calculating
          net cost of operations for the reporting
          entity? (SFFAS 7, par. 44)

    ^9 Suborganizations are considered to be generally equivalent to
    responsibility segments

        Statement of Changes in Net Position (Items 36 -  Yes, No, or Explanation
                              55)                             N/A
    The Statement of Changes in Net Position (SCNP) reports the change in net
    position during the reporting period. Net position is affected by changes
    to its two components: Cumulative Results of Operations and Unexpended
    Appropriations. (OMB Circular No. A-136, p. 51, section II.4.5.1)
          36) Do beginning balances of Cumulative Results
          of Operations and Unexpended Appropriations
          agree with the amounts reported as net position
          on the prior year's Balance Sheet? (OMB
          Circular No. A-136, p. 55, section II.4.5.5)
          37) Are "beginning balances, as adjusted,"
          equal to the sum of the beginning balances of
          net position as reported on the prior year's
          Balance Sheet, and the prior period
          adjustments? (OMB Circular No. A-136, p. 57,
          section II.4.5.5)
          38) Are the net position balances attributable
          to earmarked funds reported separately from all
          other funds, if material? (OMB Circular No.
          A-136, p. 55, section II.4.5.5)
          39) Are adjustments to the beginning balances
          for Cumulative Results of Operations and
          Unexpended Appropriations reported for

                  a) changes in accounting principles?
                  b) correction of errors?

          (OMB Circular No. A-136, pp. 55-57, section
          II.4.5.5)
          40) Are earmarked non-exchange revenue and
          other financing sources, including
          appropriations, and net cost of operations
          reported separately on the face of the SCNP?
          (OMB Circular No. A-136, p. 55, section
          II.4.5.4)
          41) Are portions of Cumulative Results of
          Operations and Unexpended Appropriations
          attributable to earmarked funds reported
          separately on the face of the SCNP? (OMB
          Circular No. A-136, p. 55, section II.4.5.4)
          42) Are earmarked and all other funds presented
          on a combined basis? (OMB Circular No. A-136,
          p. 55, section II.4.5.4)
          43) Are eliminations shown on the SCNP,
          including eliminations between the earmarked
          funds and all other funds, as well as
          eliminations within earmarked and all other
          funds? (OMB Circular No. A-136, p. 55, section
          II.4.5.4)
          44) Does the entity use a columnar presentation
          for its SCNP? (OMB Circular No. A-136, p. 55,
          sections II.4.5.3 and II.4.5.4)
          45) If the entity chose to use a linear
          presentation, did the entity also display

                  a) elimination amount for each affected
                  statement line, and
                  b) the SCNP in a columnar presentation
                  in the footnote?

          (OMB Circular No. A-136, p. 55, section
          II.4.5.4)
          46) If errors^10 were discovered after the
          issuance of the prior year financial
          statements, and if those financial statements
          or the current financial statements would be
          materially misstated absent correction of the
          errors, were corrections made in the SCNP as
          follows:

                  a) If only the current period statement
                  is presented, is the cumulative effect
                  of correcting the error reported as a
                  prior period adjustment to the
                  beginning balance of the cumulative
                  results of operations?
                  b) If comparative financial statements
                  are presented, are individual amounts
                  on the financial statements corrected
                  in the earliest affected period
                  presented?
                  c) If the earliest period presented in
                  the comparative financial statements is
                  not the period in which the error
                  occurred and the cumulative effect is
                  attributable to prior periods, is the
                  cumulative effect reported as a prior
                  period adjustment to the beginning
                  balance of cumulative results of
                  operations in the SCNP for the earliest
                  period presented?

          (SFFAS 21, par. 10 & 11; OMB Circular No.
          A-136, pp. 55-56, section II.4.5.5)
          47) Is the nature of an error in previously
          issued financial statements and the effect of
          its correction on relevant balances disclosed?
          (SFFAS 21, par. 10 (c))
          48) If changes in accounting principles^11
          would have resulted in a change to prior period
          financial statements, are they handled in the
          following manner

                  a) the cumulative effect of the change
                  on prior periods is reported as a
                  "change in accounting principle" and
                  reported as an adjustment to the
                  beginning balance of the cumulative
                  results of operations in the SCNP for
                  the period that the change is made,
                  b) if comparative financial statements,
                  prior period amounts are presented as
                  previously reported, and
                  c) the nature of the changes in
                  accounting principle and its effect on
                  relevant balances are disclosed in the
                  current period?^12

          (SFFAS 21, par. 12 & 13)
          49) Do the items reported in the "other
          financing sources" section equal the amounts
          reported as similar line items in the "other
          resources"^13 section on the Statement of
          Financing? (OMB Circular No. A-136, p. 59,
          section II.4.5.7)
          50) Does imputed financing reported on the
          Statement of Changes in Net Position equal the
          amount of imputed costs within the Statement of
          Net Cost? (OMB Circular No. A-136, p. 59,
          section II.4.5.7)
          51) Does the amount "net cost of operations"
          reported under cumulative results of operations
          agree with "net cost of operations" as reported
          on the Statement of Net Cost and Statement of
          Financing? (OMB Circular No. A-136, p. 59,
          section II.4.5.8 & p. 74, section II.4.7.7)
          52) Is the difference between the net cost of
          operations and the sum of the financing sources
          (i.e., budgetary and other) and beginning
          balance, as adjusted, equal to the ending
          balance of net position as it relates to the
          cumulative results of operations? (OMB Circular
          No. A-136, p. 59, section II.4.5.8)
          53) Do the ending balances of the cumulative
          results of operations and unexpended
          appropriations agree with the amounts reported
          as net position on the current year's Balance
          Sheet? (OMB Circular No. A-136, p. 59, section
          II.4.5.10)
          54) If the entity incurs virtually no cost in
          connection with earning exchange revenue, is
          such revenue shown as a financing source on the
          Statement of Changes in Net Position or (if
          appropriate) Statement of Custodial Activity
          and not recognized in the Statement of Net
          Cost? (SFFAS 7, par. 45)
          55) Is any portion of exchange revenue that
          cannot be retained by the entity reported as a
          transfer-out on the Statement of Changes in Net
          Position? (OMB Circular No. A-136, p. 50,
          section II.4.4.4)

    ^10 Errors in financial statements result from mathematical mistakes,
    mistakes in the application of accounting principles, or oversight or
    misuse of facts that existed at the time the financial statements were
    prepared.

    ^11 A change in accounting principle is a change from one generally
    accepted accounting principle to another one that can be justified as
    preferable; this would also include changes occasioned by the adoption of
    new federal accounting standards.

    ^12 Financial statements of subsequent periods need not repeat the
    disclosure.

    ^13 Other resources increase net position but are not budgetary resources
    as reported on the "Statement of Budgetary Resources" or defined as such
    in OMB Circular No. A-11, Part 4.

               Statement of Budgetary Resources           Yes, No,
                                                           or N/A    Explanation
                        (Items 56 - 73)
    The budget is the primary financial planning and control tool of the
    government. The Statement of Budgetary Resources (SBR) and the related
    disclosures provide information about how budgetary resources were made
    available as well as their status at the end of the period. It is the only
    financial statement predominantly derived from an entity's budgetary
    general ledger, prepared in accordance with budgetary accounting rules,
    which are incorporated into U.S. GAAP for the Federal Government. (SFFAS
    7, par. 77; OMB Circular No. A-136, p. 60, section II.4.6.1)
          56) Is the recognition and measurement of
          budgetary information reported on the SBR
          based on budget terminology, definitions, and
          guidance in OMB Circular No. A-11,
          Preparation, Submission and Execution of the
          Budget, (June 2006)? (SFFAS 7, par. 78; OMB
          Circular No. A-136, p. 61, section II.4.6.1)
          57) Is information on the SBR consistent with
          budget execution information reported on the
          Report on Budget Execution and Budgetary
          Resources (SF 133) and with information
          reported in the Budget of the United States
          Government? (OMB Circular No. A-136, p. 60,
          section II.4.6.1)
          58) Is the format of the SBR based on the
          format of the SF-133 as described in OMB
          Circular A-11, as amended? (OMB Circular No.
          A-136, p. 61, section II.4.6.3)
          59) Are material differences between
          comparable information contained in the SBR
          and the Budget of the United States Government
          disclosed in the footnotes? (OMB Circular No.
          A-136, p. 61, II.4.6.1)
          60) Is the budgetary information in the SBR
          presented on a combined basis that is
          consistent with the aggregate of the
          account-level information presented on the SF
          133s? (OMB Circular No. A-136, p. 61, section
          II.4.6.2)
          61) Are non-budgetary credit reform financing
          accounts reported separately from the
          budgetary accounts? (OMB Circular No. A-136,
          p. 61, section II.4.6.3)
          62) In its SBR under "Budgetary Resources"
          does the entity include

                  a) unobligated balances, brought
                  forward,
                  b) recoveries of prior year unpaid
                  obligations,
                  c) new budget authority, including

                          i) appropriation,
                          ii) borrowing authority,
                          iii) contract authority,

                  d) spending authority from offsetting
                  collections, including

                          i) earned authority that is
                          collected and/or change in
                          receivables from federal
                          sources,
                          ii) changes in unfilled
                          customer orders with
                          advance(s) received, and/or
                          without advance(s) from
                          federal sources,
                          iii) previously unavailable,
                          iv) expenditure transfers from
                          trust funds,

                  e) nonexpenditure transfers, net,
                  anticipated (should be zero at year
                  end), and actual,
                  f) budgetary resources temporarily not
                  available pursuant to public law, and
                  g) budgetary resources permanently not
                  available?

          (OMB Circular No. A-136, p. 64, section
          II.4.6.5 & p. 66, section II.4.6.6; SFFAS 7,
          par. 77)
          63) Do the budgetary resources reported in
          this section agree with the total budgetary
          resources reported for all of the budget
          accounts on the year-end SF 133? (OMB Circular
          No. A-136, p. 66, section II.4.6.6)
          64) Are expired obligated and unobligated
          balances that cancel at the end of the fiscal
          year reported as canceled on the year-end SBR?
          OMB Circular No. A-136, p. 66, section
          II.4.6.6)
          65) In its SBR under "Status of Budgetary
          Resources" does the entity include

                  a) obligations incurred that are:

                          i) direct and/or,
                          ii) reimbursable,

                  b) unobligated balance(s) that are:

                          i) apportioned and/or,
                          ii) exempt from apportionment,

                  c) unobligated balance(s) not
                  available?

          (OMB Circular No. A-136, p. 65, section
          II.4.6.5 & p. 66, section II.4.6.7; SFFAS 7,
          par. 77)
          66) Does the total amount displayed for the
          "status of budgetary resources" section of the
          SBR equal "total budgetary resources"
          available to the reporting entity as of the
          reporting date? (OMB Circular No. A-136, p.
          66, section II.4.6.7)
          67) Does the status of budgetary resources
          reported on the SBR agree with the total
          status reported for the aggregate of all
          budget accounts on the year-end SF 133? (OMB
          Circular No. A-136, p. 66, section II.4.6.7)
          68) In its SBR under "Change in Obligated
          Balance" does the entity include

                  a) obligated balance(s), net, that
                  are:

                          i) unpaid obligations, brought
                          forward,
                          ii) uncollected customer
                          payments from federal sources,
                          brought forward,

                  b) obligations incurred, net,
                  c) gross outlays,
                  d) obligated balance transferred, net
                  that are:

                          i) actual transfers, unpaid
                          obligations,
                          ii) actual transfers,
                          uncollected customer payments
                          from federal sources,

                  e) recoveries of prior year unpaid
                  obligations, actual,
                  f) change in uncollected customer
                  payments from federal sources,
                  g) obligated balance, net, end of
                  period that are:

                          i) unpaid obligations, and
                          ii) uncollected customer
                          payments from federal sources?

          (OMB Circular No. A-136, p. 65, section
          II.4.6.5 & p. 66, section II.4.6.8)
          69) In its SBR under "Net Outlays" does the
          entity include

                  a) gross outlays,
                  b) offsetting collections, and
                  c) distributed offsetting receipts?^14

          (OMB Circular No. A-136, p. 65, section
          II.4.6.5 & p. 66, section II.4.6.9)
          70) Do the outlays^15 reported in "Net
          Outlays" section agree with the agency outlay
          totals reported in the Budget of the United
          States Government?^16 (OMB Circular No. A-136,
          p. 66, section, II.4.6.9)
          71) Do the outlays also agree with the
          aggregate of outlays reported on the year-end
          SF 133 for the aggregate of all budget
          accounts, including non-budgetary financing
          accounts and the disbursements and collections
          reported to Treasury on a monthly basis^17 as
          per OMB Circular No. A-11, as amended? (OMB
          Circular No. A-136, p. 66, section II.4.6.9)
    Offsetting receipts are collections that are credited to general fund,
    special fund, or trust fund receipt accounts and that offset gross
    outlays. Unlike offsetting collections, which are credited to expenditure
    accounts and offset outlays at the account level, offsetting receipts are
    credited to receipt accounts and offset outlays at the agency or
    governmentwide level.

    Offsetting receipts may be distributed to agencies or undistributed.
    Distributed offsetting receipts offset the outlays of the agency, while
    undistributed offsetting receipts offset governmentwide outlays.
    Distributed offsetting receipts typically offset the outlays of the agency
    that conducts the activity, generating the receipts and the subfunction to
    which the activity is assigned. Offsetting receipts are composed of
    proprietary receipts from the public, receipts from intragovernmental
    transactions, and offsetting governmental receipts. (OMB Circular No.
    A-136, p. 67, section II.4.6.9)
          72) Does the amount of distributed offsetting
          receipts reported on the SBR agree with the
          aggregate of cash collected in the receipt
          accounts and reported to Treasury on a monthly
          basis? (OMB Circular No. A-136, p. 67, section
          II.4.6.9)
          73) Does the amount of offsetting receipts
          that are distributed to entities and reported
          on the SBR agree with the deductions for
          offsetting receipts as reported in the Budget
          of the United States Government, if available
          by the time the financial statements must be
          finalized and submitted? (OMB Circular No.
          A-136, p. 67, section II.4.6.9)

    ^14 Offsetting receipts offset budget authority and outlays at the agency
    level in the Budget of the United States Government, but are not reflected
    in budget execution reports (SF 133s), which provide account-level
    information only. Since the SBR is an agencywide report, offsetting
    receipts are included to reconcile to information in the Budget of the
    United States Government.

    ^15 Outlays consist of disbursements net of offsetting collections.

    ^16 That is, do the outlays agree with the aggregate of the outlays for
    accounts within the Budget of the United States Government?

    ^17 Agencies report their disbursements and collections using the SF 224,
    Statement of Transactions; SF 1219, Statement of Accountability; and SF
    1220, Statement of Transactions.

          Statement of Financing (Items 74 - 97)      Yes, No, or    Explanation
                                                          N/A
    The Statement of Financing is the bridge between an entity's budgetary and
    financial (i.e., proprietary) accounting. The Statement of Financing
    articulates the relationship between net obligations derived from an
    entity's budgetary accounts and net cost of operations derived from the
    entity's proprietary accounts by identifying and explaining key
    differences between the two numbers.

    Most entity transactions are recorded in both budgetary and proprietary
    accounts. However, because different accounting bases are used for
    budgetary and proprietary accounting, some transactions may appear in only
    one set of accounts (e.g., accrual of environmental and disposal
    liabilities, which is recorded only in the proprietary records).
    Furthermore, not all obligations or offsetting collections may result in
    expenses or exchange revenue (e.g., purchase of a building is capitalized
    on the balance sheet in the proprietary accounts but obligated and
    outlayed in the budgetary accounts).

    The statement is structured to first identify total resources used by an
    entity during the period (budgetary and other) and then make adjustments
    to the resources based upon how they were used to finance net obligations
    or net cost. Budgetary resources reported in this statement are those
    resources as defined in OMB Circular No. A-11 and are also reported on the
    Statement of Budgetary Resources. Other resources reported in this
    statement are also reflected in the Statement of Changes in Net Position.
    (OMB Circular No. A-136, p. 69, section II.4.7.1; SFFAS 7, par. 80 & 95)

    The section "Resources Used to Finance Activities" reflects the budgetary
    resources obligated and other resources that are used to finance the
    activities of the agency. The obligations of budgetary resources are net
    of offsetting collections, recoveries, and offsetting receipts. The other
    resources are financing sources that increase net position but are not
    budgetary resources. Every line item in this section is also reported on
    either the Statement of Budgetary Resources, or the Statement of Changes
    in Net Position. (OMB Circular No. A-136, p. 71, section II.4.7.3)
                          Resources Used to Finance Activities
          74) Is the budgetary information used to
          calculate net obligations^18 in the
          "Resources Used to Finance Activities"
          section of the Consolidated Statement of
          Financing, presented on a combined
          basis^19 and in agreement with similar
          amounts reported on the SBR? (OMB Circular
          No. A-136, p. 31, section II.4.2, item 5,
          & p. 69, section II.4.7.1)
          75) Does the amount reported as
          "obligations incurred" equal the
          obligations incurred line item as reported
          on the SBR?

          Does this include all budget accounts,
          including nonbudgetary financing accounts?
          (OMB Circular No. A-136, p. 71, section
          II.4.7.3)
          76) Does the line item "less: spending
          authority from offsetting^20 collections
          and recoveries"^21 agree with the spending
          authority from offsetting collections and
          recoveries as reported on the SBR?

          Does this include all budget accounts,
          including nonbudgetary financing accounts?
          (OMB Circular No. A-136, pp. 71-72,
          section II.4.7.3)
          77) Is "Obligations net of offsetting
          collections and recoveries" equal to the
          difference between "obligations incurred"
          and "spending authority from offsetting
          collections and recoveries?" (OMB Circular
          No. A-136, p. 72, section II.4.7.3)
          78) Does the amount reported as "less:
          offsetting receipts" equal the offsetting
          receipts^22 line item as reported on the
          SBR? (OMB Circular No. A-136, p. 72,
          section II.4.7.3)
          79) Do "net obligations"^23 equal the
          difference between "obligations net of
          offsetting collections and recoveries" and
          "offsetting receipts?" (OMB Circular No.
          A-136, p. 72, section II.4.7.3)
          80) Does the entity's Statement of
          Financing include other nonbudgetary
          resources used to finance activities?

          Do the line item amounts as reported on
          the entity's Statement of Financing equal
          the following corresponding line item
          amounts reported as "other financing
          sources" on the Statement of Changes in
          Net Position for

                  a) donations and forfeitures of
                  property?
                  b) transfers in or out without
                  reimbursement?
                  c) imputed financing from costs
                  absorbed by others?
                  d) other?

          (OMB Circular No. A-136, p. 72, section
          II.4.7.3)
          81) Is "total resources used to finance
          activities" equal to the sum of net
          obligations^24 and net other
          (nonbudgetary) resources used to finance
          activities? (OMB Circular No. A-136, p.
          70, section II.4.7.2)
    The section, "Resources Used to Finance Items Not Part of the Net Cost of
    Operations," in the Statement of Financing adjusts total resources used to
    finance the activities of the entity to account for items that were
    included in net obligations and other resources, but which were not part
    of the net cost of operations. This section would include items in which
    the expense was recognized in a prior period but the budgetary resource
    and obligation are recognized in the current period (e.g., upward/downward
    reestimates of subsidy expense accrued in the prior period but obligated
    in the current period). It would also include budgetary resources and
    obligations recognized in the current period that do not affect the net
    cost of operations (e.g., the acquisition of assets reflected in net
    obligations but not in net cost of operations for the period). (OMB
    Circular No. A-136, p. 72, section II.4.7.4)
    Resources Used to Finance Items Not Part of the Net Cost of Operations
          82) Does the line item, "change in
          budgetary resources obligated for goods,
          services, and benefits ordered but not yet
          provided (+/-),"^25 reflect undelivered
          orders, or adjustments thereof, that are
          included in net obligations, but which are
          not part of the net cost of operations?
          (OMB Circular No. A-136, p. 72, section
          II.4.7.4)
          83) Does the line item, "resources that
          fund expenses recognized in prior
          periods,"^26 reflect the obligation of
          resources that were part of the net cost
          of operations in a prior period? (OMB
          Circular No. A-136, p. 72, section
          II.4.7.4)
          84) Do the line items included under
          "budgetary offsetting collections and
          receipts that do not affect net cost of
          operations" reflect offsetting collections
          and receipts^27 that are not reported as
          exchange revenue in the Statement of Net
          Cost? (OMB Circular No. A-136, p. 72,
          section II.4.7.4)
          85) Does the line item, "resources that
          finance the acquisition of assets,"
          reflect budgetary resources obligated^28
          that are not expenses as reported on the
          Statement of Net Cost? (OMB Circular No.
          A-136, p. 73, section II.4.7.4)
          86) Does the agency include under the line
          item, "other resources or adjustments to
          net obligated resources that do not affect
          net cost of operations," activities^29 not
          otherwise classified under the other line
          items in this section of the Statement of
          Financing? (OMB Circular No. A-136, p. 73,
          section II.4.7.4)
          87) Does the line item, "total resources
          used to finance the net cost of
          operations," consist of the difference
          between the line items "total resources
          used to finance activities" and "total
          resources used to finance items not part
          of the net cost of operations?" (OMB
          Circular No. A-136, p. 70, section
          II.4.7.2)
    The section, "Components of the Net Cost of Operations that will not
    Require or Generate Resources in the Current Period," identifies (1) items
    that are recognized as a component of the net cost of operations (i.e.,
    current period expenses and exchange revenues) for which budgetary
    resources (and related obligations) will not be provided (or incurred)
    until a subsequent period and (2) items (i.e., current period expenses)
    that are recognized as a part of the net cost of operations for the period
    but will not generate or require the use of resources in the current
    period. (OMB Circular No. A-136, p. 73, section II.4.7.5 & p. 74, section
    II.4.7.6)
    Components of the Net Cost of Operations that Will Not Require or Generate
                            Resources in the Current Period
          88) Does the line item, "increase in
          annual leave liability," include the
          expense related to the increase^30 in
          annual leave liability for which the
          budgetary resources will be provided in a
          subsequent period? (OMB Circular No.
          A-136, p. 73, section II.4.7.5)
          89) Does the line item, "increase in
          environmental and disposal liability,"
          include the expense related to the
          increase in environmental and disposal
          liability for which the budgetary
          resources will be provided in a subsequent
          period? (OMB Circular No. A-136, p. 74,
          section II.4.7.5)
          90) Does the line item "upward/downward
          reestimates of credit subsidy expense
          (+/-)," include the expense recognized as
          a result of an upward (+) or downward (-)
          reestimate of credit program subsidy cost
          for which budgetary resources (or
          obligations) will be provided (or
          incurred) in a subsequent period?^31 (OMB
          Circular No. A-136, p. 74, section
          II.4.7.5)
          91) Are credit subsidy reestimates
          reflected as liabilities covered by
          budgetary resources?^32 (OMB Circular No.
          A-136, p. 74, section II.4.7.5)
          92) Does the line item, "increase in
          exchange revenue receivable from the
          public," include exchange revenue
          recognized as a component^33 of the net
          cost of operations for the period? (OMB
          Circular No. A-136, p. 74, section
          II.4.7.5)
          93) Does the entity report as "other"
          under the section "Components Requiring or
          Generating Resources in Future Periods,"
          all other expenses and exchange revenue
          not specifically mentioned in the
          preceding questions that do not require or
          generate resources in the current period
          but will do so in a subsequent period?
          (OMB Circular No. A-136, p. 74, section
          II.4.7.5)
          94) Does the line item, "depreciation and
          amortization," reflect the current period
          usage of assets^34 or amortization of
          liabilities^35 for which budgetary
          resources were obligated in a prior
          period? (OMB Circular No. A-136, p. 74,
          section II.4.7.6)
          95) Does the line item, "revaluation of
          assets and liabilities," include gains and
          losses recognized^36 during the
          revaluation of assets or liabilities? (OMB
          Circular No. A-136, p. 74, section
          II.4.7.6)
          96) Does the entity report as "other"
          under the section "components not
          requiring or generating resources," all
          other expenses^37 and exchange revenue not
          specifically mentioned in the preceding
          questions that will not require or
          generate resources in the current period?
          (OMB Circular No. A-136, p. 74, section
          II.4.7.6)
          97) Does the sum of the line items "total
          resources used to finance net cost of
          operations" and "total components of net
          cost of operations that will not require
          or generate resources in the current
          period" agree with the net cost of
          operations as reported in the Statement of
          Net Cost as well as the Statement of
          Changes in Net Position? (OMB Circular No.
          A-136, p. 74, section II.4.7.7, and page
          52, line 15)

    ^18 The budgetary information includes the line items (1) "obligations
    incurred," (2) "less: spending authority from offsetting collections and
    recoveries," (3) "obligations net of offsetting collections and
    recoveries," and 4) "less: offsetting receipts."

    ^19 A combined basis means the aggregation of account-level information as
    opposed to a consolidation that implies the elimination of inter-account
    transactions.

    ^20 "Offsetting" in the term "offsetting collections" means that the
    resources generated by the collecting activity are added to the
    expenditure accounts and hence "offset" gross obligations. (SFFAS 7
    Implementation Guide (April 2002), par. 22)

    ^21 Recoveries are budgetary resources that offset obligations on the
    Statement of Budgetary Resources, but are not a proprietary financing
    source used to offset costs on the Statement of Net Cost. (OMB Circular
    A-136, p. 73, section II.4.7.4)

    ^22 Offsetting receipts differ from "offsetting collections." Offsetting
    collections are included in the entity's expenditure account and thus are
    usually available for spending for the purposes of the account without
    further action by Congress. (SFFAS 7 Implementation Guide (April 2002),
    par. 23)

    ^23 Net obligations reflect obligations incurred net of offsetting
    collections, recoveries, and offsetting receipts.

    ^24 One of the reasons that net obligations does not equal the amount of
    the net cost of operations is that there are resources that are not
    reported in the Budget of the United States Government that may finance
    the net cost of operations or other activities of the agency.

    ^25 This line item is used to explain the difference between the total
    resources used to finance activities and the net cost of operations
    because of the change in "budgetary resources obligated for goods,
    services, and benefits ordered but not yet provided," i.e., "undelivered
    orders." Undelivered orders are part of "obligations incurred," but they
    do not affect the net cost of operations. Thus, for a transaction
    involving the placing a $100 undelivered order, obligations incurred would
    increase by $100 but would be shown as a negative or a reduction to total
    resources used to finance activities. (SFFAS 7 Implementation Guide (April
    2002), par. 53-55)

    ^26 This line item is used to explain differences in resources and net
    cost of operations caused by expenses, which were accrued in previous
    periods but paid in the current period. If, for example, the amount of
    annual leave taken or obligated was worth $250 but the amount of annual
    leave earned (i.e., expensed) for the period was $200, the difference of
    $50 between obligation and expense would be shown as a negative. (SFFAS 7
    Implementation Guide (April 2002), par. 56-58)

    ^27 Examples of offsetting collections and receipts that are not exchange
    revenue are (1) collections of subsidy expenses for post -1991 credit
    programs, (2) collections of exchange revenue receivable from the public,
    and (3) advances (i.e., unfilled customer orders) for work not performed,
    with the caveat that in most cases, orders from the public without
    advances cannot be accepted. This line item is usually shown as a
    positive, the opposite (i.e., negative) of what is included under the line
    item, "less: spending authority from offsetting collections and
    recoveries," unless there is a net decrease in unfilled customer orders.
    (SFFAS 7 Implementation Guide (April 2002), par. 59-61)

    ^28 An example of this activity is the purchase of capital assets. (SFFAS
    7 Implementation Guide (April 2002), par. 62)

    ^29 This activity may include noncash recoveries of prior year
    obligations. Recoveries are budgetary resources that offset obligations on
    the Statement of Budgetary Resources, but which are not a proprietary
    financing source used to offset costs on the Statement of Net Cost.

    ^30 An increase in annual leave liability has no effect on budgetary
    accounts, because it is not funded on an accrual basis. It is financed
    when it is taken and the amounts are paid to employees who took the leave.
    Thus, budgetary resources are zero, but the net cost of operations
    includes the amount of accrued leave. (SFFAS 7 Implementation Guide (April
    2002), par. 40)

    ^31 The Credit Reform Act of 1990, as amended, provides that agencies will
    receive subsidies to cover defaults and other situations for direct loans
    and loan guarantees obligated after September 30, 1991. (SFFAS 7
    Implementation Guide (April 2002), par. 66)

    ^32 Budget authority to fund reestimates is permanent and indefinite and
    no further congressional action is needed to provide the resources.

    ^33 Absent specific legislation to the contrary, public receivables do not
    count as budgetary resources until they are collected. Hence, the revenue
    related to accruals of those resources is not reflected in offsetting
    collection activity at the time they are accrued. (SFFAS 7 Implementation
    Guide (April 2002) par. 70)

    ^34 Budgetary resources are obligated when the asset is acquired, not when
    it is depreciated or used up. No budgetary resources are used when an
    asset is depreciated. (SFFAS Implementation Guide, par. 44)

    ^35 Budgetary resources are obligated when an allowance (i.e., liability
    or contra-asset) for a subsidy is set up, and as the estimated expenses
    are realized the allowance account is amortized. The budgetary accounts,
    which have already recognized the obligation and offsetting collection for
    subsidy expense, are not affected by the transaction. (SFFAS 7
    Implementation Guide (April 2002), par. 92)

    ^36 Gains are shown as a negative; losses are shown as a positive.

    ^37 An example of this would be default expenses of pre-credit reform (or
    pre-1992) loans.

               Statement of Custodial Activities          Yes, No, or
                                                              N/A     Explanation
                         (Items 98-106)
    Entities that collect nonexchange revenue for the General Fund of the
    Treasury, a trust fund, or other recipient entities account for the
    sources and disposition of these collections in a Statement of Custodial
    Activity.

    An entity need not prepare a Statement of Custodial Activity when
    custodial collections are immaterial and incidental to their primary
    mission. In these cases, the sources and disposition of the collections
    may be disclosed in accompanying footnotes. (OMB Circular No. A-136, p.
    75, section II.4.8.1)
          98) Is nonexchange revenue transferred to
          others reported on the Statement of Custodial
          Activity? (OMB Circular No. A-136, p. 75,
          section II.4.8.1, par. 1)
          99) In exceptional circumstances, has the
          entity reported exchange revenue with virtually
          no collection costs on the Statement of
          Custodial Activity? (OMB Circular No. A-136, p.
          75, section II.4.8.1. par. 3)
                                 Sources of Collections
          100) Are the components of cash collections
          classified by source and nature of collection,
          such as by type of tax or duty? (OMB Circular
          No. A-136, p. 77, section II.4.8.3)
          101) Are nonexchange revenue accrual
          adjustments shown separately in the "sources of
          collections" section and added or subtracted
          from the net collections to determine the total
          custodial exchange revenue? (OMB Circular No.
          A-136, p. 77, section II.4.8.3)
                               Disposition of Collections
          102) Do the amounts transferred to others,
          reported in the "disposition of collections"
          section, identify the specific agencies to
          which collections were transferred and the
          amounts transferred? (OMB Circular No. A-136,
          p. 77, section II.4.8.4)
          103) Is the change in liability for accrued and
          collected revenue yet to be transferred
          reported separately in the "disposition of
          collections" section of the Statement of
          Custodial Activity? (OMB Circular No. A-136, p.
          77, section II.4.8.4)
          104) Are the amounts of refunds and other
          payments made reported separately in the
          "disposition of collections" section of the
          Statement of Custodial Activity? (OMB Circular
          No. A-136, p. 77 section II.4.8.4)
          105) Are collections retained by the entity
          separately reported as exchange revenue in the
          Statement of Net Cost and treated as a
          disposition of collections revenue in the
          statement of custodial activity? (OMB Circular
          No. A-136, p. 75, section II.4.8.1 & p. 77,
          section II.4.8.4)
          106) Do total sources of collections equal
          total disposition of collections (revenue) so
          that the net custodial activity is zero? (OMB
          Circular No. A-136, p. 77, section II.4.8.5)

                  Statement of Social Insurance            Yes, No,
                                                            or N/A   Explanation
                         (Items 107-108)
    Reporting on stewardship responsibilities aids in assessing the federal
    government's financial condition and the sufficiency of future budgetary
    resources to sustain public services and meet obligations as they become
    due. Information for social insurance programs is reported to address
    fundamental questions about the current and future financial condition of
    these programs. These fundamental questions include whether scheduled
    expenditures are sustainable with current scheduled income. Information to
    be disclosed for social insurance programs is intended to facilitate an
    assessment of the long-term sustainability of the program as well as the
    ability of the program to raise resources from future program participants
    to pay for benefits to present participants.

    For the programs listed as social insurance, the Statement of Social
    Insurance (SOSI) present the actuarial present value for the projection
    period of all future contributions and tax income (excluding interest)
    received from or on behalf of current and future participants; the
    actuarial present value for the projection period of estimated future
    scheduled expenditures paid to or on behalf of current and future
    participants; and the actuarial present value for the projection period of
    the estimated future excess of contributions and tax income (excluding
    interest) over future scheduled expenditures. The SOSI provides
    information for the current year and separate estimates for each of the
    preceding four years. (SFFAS 17, par. 1; OMB Circular No. A-136, p. 78,
    section II.4.9.1)
          107) For all social insurance programs except
          Unemployment Insurance (UI),^38 does the
          responsible entity's SOSI present

                  a) The actuarial present value of all
                  future expenditures during the
                  projection period related to benefit
                  payments: (SFFAS 17, par. 27 (3) (a) -
                  (c))

                          i) to or on behalf of current
                          participants who have not yet
                          attained retirement/eligibility
                          age;
                          ii) to or on behalf of current
                          participants who have attained
                          retirement/eligibility age; and
                          iii) to or on behalf of those
                          who are expected to become plan
                          participants during a projection
                          period encompassing
                          substantially all the present
                          value attributed to i) and ii)
                          immediately above.

                  b) the actuarial present value of all
                  future contributions and tax income
                  (from taxation of benefits) during the
                  projection period: (SFFAS 17, par. 27
                  (3) (d) - (f)),

                          i) from or on behalf of current
                          participants who have not yet
                          attained retirement/eligibility
                          age;
                          ii) from or on behalf of current
                          participants who have attained
                          retirement/eligibility age; and
                          iii) from or on behalf of those
                          who are expected to become plan
                          participants during a projection
                          period encompassing
                          substantially all the present
                          value attributed to i) and ii)
                          immediately above.

                  c) the net present value of cash flow
                  during the projection period?

          (SFFAS 17, par. 27 (3) (g))
          108) Is the information detailed in the
          preceding question for the current year and for
          each of the preceding four years? (SFFAS 17,
          par. 27 (3) (j); OMB Circular No. A-136, p. 79,
          section II.4.9.1)
          109) Are all projections and estimates made as
          of a date (the valuation date) as close to the
          end of the fiscal year being reported upon
          ("current year") as possible and no more than
          one year prior to the end of the current year?
          (SFFAS 17, par. 26)

    ^38 Although SFFAS 17 lists UI for general public, the requirements for
    the SOSI in paragraphs 27(3) and 32(3) of SFFAS 17 specifically exclude
    UI. Therefore, a SOSI is not required for UI.

      Section V -- Note Disclosures

    The question numbers related to each caption are identified below.

    Note Disclosure                                           Question numbers
    Significant Accounting Policies                                1 - 10
    Non-entity Assets                                                11
    Fund Balance with Treasury                                    12 - 21
    Cash and Other Monetary Assets                                22 - 26
    Investments                                                   27 - 35
    Receivables:
    Accounts Receivable, Net                                      36 - 38
    Taxes Receivable, Net                                            39
    Interest Receivable, Net                                      40 - 41
    Direct Loans and Loan Guarantees, Non-Federal Borrowers       42 - 73
    Inventory and Related Property, Net:
    Inventory (primarily held for sale)                           74 - 76
    Operating Materials and Supplies                              77 - 79
    Stockpile Materials                                           80 - 81
    Seized Property                                               82 - 85
    Forfeited Property                                            86 - 87
    Goods Held Under Price Support and Stabilization Programs     88 - 89
    General Property, Plant, and Equipment (PP&E), Net            90 - 94
    Stewardship PP&E                                              95 - 100
    Other Assets                                                 101 - 104
    Liabilities Not Covered by Budgetary Resources               105 - 107
    Debt                                                         108 - 112
    Federal Employee and Veterans' Benefits                      113 - 115
    Environmental Liabilities                                       116
    Cleanup Cost Adjustments                                        117
    Other Liabilities                                            118 - 120
    Leases                                                       121 - 124
    Life Insurance Liabilities                                   125 - 126
    Commitments and Contingencies                                127 - 130
    Earmarked Funds                                              131 - 133
    Intragovernmental Costs and Exchange Revenue                 134 - 138
    Suborganization Program Costs/Program Costs by Segment       139 - 140
    Cost of Stewardship PP&E                                      141 -142
    Exchange Revenues                                               143
    Budgetary Resources Statement Disclosures                     144 -146
    Financing Statement Disclosures                                 147
    Custodial Activity Statement Disclosures                     148 - 153
    Social Insurance Statement Disclosures                        154 -157
    Dedicated Collections                                         158 -160
    Restatements                                                 161 - 164
    Fiduciary Activities                                         165 - 178

                Significant Accounting Policies          Yes, No, or  Explanation
                                                             N/A
                        (Items 1 - 10)
    Disclosure of accounting policies identifies and describes the accounting
    principles followed by the reporting entity and the methods of applying
    those principles. In general, the disclosure encompasses important
    judgments as to the valuation, recognition, and allocation of assets,
    liabilities, expenses, revenues and other financing sources. (OMB Circular
    No. A-136, p. 83, section II.4.10.1)
          1) Is a description of the reporting entity
          including identification of its major
          components disclosed in significant accounting
          policies? (OMB Circular No. A-136, p. 83,
          section II.4.10.1)
          2) Has entity management summarized all
          appropriate accounting principles and their
          application to fairly present the entity's
          assets, liabilities, net cost of operations,
          changes in net position and budgetary
          resources in the disclosure of significant
          accounting policies? (OMB Circular No. A-136,
          p. 83, section II.4.10.1)
          3) Does the disclosure of accounting policies
          encompass important judgments as to the
          valuation, recognition, and allocation of
          assets, liabilities, expenses, revenues and
          other financing sources? (OMB Circular No.
          A-136, p. 83, section II.4.10.1)
          4) Do the disclosures of accounting policies
          not duplicate details in other notes to the
          financial statements? (OMB Circular No. A-136,
          p. 83, section II.4.10.1)
          5) Is a description of changes in generally
          accepted accounting principles, and an
          explanation of concepts, such as Fund Balance
          with Treasury and Earmarked Funds unique to
          Federal financial statements included in the
          disclosure of significant accounting policies?
          (OMB Circular No. A-136, p. 83, section
          II.4.10.1)
          6) If the entity is a "parent" involved in an
          allocation transfer with a different federal
          entity, is there an explanation (no amount) in
          the significant accounting policies disclosure
          that there are amounts being reported on its
          net cost of operations, changes in net
          position, and budgetary resources where
          activity is being performed by the receiving
          federal entity? (OMB Circular No. A-136, p.
          83, section II.4.10.1)
          7) If the entity is a "child" involved in an
          allocation transfer with a different federal
          entity, is there an explanation (no amount)
          that it performed activity being reported in
          the financial statements of the "parent"? (OMB
          Circular No. A-136, p. 84, section II.4.10.1)
          8) Regardless of whether the entity is the
          "parent" or the "child" in an allocation
          transfer, are the names of the federal
          departments involved in the allocation
          transfers disclosed? (OMB Circular No. A-136,
          p. 84, section II.4.10.1)
          9) Are significant changes in the composition
          of the entity or manner in which the entity
          aggregates information for financial reporting
          purposes disclosed? (OMB Circular No. A-136,
          p. 84, section II.4.10.1)
          10) Changes in the composition of the
          reporting entity or manner in which the
          reporting entity aggregates information for
          financial reporting purposes, in effect,
          result in a new reporting entity. Therefore,
          has the entity restated financial statements
          for prior periods presented to correspond to
          the changes? (OMB Circular No. A-136, p. 84,
          section II.4.10.1)

            Non-entity Assets (Item 11)         Yes, No, or N/A     Explanation
    Entity assets are assets that the reporting entity has authority to use in
    its operations. The authority to use funds in an entity's operations means
    that entity management has the authority to decide how funds are used, or
    management is legally obligated to use funds to meet entity obligations,
    e.g., repay loans from Treasury. Non-entity assets are assets held by an
    entity but are not available to the entity. An example of non-entity
    assets is tax receivables, which the Internal Revenue Service collects for
    the U.S. Government but has no authority to spend. (OMB Circular No.
    A-136, p. 36, section II.4.3.3)
          11) Are the amounts and types of
          non-entity assets disclosed in a
          note to the financial statements?
          (OMB Circular No. A-136, p. 34,
          section II.4.3.1; p. 36, section
          II.4.3.3; p. 85, section II.4.10.2)

                Fund Balance with Treasury           Yes, No, or
                                                         N/A        Explanation
                     (Items 12 - 21)
    A federal entity's Fund Balance with Treasury (FBWT) is the aggregate
    amount of funds in the entity's accounts with Treasury for which the
    entity is authorized to make expenditures and pay liabilities. FBWT
    includes clearing account balances and the dollar equivalent of foreign
    currency account balances. From the reporting entity's perspective, FBWT
    is an (intragovernmental) asset (although it is an intragovernmental
    liability to Treasury.) From the perspective of the federal government as
    a whole, FBWT is neither an asset nor a liability and is eliminated in the
    federal consolidated financial statements. FBWT represents a commitment to
    make resources available to federal departments, agencies, programs, and
    other entities. (SFFAS 1, par. 31 & 32 with parenthesis provided for
    clarification.)
          12) Is the FBWT reported as an
          intragovernmental asset? (SFFAS 1, par.
          31; OMB Circular No. A-136, p. 35,
          section II.4.3.2)
          13) Are amounts disclosed as fund
          balances in deposit, suspense, and
          clearing accounts that are not available
          to finance entity activities reported as
          nonentity assets? (OMB Circular No.
          A-136, p. 36, section II.4.3.3)
          14) Does the entity distinguish funds
          within FBWT as the obligated balance not
          yet disbursed^39 and the unobligated
          balance^40 in a note to the financial
          statements? (SFFAS 1, par. 37; OMB
          Circular No. A-136, p. 85, section
          II.4.10.3)
          15) Are fund balances that agencies are
          authorized to use disclosed by fund type
          (e.g., trust funds, revolving funds,
          appropriated funds, other fund types)?
          (OMB Circular No. A-136, p. 85, section
          II.4.10.3, item A)
          16) Are restrictions on unobligated
          balances related to future use disclosed?
          (SFFAS 1, par. 38; OMB Circular No.
          A-136, p. 85, section II.4.10.3, item B)
          17) Does the entity disclose any

                  a) differences and the causes of
                  such differences between FBWT in
                  its general ledger accounts and
                  the balance in its Treasury's
                  accounts,^41 and
                  b) other information necessary
                  for understanding the nature of
                  fund balances?

          (SFFAS 1, par. 39; OMB Circular No.
          A-136, p. 86, section II.4.10.3, item C)
          18) Does the entity disclose information
          on unused funds in expired appropriations
          that are returned to Treasury at the end
          of a fiscal year? (SFFAS 1, par. 39)
          19) Are balances in deposit accounts,
          such as collections pending litigation,
          funds awaiting determination of proper
          accounting disposition, or funds being
          held by the entity in the capacity of a
          banker or agent for others, disclosed
          under "other fund types?" (OMB Circular
          No. A-136, p. 85, section II.4.10.3, item
          A)
          20) If any of the balances under "other
          fund types" are material, are they listed
          separately? (OMB Circular No. A-136, p.
          85, section II.4.10.3, item A)
          21) Is other information necessary for
          understanding Fund Balances with Treasury
          disclosed? (OMB Circular No. A-136, p.86,
          section II.4.10.3, item C)

    ^39 The obligated balance not yet disbursed is the amount of funds against
    which budgetary obligations have been incurred, but disbursements have not
    been made.

    ^40 The unobligated balance is the amount of funds available to the entity
    against which no claims have been recorded. (SFFAS 1, par. 38)

    ^41 The entity should reconcile differences and correct errors when
    preparing financial reports. Although both SFFAS 1 and OMB Circular No.
    A-136 state "any differences", for audit purposes materiality would apply.
    FASAB standards generally state that they need not be applied to
    immaterial items; however, the determination of immateriality requires
    considerable judgment based upon specific facts and circumstances.

                Cash and Other Monetary Assets           Yes, No, or
                                                             N/A      Explanation
                        (Items 22 - 26)
    Cash (including imprest funds) consists of: coins, paper currency, readily
    negotiable instruments (such as checks, money orders, and bank drafts),
    demand deposits, and foreign currencies stated in U.S. dollars at the
    Treasury exchange rate on the financial statement date.

    Other monetary assets consist of other items such as gold, special drawing
    rights, and U.S. reserves in the International Monetary Fund (IMF). (SFFAS
    1, par. 27; OMB Circular No. A-136, p. 37, section II.4.3.3)
          22) Are the components of cash and other
          monetary assets disclosed and described in a
          note to the financial statements? (OMB
          Circular No. A-136, p. 37, section II.4.3.3 &
          p. 86, section II.4.10.4)
    Entity cash is the amount of cash that the reporting entity holds and is
    authorized by law to spend. Nonentity cash is the cash that a federal
    entity collects and holds on behalf of the U.S. government or other
    entities. In some instances the entity deposits cash in its accounts in a
    fiduciary capacity for the U.S. Treasury or other entities. (SFFAS 1, par.
    28 & 29)
          23) Is nonentity cash disclosed in the notes
          to the financial statements, separately from
          entity cash? (SFFAS 1, par. 29; OMB Circular
          No. A-136, p. 36, section II.4.3.3)
          24) If cash is restricted,^42 is the nature
          and reason disclosed? (SFFAS 1, par. 30; OMB
          Circular No. A-136, p. 86, section II.4.10.4)
          25) Does the entity disclose restrictions on
          the use or conversion of cash denominated in
          foreign currencies and the significant effects
          of changes in the exchange rate on the
          entity's financial position that occur after
          the end of the reporting period but before the
          issuance of financial statements? (OMB
          Circular No. A-136, p. 87, section II.4.10.4)
          26) Is other information on cash and other
          monetary assets disclosed, as appropriate,
          such as the valuation rate of gold? (OMB
          Circular No. A-136, p. 87, section II.4.10.4)

    ^42 Nonentity cash is always restricted. Other examples of restricted cash
    includes cash held in escrow to pay property taxes and insurance related
    to property associated with defaulted loans, seized cash (recognized as an
    asset per SFFAS No. 3), bid deposits held in a commercial bank, and cash
    held in earmarked funds.

              Investments (Items 27- 35)          Yes, No, or N/A    Explanation
    Investments in federal (i.e., Treasury) securities include (1)
    nonmarketable par value Treasury securities, (2) market-based Treasury
    securities expected to be held to maturity, (3) marketable Treasury
    securities expected to be held to maturity, and (4) securities issued by
    other federal entities. Nonfederal securities include those issued by
    state and local governments, private corporations, and
    government-sponsored enterprises. (SFFAS 1, par. 62; OMB Circular No.
    A-136, p. 37, section II.4.3.3)
          27) Are investments in federal
          securities reported separately from
          investments in nonfederal securities?
          (SFFAS 1, par. 67; OMB Circular No.
          A-136, p. 37, section II.4.3.3.)
          28) Are investments in securities
          reported at their acquisition cost or
          amortized acquisition cost (less an
          allowance for losses, if any)? (SFFAS
          1, par. 68 & 69; OMB Circular No.
          A-136, p. 37, section II.4.3.3)
          29) Subsequent to acquisition, are
          investments in securities reported at
          their acquisition cost adjusted for
          amortized premium or discount? (SFFAS
          1, par. 70-71; OMB Circular No. A-136,
          p. 89, section II.4.10.5)
          30) Is the market value of
          market-based and marketable securities
          disclosed? (SFFAS 1, par. 72; OMB
          Circular No. A-136, pp. 87 & 88,
          section II.4.10.5)
          31) Are investments grouped by type of
          security, such as marketable or
          market-based Treasury securities?
          (SFFAS 1, par. 72; OMB Circular No.
          A-136, p. 89, section II.4.10.5)
          32) Are the components of investments
          (e.g., cost, amortization, other
          adjustments) disclosed in the
          footnotes to the financial statements?
          (OMB Circular No. A-136, p. 37,
          section II.4.3.3 & pp. 87 and 88,
          section II.4.10.5)
          33) Are securities that have been
          reclassified as securities available
          for sale or early redemption
          disclosed? (SFFAS 1, par. 73; OMB
          Circular No. A-136, p. 89, section
          II.4.10.5, item C)
          34) Does the entity disclose any other
          information relative to understanding
          the nature of reported investments,
          such as permanent impairments? (OMB
          Circular No. A-136, p. 89, section
          II.4.10.5, item C)
          35) If the entity has investments in
          Treasury Securities for earmarked
          funds are issues disclosed in a
          footnote to the financial statements?
          (SFFAS 27, par. 27 & 28; OMB Circular
          No. A-136, p. 89, section II.4.10.5,
          item B)

                Receivables (Items 36 - 41)            Yes, No, or   Explanation
                                                           N/A
    Receivables are amounts that the entity claims for payment from others.
    Receivables can result from such activities as the sales of goods or
    services, the non-payment of taxes, the making of loans or loans assumed
    from defaults on previously made loan guarantees, the earning of interest,
    the advance or prepayment of monies, etc. (SFFAC 2, par. 84)
                        Accounts Receivable, Net (Items 36 - 38)
          36) Are receivables from federal entities
          reported as intragovernmental receivables,
          and reported separately from receivables
          from nonfederal entities? (SFFAS 1, par.
          42; OMB Circular No. A-136, p. 36, section
          II.4.3.3)
    Entity receivables are amounts due from other federal or nonfederal
    entities that the federal entity is authorized by law to include in its
    obligational authority or to offset its expenditures and liabilities upon
    collection. Nonentity receivables are amounts that the entity is to
    collect on behalf of the federal government or other entities, and the
    entity is not authorized to spend. (SFFAS 1, par. 43)
          37) Are receivables not available to the
          entity disclosed in a note to the financial
          statements as non-entity assets, separate
          from receivables available to the entity?
          (SFFAS 1, par. 43; OMB Circular No. A-136,
          p. 36, section II.4.3.3 & p. 85, section
          II.4.10.2)
          38) Does the reporting entity disclose

                  a) major categories of accounts
                  receivable by amount (gross and
                  net) and type,
                  b) methodology used to estimate the
                  allowance for uncollectible
                  amounts, and
                  c) total dollar amount of the
                  allowance for uncollectible
                  accounts?

          (SFFAS 1, par. 52; OMB Circular No. A-136,
          p. 90, section II.4.10.6)

    Receivables (Items 36 - 41) Yes, No, or N/A Explanation

                            Taxes Receivable, Net (Item 39)
          39) Does the reporting entity disclose

                  a) gross taxes receivable,
                  b) allowance for uncollectible taxes receivable,
                  c) net taxes receivable, and
                  d) methodology used to estimate the allowance for
                  uncollectible taxes?

          (SFFAS 1, par. 52; OMB Circular No. A-136, p. 90, section II.4.10.7)
                          Interest Receivable (Items 40 - 41)
          40) Is interest accrued on uncollectible accounts receivable
          disclosed until (1) the interest payment requirement has been waived
          by the federal government or (2) the related debt has been written
          off? (SFFAS 1, par. 55)
          41) Is interest receivable from federal entities accounted for and
          reported separately from interest receivable from the public? (SFFAS
          1, par. 56)

    Direct Loans and Loan Guarantees (Items 42 - 73)   Yes, No,   Explanation
                                                           or N/A
    The Federal Credit Reform Act of 1990, as amended, divides direct loans
    and loan guarantees (for non-federal borrowers) into two groups: pre-1992
    and post-1991. Pre-1992 refers to direct loan obligations or loan
    guarantee commitments made prior to fiscal year 1992; post-1991 refers to
    direct loan obligations or loan guarantee commitments made after fiscal
    year 1991.^43 (OMB Circular No. A-136, p. 98, section II.4.10.8, item A)
          42) Is interest receivable related to pre-1992
          and post-1991 direct loans and acquired
          defaulted guaranteed loans reported as a
          component of loans receivables and related
          foreclosed property? (OMB Circular No. A-136,
          p. 38, section II.4.3.3)
          43) Are special fund receipt accounts for
          negative subsidies and downward subsidy
          reestimates included in the credit reporting
          entity's financial statements? (OMB Circular
          No. A-136, p. 38, section II.4.3.3)
          44) Are any assets in these special fund
          receipt accounts shown as non-entity assets
          that are offset by intragovernmental
          liabilities covered by budgetary resources?
          (OMB Circular No. A-136, p. 38, section
          II.4.3.3)
          45) Did the entity disclose that direct loan
          obligations and loan guarantee commitments
          made after fiscal year 1991, and the resulting
          direct loans or loan guarantees, are governed
          by the Federal Credit Reform Act of 1990, as
          amended? (OMB Circular No. A-136, p. 98,
          section II.4.10.8, instruction A)
          46) Do the notes disclose other relevant and
          appropriate information related to direct
          loans and loan guarantees including

                  a) a description of the
                  characteristics of the loan programs,
                  b) commitments to guarantee,
                  c) management's method for accruing
                  interest revenue and recording
                  interest receivable, and
                  d) management's policy for accruing
                  interest on nonperforming loans?

          (OMB Circular No. A-136, p. 99, section
          II.4.10.8)
          47) Is the value of the assets related to
          defaults^44 included in the reported credit
          program receivables for

                  a) pre-1992 direct loans,
                  b) post-1991 direct loans,
                  c) pre-1992 guarantee loans, and
                  d) post-1991 guaranteed loans?

          (OMB Circular No. A-136, p. 102, section
          II.4.10.8, instruction I)
          48) Does the entity disclose whether pre-1992
          direct loans and loan guarantees are reported
          on a present value basis or are reported under
          the allowance method? (OMB Circular No. A-136,
          p. 98, section II.4.10.8, instruction A)
          49) Are components of assets related to
          pre-1992 direct loans receivable disclosed by
          loan program for

                  a) loans receivable, gross,
                  b) interest receivable,
                  c) estimated net realizable value of
                  related foreclosed property,
                  d) present value allowance^45 (if the
                  present value method is used),
                  e) allowance for loan losses^46 (if
                  the allowance-for-loss method is
                  used), and
                  f) value of assets related to direct
                  loans receivable, net?

          (OMB Circular No. A-136, p. 100, section
          II.4.10.8, instruction B)
          50) Are components of assets related to
          post-1991 direct loans receivable disclosed by
          loan program for

                  a) loans receivable, gross,
                  b) interest receivable,
                  c) estimated net realizable value of
                  foreclosed property,
                  d) allowance for subsidy costs
                  (present value), and
                  e) value of assets related to direct
                  loans receivable, net?

          (OMB Circular No. A-136, p. 100, section
          II.4.10.8, instruction C)
          51) Are components of defaulted guaranteed
          loans receivable from pre-1992 guarantees
          disclosed by loan program for

                  a) defaulted guaranteed loans
                  receivable, gross,
                  b) interest receivable,
                  c) the estimated net realizable value
                  of related foreclosed property,
                  d) the present value allowance (if the
                  present value method is used),
                  e) the allowance for loan losses (if
                  the allowance for loss method is
                  used), and
                  f) value of assets related to
                  defaulted guaranteed loans receivable,
                  net?

          (OMB Circular No. A-136, p. 102, section
          II.4.10.8, instruction H)
          52) Are components of defaulted guaranteed
          loans receivable from post-1991 guarantees
          disclosed by loan program for

                  a) defaulted guaranteed loans
                  receivable, gross,
                  b) interest receivable,
                  c) estimated net realizable value of
                  foreclosed property,
                  d) allowance for subsidy costs
                  (present value), and
                  e) value of assets related to
                  defaulted guaranteed loans receivable,
                  net?

          (OMB Circular No. A-136, p. 102, section
          II.4.10.8, instruction I)
    Foreclosed property is any asset, which is assumed to be held for sale,
    that is either received in satisfaction of a loan receivable or as a
    result of payment of a claim under a guaranteed or insured loan (excluding
    commodities acquired under price support programs). Pre-1992 foreclosed
    property refers to property associated with direct loans obligated or loan
    guarantees committed before October 1, 1991. Post-1991 foreclosed property
    refers to property associated with direct loans obligated or loan
    guarantees committed after September 30, 1991. (SFFAS 3, par. 79 & 80)
          53) When the government acquires foreclosed
          assets in full or partial settlement of a
          direct or guaranteed loan (pre-1992 and
          post-1991), is information disclosed for

                  a) valuation basis for foreclosed
                  property,
                  b) changes from prior-year's
                  accounting methods,
                  c) restrictions on the use/disposal of
                  property,
                  d) balances by categories (i.e.,
                  pre-1992 and post-1991 foreclosed
                  property),
                  e) number of properties held and
                  average holding period by type or
                  category, and
                  f) number of properties for which
                  foreclosure proceedings are in process
                  at the end of the period?

          (SFFAS 3, par. 91; OMB Circular No. A-136, p.
          99 & 100, section II.4.10.8, instruction A)
          54) Is the total amount of new direct loans
          and guaranteed loans disbursed for the current
          and prior year reported by program? (SFFAS 2,
          par. 11 (A); OMB Circular No. A-136, p. 100 &
          102, section II.4.10.8, instructions D & J)
          55) Is a reconciliation between beginning and
          ending balances presented in a footnote for

                  a) the subsidy cost allowances for
                  outstanding direct loans, and
                  b) the liability for outstanding loan
                  guarantees?

          (SFFAS 18, par. 10; OMB Circular No. A-136,
          pp. 101 & 103, section II.4.10.8, instructions
          G & N)
          56) Does the reconciliation of beginning and
          ending subsidy cost allowances and loan
          guarantee liability balances include changes
          for

                  a) interest subsidy costs, default
                  costs, fees and other collections, and
                  other subsidy costs,
                  b) interest rate and technical/default
                  reestimates, and
                  c) other adjustments?

          (SFFAS 18, par. 10)
          57) Does each loan guarantee program disclose

                  a) face value of outstanding principal
                  of guaranteed loans disbursed by a
                  third party, and
                  b) amount of outstanding principal
                  that is guaranteed?

          (SFFAS 2, para. 23; OMB Circular No. A-136, p.
          102, section II.4.10.8, instruction J)
          58) Does the liability for loan guarantees
          disclose

                  a) present value of liabilities for
                  losses on pre-1992 loan guarantees (if
                  the present value method is used),
                  b) estimated future default claims on
                  pre-1992 loan guarantees (if the
                  estimated future default claims method
                  is used),
                  c) present value of the estimated net
                  cash flows (outflows less inflows) to
                  be paid as a result of post-1991 loan
                  guarantees, and
                  d) total liabilities for loan
                  guarantees?

          (OMB Circular No. A-136, p. 102, section
          II.4.10.8, instruction K)
          59) When the total loan guarantee liability
          for all of the credit programs is negative, is
          it reported as an asset? (OMB Circular No.
          A-136, p. 42, section II.4.3.4)
          60) If the loan guarantee liability is the
          result of both positive and negative amounts
          of the various components, is the total shown
          as a liability?

          Are the negative components (of the loan
          guarantee liability) disclosed?

          (OMB Circular No. A-136, p. 42, section
          II.4.3.4)
    For post-1991direct loans and guarantees, a subsidy expense is recognized
    in the year they are disbursed. For pre-1992 direct loans and guarantees,
    disclosure of a loss and liability is not recognized until it is more
    likely than not that a loan (either direct or guaranteed) will go into
    default. (SFFAS 2, par. 24 & 39)
          61) Does the reporting entity disclose,
          discuss, and explain events and changes in
          economic conditions, other risk factors,
          legislation, credit policies,^47 and subsidy
          estimation methodologies and assumptions that
          have had a significant and measurable effect
          on subsidy rates, subsidy expenses, and
          subsidy reestimates? (SFFAS 18, par. 11 (C) &
          OMB Circular No. A-136, p. 99, section
          II.4.10.8, instruction A)
          62) Does the disclosure and discussion include
          events and changes that have occurred and are
          more likely than not to have a significant
          impact, but whose effects are not measurable
          at the reporting date? (SFFAS 18, par. 11 (C)
          & OMB Circular No. A-136, p. 99, section
          II.4.10.8, instruction A)
          63) Are components of subsidy expense for new
          direct loans disbursed disclosed by loan
          program for

                  a) interest rate differential costs,
                  b) default costs (net of recoveries),
                  c) fees and other collections,
                  d) other costs, and
                  e) total subsidy expense for new
                  direct loans?

          (SFFAS 18, par. 11 (A); OMB Circular No.
          A-136, p. 100, section II.4.10.8, instruction
          E1)
          64) Are components of subsidy expense related
          to direct loan modifications and reestimates
          disclosed for

                  a) total subsidy expense for
                  modifications of direct loans
                  previously disbursed, and
                  b) total reestimates of the subsidy
                  expense for direct loans, previously
                  disbursed, by component (i.e.,
                  interest rate and technical/default)?

          (SFFAS 18, par. 11 (A); OMB Circular No.
          A-136, p. 101, section II.4.10.8, instruction
          E2)
          65) Is the total subsidy expense for current
          and prior year's direct loans, modifications,
          and reestimates disclosed? (SFFAS 18, par. 11
          (A); OMB Circular No. A-136, p. 101, section
          II.4.10.8, instruction E3)
          66) Are components of subsidy expense for new
          loan guarantees disclosed by loan program for

                  a) interest supplement costs,
                  b) default costs (net of recoveries),
                  c) fees and other collections,
                  d) other costs, and
                  e) total subsidy expense for new loan
                  guarantees?

          (SFFAS 18, par. 11 (A); OMB Circular No.
          A-136, p. 103, section II.4.10.8, instruction
          L1)
          67) Are components of subsidy expense related
          to loan guarantee modifications and
          reestimates disclosed for

                  a) total subsidy expense for
                  modifications of loan guarantees on
                  guaranteed loans previously disbursed
                  by a third party, and
                  b) total reestimates of the subsidy
                  expense for loan guarantees,
                  previously committed, by component
                  (i.e., interest rate and
                  technical/default)?

          (SFFAS 18, par. 11 (A); OMB Circular No.
          A-136, p. 103, section II.4.10.8, instruction
          L2)
          68) Is the total subsidy expense for current
          and prior year's loan guarantees,
          modifications, and reestimates disclosed?
          (SFFAS 18, par. 11 (A); OMB Circular No.
          A-136, p. 103, section II.4.10.8, instruction
          L3)
          69) Does the reporting entity disclose, at the
          program level, the subsidy rates^48 for direct
          loans and loan guarantees in the current
          year's budget for the current year's cohorts
          for

                  a) total subsidy cost,
                  b) interest subsidy costs,
                  c) default costs (net of recoveries),
                  d) fees and other collections, and
                  e) other costs?

          (SFFAS 18, par. 11 (B); OMB Circular No.
          A-136, p. 101, section II.4.10.8, instructions
          F & M)
          70) If the entity uses trend data in the notes
          to display significant fluctuations in subsidy
          rates, are these data accompanied by an
          analysis that explains the underlying causes
          for the fluctuations? (SFFAS 18, par. 11 (B);
          OMB Circular No. A-136, p. 101, section
          II.4.10.8, instructions F & M)
    A loan modification is a federal government action that directly or
    indirectly alters the estimated subsidy cost and the present value of
    outstanding direct loans or the liability of loan guarantees. A direct
    modification changes the subsidy cost by altering the terms of existing
    contracts or through the sale of direct loans. An indirect modification
    changes the subsidy costs by altering the way loans and loan guarantees
    are administered. A modification does not include subsidy cost
    reestimates, routine administrative workouts of troubled loans, and other
    actions permitted within existing contract terms. (SFFAS 2, par. 41-44)
          71) Are loan modifications by program
          disclosed in the notes to the financial
          statements for

                  a) the nature of the modification of
                  direct loans or loan guarantees,
                  b) the discount rate used in
                  calculating the modification expense,
                  and
                  c) the basis for recognizing a gain or
                  loss related to the modification?

          (SFFAS 2, par. 56 & OMB Circular No. A-136, p.
          99, section II.4.10.8, instruction A)
          72) Is the expectation that proceeds from the
          sale of its loans will differ from the
          reported face value of the loans or the value
          of their related assets disclosed? (OMB
          Circular No. A-136, p. 99, section II.4.10.8,
          instruction A)
          73) Are administrative expenses for loans and
          loan guarantee programs broken out and
          disclosed by program? (OMB Circular No. A-136,
          p. 104, section II.4.10.8, instruction O)

    ^43 Section 506 (a) of the Federal Credit Reform Act, as amended, exempts
    the credit activities of certain agencies, such as the Federal Deposit
    Insurance Corporation (FDIC) and the Tennessee Valley Authority (TVA).
    These agencies can report in accordance with other requirements.

    ^44 That is, the sum of (1) defaulted guaranteed loans receivable gross,
    (2) interest receivable, and (3) foreclosed property, less the allowance
    for subsidy cost at present value.

    ^45 Under the present value method, the nominal amount of the direct loans
    is reduced by an allowance equal to the difference between the nominal
    amount and the present value of the expected net cash flows from the
    loans. OMB Circular A-136, p. 98, section II.4.10.8, instruction A, 4th
    par.)

    ^46 Under the allowance-for-loss method, the nominal amount of the direct
    loans is reduced by an allowance for uncollectible amounts. (OMB Circular
    A-136, p. 98, section II.4.10.8, Instruction A, 4th par.)

    ^47 Changes in legislation or credit policies include, for example,
    changes in borrowers' eligibility, the levels of fees or interest rates
    charged to borrowers, the maturity terms of loans, and the percentage of
    private loans that are guaranteed.

    ^48 The subsidy rate is the dollar amount of the subsidy component as a
    percentage of the direct loans or loan guarantees obligated in the cohort.

              Inventory and Related Property, Net         Yes, No,
                                                           or N/A    Explanation
                        (Items 74 - 89)
                   Inventory (primarily held for sale) (Items 74-76)
    Inventory is tangible personal property that is (1) held for sale
    including raw materials and work in process, (2) in process of production
    for sale, or (3) to be consumed in the production of goods for sale or in
    the provision of services for a fee. Inventory does not include other
    assets held for sale such as (1) stockpile materials, (2) seized and
    forfeited property, (3) foreclosed property, and (4) goods held under
    price support and stabilization programs. (SFFAS 3, par. 1; OMB Circular
    No. A-136, p.104, section II.4.10.9)
          74) Are inventory stocks, which are maintained
          because they are not readily available in the
          market or because there is more than a remote
          chance that they will eventually be needed,
          classified as inventory held in reserve for
          future sale, and reported as either

                  a) included in the inventory line item
                  on the face of the financial
                  statements with separate disclosure in
                  the footnotes, or
                  b) shown as a separate line item on
                  the face of the financial statements?

          (SFFAS 3, par. 27)
          75) Is inventory identified as excess,
          obsolete, or unserviceable reported as either

                  a) included in the inventory line item
                  on the face of the financial
                  statements with separate disclosures
                  in the footnotes, or
                  b) shown as a separate line item on
                  the face of the financial statements?

          (SFFAS 3, par. 29; OMB Circular No. A-136, p.
          104, section II.4.10.9)
          76) Does entity disclosure of inventory
          include

                  a) general composition,
                  b) basis for determining inventory
                  values (including the valuation method
                  and any cost flow assumptions),
                  c) changes from prior years'
                  accounting methods, if any,
                  d) balances for each of the following
                  categories of inventory (unless
                  otherwise presented on the financial
                  statements):

                          i) inventory held for current
                          sale
                          ii) inventory held in reserve
                          for future use
                          iii) excess, obsolete, and
                          unserviceable inventory
                          iv) inventory held for repair

                  e) difference between the carrying
                  amount of the inventory before
                  identification as excess, obsolete, or
                  unserviceable, and its expected net
                  realizable value,
                  f) restriction on the sale of
                  inventory,
                  g) decision criteria for categorizing
                  inventory, and
                  h) changes in the criteria for
                  categorizing inventory?

          (SFFAS 3, par. 18, 27-29, 31, 32 & 35; OMB
          Circular No. A-136, p. 104, section II.4.10.9)
                     Operating Materials and Supplies (Items 77-79)
    Operating materials and supplies are tangible personal property to be
    consumed in normal operations. Excluded are (1) goods that have been
    acquired to construct real property or equipment for the entity's use (2)
    stockpile materials, (3) goods held under price stabilization programs,
    (4) foreclosed property, (5) seized and forfeited property, and (6)
    inventory. (SFFAS 3, par. 36 & OMB Circular No. A-136, p. 38, section
    II.4.3.3)
          77) Are operating materials and supplies
          stocks, which are maintained because they are
          not readily available in the market or because
          there is more than a remote chance that they
          will eventually be needed (although not
          necessarily in the normal course of
          operations), classified as operating materials
          and supplies held in reserve for future use,
          and reported as either

                  a) included in the operating materials
                  and supplies line item on the face of
                  the financial statements with separate
                  disclosure in the footnotes, or
                  b) shown as a separate line item on
                  the face of the financial statements?

          (SFFAS 3, par. 45)
          78) Are operating materials and supplies
          identified as excess, obsolete, or
          unserviceable reported as either

                  a) included in the operating materials
                  and supplies line item on the face of
                  the financial statements with separate
                  disclosure in the footnotes, or
                  b) shown as a separate line item on
                  the face of the financial statements?

                  (SFFAS 3, par. 47)
          79) Does entity disclosure of operating
          materials and supplies include

                  a) general composition,
                  b) basis for valuation (including
                  valuation method and any cost flow
                  assumptions),
                  c) change from prior years' accounting
                  methods,
                  d) balances in each operating material
                  and supply category,^49
                  e) difference between the carrying
                  amount of the operating materials and
                  supplies before identification as
                  excess, obsolete, or unserviceable and
                  estimated net realizable value,
                  f) restrictions on the use of
                  materials and supplies, if any,
                  g) decision criteria for identifying
                  each category to which material and
                  supplies are assigned, and
                  h) changes in the criteria for
                  identifying the category to which the
                  operating materials and supplies are
                  assigned?

          (SFFAS 3, par. 50; OMB Circular No. A-136, p.
          105, section II.4.10.9)
                           Stockpile Materials (Items 80-81)
    Stockpile materials are strategic and critical materials held due to
    statutory requirements for use in national defense, conservation, or
    national emergencies. Not included under this category are (1) items held
    for sale or use in normal operations, (2) items held for use in the event
    of an agency's operating emergency or contingency, and (3) materials
    acquired to support market prices. (SFFAS 3, par. 51 & OMB Circular No.
    A-136, p. 38, section II.4.3.3)
          80) Is any difference between the carrying
          amount of the stockpile materials held for
          sale and their estimated selling price
          disclosed? (SFFAS 3, par. 55)
          81) Does entity disclosure of stockpile
          materials include

                  a) general composition,
                  b) basis for valuing stockpile
                  materials, including valuation method
                  and any cost flow assumptions,
                  c) changes from prior year's
                  accounting methods,
                  d) restrictions on the use of the
                  material,
                  e) balances in each category of
                  stockpile material (i.e., stockpile
                  materials and stockpile materials held
                  for sale),
                  f) decision criteria for categorizing
                  stockpile material as held for sale,
                  and
                  g) changes in criteria for
                  categorizing stockpile materials as
                  held for sale?

          (SFFAS 3, par. 56; OMB Circular No. A-136, p.
          105, section, II.4.10.9)
                             Seized Property (Items 82-85)
    Seized property includes monetary instruments, real property, and tangible
    personal property belonging to others in actual or constructive possession
    of the custodial agency. This includes illegal drugs, contraband, and
    counterfeit items seized by authorized law enforcement agencies (SFFAS 3,
    par. 59; OMB Circular No. A-136, p. 38, section II.4.3.3)

    There may be as many as three government entities involved with seized
    property: (1) the seizing agency, (2) the custodial agency, and (3)
    another agency with a "central fund" set up for financial recordkeeping of
    seizure activities. (SFFAS 3, par. 57)
          82) Is seized property other than monetary
          instruments disclosed in a note to the
          financial statements? (SFFAS 3, par. 62)
          83) Does entity disclosure of seized property
          by type in its custody include

                  a) explanation of what constitutes a
                  seizure and a general description of
                  the composition of seized property.
                  b) valuation method(s).
                  c) changes from prior years'
                  accounting methods,
                  d) analysis of change in seized
                  property (including dollar value and
                  number of seized properties) that are

                          i) on hand at the start of the
                          year,
                          ii) seized during the year,
                          iii) disposed of during the
                          year,
                          iv) on hand at the end of the
                          year, and
                          v) known liens or other claims
                          against the property?

                  (SFFAS 3, par. 66; OMB Circular No.
                  A-136, p. 39, section II.4.3.3 & p.
                  106, section II.4.10.9)
          84) Where material, does the entity also
          disclose the method of disposal of seized
          property? (SFFAS 3, par. 66; OMB Circular No.
          A-136, p. 106, section II.4.10.9)
          85) Is a liability for seized monetary
          instruments reported in "Other Liabilities" in
          an amount equal to the seized asset value?
          (OMB Circular No. A-136, p. 106, section
          II.4.10.9)
                            Forfeited Property (Items 86-87)
    Forfeited property consists of (a) property (i.e., monetary instruments,
    intangible property, real property, and tangible personal property)
    acquired through forfeiture proceedings, (b) property acquired to satisfy
    a tax liability, and (c) unclaimed and abandoned merchandise. (SFFAS 3,
    par. 67 & 68 & OMB Circular No. A-136, p. 39, section II.4.3.3)
          86) For forfeited property that cannot be sold
          due to legal restrictions, but may be either
          donated or destroyed, does the entity disclose
          the composition, valuation, and disposition of
          the property? (SFFAS 3, par. 71 & 78)
          87) Does entity disclosure of forfeited
          property include

                  a) composition of the property,
                  b) valuation method(s),
                  c) restrictions on the use or
                  disposition of forfeited property,
                  d) changes from prior year's
                  accounting methods,
                  e) analysis of the changes in
                  forfeited property by dollar amount
                  and number of forfeitures that
                  includes, forfeitures on hand at the
                  beginning of the year ; additions;
                  disposals and method of disposition;
                  and forfeitures on hand at the end of
                  the year, and
                  f) if available, an estimate of the
                  value of property or funds to be
                  distributed to other federal, state,
                  and local agencies in future reporting
                  periods?

          (SFFAS 3, par. 78; OMB Circular No. A-136, p.
          106, section II.4.10.9)
        Goods Held Under Price Support and Stabilization Programs (Items 88-89)
    Goods acquired under price support and stabilization programs (i.e.,
    commodities) are items of commerce or trade (usually farm commodities)
    having an exchange value. They are acquired, held, sold, or otherwise
    disposed of to satisfy or help satisfy economic goals. Producers of the
    goods (1) are either given nonrecourse loans under which they can, at
    their option, repay the loan with interest or surrender their commodity
    pledged as collateral for the loan or (2) may enter into purchase
    agreements that allow the producer the option to sell commodities to the
    government (the Commodity Credit Corporation) at the price support rate.
    (SFFAS 3, par. 92, 93, & 94)
          88) If a loss contingency arising from a
          purchase agreement is not recognized because
          it is less than probable or is not reasonably
          measurable, is the loss contingency disclosed
          if it is at least "reasonably possible that a
          loss may occur?" (SFFAS 3, par. 98)
          89) Does entity disclosure of goods held under
          price support and stabilization programs
          include

                  a) basis for valuing commodities
                  including valuation method and cost
                  flow assumptions (e.g., FIFO, weighted
                  average, moving average, specific
                  identification),
                  b) changes from prior years'
                  accounting methods,
                  c) restrictions on the use, disposal,
                  or sale of commodities, and
                  d) analysis of the changes in dollar
                  amount and volume of commodities,
                  including those:

                          i) on hand at the beginning of
                          the year,
                          ii) acquired during the year,
                          iii) disposed of during the
                          year by method of disposition,
                          iv) on hand at the end of the
                          year,
                          v) on hand at year's end and
                          estimated to be donated or
                          transferred during the coming
                          period,
                          vi) received as a result of
                          surrender of collateral
                          related to nonrecourse loans
                          outstanding, and
                          vii) dollar value and volume
                          of purchase agreement
                          commitments?

                  (SFFAS 3, par. 108 & 109; OMB Circular
                  No. A-136, p. 106-107, section
                  II.4.10.9)

    ^49 Major categories of operating materials and supplies include (1) items
    held for use; (2) items held in reserve for future uses; and (3) excess,
    obsolete, and unserviceable items.

    General Property, Plant, & Equipment, Net (Items Yes, No, or  Explanation
                           90 - 94)                         N/A
    General property, plant, and equipment (PP&E) consists of tangible assets
    that (1) have an estimated useful life of 2 or more years, (2) are not
    intended for sale in the ordinary course of business, and (3) are intended
    to be used or available for use by the entity. (SFFAS 6, par. 17) General
    property, plant, and equipment (PP&E) are any property, plant, and
    equipment used in providing goods or services. (SFFAS 6, par. 23)
          90) Does entity disclosure of its general
          PP&E include

                  a) the cost, associated accumulated
                  depreciation, and book value by major
                  class (e.g., building and structures,
                  fixtures, equipment),
                  b) the estimated useful lives for
                  each major class,
                  c) the method(s) of depreciation for
                  each major class,
                  d) capitalization threshold(s)
                  including any changes in
                  thresholds(s) during the period, and
                  e) restrictions on the use or
                  convertibility of general PP&E?

          (SFFAS 6, par. 45; OMB Circular No. A-136. p.
          107, section II.4.10.10)
          91) To record existing general PP&E, is the
          difference in amounts added to asset and
          contra-accounts credited (or charged) to the
          net position of the entity, with the amount
          of the adjustment disclosed as a "prior
          period adjustment" in the Statement of
          Changes in Net Position? (SFFAS 6, par. 43)
          92) To record existing general PP&E
          previously identified as national defense
          PP&E, is the difference in amounts added to
          asset and contra accounts disclosed as a
          "change in accounting principle" with an
          adjustment to the beginning balance of
          cumulative results of operations in the
          statement of changes in net position? (SFFAS
          23, par. 10 & 16)
          93) Does the entity include footnote
          disclosure explaining that "physical
          quantity" information for the multiuse
          heritage assets is included in the
          Stewardship PP&E note? (OMB Circular No.
          A-136, p. 40, section II.4.3.3)
    Software includes the application and operating system programs,
    procedures, rules, and any associated documentation pertaining to the
    operation of a computer system or program. "Internal use software"
    includes software that is purchased from commercial vendors "off the
    shelf," internally developed, or contractor-developed solely to meet the
    entity's internal or operational needs. (SFFAS 10, par. 8)
          94) Does entity disclosure of capitalized
          software include

                  a) the cost, associated amortization,
                  and book value,
                  b) the estimated useful life for each
                  major class of software, and
                  c) the method(s) of amortization?

          (SFFAS 10, par. 35; SFFAS 6, par. 45)

          Stewardship PP&E (Items 95 - 100)       Yes, No, or N/A    Explanation
    Stewardship PP&E includes heritage assets and stewardship land. PP&E are
    classified as heritage assets if they have (1) historical or natural
    significance; (2) cultural, educational, or artistic importance; or (3)
    significant architectural characteristic. Multiuse heritage assets are
    heritage assets that are predominately used in general government
    operations (e.g., buildings such as the main Treasury building, which is
    used as an office building). (SFFAS 29, par. 15 & 18; OMB Circular A-136,
    p. 40, section II.4.3.3)

    Stewardship land is land and land rights owned by the federal government
    but not acquired for or in connection with items of general PP&E. (SFFAS
    29, par. 33; OMB Circular No. A-136, p. 40, section II.4.3.3 )
          95) Does entity disclosure of stewardship PP&E
          include

                  a) a statement explaining how they relate
                  to the mission of the entity, and
                  b) a description of the entity's
                  stewardship policies?

          (SFFAS 29, par. 25 and 40; OMB Circular No. A-136,
          pp. 108 & 109, section II.4.10.11)
          96) Does the entity disclose that multi-use
          heritage assets are recognized and presented with
          general PP&E in the basic financial statements and
          that additional information for the multi-use
          heritage assets is included with the heritage
          assets information? (SFFAS 29, par. 27)
    Questions 97 & 98 are effective for reporting periods beginning after
    September 30, 2007
          97) Does the entity present a concise description
          of each major category of heritage asset in a note
          to the financial statements? (SFFAS 29, par. 25 &
          40; OMB Circular No. A-136, p. 132, section
          II.4.12.2)
          98) Does the entity present physical unit
          information for stewardship PP&E at the end of the
          reporting period in a note to the financial
          statements? (SFFAS 29, par. 25 & 40; OMB Circular
          No. A-136, p. 132, section II.4.12.2)
    Questions 99 & 100 are effective for reporting periods beginning after
    September 30, 2008
          99) Does the entity disclose the number of physical
          units acquired and withdrawn for stewardship PP&E
          by major category during the year in a note to the
          financial statements? (SFFAS 29, par. 25 & 40; OMB
          Circular No. A-136, p. 132, section II.4.12.2)
          100) Does the entity disclose in a note to the
          financial statements a description of the major
          methods of acquisition and withdrawal of
          stewardship PP&E during the reporting period
          including

                  a) the number of physical units by major
                  category,
                  b) transfers between federal entities, and
                  c) the number of physical units acquired
                  through donation or devise?

          (SFFAS 29, par. 25 & 40; OMB Circular No. A-136, p.
          132, section II.4.12.2)

                Other Assets (Items 101 - 104)           Yes, No, or  Explanation
                                                             N/A
          101) Are assets that are not reported in a
          separate category on the face of the balance
          sheet included under the "other" assets
          category? (OMB Circular No. A-136, p. 41,
          section II.4.3.3)
          102) Are other asset amounts listed and
          described in a note to the financial
          statements and broken out by major homogenous
          components and intragovernmental versus other
          (nonfederal) entity assets)? (OMB Circular No.
          A-136, p. 109, section II.4.10.12)
    Advances are cash outlays made by a federal entity to its employees,
    contractors, grantees, or others to cover the recipient's anticipated
    expenses or as advance payments for the costs of goods and services
    acquired by an entity. (SFFAS 1, par. 57; OMB Circular A-136, p. 41,
    section II.4.3.3)

    Prepayments are payments made by a federal entity to cover certain
    periodic expenses before those expenses are incurred (SFFAS 1, par. 58;
    OMB Circular No. A-136, p. 41, section II.4.3.3)

    Progress payments on work in progress are not included in advances and
    prepayments (OMB Circular A-136, p. 41, section II.4.3.3)
          103) Are advances and prepayments shown as
          assets and disclosed in the notes to the
          financial statements? (SFFAS 1, par. 59; OMB
          Circular No. A-136, p. 41, section II.4.3.3)
          104) Are advances and prepayments that are
          made to federal entities reported separately
          from those made to nonfederal entities? (SFFAS
          1, par. 61; Circular No. A-136, p. 109,
          section II.4.10.12)

          Liabilities Not Covered by Budgetary    Yes, No, or N/A   Explanation
               Resources (Items 105-107)
    Liabilities of federal agencies are reported under two major categories:
    (1) liabilities covered by budgetary resources,^50 and (2) liabilities not
    covered by budgetary resources.^51 Within each of these two categories,
    liabilities are classified as either (1) intragovernmental liabilities,
    which are amounts owed to other federal entities, or (2) governmental
    liabilities, which are amounts owed to nonfederal entities by the federal
    government or an entity within the federal government. (SFFAS 1, par. 18-
    21; SFFAS 5, footnote 1 in summary; OMB Circular No. A-136, pp. 41-42,
    section II.4.3.4)
          105) Are the amounts and types of
          liabilities not covered by budgetary
          resources separately disclosed?
          (SFFAS1, par. 80 & 86; OMB Circular No.
          A-136, pp. 42 & 110, sections II.4.3.4
          & II4.10.13)
          106) Are amounts and types of
          intragovernmental liabilities not
          covered by budgetary resources
          separately disclosed? (OMB Circular No.
          A-136, p. 110, section II.4.10.13)
          107) Is other information needed to
          understand the nature of liabilities
          not covered by budgetary resources
          provided? (OMB Circular No. A-136, p.
          110, section II.4.10.13)

    ^50 Liabilities covered by budgetary resources are liabilities covered by
    realized budgetary resources as of the balance sheet date. Budgetary
    resources include (1) new budget authority, (2) unobligated balances of
    budgetary resources at the beginning of the year or net transfers of prior
    year balances during the year, (3) spending authority from offsetting
    collections (credited to an appropriation or fund account), (4) recoveries
    of unexpired budget authority through downward adjustments of prior year
    obligations, and (5) permanent indefinite appropriations or borrowing
    authority, which have been enacted and signed into law as of the balance
    sheet date, provided that the resources may be apportioned by OMB without
    further action by the Congress and without a contingency having to be met.

    ^51 Liabilities not covered by budgetary resources are liabilities for
    which congressional action is needed before budgetary resources can be
    provided.

    Debt (Items 108 - 112)                           Yes, No, or Explanation
                                                        N/A
    Debts are amounts borrowed from the Treasury, the Federal Financing Bank,
    other federal agencies, or the public under general or special financing
    authority, such as Treasury bills, notes, bonds, and Federal Housing
    Administration (FHA) debentures. The components of debt are disclosed in
    the notes to the financial statements. (SFFAS 5, par. 47; OMB Circular No.
    A-136, p. 42, section II.4.3.4)
          108) Is all debt owed to Treasury, the
          Federal Financing Bank, or other federal
          agencies reported under intragovernmental
          liabilities on the balance sheet and
          disclosed by category? (OMB Circular No.
          A-136, p. 112, section II.4.10.14)
          109) Is all debt owed to the public reported
          on a separate line entitled "debt held by
          public" on the balance sheet? (OMB Circular
          No. A-136, p. 112, section II.4.10.14)
          110) Are prior and current year beginning
          balances, net borrowings, and ending balances
          of debt disclosed for

                  a) total Treasury debt (reported by
                  the Treasury Department only)
                  classified between intragovernmental
                  and debt held by the public,
                  b) total agency debt issued under
                  special financing authority (e.g.,
                  FHA debentures and Tennessee Valley
                  Authority (TVA) bonds) classified
                  between intragovernmental and debt
                  held by the public, and
                  c) other debt classified by debt owed
                  to the Treasury (including direct
                  loan and guaranteed loan financing
                  account debt), debt owed to the
                  Federal Financing Bank and debt owed
                  to other federal agencies?

          (OMB Circular No. A-136, p. 112, section
          II.4.10.14)
          111) Are the names of agencies disclosed,
          other than Treasury or the Federal Financing
          Bank, to which intragovernmental debt is owed
          and the corresponding amounts disclosed? (OMB
          Circular No. A-136, p. 112, section
          II.4.10.14)
          112) Does the entity disclose other
          information relative to debt such as
          redemption or call of debt owed to the public
          before maturity date, or write-offs of debts
          owed to Treasury or the Federal Financing
          Bank? (OMB Circular No. A-136, p. 112,
          section II.4.10.14)

         Federal Employee and Veteran's Benefits   Yes, No, or N/A  Explanation
                    (Items 113 - 115)
    Entities responsible for accounting for pensions, other retirement
    benefits (ORB) (e.g., health benefits for retirees), and other
    post-employment benefits (OPEB) are to calculate and report these
    liabilities and related expenses in accordance with SFFAS No. 5. The
    accrued entitlement benefits payable that are applicable to the current
    period, but not yet paid, and annuities for the current fiscal year
    administered by trust, pension, or insurance programs for which payment
    would be made in the following fiscal year, are classified as current
    liabilities. Liabilities for federal employee and veteran benefits include
    the actuarial portion of these benefits. They do not include liabilities
    related to ongoing continuous expenses such as employees' accrued salary
    and accrued annual leave, which are reported as other liabilities.
    Actuarial liabilities, assumptions used to compute the actuarial
    liabilities and the components of expense for the period for pensions,
    other retirement benefits, and other post-employment benefits are
    disclosed in the notes to the financial statements. (SFFAS 1, par. 83 &
    84; SFFAS 5, par. 56; OMB Circular No. A-136, p. 42, section II.4.3.4)

    In the context of accounting for pensions, ORB, and OPEB, the
    "administrative entity" manages and accounts for the pension or other
    employee plan, while the "employer entity" employs federal workers and
    generates employee costs, for which it would typically receive a salary
    and expense appropriation. (SFFAS 5, par. 57, footnote 38)

    The "aggregate entry age normal" actuarial cost method is where expenses
    or liabilities arising from the actuarial present value of projected
    pension benefits are allocated on a level basis over the earnings or the
    service of the group between entry age and assumed exit ages. The portion
    of the actuarial present value allocated to a valuation year is called
    "normal cost." (SFFAS 5, par. 64)
          113) Does the administrative entity
          disclose the assumptions used to
          calculate the liability for pensions,
          ORB, and OPEB? (SFFAS 5, par. 67 & 83;
          OMB Circular No. A-136, p. 112, section
          II.4.10.15)
          114) If the assumptions for a pension
          plan differ from the assumptions used by
          the three primary plans--Civil Service
          Retirement System (CSRS), Federal
          Employees Retirement System (FERS), and
          Military Retirement System (MRS)--does
          the administrative entity disclose how
          and why the assumptions differ from
          those of the primary plans? (SFFAS 5,
          par. 67; OMB Circular No. A-136, p. 112,
          section II.4.10.15)
          115) For the period, does the
          administrative entity separately
          disclose individual components of
          pension and other retirement expense for

                  a) normal cost,
                  b) interest on the liability for
                  the period,
                  c) prior and past service cost
                  from plan amendments during the
                  period,
                  d) any gains/losses due to a
                  change in the medical inflation
                  rate assumption, and
                  e) other actuarial gains or
                  losses during the period?

          (SFFAS 5, par. 72; OMB Circular No.
          A-136, p. 112, section II.4.10.15)

    Environment and Disposal Liabilities       Yes, No, or N/A
                                                                  Explanation
    (Item 116)
    Cleanup costs are the costs of removing, containing, and/or disposing of
    (1) hazardous waste from property, or (2) material and/or property that
    consists of hazardous waste at permanent or temporary closure or shutdown
    of associated PP&E.

    SFFAS No. 5 provides criteria for recognizing a contingent liability,
    which the entity applies to determine whether to recognize clean-up costs
    as liabilities and/or disclose them in a note. SFFAS No. 6 supplements the
    liability standard by providing guidance for recording cleanup costs
    related to general and stewardship PP&E used in federal operations. The
    guidance applies to cleanup costs from federal operations known to result
    in hazardous waste which the federal government is required by federal,
    state and/or local statutes and/or regulations to cleanup. Depending on
    the materiality of the amount, the liability for cleanup costs may be
    displayed separately or included with other liabilities. Note disclosures
    for liabilities associated with cleanup costs are described in SFFAS No.
    6, TR No. 2, and OMB Circular No. A-136, p. 43, section II.4.3.4.
          116) Does entity disclosure of clean-up
          costs include

                  a) sources (i.e., applicable
                  laws and regulations) of
                  clean-up requirements,
                  b) method for assigning
                  estimated total clean-up costs
                  to current operating periods
                  (e.g., physical capacity versus
                  passage of time),
                  c) unrecognized portion of
                  estimated total clean-up costs
                  associated with PP&E,
                  d) material changes in total
                  estimated clean-up costs due to
                  changes in laws, technology, or
                  plans,
                  e) portion of change in an
                  estimate that relates to
                  prior-period operations,
                  f) the nature of estimates, and
                  g) information regarding
                  possible changes due to
                  inflation, deflation,
                  technology, or applicable laws
                  and regulations?

          (SFFAS 6, par. 107-111; OMB Circular
          No. A-136, pp. 112 &113, section
          II.4.10.16)

            Cleanup Costs Adjustments (Item 117)      Yes, No, or N/A Explanation
          117) Are amounts of prior-period
          adjustments arising from belated
          recognition of clean-up costs and
          liabilities disclosed?

          Are amounts associated with current and
          prior periods noted?

          (SFFAS 6, par. 105; SFFAS 21, par. 13)

    Other Liabilities (Items 118 - 120)          Yes, No, or    Explanation
                                                    N/A
    Other liabilities include liabilities that are not recognized in specific
    categories. They include (but are not limited to) liabilities related to:
    capital leases, insurance, advances and prepayments, deposit fund amounts
    held in escrow, and accrued liabilities related to ongoing continuous
    expenses such as federal employee salaries and accrued employee annual
    leave. This item also covers adjudicated losses due to litigation, claims,
    and contingencies. Clean up costs are reported as "Other Liabilities" if
    they are not material to the balance sheet. Clean up costs that are
    material are reported separately as "Environmental and Disposal
    Liabilities."

    Separate reporting of items normally characterized as "Other Liabilities"
    is appropriate if the amounts are significant to the balance sheet. Other
    current liabilities may include accrued expenses. Entities separately
    disclose the amount of other current liabilities. (SFFAS 1, par. 83-86;
    OMB Circular No. A-136, p. 43, section II.4.3.4)
          118) Are significant other liabilities
          reported separately? (OMB Circular No.
          A-136, p. 43, section II.4.3.4)
          119) Does the entity disclose and/or
          classify the portion of other liabilities

                  a) covered by budgetary resources
                  that not covered by budgetary
                  resources,
                  b) payable to federal entities
                  (intragovernmental liabilities),
                  c) payable to non-federal
                  entities, and
                  d) that are current and
                  noncurrent?

          (SFFAS 1, par. 83, 85 & 86; OMB Circular
          No. A-136, pp. 113-114, section
          II.4.10.17)
          120) Is other information necessary for
          understanding other liabilities
          disclosed? (OMB Circular No. A-136, p.
          114, section II.4.10.17)

                    Leases (Items 121 - 124)              Yes, No, or Explanation
                                                              N/A
    Capital leases are leases that transfer substantially all of the benefits
    and risks of ownership to the lessee. Leases not meeting the criteria of a
    capital lease are operating leases. (SFFAS 5, par. 43)
                                Capital Leases - Lessee
          121) As the lessee, does entity disclosure of
          its capital leases include

                  a) gross amounts of assets under
                  capital lease by major asset category
                  with the related total accumulated
                  amortization,
                  b) a description of the lease
                  arrangements, (for example, future
                  funding commitments, lease terms,
                  renewal options, escalation clauses,
                  restrictions, amortization periods),
                  c) future payments due, by major asset
                  category, and deductions for imputed
                  interest and executory costs for all
                  noncancelable leases with terms longer
                  than 1 year,
                  d) a breakout of portions of the
                  capital lease liability covered by
                  budgetary resources and not covered by
                  budgetary resources, and
                  e) other information necessary for
                  understanding lessee capital leases?

          (OMB Circular No. A-136, pp. 115-116, section
          II.4.10.18, items A & C)
                                Capital Leases - Lessor
          122) As the lessor, does entity disclosure of
          its capital leases include

                  a) information regarding the commitment
                  of the entity's assets, including major
                  asset category and lease terms,
                  b) future projected receipts, by major
                  asset category, for all noncancelable
                  leases with terms longer than one year,
                  and
                  c) other information necessary for
                  understanding lessor capital leases?

                  (OMB Circular No. A-136, p. 116,
                  section II.4.10.18, items B & C)
                               Operating Leases - Lessee
          123) As the lessee, does entity disclosure of
          its operating leases include

                  a) a description of the lease
                  arrangements, such as future funding
                  commitments, lease terms, renewal
                  options, escalation clauses,
                  restriction, amortization periods,
                  b) future payments due, by major asset
                  category, for all noncancelable leases
                  with terms longer than 1 year, and
                  c) other information necessary for
                  understanding lessee operating leases?

                  (OMB Circular No. A-136, pp. 114-115,
                  section II.4.10.18, items A & C)
                               Operating Leases - Lessor
          124) As the lessor, does entity disclosure of
          its operating leases include

                  a) information regarding the commitment
                  of the entity's assets, including but
                  not limited to, the major asset
                  category and lease terms,
                  b) future projected receipts, by major
                  asset category, for all noncancelable
                  leases with terms longer than one year,
                  and
                  c) other information necessary for
                  understanding lessor operating leases?

          (OMB Circular No. A-136, p. 116, section
          II.4.10.18, items B & C)

              Life Insurance Liabilities         Yes, No, or N/A
                                                                    Explanation
                  (Items 125 - 126)
    Insurance liabilities are reported as a component of Other Liabilities on
    the balance sheet and disclosed in a separate note to the financial
    statements.

    Entities with federal insurance and guarantee programs, except social
    insurance and loan guarantee programs, recognize a liability for unpaid
    claims incurred, resulting from insured events that have occurred as of
    the reporting date. The amount recognized is the liability known with
    certainty plus an accrual for a contingent liability recognized when an
    existing condition, situation, or set of circumstances involving
    uncertainty as to possible loss exists and the uncertainty is ultimately
    resolved when one or more future events occur or fail to occur, a future
    outflow or other sacrifice of resources is probable, and the future
    outflow or sacrifice of resources is measurable. Life insurance programs
    recognize a liability for future policy benefits in addition to the
    liability for unpaid claims incurred. (SFFAS 5, par. 104 & 105; OMB
    Circular No. A-136, p. 44, section II.4.3.4)
          125) Are liabilities for future
          benefits of whole life insurance
          policies reported and disclosed in
          accordance with private sector
          accounting standards (i.e., FASB
          Statement of Accounting Standards
          (SFAS) 60, 97, & 120; American
          Institute of Certified Public
          Accountants (AICPA) and Statement of
          Position (SOP) 95-1)? (SFFAS 5, par.
          117; OMB Circular No. A-136, p. 116,
          section II.4.10.19)
          126) Does the entity separately
          disclose the components^52 of the
          liability for future policy benefits
          of whole life insurance contracts
          along with a description of each
          amount and explanation of its
          projected use and any other potential
          uses? (SFFAS 5, par. 121; OMB
          Circular No. A-136, p. 116, section
          II.4.10.19)

    ^52 The net-level premium reserve for a death and endowment policy and the
    liability for terminal dividends.

              Commitments and Contingencies          Yes, No, or
                                                         N/A        Explanation
                    (Items 127 - 130)
    A loss contingency is an existing condition, situation, or set of
    circumstances involving uncertainty as to possible loss to an entity. The
    uncertainty will ultimately be resolved when one or more future events
    occur or fail to occur. A loss contingency is a liability when a past
    event or exchange transaction has occurred; a future outflow or other
    sacrifice of resources is probable; and the future outflow or sacrifice of
    resources is measurable.

    In addition to loss contingencies in SFFAS No. 5, the entity also
    discloses (1) an estimate of obligations related to canceled
    appropriations for which the reporting entity has a contractual commitment
    for payment, and (2) amounts for contractual arrangements that may require
    future financial obligations. Examples of claims or other contingencies
    include: (1) indemnity agreements -reimbursements due to licensees or
    contractors for losses incurred in support of federal activities; (2)
    claims against the federal government that are in process of judicial
    proceedings; (3) the unfunded portion of total liabilities to
    international organizations; and (4) litigation addressing claims for
    equity relief or non-monetary judgments whereby claimants are seeking
    specific actions by a federal agency. (SFFAS 5, par. 35 & 36, as amended
    by SFFAS 12, SFFAS 6, par. 85-111, TR No. 2; OMB Circular No. A-136, p.
    44, section II.4.3.4)
          127) When determining an estimated
          contingent liability, if no amount within
          a range of amounts is a better estimate
          than any other amount, does the entity
          disclose a minimum amount in the range
          with a description of the nature of the
          contingency? (SFFAS 5, par. 39)
          128) If any one of the conditions for
          recognizing a contingent liability is not
          met and there is at least a "reasonable
          possibility" ^53 that a loss or
          additional loss may be incurred, does the
          entity disclose the nature of the
          contingency^54 and one of the following

                  a) an estimate of the possible
                  liability, or
                  b) an estimate of the range of
                  the possible liability, or
                  c) a statement that such an
                  estimate cannot be made?

          (SFFAS 5, par. 36, 38, 40, & 41, as
          amended by SFFAS 12)
          129) If information about remote
          contingencies, or related to remote
          contingencies, is included in general
          purpose federal financial reports,^55 is
          the information labeled to avoid the
          misleading implication that there is more
          than a remote chance of a loss of that
          amount? (SFFAS 5, par. 42)
          130) Are the following commitments and
          contingencies disclosed

                  a) an estimate of obligations
                  related to canceled
                  appropriations for which the
                  reporting entity has a
                  contractual commitment for
                  payment, and
                  b) amounts for contractual
                  arrangements that may require
                  future financial obligations?

          (OMB Circular no. A-136, p. 116, section
          II.4.10.20)

    ^53 The chance of a future event occurring is less than "probable" but
    more than "remote."

    ^54 Examples of claims or other contingencies include (1) indemnity
    agreements-reimbursements due to licenses or contractors for losses
    incurred in support of federal activities; (2) adjudicated claims (i.e.,
    claims against the federal government that are in the process of judicial
    proceedings); and (3) commitments to international institutions-payment
    due to international institutions.

    ^55 An example of information related to a remote contingency would be the
    total face amount of insurance and guarantees in force.

                 Earmarked Funds (Items 131 - 133)            Yes, No, or N/A
    Earmarked funds are financed by specifically identified revenues, often
    supplemented by other financing sources, which remain available over time.
    These specifically identified revenues and other financing sources are
    required by statute to be used for designated activities, benefits or
    purposes, and are accounted for separately from the entity's general
    revenues. (SFFAS 27, par. 11; OMB Circular No. A-136 p.118, section
    II.4.10.21 )
          131) Is earmarked non-exchange and other financing
          sources, including appropriations, and net cost of
          operations shown separately on the Statement of
          Changes in Net Position? (SFFAS 27, par. 19)
          132) Does entity disclosure for each selected
          individual earmarked fund and in the aggregate for
          all remaining earmarked funds include

                  a) condensed information about assets and
                  liabilities showing investments in Treasury
                  securities, other assets, liabilities due
                  and payable, other liabilities, cumulative
                  results of operations and net position,
                  b) condensed information on gross cost,
                  exchange revenue, net cost, nonexchange
                  revenues and other financing sources, and
                  change in net position,
                  c) a description of each fund's purpose,
                  how the entity accounts for and reports the
                  fund, and its authority to use those
                  revenues and other financing sources,
                  d) 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 entity or the result of
                  intragovernmental flows, and
                  e) any change in legislation during or
                  subsequent to the reporting period and
                  before the issuance of the financial
                  statements that significantly changes the
                  purpose of the fund or that redirects a
                  material portion of the accumulated
                  balance?

          (SFFAS 27, par. 22-23; OMB Circular No. A-136, p.
          118, section II.4.10.21)
          133) Do total cumulative results of operations of
          all earmarked funds shown in the note disclosure
          agree with the cumulative results of operations of
          earmarked funds shown on the entity's Balance Sheet
          and the Statement of Changes in Net Position?

          (SFFAS 27, par. 25; OMB Circular No. A-136, p. 118,
          section II.4.10.21)

          Intragovernmental Costs and Exchange Revenue    Yes, No, or Explanation
                       (Items 134 - 138)                      N/A
    Intragovernmental gross costs and earned revenues, and public costs and
    earned revenues are disclosed. (OMB Circular No. A-136, p.47, section
    II.4.4.1)
          134) Are intragovernmental costs (exchange
          transactions made between two reporting
          entities within the federal government)
          disclosed separately from costs with the public
          (exchange transactions made between the
          reporting entity and a non-federal entity)?
          (OMB Circular No. A-136, p. 119, section
          II.4.10.22)
          135) Are intragovernmental exchanges revenue
          (exchange transactions made between two
          reporting entities within the federal
          government) disclosed separately from exchange
          revenue with the public (exchange transactions
          made between the reporting entity and a
          non-federal entity) for each program? (OMB
          Circular No. A-136, p. 119, section II.4.10.22)
          136) Is the definition criteria used to
          classify costs and/or revenues between
          intragovernmental and public disclosed? (OMB
          Circular No. A-136, p. 119, section II.4.10.22)
          137) Is an explanation included that
          intragovernmental expenses relate to the source
          of goods and services purchased by the
          reporting entity and not to the classification
          of related revenue? (OMB Circular No. A-136, p.
          119, section II.4.10.22)
          138) Is the classification of revenue and/or
          costs as intragovernmental or with the public
          determined on a transaction by transaction
          basis for disclosure? (OMB Circular No. A-136,
          p. 119, section II.4.10.22)

         Suborganization Program Costs/Program Costs by   Yes, No, or Explanation
                   Segment (Items 139 - 140)                  N/A
    A responsibility segment is a component of a reporting entity that is
    responsible for carrying out a mission, conducting a major line of
    activity, or producing one or a group of related products or services.
    (SFFAS 4, par. 78)
          139) Are supporting schedules of costs and
          revenue by major program and activity disclosed
          in the footnotes if not disclosed on the
          Statement of Net Cost? (OMB Circular No. A-136,
          p. 120, section II.4.10.23)
          140) Are supporting schedules of costs,
          revenues, and intra-entity eliminations by
          suborganization (segment) that support summary
          information in the Statement of Net Costs
          disclosed in the footnotes? (OMB Circular No.
          A-136, p. 120, section II.4.10.23)

        Cost of Stewardship PP&E (Items 141 - 142)   Yes, No, or    Explanation
                                                         N/A
                                Cost of Stewardship PP&E
    The cost of acquiring, constructing, improving, reconstructing, or
    renovating heritage assets (other than multi-use heritage assets), and the
    cost of acquiring stewardship land and any costs to prepare stewardship
    land for its intended use are recognized as a cost in the SNC in the
    period when it is incurred. (OMB Circular No. A-136, p. 121, section
    II.4.10.24)
          141) Are the costs of stewardship PP&E
          reported either separately in the
          Statement of Net Cost, or disclosed in
          the footnotes? (OMB Circular No. A-136,
          p. 121, section II.4.10.24)
            Stewardship PP&E Acquired Through Transfer, Donation, or Devise
    Heritage assets and stewardship land acquired through transfer, donation,
    or devise are not recognized as a cost in calculating net cost, but the
    fair value of the property is disclosed, if known and material. If the
    fair value is not known or reasonably estimable, information related to
    the type and quantity of assets received is disclosed. (OMB Circular No.
    A-136, p. 121, section II.4.10.25)
          142) For heritage assets and stewardship
          land acquired through transfer, donation,
          or devise, does the entity disclose

                  a) if the cost is known and
                  material, the fair value, or
                  b) if the fair value is not known
                  or reasonably estimable,
                  information related to the type
                  and quantity of assets received?

          (OMB Circular No. A-136, p. 121, section
          II.4.10.25)

                  Exchange Revenues (Item 143)            Yes, No, or Explanation
                                                              N/A
    Exchange (or earned) revenues arise when a government entity provides
    goods or services to the public or to another government entity for a
    price. (SFFAS 7, par. 30; OMB Circular No. A-136, p. 49, section II.4.4.4)
          143) Does a reporting entity that provides
          goods or services to the public or other
          government entity disclose

                  a) a pricing policy that differs from
                  the full cost or market pricing
                  guidance set forth in OMB Circular No.
                  A-25 and the possible effect on demand
                  and revenue if prices were raised to
                  reflect the market or full cost,
                  b) exchange transactions with the
                  public in which prices are set by law
                  or executive order and are not based
                  on full cost or market price, or the
                  possible effect on demand and revenue
                  if prices were raised to reflect the
                  market or full cost,
                  c) the nature of intragovernmental
                  exchange transactions in which goods
                  or services are provided free or at
                  less than full cost and the reasons
                  for differences between billing and
                  full cost, and
                  d) the full amount of any expected
                  loss when specific goods or services
                  are provided or made to order under a
                  contract and a loss is both probable
                  and measurable?

          (SFFAS 7, par. 46 & 47)

    Budgetary Resources Statement Disclosures (Items 144  Yes, No, Explanation
                              - 146)                          or N/A
          144) Does the entity disclose the amount of direct
          and reimbursable obligations incurred against
          amounts apportioned under category^56 "A," "B,"
          and "exempt from apportionment"? (OMB Circular No.
          A-136, p. 122, section II.4.10.28)
          145) Does the disclosure of the amount of direct
          and reimbursable obligations incurred against
          amounts apportioned under category "A," "B," and
          "exempt from apportionment" agree with

                  a) the aggregate of the related
                  information as reported on the entity's
                  year-end SF 133, and

                          b) the amounts reported under
                          direct and reimbursable
                          obligations incurred, reported on
                          the SBR?

          (OMB Circular No. A-136, p. 122, section
          II.4.10.28)
          146) Does entity disclosure of the status of
          budgetary resources include

                  a) available borrowing and contract
                  authority at the end of the period,
                  b) repayment requirements, financing
                  sources for repayment, and other terms of
                  borrowing authority used,
                  c) adjustments to "budgetary resources
                  available at the beginning of the year,"
                  during the reporting period, as well as an
                  explanation of the adjustments,
                  d) existence, purpose, and availability of
                  permanent, indefinite appropriations,
                  e) information about legal arrangements
                  affecting the use of unobligated balances
                  of budget authority, such as time limits,
                  purpose, and obligation limitations,
                  f) explanations of any material
                  differences between amounts reported in
                  the SBR and amounts reported in the Budget
                  of the United States Government,^57
                  g) a statement that the President's Budget
                  with actual numbers for the current fiscal
                  year has not yet been published, as well
                  as an explanation as to when it is
                  expected to be published and an indication
                  where it will be available,
                  h) the amount of budgetary resources
                  obligated for undelivered orders at the
                  end of the period, and
                  i) the amount of any capital infusion
                  received during the reporting period?

          (SFFAS 7, par. 79; OMB Circular No. A-136, pp.
          122-124, sections II.4.10.28-II.4.10.36)

    ^56 Apportionment categories are determined in accordance with guidance
    provided in OMB Circular No. A-11, Part 4, Instructions on Budget
    Execution.

    ^57 FASAB Technical Bulletin 2002-2 indicates disclosures when the entity
    issues financial statements for a given year before the Budget of the
    United  States Government for the same fiscal year is published.

                Financing Statement Disclosures           Yes, No, or
                                                              N/A     Explanation
                           (Item 147)
          147) Is the relationship between amounts
          reported as "liabilities not covered by
          budgetary resources" reported on the Balance
          Sheet and amounts reported as "components
          requiring or generating resources in future
          periods" on the Statement of Financing
          identified and explained in a note to the
          financial statements? (OMB Circular No. A-136,
          p. 124, section II.4.10.37)

    Custodial Activities Statement Disclosures (Items  Yes, No, or Explanation
                           148 - 153)                         N/A
          148) If custodial revenues are immaterial and
          incidental to the entity's primary mission and
          are not reported separately on the Statement of
          Custodial Activity, the sources and amounts of
          the collections and amounts to be distributed
          to others may be disclosed in a note. Does the
          entity disclose such collections? (OMB Circular
          No. A-136, p. 125, section II.4.10.39)
          149) Do entities that collect taxes and duties
          disclose in a note or narrative the

                  a) basis of accounting,
                  b) factors affecting the collectibility
                  and timing of taxes and other
                  nonexchange revenues, and
                  c) cash collections and refunds by tax
                  year and type of tax for the reporting
                  period?

          (SFFAS 7, par. 65.1 & 65.3; OMB Circular No.
          A-136, p. 125, section II.4.10.40)
          150) Does the collecting entity disclose and
          explain the

                  a) basis of accounting when application
                  of the general rule for recognizing
                  nonexchange revenue (i.e., specifically
                  identifiable, legally enforceable, and
                  reasonably estimable) results in a
                  modified cash basis of accounting,
                  b) specific potential accruals that are
                  not made as a result of using the
                  modified cash basis accounting,
                  c) practical and inherent limitations
                  affecting the accrual of taxes and
                  duties, and
                  d) use of accrual-based accounting, if
                  applicable?

          (SFFAS 7, par.48 & 64)
          151) If trust fund revenues are not recorded in
          accordance with applicable law, do the
          collecting and recipient entities disclose the
          reasons? (SFFAS 7, par. 66)
          152) If material, are accrual adjustments^58
          disclosed in the notes? (OMB Circular No.
          A-136, p. 77, section II.4.8.3)
          153) Are refunds of taxes or other non-exchange
          revenues disclosed by component in the notes?
          (OMB Circular No. A-136, p. 77, section
          II.4.8.3)

    ^58 Accrual adjustments, which modify the net of cash collections and
    refunds to determine the amount of revenue recognized, are the net
    increases or decreases during the reporting period in accounts receivable,
    allowance for uncollectible accounts, and accounts payable for refunds.

    Social Insurance Statement Disclosures (Items 154  Yes, No, or Explanation
                             - 157)                           N/A
          154) Are significant assumptions used in making
          estimates and projections disclosed? (SFFAS 17,
          par. 27 (4), SFFAS 26, par. 5; OMB Circular No.
          A-136, p. 125, section II.4.10.41)
          155) Does the fund balance at the valuation
          date disclose the accumulated excess of all
          past cash receipts, including interest on
          investments, over all past cash disbursements?
          (SFFAS 17, par. 27 (3) (h); OMB No. Circular
          A-136, p. 126, section II.4.10.41)
          156) Is there disclosure that the actuarial net
          present value of the excess of future scheduled
          expenditures paid to or on behalf of current
          participants is calculated by subtracting the
          actuarial present value of future contributions
          and tax income paid by and for current
          participants from the actuarial present value
          of the future scheduled expenditures? (SFFAS
          17, par. 27 (3) (i); OMB Circular No. A-136, p.
          126, section II.4.10.41)
          157) The underlying significant assumptions
          shall be included in the notes that are
          presented as an integral part of the basic
          financial statements. Other information
          required by SFFAS 17 - including the
          sensitivity analysis required in par. 27(4) for
          the component entity and 32(4) for the
          governmentwide entity - shall be presented as
          required supplementary information, except to
          the extent that the preparer elects to include
          some or all of that information in notes that
          are presented as an integral part of the basic
          financial statements. (SFFAS 26, par. 5)

          Dedicated Collections (Items 158 - 160)      Yes, No, or   Explanation
                                                           N/A
    Dedicated collections are funds held with the expectation that they will
    be held for and applied to the purposes for which the funds were
    dedicated. Such funds include all funds within the budget classified as
    trust funds, those funds within the budget that are classified as "special
    funds" but that are similar in nature to trust funds, and those funds
    (inside or outside the budget) that are fiduciary in nature. (SFFAS 7,
    par. 83; OMB Circular No. A-136, p. 126, section II.4.10.42)
          158) Are the receipts and expenditures of
          dedicated trust funds, "special funds," and
          fiduciary or deposit funds (both inside and
          outside the budget) that do not meet the
          definition of earmarked funds disclosed?
          (SFFAS 7, par. 83; OMB Circular No. A-136,
          pp. 126-127, section II.4.10.42)
          159) Is separate financial information
          about dedicated funds presented? (SFFAS 7,
          par. 84; OMB Circular No. A-136, p. 126,
          section II.4.10.42)
          160) Does entity disclosure for individual
          funds that account for dedicated
          collections include

                  a) a description of each fund's
                  purpose, how the administrative
                  entity accounts for and reports the
                  fund, and its authority to use
                  those collections,
                  b) the sources of revenue or other
                  financing for the period and an
                  explanation of the extent to which
                  they are inflows of resources to
                  the government or the result of
                  intragovernmental flows,
                  c) condensed information about
                  assets and liabilities showing
                  investments in Treasury securities,
                  other assets, liabilities due and
                  payable to beneficiaries, other
                  liabilities, and fund balance,
                  d) condensed information on net
                  cost and changes to fund balance
                  showing revenues by type (exchange
                  or nonexchange), program expenses,
                  other expenses, other financing
                  sources, and other changes in fund
                  balance, and
                  e) the amounts of any
                  revenues--other financing sources
                  or costs attributable to the fund
                  under accounting standards--that
                  are not legally allowable as
                  credits or charges to the fund?

          (SFFAS 7, par. 85; OMB Circular No. A-136,
          p. 127, section II.4.10.42)

            Restatements (Items 161 - 164)       Yes, No, or      Explanation
                                                     N/A
    Errors in financial statements result from mathematical mistakes, mistakes
    in the application of accounting principles, or oversight or misuse of
    facts that existed at the time the financial statements were prepared.
    When errors are discovered after the issuance of financial statements, and
    if the financial statements would be materially misstated absent
    correction of the errors, corrections are made as follows:

          (a)  If only the current period statements are presented, then the
          cumulative effect of correcting the error is reported as a prior period
          adjustment.
          (b)  If comparative financial statements are presented, then the error
          is corrected in the earliest affected period presented by correcting
          individual amounts on the financial statements. (SFFAS 21, par. 10)
          161) Does entity disclosure for
          restatement of financial statements
          due to material errors include

                  a) the nature of the error
                  and the reason for the
                  restatement,
                  b) the year(s) being
                  restated,
                  c) the financial statements
                  that are impacted,
                  d) amounts being restated,
                  and
                  e) effect of the restatement
                  on the financial statements
                  as a whole (e.g., change in
                  overall net position and
                  change in audit opinion)?

          (SFFAS 21, par. 10(c); OMB Circular
          No. A-136, p. 127, section II.4.10.3
          162) Does the entity discuss the
          actions management took after
          discovering the error? (OMB Circular
          No. A-136, p. 127, section II.4.10.3)
    Restatements (Items 161 - 164)             Yes, No, or N/A   Explanation
          163) If the entity discovered
          misstatements in a prior period with
          a material effect on current or prior
          period financial statements, did the
          entity restate its financial
          statements?

          Did the entity determine the material
          effect based on accounting
          materiality which is often less than
          the auditor's planning materiality
          (defined as 3% of the materiality
          base in FAM 230.11) as it includes
          any qualitative factors?

          (SFFAS 21, par 2-6 & 11)
          164) Although immaterial to the
          entity's consolidated financial
          statements, the entity may disclose
          the restatement of a component
          entity's financial statement in a
          note to its consolidated financial
          statements. Did the entity disclose a
          component restatement?

          (SFFAS 21 par. 11)

              Fiduciary Activities (Item 165-178)         Yes, No, or Explanation
                                                              N/A
    In a fiduciary activity a federal entity collects or receives and
    subsequently manages, protects, accounts for, invests, and/or disposes of
    cash or other assets in which non-federal individuals or entities (or
    "non-federal parties") have an ownership interest that the federal
    government upholds. (SFFAS 31, par. 10)

    Note: SFFAS 31 is effective for periods beginning after September 30,
    2008. Earlier adoption is prohibited.
          165) Is a statement included to indicate that
          fiduciary assets are not assets of the entity
          and are not recognized on the balance sheet?
          (SFFAS 31, par. 17)
          166) Does entity disclosure for fiduciary
          activities describe

                  a) the fiduciary relationship (e.g.,
                  the applicable legal authority),
                  b) the objectives of the fiduciary
                  activity, and
                  c) a general description of the
                  beneficial owners or class of owners?

          (SFFAS 31, par. 18a)
          167) Is a Schedule of Fiduciary Activity for
          all periods included that discloses

                  a) beginning balance of net assets,
                  b) inflows from the fiduciary
                  activities by category (e.g.,
                  contributions, investment earnings) and
                  outflows by category (e.g., benefit
                  payments, refunds, administrative
                  expenses),
                  c) change in net assets, and
                  d) ending balance of net assets?

          (SFFAS 31, par. 18b)
          168) Does a Schedule of Fiduciary Net Assets
          disclose the current and prior period ending
          balances for

                  a) cash and any other assets by
                  category (e.g., receivables,
                  investments),
                  b) liabilities by category (e.g.,
                  accounts payable, refunds payable), and
                  c) significant changes from the prior
                  period?

          (SFFAS 31, par. 18c)
          169) Does entity disclosure for non-monetary
          fiduciary assets describe

                  a) composition of the assets,
                  b) the method(s) of valuation, and

                          c) changes from prior period
                          accounting methods?

                  (SFFAS 31, par. 18c)
          170) Are non-valued fiduciary assets,^59
          disclosed in a Schedule of Changes in
          Non-Valued Fiduciary Assets, which includes

                  a) a description of non-valued
                  fiduciary assets,
                  b) beginning quantity,
                  c) quantity received,
                  d) quantity disposed of,
                  e) net increase/decrease in non-valued,
                  fiduciary assets, and
                  f) ending total quantity?

          (SFFAS 31, par. 18d)
          171) If separate audited financial statements
          are issued for an individual fiduciary activity
          that is presented individually in accordance
          with the acceptable criteria,^60 does
          disclosure include

                  a) the basis of accounting used and
                  auditor's opinion on the current or
                  most recent financial statements,
                  b) the reason(s) stated by the auditors
                  if the auditor's opinion was not
                  unqualified, and a reference to the
                  audit opinion for further information,
                  and
                  c) how the reader can obtain a copy of
                  the financial statements and the audit
                  opinion thereon?

          (SFFAS 31, par. 18e & 22)
          172) If the separate audited financial
          statements for an individual fiduciary activity
          are prepared with a fiscal year-end other than
          September 30, is information provided for the
          fiduciary activity's most recent fiscal year?
          (SFFAS 31, par. 18e)
          173) If more than one entity administers a
          fiduciary activity, and the separate portions
          of the activity can be clearly identified with
          a responsible entity, does each entity disclose
          its portion, including the identification of
          the other entities that administer the
          activity? (SFFAS 31, par. 19)
          174) If separate portions of the activity
          cannot be identified, does the entity with
          program management responsibility disclose the
          fiduciary activity? (SFFAS 31, par. 19)
          175) For entities with several distinct
          fiduciary activities, is a summary of financial
          information provided for each fiduciary
          activity presented individually? (SFFAS 31,
          par. 18 & 20)
          176) Does the entity consider both quantitative
          and qualitative criteria^61 when selecting
          fiduciary activities to be presented
          individually? (SFFAS 31, par. 21)
          177) Is prior year information not displayed in
          the initial year of implementation? (SFFAS 31,
          par. 23)
          178) In the reporting periods following the
          initial year of implementation, are prior
          period amounts disclosed? (SFFAS 31, par. 23)

    ^59 Nonvalued fiduciary assets are fiduciary assets for which required
    disclosure does not include dollar values. Non-valued fiduciary assets may
    include land held in trust.

    ^60 Acceptable criteria include: quantitative factors such as the
    percentage of the reporting entity's fiduciary net assets or inflows; and
    qualitative factors such as whether a fiduciary activity is of immediate
    concern to beneficiaries, whether it is politically sensitive or
    controversial, whether it is accumulating large balances, or whether the
    information provided in the fiduciary note disclosure would be the primary
    source of financial information for the public.

    ^61 Acceptable criteria include: quantitative factors such as the
    percentage of the reporting entity's fiduciary net assets or inflows; and
    qualitative factors such as whether a fiduciary activity is of immediate
    concern to beneficiaries, whether it is politically sensitive or
    controversial, whether it is accumulating large balances, or whether the
    information provided in the fiduciary note disclosure would be the primary
    source of financial information for the public.

      Section VI - Required Supplementary Stewardship Information

    Stewardship reporting involves the federal government reporting on its
    stewardship over certain resources entrusted to it and certain
    responsibilities assumed by it that cannot be measured in traditional
    financial reports. These resources and responsibilities do not meet the
    criteria for assets and liabilities that are required to be reported in
    the financial statements, but are important to understanding the
    operations and financial condition of the federal government.

    The questions related to the unaudited required supplementary stewardship
    information (RSSI) are presented under one caption of stewardship
    investments. The question numbers related to the caption for each type of
    investment are identified below.

    Stewardship Investments       Question Numbers
    Non-federal Physical Property      1 - 5
    Human Capital                      6 - 10
    Research and Development          11 - 16

          Stewardship Investments (Items 1 - 16)     Yes, No, or    Explanation
                                                         N/A
    Stewardship investments are substantial investments made by the Federal
    Government for the benefit of the nation but are not physical assets owned
    by the Federal Government. When incurred, they are treated as expenses in
    determining the net cost of operations. However, these items merit special
    treatment so that users of Federal financial reports know the extent of
    investments that are made for long-term benefit. Such investments are
    incurred for: (1) federally-financed but not federally-owned physical
    property (Non-federal Physical Property); (2) certain education and
    training programs (Human Capital); and (3) federally-financed research and
    development (Research and Development) (OMB Circular No. A-136, p. 129,
    section II.4.11.2)
                      Non-federal Physical Property (Items 1 - 5)
          1) Does RSSI include the full cost of the
          investment, a narrative description, of
          the federal property transferred to state
          and local governments for the year being
          reported on, as well as at least the
          preceding 4 years? (SFFAS 8, par. 87; OMB
          Circular No. A-136, p. 129, section
          II.4.11.3 & p. 131, section II.4.11.6)
          2) Does the description of major programs
          involving federal investments include a
          description of programs or policies under
          which non-cash assets are transferred to
          state and local governments? (SFFAS 8,
          par. 87; OMB Circular No. A-136, p. 131,
          section II.4.11.6)
          3) Is expense or outlay data for
          investments in nonfederal physical
          property reported at a meaningful
          category or level (e.g., by major
          program/department)? (SFFAS 8, par. 87)
          4) If expense data for the purchase of
          PP&E for state and local governments for
          the year being reported on and for the
          preceding 4 years is not available, does
          the entity report outlay data for these
          periods? (SFFAS 8, par. 87; OMB Circular
          No. A-136, p. 131, section II.4.11.6)
          5) If neither historical expense nor
          outlay data is available on stewardship
          investments for the year being reported
          on and the preceding 4 years, does the
          entity report expense data for the
          current reporting year and such other
          years, as available? (SFFAS 8, par. 87;
          OMB Circular No. A-136, p. 131, section
          II.4.11.6)
                              Human Capital (Items 6 - 10)
          6) Does the RSSI include the full cost
          and a narrative description of the
          investment made in human capital for the
          year being reported on, as well as the
          preceding 4 years? (SFFAS 8, par. 94; OMB
          Circular No. A-136, p. 129, section
          II.4.11.3, and p. 131, section II.4.11.6)
          7) Is a narrative description of the
          major education and training programs
          considered to be federal investments
          included? (SFFAS 8, par. 94; OMB Circular
          No. A-136, p. 131, section II.4.11.6)
          8) If expense data for the investments in
          human capital for the year being reported
          and for the preceding 4 years is not
          available, does the entity report outlay
          data? (SFFAS 8, par. 94; OMB Circular No.
          A-136, p. 131, section II.4.11.6)
          9) If neither historical expense nor
          outlay data for the investments in human
          capital is available for the year being
          reported on and the preceding 4 years,
          does the entity report expense data for
          the current reporting year and such other
          years? (SFFAS 8, par. 94; OMB Circular
          No. A-136, p. 131, section II.4.11.6)
          10) Is expense or outlay data for
          investments in human capital reported at
          a meaningful category or level (e.g., by
          major program or department)? (SFFAS 8,
          par. 94)
                        Research and Development (Items 11 - 16)
          11) Does the RSSI include the full cost,
          including a narrative description, of the
          investment made in major research and
          development programs for the year being
          reported on, as well as the preceding 4
          years? (SFFAS 8, par. 100; OMB Circular
          No. A-136, p. 129, section II.4.11.3, and
          p. 131, section II.4.11.6)
          12) Is a narrative description of the
          major research and development programs
          included? (SFFAS 8, par. 100; OMB
          Circular No. A-136, p. 131, section
          II.4.11.6)
          13) If expense data for the investments
          in research and development for the year
          being reported and for the preceding 4
          years are not available, does the entity
          report outlay data, if available? (SFFAS
          8, par. 100; OMB Circular No. A-136, p.
          131, section II.4.11.6)
          14) If neither historical expense nor
          outlay data are available for the year
          being reported on and the preceding 4
          years, does the entity report expense
          data for the current year and such other
          years as available? (SFFAS 8, par. 100;
          OMB Circular No. A-136, p. 131, section
          II.4.11.6)
          15) Is expense or outlay data for
          investments in research and development
          reported at a meaningful category or
          level (e.g., by major
          program/department)? (SFFAS 8, par 100)
          16) Does the RSSI include the amounts of
          significant contributions from state,
          local, private, and other sources to its
          investments in nonfederal physical
          property, human capital, and research and
          development?^62 (SFFAS 8, par. 88, 95, &
          101)

    ^62This reporting is encouraged, but is not required.

      Section VII - Required Supplementary Information

    The questions related to the unaudited required supplementary information
    (RSI) requirements are presented under six captions. The question numbers
    related to each caption are identified below.

    Caption                          Question Numbers
    Stewardship PP&E                      1 - 5
    Deferred Maintenance                  6 - 9
    Social Insurance                     10 - 26
    Statement of Budgetary Resources     27 - 28
    Statement of Custodial Activity      29 - 30
    Risk Assumed Information             31 - 33

              Stewardship PP&E (Items 1 - 5)         Yes, No, or    Explanation
                                                         N/A
    SFFAS 29, Heritage Assets and Stewardship Land, reclassifies all heritage
    assets and stewardship land information as basic except for condition
    information, which is classified as RSI, which may be reported with the
    deferred maintenance information. The reclassification as basic of the
    heritage assets and stewardship land information is being phased. The
    phase-in approach provides for full implementation for reporting periods
    beginning after September 30, 2008. (OMB Circular No. A-136, p. 129,
    section II.4.12.2)
          1) Is a concise description of each major
          category of heritage asset presented?
          (SFFAS 29, par. 25 & 40; OMB Circular No.
          A-136, p. 132, section II.4.12.2)
          2) Is physical unit information for the
          end of the reporting period for
          stewardship PP&E presented? (SFFAS 29,
          par. 25 & 40; OMB Circular No. A-136, p.
          132, section II.4.12.2)
          3) Are the number of physical units
          acquired and withdrawn for stewardship
          PP&E during the year reported by major
          category? (SFFAS 29, par. 25 & 40; OMB
          Circular No. A-136, p. 132, section
          II.4.12.2)
          4) Is a description of the major methods
          of acquisition and withdrawal of
          stewardship PP&E during the reporting
          period presented, including the number of
          physical units, by major category, of
          transfers between federal entities and
          the number of physical units acquired
          through donation or devise? (SFFAS 29,
          par. 25 & 40; OMB Circular No. A-136, p.
          132, section II.4.12.2)
          5) Is the condition of the stewardship
          PP&E reported in a note if not included
          with the deferred maintenance
          information? (SFFAS 29, par. 26 & 41; OMB
          Circular No. A-136, p. 132, section
          II.4.12.2)

               Deferred Maintenance (Items 6 - 9)         Yes, No, or Explanation
                                                              N/A
    Maintenance is the act of keeping fixed assets in acceptable condition.
    Maintenance includes preventive maintenance, normal repairs, replacement
    of parts and structural components, and other activities needed to
    preserve the asset so that it continues to provide acceptable services and
    achieves its expected life.

    Maintenance excludes activities aimed at expanding the capacity of an
    asset or otherwise upgrading it to serve needs different from, or
    significantly greater than, originally intended.

    Deferred maintenance is maintenance that was not performed when it should
    have been, or was scheduled to be, and that, therefore, is put off or
    delayed for a future period. (SFFAS 6, par. 77 & 78)
          6) Does the entity report for each major
          category of its PP&E (i.e., general PP&E,
          heritage assets, and stewardship land) the

                  a) identity (e.g., building, equipment,
                  land) of each major class of asset for
                  which maintenance was deferred, and
                  b) method of measuring deferred
                  maintenance for each major class of
                  asset?

          (SFFAS 6, par. 83; OMB Circular No. A-136, p.
          133, section II.4.12.3)
    Amounts reported for deferred maintenance may be measured using condition
    assessment surveys or life-cycle cost forecasts.

    Condition assessment surveys are periodic inspections of PP&E, based on
    generally accepted and consistently applied methods, to determine PP&E's
    current condition and the estimated cost to correct any deficiencies.
    (SFFAS 6, par. 81)

    Life-cycle costing is an acquisition or procurement technique that
    considers operating, maintenance, and other costs in addition to the
    acquisition cost of assets. (SFFAS 6, par. 82)
          7) If the condition assessment survey method is
          used to measure deferred maintenance, does each
          major class of PP&E in RSI disclose

                  a) a description of requirements or
                  standards for acceptable operating
                  condition,
                  b) any changes in the condition
                  requirements or standards, and
                  c) asset condition and a range estimate
                  of the dollar amount of maintenance
                  needed to return it to its acceptable
                  operating condition?

          (SFFAS 6, par. 83)
          8) If the total life cycle cost method is used
          to measure deferred maintenance, does each
          major class of PP&E disclose

                  a) the original date of the maintenance
                  forecast and an explanation for any
                  changes to the forecast,
                  b) prior-year balance of the cumulative
                  deferred maintenance amount,
                  c) 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,
                  d) the dollar amount of maintenance
                  actually performed during the period,
                  e) the difference between the forecast
                  and actual maintenance,
                  f) any adjustments to the scheduled
                  amounts deemed necessary by the
                  managers of the PP&E, and
                  g) the ending cumulative balance for
                  the reporting period for each major
                  class of asset experiencing deferred
                  maintenance?

          (SFFAS 6, par. 83)
          9) If management elects to break out deferred
          maintenance by critical and noncritical amounts
          needed to bring each class of asset to its
          acceptable operating condition, does it also
          include its definition of these categories?
          (SFFAS 6, par. 84; OMB Circular No. A-136, p.
          133, section II.4.12.3)

              Social Insurance (Items 10 - 26)          Yes, No, or  Explanation
                                                            N/A
    Reporting on stewardship responsibilities aids in assessing the federal
    government's financial condition and the sufficiency of future budgetary
    resources to sustain public services and meet obligations as they become
    due. Supplementary information for social insurance programs is reported
    to address fundamental questions about the current and future financial
    condition of these programs. Information disclosed for social insurance
    programs is intended to facilitate an assessment of the long-term
    sustainability of the program as well as the ability of the program to
    raise resources from future program participants to pay for benefits to
    present participants. (OMB Circular No. A-136, p. 129, section II.4.12.4)
          10) Is a clear and concise description of
          the program, including how its financed, how
          benefits are calculated, and its financial
          and actuarial status included in RSI? (SFFAS
          17, par. 24; OMB Circular No. A-136, p. 135,
          section II.4.12.4)
          11) Does this description include

                  a) discussion of the long-term
                  sustainability and financial
                  condition of the program, and
                  b) an illustration and explanation
                  of the long-term trends revealed in
                  the data?

          (SFFAS 17, par. 24)
          12) Are statutory or other material changes,
          and implications thereof, affecting the
          program after the current fiscal year
          described? (SFFAS 17, par. 24)
          13) Does information on the financial and
          actuarial status of the social insurance
          program(s) include projections of cash flows
          during a projection period sufficient to
          illustrate long-term sustainability and show
          the annual cash flows in nominal dollars for
          current and future participants? (SFFAS 17,
          par. 27 (1); OMB Circular No. A-136, p. 134,
          section II.4.12.4)
          14) Are the actuarial projections of cash
          flow amounts reported for at least every
          fifth year in the projection period? (SFFAS
          17, par. 27 (1) (a))
          15) Does the cash flow information show

                  a) total cash inflow from all
                  sources (i.e., by and on behalf of
                  participants) less net interest on
                  intragovernmental borrowing and
                  lending, and
                  b) total cash outflow?

          (SFFAS 17, par. 27 (1) (a))
          16) Does the narrative accompanying the cash
          flow data include identification of any year
          or years during the projection period when
          cash outflow exceeds cash inflow, with and
          without interest on intragovernmental
          borrowing or lending (the "cross-over
          points")? (SFFAS 17, par. 27 (1) (a))
          17) Does the narrative provide an
          explanation of the significance of the cash
          flow "cross-over points" where cash outflows
          begin exceeding cash inflows? (SFFAS 17,
          par. 27 (1) (a))
          18) Do the cash flow projections (net of
          interest on intragovernmental
          borrowing/lending) for Social Security
          (OASDI) and Medicare Part A (HI) include an
          estimate of cash flows as a percentage of
          taxable payroll? (SFFAS 17, par. 27 (1) (b))
          19) Do the cash flow projections (net of
          interest on intragovernmental
          borrowing/lending) for OASDI, HI, and
          Medicare Parts B and D (SMI) include an
          estimate of cash flows as a percentage of
          gross domestic product? (SFFAS 17, par. 27
          (1) (b))
          20) For OASDI and HI programs, does the
          entity's cash flow information show its
          estimate of the ratio of the number of
          contributors to the number of beneficiaries
          during the same projection period as for
          cash flow projections (commonly called the
          "dependency ratio")? (SFFAS 17, par. 27 (2);
          OMB Circular No. A-136, p. 135, section
          II.4.12.4)
          21) Is the ratio of contributors to
          beneficiaries for OASDI and HI reported for
          the beginning and end of the projection
          period? (SFFAS 17, par. 27 (2))
          22) For all social insurance programs except
          UI, does the responsible entity illustrate
          the sensitivity of the projections of cash
          flows and actuarial present values to
          changes in the most significant individual
          assumptions? (SFFAS 17, par. 27 (4) (a),
          SFFAS 26, par. 5; OMB Circular No. A-136, p.
          135, section II.4.12.4)
          23) Do the Social Security and Medicare
          programs analyze assumptions regarding
          factors for

                  a) birth and death rates,
                  b) net immigration,
                  c) real wage differential,^63 and
                  d) real interest rate?

          (SFFAS 17, par. 27 (4) (a))
          24) Are the health care cost factors and
          their trend analyzed for the Medicare
          program? (SFFAS 17, par. 27 (4) (a))
          25) Does the sensitivity analysis for UI
          programs show the effects of increasing the
          unemployment rate

                  a) by approximately one percentage
                  point, and
                  b) to a level sufficient enough to
                  put stress on the system (e.g., to
                  simulate the largest recession
                  occurring within the last 25 years)?

          (SFFAS 17, par. 27 (4) (b), SFFAS 26, par.
          5; OMB Circular No. A-136, p. 135, section
          II.4.12.4)
          26) Does information on the UI program
          provide a state-by-state analysis
          illustrating the relative solvency of
          individual state programs, including the
          ratio of each state's current accumulated
          fund balance to a year's projected benefit
          payments based on the highest level of
          annual benefit payments experienced by that
          state over the last 20 years? (SFFAS 17,
          par. 27 (5); OMB Circular A-136, p. 135,
          section II.4.12.4)

    ^63 The real-wage differential is the difference between the annual
    percentage increase in wages in covered employment and the inflation rate,
    as measured by the CPI.

               Statement of Budgetary Resources          Yes, No, or
                                                             N/A      Explanation
                        (Items 27 - 28)
    Budgetary information aggregated for purposes of the SBR is disaggregated
    for each of the reporting entity's major budget accounts and presented as
    RSI. (OMB Circular No. A-136, p. 129, section II.4.12.5)
          27) Is budgetary information disaggregated for
          each of the reporting entity's major budget
          accounts and presented as RSI? (SFFAS 7, par.
          78; OMB Circular No. A-136, p. 135, section
          II.4.12.5)
          28) Do the major accounts and the aggregate of
          small budget accounts, in total, agree with
          the amounts reported on the face of the SBR?
          (OMB Circular No. A-136, p. 135, section
          II.4.12.5)

                Statement of Custodial Activity           Yes, No, or
                                                              N/A     Explanation
                        (Items 29 - 30)
    Entities that collect taxes and duties provide information on potential
    collections and custodial responsibilities as RSI. (OMB Circular No.
    A-136, p. 129, section II.4.12.6)
          29) Do entities that collect taxes and duties
          provide RSI relating to their potential revenue
          and custodial responsibilities that includes

                  a) the estimated realizable value, as
                  of the end of the reporting period, of
                  compliance assessments and, if
                  reasonably estimable, pre-assessment
                  work in process, based on management's
                  best estimate that is appropriately
                  identified as to their reliability,
                  b) other claims for refunds not yet
                  accrued but likely to be paid when
                  administrative action is complete,
                  based on management's best estimates,
                  c) amount of assessments written-off
                  (i.e., no further collection potential)
                  that continues to be statutorily
                  collectable, and
                  d) amounts by which trust funds may be
                  overfunded or underfunded in comparison
                  with the requirements of the law?

          (SFFAS 7, par. 67; OMB Circular No. A-136, pp.
          135-136, section II.4.12.6)
          30) If the entity receiving funds from the
          collecting entity is itself a trust fund, does
          it provide as supplementary information amounts
          by which related trust funds may be overfunded
          or underfunded in comparison with the
          requirements of the law? (SFFAS 7, par. 68; OMB
          Circular No. A-136, p. 136, section II.4.12.6)

            Risk Assumed Information (Items 31 - 33)       Yes, No or Explanation
                                                              N/A
    Risk-assumed information is generally measured by the present value of
    unpaid expected losses net of associated premiums based on the risk
    inherent in the insurance or guarantee coverage in force. (SFFAS 5, par.
    105 & 106; OMB Circular No. A-136, p. 136, section II.4.12.7)
          31) Does the entity include as RSI the current
          amount and periodic changes of "risk assumed"
          arising from insurance and guarantee programs?
          (SFFAS 5, par. 105, 106, 110; SFFAS 25, par. 2;
          OMB Circular No. A-136, p. 136, section
          II.4.12.7)
          32) Does the entity also report under RSI the
          indicators of the range of uncertainty around
          insurance-related estimates and sensitivity of
          the estimates to changes in major assumptions?
          (SFFAS 5, par. 114; SFFAS 25, par.4)
          33) Does the entity report under RSI the major
          assumptions and "risks assumed" (i.e., the
          present value of unpaid expected losses net of
          associated premiums based on risk inherent in
          the insurance or guarantee coverage) for all
          sponsored insurance programs (except for social
          insurance, life insurance, and loan guarantee
          programs)? (SFFAS 5, par. 105 & 106; SFFAS 25,
          par. 4)

      Section VIII - Other Accompanying Information

    The questions related to the unaudited other accompanying information
    (OAI) requirements are presented under six captions. The question numbers
    related to each caption are identified below.

    Caption                                            Question Numbers
    Revenue Forgone                                           1
    Tax Burden/Tax Gap                                        2
    Tax Expenditures with Directed Flow of Resources          3
    Management Challenges                                     4
    Improper Payments Information Act (IPIA)                  5
    Other Agency-specific Statutorily Required Reports        6

                  Other Accompanying Information             Yes, No,
                                                              or N/A  Explanation
                           (Items 1 - 6)
    Other Accompanying Information includes such items as revenue foregone,
    tax burden/tax gap, tax expenditure with directed flow of resources, and
    management challenges. (OMB Circular No. A-136, p. 14, section II.1.2)
                                    Revenue Foregone
          1) Does the entity disclose differences between
          the prices it charges in exchange transactions and
          full cost or market price?

          If so, does the entity provide an estimate of the
          amount of revenue foregone and explain whether,
          and to what extent, the quantity demanded was
          assumed to change as a result of a difference in
          price?

          (OMB Circular No. A-136, p. 137, section II.5.2)
                                   Tax Burden/Tax Gap
          2) Does the tax collecting entity present

                  a) a perspective on the income tax burden
                  such as a summary of the latest available
                  information on the income tax and on
                  related income, deductions, exemptions,
                  and credits for individuals by income
                  level and for corporations by value of
                  assets, and
                  b) available information on the size of
                  the tax gap, including any relevant
                  estimates of the annual tax gap that
                  become available as a result of federal
                  surveys or studies?

          (SFFAS 7, par. 69.1 & 69.2; OMB Circular No.
          A-136, p. 137, section II.5.3)
                    Tax Expenditures with Directed Flow of Resources
          3) Does the entity having tax expenditures with a
          directed flow of resources disclose information on

                  a) tax expenditures relevant to entity
                  performance, which is appropriately
                  described, explained, and qualified, and
                  b) directed flows of resources which are
                  appropriately described, explained, and
                  qualified?

          (SFFAS 7, par. 69.3 & 69.4; OMB Circular No.
          A-136, p. 138, section II.5.4)
                                 Management Challenges
          4) Does the PAR include

                  a) a statement prepared by the entity's
                  Inspector General (IG) summarizing what
                  the IG considers to be the most serious
                  management and performance challenges
                  facing the entity and briefly assesses the
                  entity's progress in addressing those
                  challenges, and
                  b) the entity head's response to IG's
                  management challenges statement?

          (OMB Circular No. A-136, p. 138, section II.5.5)
                   Improper Payments Information Act (IPIA) Reporting
          5) Does the entity disclose for IPIA

                  a) description of the risk assessment(s),
                  performed subsequent to completing its
                  full program inventory, including a list
                  of the risk-susceptible programs (i.e.,
                  programs that have a significant risk of
                  improper payments) identified through its
                  risk assessments and the programs
                  previously identified in the former
                  Section 57 of OMB Circular No. A-11,
                  b) description of the statistical sampling
                  process conducted to estimate the improper
                  payment rate for each program identified,
                  c) description of corrective action plans
                  for:

                          i) reducing the estimated rate of
                          improper payments, including what
                          is seen as the cause(s) of errors,
                          corresponding steps necessary to
                          prevent future occurrences, and
                          efforts to prevent such
                          occurrences, and
                          ii) grant-making agencies with
                          risk susceptible grant programs,
                          including a discussion of what the
                          entity has accomplished in
                          stewardship of funds past the
                          primary recipient, status of
                          projects, and results of reviews.

                  d) table that includes

                          i) all risk susceptible programs,
                          ii) the date by which a
                          measurement is expected where no
                          measurement is provided,

                          iii) baseline measurement year,
                          iv) separation of amounts for
                          newly established measurement
                          components and previously
                          established measurement
                          components,
                          v) outlay estimates for the
                          current plus 3 years,
                          vi) current year activity but if
                          not feasible, then prior year
                          activity, and
                          vii) future year outlay estimates
                          (current year plus 3 years) should
                          match the outlay estimates for
                          those years as reported in the
                          most recent President's Budget.

                  e) discussion of recovery auditing effort,
                  if applicable, to include

                          i) any contract types excluded
                          from review and the justification
                          for doing so, and
                          ii) actions taken to recoup
                          improper payments, business
                          process changes, and internal
                          controls instituted and/or
                          strengthened to prevent further
                          occurrences.

                  f) table which includes

                          i) entity component,
                          ii) amount subject to review for
                          current year reporting,
                          iii) actual amount reviewed and
                          reported,
                          iv) amounts identified for
                          recovery,
                          v) amounts recovered in the
                          current year, and
                          vi) amounts recovered in prior
                          years.

                  g) description of the steps the entity has
                  taken and plans to take (including time
                  line) to reduce and recover improper
                  payments,
                  h) description of whether the entity

                          i) has the information systems and
                          infrastructure it needs to reduce
                          improper payments, or
                          ii) a description of the resources
                          requested in the most recent
                          budget submission to obtain the
                          necessary information systems and
                          infrastructure.

                  i) description of

                  i) statutory or regulatory barriers that
                  may limit the entity's corrective actions
                  in reducing improper payments, and

                  ii) actions taken by the entity to
                  mitigate the barriers' effects, and

                  j) additional comments on overall efforts,
                  specific programs, best practices, or
                  common challenges identified, as a result
                  of IPIA implementation?

          (OMB Circular No. A-136, pp. 138-141, section
          II.5.6)
                   Other Agency-specific Statutorily Required Reports
          6) Does the entity disclose other agency-specific
          statutorily required reports pertaining to
          financial or performance management based on
          consultation with OMB and the Congress? (OMB
          Circular No. A-136, p. 142, section II.5.7)

                         [This page intentionally left blank.]

    June 29, 2007

    TO AUDIT OFFICIALS, AGENCY CFOS, AND OTHERS INTERESTED IN

    FEDERAL FINANCIAL AUDITING, ACCOUNTING, AND REPORTING

    This letter transmits an exposure draft of Volume III of the Government
    Accountability Office (GAO) and the President's Council on Integrity and
    Efficiency (PCIE) Financial Audit Manual (FAM) for your review and
    comment. GAO and PCIE issued the joint FAM in July 2001. The FAM presents
    a methodology to perform financial statement audits of federal entities in
    accordance with professional standards. It is now time to update the FAM
    for significant changes that have occurred in auditing financial
    statements in the federal government since the last major revisions to the
    FAM were issued in July 2004.

    To help the FAM continue to meet the needs of the federal audit community
    and the public it serves, GAO and the PCIE created a joint FAM Working
    Group. The Group is comprised of auditors from GAO and several Offices of
    the Inspectors General experienced in conducting audits of federal entity
    financial statements. Through a collaborative effort, the FAM Working
    Group has prepared an exposure draft of a new FAM Volume III that contains
    accounting, reporting, and disclosure checklists.

    The checklists are intended to assist federal entities and their auditors
    in documenting financial statement conformity with professional standards.
    We invite your comments on the accompanying exposure draft of FAM Volume
    III. We are also working on revisions to FAM Volumes I and II, which
    contain the audit methodology. We plan to issue exposure drafts for public
    comment on these volumes later this year.

    The revisions to the FAM are primarily due to changes in (1) professional
    auditing and attestation standards of the Auditing Standards Board of the
    American Institute of Certified Public Accountants (AICPA); (2) GAO's
    Government Auditing Standards; (3) Office of Management and Budget (OMB)
    audit and reporting guidance; (4) Federal Accounting Standards Advisory
    Board (FASAB) accounting standards; and (5) laws and regulations.

    Summary of Major Revisions and Improvements for FAM Volume III

    The exposure draft of FAM Volume III incorporates FASAB accounting
    concepts and standards issued through May 31, 2007, including new
    requirements in accounting, reporting, and disclosure for social
    insurance, heritage assets and stewardship land, and earmarked funds. It
    also includes financial reporting guidance provided by OMB Circular No.
    A-136, Financial Reporting Requirements, (July 24, 2006).^1 Additionally,
    FAM Volume III has been revised to improve efficiency and includes two
    checklists as follows:

    FAM 2010 - Federal Accounting Checklist

    FAM 2020 - Federal Reporting and Disclosure Checklist

    These checklists are tools that may be used by entities and auditors to
    document conformity with U.S. generally accepted accounting principles
    (U.S. GAAP). The use of these checklists is a policy decision to be made
    by each organization. However, auditors should document the alternative
    means for determining whether the entity's financial statements conform
    with U.S. GAAP. Major changes to improve efficiency are:

               o Two checklists have been created to spread completion and review
               work over the entire audit period, rather than performing all of
               this work at year end. Previously, FAM 1050 included all of this
               information in one checklist that created a difficult process to
               complete at the end of the audit. The new FAM 2010 contains
               questions on federal accounting that entities may complete during
               the year and auditors may review as part of interim audit work.
               The new FAM 2020 contains questions on year end reporting and
               disclosure that entities may complete when they prepare their
               annual financial statements and auditors may review during the
               reporting phase of the audit.
               o Only those sections of the detailed checklists that are
               applicable to the entity's financial statements need detailed
               completion. Those areas that are not applicable or not significant
               are simply documented one time, thus eliminating the need to read
               and evaluate each individual question.
               o The checklists are better organized, with accounting issues
               grouped by line item and reporting and disclosure issues grouped
               by statement, footnote, and other required supplemental
               disclosures to reduce overlap and duplication.

    When issued in final form, FAM Volume III will supersede FAM 1050,
    Checklist for Federal Accounting, Reporting, and Disclosures (July 2004).
    We anticipate that, when finalized, FAM Volume III will be available for
    use in preparing and auditing financial statements for the fiscal year
    ended September 30, 2007.

    Instructions for Commenting on Exposure Draft

    The exposure draft of FAM Volume III is available only in electronic form
    and can be downloaded from GAO's Web Page at
    [147]http://www.gao.gov/special.pubs/gaopcie/ . We are requesting comments
    from federal audit officials, CFOs, financial managers, the public
    accounting profession, and other interested parties. Please associate your
    comments with specific references to section, page, and question number.
    Also, please provide the rationale for your comments and proposed changes,
    along with suggested revised language. Please send your comments
    electronically to [148]FAM@gao.gov no later than July 30, 2007.

    ^1 A-136 is currently under revision and changes to FAM Volume III may be
    made after A-136 is issued.

    In addition, we are interested in your response to the following four
    questions:

               1. Does the format of the two checklists make it easier for
               preparers and auditors to determine that financial statements
               comply with U.S. GAAP?
               2. Does the revised format lead to more efficient preparation and
               review?
               3. How can these tools be improved to make them more effective and
               efficient?
               4. Do the checklists accurately capture the significant
               requirements, especially the recent changes?

    You may click on the attached link at
    [149]http://www.gao.gov/special.pubs/gaopcie/famcomment.htm to respond.

    Should you need additional information, please call GAO's Financial
    Management and Assurance Assistant Directors Roger Stoltz at (202)
    512-9408, or Janet Krell at (202) 512-4716, Director Steve Sebastian at
    (202) 512-9521, or PCIE Working Group Leaders Alex Biggs at (202)
    693-5258, or Joel Grover at (202) 927-5768.

    Sincerely yours,

    Jeffrey C. Steinhoff The Honorable John P. Higgins

    Managing Director Chairman, Audit Committee

    Financial Management and Assurance President's Council on Integrity

    U.S. Government Accountability Office and Efficiency

    Enclosures

                         [This page intentionally left blank.]

                     United States Government Accountability Office

                    President's Council on Integrity and Efficiency

                                 FINANCIAL AUDIT MANUAL

                                       Volume III

                        2010 - Checklist for Federal Accounting

    Contents

    Abbreviations.....................................................................................ii
    2010            -             Checklist            for             Federal
    Accounting..........................................1
    Section                                I                                 -
    Overview............................................................................................................1
    Section           II            -            General            Accounting
    Item................................................................................7
    Section                               III                                -
    Assets...............................................................................................................8
    Section                                IV                                -
    Liabilities.......................................................................................................53
    Section       V       -        Net       Position       and        Related
    Changes..............................................................67
    Section                    VI                    -                     Net
    Cost.........................................................................................................76
    Section                  VII                  -                  Budgetary
    Resources................................................................................106
    Section                 VIII                  -                  Custodial
    Activity.....................................................................................108
    Section      IX      -       Required      Supplementary       Stewardship
    Information..............................114
    Section                   X                    -                    Social
    Insurance...........................................................................................118
    Section                   XI                   -                    Credit
    Reform.............................................................................................120

    Abbreviations

    AcSEC   Accounting Standards Executive Committee
    AICPA   American Institute of Certified Public Accountants
    CFO Act Chief Financial Officers Act of 1990
    CSRS    Civil Service Retirement System
    FASAB   Federal Accounting Standards Advisory Board
    FASB    Financial Accounting Standards Board
    FDIC    Federal Deposit Insurance Corporation
    FERS    Federal Employees Retirement System
    FFMIA   Federal Financial Management Improvement Act of 1996
    FHA     Federal Housing Administration
    FIFO    First-In, First-Out (method of inventory valuation)
    FMFIA   Federal Managers' Financial Integrity Act of 1982
    GAAP    (U.S.) Generally Accepted Accounting Principles
    GAAS    (U.S.) Generally Accepted Auditing Standards
    GAGAS   (U.S.) Generally Accepted Government Auditing Standards
    GASB    Government Accounting Standards Board (state & local)
    GMRA    Government Management Reform Act of 1994
    GPRA    Government Performance and Results Act of 1993
    GSE     Government Sponsored Enterprise
    HI      Hospital Insurance (Medicare Part A)
    IMF     International Monetary Fund
    IPIA    Improper Payments Information Act
    MD&A    Management's Discussion and Analysis
    MRS     Military Retirement System
    OAI     Other Accompanying Information
    OASDI   Old Age, Survivors, and Disability Insurance
    OMB     Office of Management and Budget
    OPEB    Other Post Employment Benefits
    ORB     Other Retirement Benefits
    PP&E    Property, Plant, and Equipment
    RRB     Railroad Retirement Benefits
    RSI     Required Supplementary Information
    RSSI    Required Supplementary Stewardship Information
    SBR     Statement of Budgetary Resources
    SCNP    Statement of Change in Net Position
    SFAS    Statement of Financial Accounting Standards
    SFFAC   Statements of Federal Financial Accounting Concepts
    SFFAS   Statements of Federal Financial Accounting Standards
    SMI     Supplementary Medical Insurance (Medicare Part B & D)
    SNC     Statement of Net Cost
    SOP     Statement of Position
    SOSI    Statement of Social Insurance
    TVA     Tennessee Valley Authority
    UI      Unemployment insurance
    UTF     Unemployment Trust Fund

    2010 - Checklist for Federal Accounting

      Section I - Overview

    Introduction

    The Chief Financial Officers (CFO) Act of 1990 and the Government
    Management Reform Act of 1994 (GMRA) require that agencies' chief
    financial officers submit annual reports to their agency heads and to the
    Office of Management and Budget (OMB). These annual reports are to contain
    audited financial statements of their agencies. The financial statements
    are to be presented in conformity with U. S. generally accepted accounting
    principles (U.S. GAAP).^1

    The previous checklist, FAM 1050, Checklist for Federal Accounting,
    Reporting, and Disclosures (July 2004), included guidance for accounting,
    reporting, and disclosures. This checklist has been revised and is
    separated into two separate checklists: FAM 2010, Checklist for Federal
    Accounting and FAM 2020, Checklist for Federal Reporting and Disclosures.
    FAM 2010 provides guidance for federal accounting that entities may
    complete during the year and auditors may review the completed checklist
    during interim audit work. FAM 2020 provides guidance for year end
    reporting and disclosure that entities may complete when they prepare
    their annual financial statements and auditors may review the completed
    checklist during the reporting phase of the audit.

    These checklists are being issued to assist (i) federal entities in
    preparing their financial statements in accordance with U.S. GAAP, and
    (ii) auditors in auditing them in accordance with U.S. generally accepted
    government auditing standards (GAGAS). Neither the entities nor the
    auditors are required to use this checklist and may develop their own
    checklists. However, entities should document how they are satisfied that
    their financial statements conform with U.S. GAAP. Likewise, auditors
    should document the basis for accepting that the entity's financial
    statements conform with U.S. GAAP if they do not use the checklist.

    The checklist provides a systematic, organized, and structured approach to
    preparing or reviewing federal entity financial statements. While the
    questions contained in the checklist are taken from authoritative sources,
    the checklist itself is not authoritative, nor is it comprehensive.
    Preparers and auditors may also consult financial management regulations
    and policies for their individual entity, as these regulations and
    policies may have guidance when standards allow alternatives or management
    flexibility, such as for property capitalization limits.

    Checklist Organization

    In order to facilitate the completion of the checklist, an index of
    relevant accounting requirements is included in the following section. The
    preparer uses the index to determine those areas that apply to the entity.
    The checklist is divided into 10 sections as follows

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

    Section II - General Accounting Item
    Section III - Assets
    Section IV - Liabilities
    Section V - Net Position and Related Changes
    Section VI - Net Cost
    Section VII - Budgetary Resources
    Section VIII - Custodial Activity
    Section IX - Required Supplementary Stewardship Information
    Section X - Social Insurance
    Section XI - Credit Reform

    Authoritative Guidance

    Each question in this guide is referenced to a source. The sources cited
    are (1) Federal Accounting Standards Advisory Board (FASAB) Statements of
    Federal Financial Accounting Concepts (SFFAC), (2) FASAB Statements of
    Federal Financial Accounting Standards (SFFAS), and (3) OMB Circular No.
    A-136, Financial Reporting Requirements.

    Because this checklist is for the federal entity reporting level, and is
    not for the financial report of the U.S. government, certain sources are
    excluded.

    The four approved accounting concept statements and year they were issued
    are:

    SFFAC 1, Objectives of Federal Financial Reporting, 1993

    SFFAC 2, Entity and Display, 1995

    SFFAC 3, Management's Discussion and Analysis, 1999

    SFFAC 4, Intended Audience and Qualitative Characteristics for the
    Consolidated Financial Report of the United States Government, 2003 (Not
    covered by this checklist)

    The 32 SFFAS standards and year they were issued are:

    SFFAS 1, Accounting for Selected Assets and Liabilities, 1993

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

    SFFAS 3, Accounting for Inventory and Related Property, 1993

    SFFAS 4, Managerial Cost Accounting Standards and Concepts, 1995

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

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

    SFFAS 7, Accounting for Revenue and Other Financing Sources and Concepts
    for Reconciling Budgetary and Financial Accounting, 1996

    SFFAS 8, Supplementary Stewardship Reporting, 1996

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

    SFFAS 10, Accounting for Internal Use Software, 1998

    SFFAS 11, Amendments to Accounting for Property, Plant, and Equipment -
    Definitional Changes, 1998^2

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

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

    SFFAS 14, Amendments to Deferred Maintenance Reporting, 1999

    SFFAS 15, Management's Discussion and Analysis, 1999

    SFFAS 16, Amendments to Accounting for Property, Plant, and Equipment -
    Measurement and Reporting for Multi-Use Heritage Assets, 1999^3

    SFFAS 17, Accounting for Social Insurance, 1999

    SFFAS 18, Amendments to Accounting Standards for Direct Loans and Loans
    Guarantees in SFFAS No. 2, 2000

    SFFAS 19, Technical Amendments to Accounting Standards for Direct Loans
    and Loan Guarantees in SFFAS No. 2, 2001

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

    SFFAS 21, Reporting Corrections of Errors & Changes in Accounting
    Principles, 2001

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

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

    SFFAS 24, Selected Standards for the Consolidated Report of the United
    States Government, 2003 (Not covered by this checklist)

    SFFAS 25, Reclassification of Stewardship Responsibilities and Eliminating
    the Current Services Assessment, 2003^4

    SFFAS 26, Presentation of Significant Assumptions for the Statement of
    Social Insurance, 2004

    SFFAS 27, Identifying and Reporting Earmarked Funds, 2004

    SFFAS 28, Deferral of the Effective Date of Reclassification of the
    Statement of Social Insurance, 2005

    SFFAS 29, Heritage Assets and Stewardship Land, 2005

    SFFAS 30, Inter-Entity Cost Implementation, 2005

    SFFAS 31, Accounting for Fiduciary Activities, 2006

    SFFAS 32, CFR of the U.S. Government Requirements, 2006 (Not covered by
    this checklist)

    ^2 SFFAS 11 was rescinded in its entirety by SFFAS 23.

    ^3 SFFAS 16 was rescinded in its entirety by SFFAS 29.

    ^4  SFFAS  25   changes  reporting  requirements   for  social   insurance
    information required by SFFAS 17.

    Also included in this checklist is FASAB's Implementation Guide to
    Accounting for Revenue and Other Financing Sources, (June 1996), and OMB
    Circular No. A-136, Financial Reporting Requirements, (July 24, 2006),
    that provides detailed requirements for the form and content of entity
    financial statements.

    FASAB interpretations and technical bulletins are not covered in this
    checklist; consult this material as necessary for guidance on specific
    situations. Furthermore, preparers and auditors should document how the
    entity complied with any new standards issued after SFFAS 32.

          How to Use the Index to the Checklist

    The preparer completes the index to FAM 2010, Checklist for Federal
    Accounting prior to completing the detailed checklist. For each category
    of accounting considerations listed in the index on the next two pages,
    the preparer indicates whether it is either applicable (Y) to the entity's
    financial statements, or is not applicable (NA). Complete only those
    sections of the detailed checklist that are applicable to the entity's
    financial statements. If the entity has an insignificant amount of
    transactions or balances for a section, it may decide not to complete that
    section. It may document that decision by indicating "not significant"
    (NS). Those areas that are not applicable or not significant are not
    considered further, thus eliminating the need to read and evaluate each
    individual question. For example, many federal agencies do not administer
    loan, loan guarantee, or loan insurance programs and, therefore, do not
    have credit program receivables and related property. Consequently, the
    questions on these receivables, property, and subsidies would not apply.

    How to Use the Detailed Checklist

    To the right of each question are two columns. The first column provides
    for a "yes," "no," or "N/A" (not applicable) answer to each question. The
    second column provides for an explanation of the answer to each question.

    A "yes" answer indicates that the financial statements contain the
    information asked by the question. This would include immaterial items if
    the entity elected to disclose them. For each "yes" answer, include in the
    explanation column the page number or location in the financial statements
    where the information is found. Also, provide any other information
    pertinent to the question and the response in the explanation column.

    A "no" answer indicates that the information asked for in the question is
    not included in the financial statements, notes, or supplementary
    information, respectively. This would include immaterial items that need
    not be disclosed. Describe in the explanation column or footnote why the
    information is not included and whether this causes the financial
    statements to not be in conformity with U.S. GAAP.

    An "N/A" answer might indicate that the question does not apply to the
    federal entity. Describe in the explanation column or footnote why this
    information is not applicable.

    Completion and Review of the Checklists

    Preparers of entity financial statements may complete the checklists to
    document that applicable accounting, reporting, and disclosure items have
    been addressed, including those contained in OMB Circular No. A-136.
    Auditors generally should then review the checklists for completeness and
    accuracy.

    Index to the Checklist

                                                            Applicable (Y), Not
                                                          Applicable (NA), or Not
    Page No.         Accounting Considerations            Significant (NS)
          7     Section II - General Accounting Item
          8     Section III - Assets
          9     Fund Balance with Treasury
          11    Investments
          12    Accounts Receivable
          16    Interest Receivable
          17    Cash and Other Monetary Assets
          18    Inventory
          22    Operating Materials and Supplies
          25    Stockpile Materials
          27    Seized Property
          28    Forfeited Property
          31    Goods Held Under Price Support and
                Stabilization Programs
          34    General Property, Plant, and Equipment
                (Net)
          46    Software
          52    Other Assets
          53    Section IV - Liabilities
          54    Liabilities in General
          56    Accounts Payable and Interest Payable
          57    Capital Lease Liabilities
          58    Federal Debt and Related Interest
          60    Pensions, Other Retirement Benefits, and
                Postemployment Benefits
          61    Other Liabilities
          67    Section V - Net Position and Related
                Changes
          68    Unexpended Appropriations & Cumulative
                Results of Operation
          69    Budgetary Financing Sources
          72    Other Financing Sources
          74    Earmarked Funds
          76    Section VI - Net Cost
          77    Cost Accounting
          87    Revenues
          90    Pensions, Other Retirement, and
                Postemployment Benefit Costs
          96    Inventory, Materials, Supplies, and
                Commodities Costs
          98    Property, Plant, and Equipment Costs
         101    Clean-up Costs
         103    Interest Costs
         104    Insurance and Subsidies Costs
         106    Section VII - Budgetary Resources
         108    Section VIII - Custodial Activity
         114    Section IX - Required Supplementary
                Stewardship Information
         118    Section X - Social Insurance
         120    Section XI - Credit Reform

      Section II -  General Accounting Item

    This question relates to overall general accounting at the entity.

                        General Item (1)                  Yes, No, or Explanation
                                                              N/A
          1) Does the entity use the following hierarchy
          as its source of guidance

                  a) FASAB Statements and Interpretations
                  as well as AICPA and FASB
                  pronouncements if made applicable to
                  federal government entities by a FASAB
                  Statement or Interpretation,
                  b) FASAB Technical Bulletins and, if
                  specifically made applicable to federal
                  government entities by AICPA and
                  cleared by FASAB, AICPA Industry Audit
                  and Accounting Guides, and AICPA
                  Statements of Position,
                  c) AICPA Accounting Standards Executive
                  Committee (AcSEC) Practice Bulletins if
                  specifically made applicable to federal
                  government entities and cleared by
                  FASAB, as well as Technical Releases of
                  the Accounting and Auditing Policy
                  Committee of FASAB,
                  d) Implementation guides published by
                  FASAB staff and practices that are
                  widely recognized and prevalent in the
                  federal government, and
                  e) In the absence of a pronouncement
                  covered by federal U. S. Generally
                  Accepted Accounting Principles (U.S.
                  GAAP) or another source of established
                  principles, other accounting
                  literature, depending on its relevance
                  in the circumstances?^5 (OMB Circular
                  No. A-136, p. 29, item1)

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

      Section III -  Assets

    Questions related to accounting for assets in federal financial statements
    are presented under the following captions.

    Caption                                                   Question Numbers
    Fund Balance with Treasury                                     1 - 6
    Investments                                                    7 - 10
    Accounts Receivable                                           11 - 25
    Interest Receivable                                           26 - 29
    Cash and Other Monetary Assets                                30 - 31
    Inventory                                                     32 - 53
    Operating Materials and Supplies                              54 - 64
    Stockpile Materials                                           65 - 75
    Seized Property                                               76 - 82
    Forfeited Property                                            83 - 95
    Goods Held Under Price Support and Stabilization Programs     96 - 107
    General Property, Plant, and Equipment (Net)                 108 - 152
    Software                                                     153 - 180
    Other Assets                                                 181 - 183

            Fund Balance with Treasury (1 - 6)        Yes, No, or    Explanation
                                                          N/A
    A federal entity's fund balance with the Treasury is the aggregate amount
    of funds in the entity's accounts with Treasury for which the entity is
    authorized to make expenditures and pay liabilities. Fund balance with
    Treasury includes clearing account balances and the dollar equivalent of
    foreign currency account balances. For the reporting entity, a fund
    balance with Treasury is an asset but for Treasury it is a liability. From
    the perspective of the federal government as a whole, the fund balance is
    neither an asset nor a liability as it eliminates in consolidation.
    However, it represents a commitment from the Treasury to make resources
    available to federal departments, agencies, programs, and other entities.
    (SFFAS 1, par. 31 & 32)
          1) Does fund balance with Treasury include

                  a) clearing account balances,
                  b) balances for direct loan and
                  loan guarantee activities held in
                  the credit reform program,
                  financing, and liquidating
                  accounts,
                  c) funds actually borrowed from
                  Treasury under statutory
                  authority, and
                  d) the dollar equivalent of
                  foreign currency account balances?

          (SFFAS 1, par. 32 & 35)
          2) Are foreign currency account balances
          reported on the balance sheet translated
          into U.S. dollars at exchange rates
          determined by the Treasury and effective
          at the financial reporting date? (SFFAS 1,
          par. 32)
          3) Does fund balance with Treasury exclude
          contract authority^6 or unused authority
          to borrow? (SFFAS 1, par. 34)
          4) Does the entity record an increase in
          its fund balance with Treasury when it

                  a) receives appropriations,
                  reappropriations, continuing
                  resolutions, appropriation
                  restorations, and allocations,
                  b) redeems investments in U.S.
                  securities,
                  c) receives transfers and
                  reimbursements from other
                  agencies,
                  d) borrows from the Treasury,
                  Federal Financing Bank, or other
                  entities, and
                  e) collects and credits amounts to
                  its appropriations or fund
                  accounts that the entity is
                  authorized to spend or use to
                  offset its expenditures?

          (SFFAS 1, par. 33)
          5) Does the entity record a decrease in
          its fund balance with Treasury when it

                  a) disburses to pay liabilities or
                  to purchase assets, goods, and
                  services,
                  b) invests in U.S. securities,
                  c) cancels expired appropriations,
                  d) makes transfers and
                  reimbursements to other entities
                  or to the Treasury, and
                  e) cancels appropriations through
                  sequestration or rescission?

          (SFFAS 1, par. 36)
          6) Are unexpended appropriations
          recognized as capital and included under
          fund balance with Treasury when they are
          made available for apportionment? (SFFAS
          7, par. 71)

    ^6 Contract authority is  a statutory authority  under which contracts  or
    other obligations may be entered into prior to receiving an  appropriation
    for the payment of obligations.

                   Investments (7 - 10)              Yes, No, or    Explanation
                                                         N/A
    Investments in federal (i.e., Treasury) securities include (1)
    nonmarketable par value Treasury securities, (2) market-based Treasury
    securities expected to be held to maturity, (3) marketable Treasury
    securities expected to be held to maturity, and (4) securities issued by
    other federal entities. Nonfederal securities include those issued by
    state and local governments, private corporations, and
    government-sponsored enterprises. (SFFAS 1, par. 62)
          7) Are investments in federal securities
          initially recorded at their acquisition
          cost or amortized acquisition cost (less
          an allowance for losses, if any)? (SFFAS
          1, par. 68 & 69)
          8) Are investments in federal securities
          acquired in exchange for nonmonetary
          assets recognized at the fair market
          value of either the securities acquired
          or the assets given up, whichever is more
          definitively determinable? (SFFAS 1, par.
          68)
          9) Subsequent to acquisition, is the
          carrying amount (i.e., acquisition cost)
          of investments in federal securities,
          adjusted for amortized premium or
          discount? (SFFAS 1, par. 70-71)
          10) Is the interest method (i.e.,
          effective interest rate multiplied by the
          carrying amount) used in amortizing the
          premium or discount over the life of the
          Treasury security? (SFFAS 1, par. 71)

                Accounts Receivable (11 - 25)           Yes, No, or  Explanation
                                                            N/A
    Accounts receivable arise from claims to  cash or other assets. (SFFAS  1,
    par. 40)
          11) Is a receivable recognized when a federal
          entity establishes a claim to cash or other
          assets against other entities based on legal
          provisions, or when goods or services are
          provided? (SFFAS 1, par. 41)
          12) If the exact amount of a receivable is
          unknown, is a reasonable estimate made?
          (SFFAS 1, par. 41)
          13) Are losses on receivables recognized when
          it is more likely than not (greater than a 50
          percent chance of occurrence) that the
          receivables will not be totally collected?
          (SFFAS 1, par. 44)
          14) Is an allowance for estimated
          uncollectible amounts recognized to reduce
          the gross amount of receivables to their net
          realizable value?

          If so, is this allowance reestimated on each
          annual financial reporting date and when
          information indicates that the latest
          estimate is no longer correct?

          (SFFAS 1, par. 45)
          15) Is an allowance for uncollectible amounts
          based on an analysis of both individual
          accounts receivable and groups of accounts
          receivable? (SFFAS 1, par. 47-51; SFFAS 7,
          par. 56)
          16) Are accounts that represent significant
          amounts individually analyzed to determine
          the loss allowance? (SFFAS 1, par. 47)
          17) Is a loss estimation for individual
          accounts based on

                  a) the debtor's ability to pay,
                  b) the debtor's payment record and
                  willingness to pay, and
                  c) probable recovery of amounts from
                  secondary sources including liens,
                  garnishments, cross collections, and
                  other applicable collection tools?

          (SFFAS 1, par. 47)
          18) If information is not available to make a
          reliable assessment of losses on an
          individual account basis, or if the nature of
          the receivables does not lend itself to
          individual account analysis, are the
          potential losses assessed on a group basis?
          (SFFAS 1, par. 48)
          19) If potential losses are assessed on a
          group basis, are the receivables separated
          into groups of homogeneous accounts with
          similar risk characteristics? (SFFAS 1, par.
          49-51)
          20) Is an account receivable arising from a
          nonexchange transaction recognized when a
          collecting entity establishes a specifically
          identifiable, measurable, and legally
          enforceable claim to cash or other assets?
          (SFFAS 7, par. 53, footnote 9)
          21) Are assessments recognized as accounts
          receivable if an enforceable claim for taxes
          and duties exists in instances where

                  a) tax returns are filed by the
                  taxpayer without sufficient payment,
                  b) customs documents are filed by the
                  importer without sufficient payment,
                  c) taxpayer agreements to assessments
                  are signed at the conclusion of an
                  audit or where assessments substitute
                  for a tax return,
                  d) importer agreements to
                  supplemental assessments are signed,
                  e) court actions determine an
                  assessment,
                  f) taxpayer (or importer) agreements
                  to pay an assessment exist on an
                  installment plan, and
                  g) receivables determined to be
                  currently not collectible have future
                  collection potential?

          (SFFAS 7, par. 53 & 54)
    Entity receivables are amounts due from other federal or nonfederal
    entities that the federal entity is authorized by law to include in its
    obligational authority or to offset its expenditures and liabilities upon
    collection. Nonentity receivables are amounts that the entity is to
    collect on behalf of the federal government or other entities, and the
    entity is not authorized to spend. (SFFAS 1, par. 43)
          22) Is an entity receivable recognized when
          (1) a legally enforceable claim exists
          between a collecting entity and a recipient
          entity for the transfer or repayment of taxes
          or duties, and (2) payment of such a claim is
          probable and measurable? (SFFAS 7, par. 60)
          23) Are receivables distinguished between
          entity receivables and non-entity
          receivables? (SFFAS 1, par. 43)
    Compliance assessments are proposed assessments by the collecting entity
    in definitive amounts, but with which the taxpayer (or importer) still has
    the right to disagree or object. (SFFAS 7, par. 55.A)

    Preassessment work-in-process are assessments not yet officially asserted
    by the collecting entity that are subject to a taxpayer's right to
    conference in response to initial information notices. (SFFAS 7, par.
    55.B)

    Compliance assessments and preassessment work-in-process are not accounts
    receivable.
          24) Do nonexchange-related accounts
          receivable for taxes and duties exclude

                  a) amounts received or due with tax
                  returns received after the close of
                  the reporting period,
                  b) compliance assessments, and
                  c) preassessment work-in-process?

          (SFFAS 7, par. 54)
          25) Are compliance assessments reclassified
          and recognized as account receivables in
          instances when

                  a) the taxpayer files an amended tax
                  return (agreeing to the assessment),
                  b) customs' protest or retention
                  period lapses,
                  c) court action or an appeal finally
                  determines the assessment,
                  d) the taxpayer (or importer) agrees
                  to pay currently or through an
                  installment agreement, and
                  e) an offer in compromise is
                  accepted?

          (SFFAS 7, par. 55.A)

                 Interest Receivable (26 - 29)            Yes, No, or Explanation
                                                              N/A
          26) Is interest receivable recognized for the
          amount of interest income earned but not
          received for the accounting period, including
          interest earned on investments in
          interest-bearing securities? (SFFAS 1, par. 53)
          27) Is interest receivable recognized on
          outstanding accounts receivable and other U.S.
          government claims against persons and entities
          in accordance with 31 U.S.C. 3717, Interest and
          Penalty on Claims?^7 (SFFAS 1, par. 53)
          28) Does interest receivable exclude interest
          on accounts receivable or investments that are
          determined to be uncollectible? (SFFAS 1, par.
          54)
          29) Is interest receivable from federal
          entities accounted for separately from interest
          receivable from the public? (SFFAS 1, par. 56)

    ^7 See also Federal Claims Collection Standards, 31 C.F.R. Parts 900-904)

          Cash and Other Monetary Assets (30-31)     Yes, No, or    Explanation
                                                         N/A
    Cash (including imprest funds) consists of: coins, paper currency, readily
    negotiable instruments (such as checks, money orders, and bank drafts),
    demand deposits, and foreign currencies stated in U.S. dollars at the
    exchange rate on the financial statement date. (SFFAS 1, par. 27; OMB
    Circular No. A-136, p. 37, Section II.4.3.3)

    Entity cash is the amount of cash that the reporting entity holds and is
    authorized to spend. Nonentity cash is cash that a federal entity collects
    and holds on behalf of the U.S. government or other entities. In some
    instances the entity deposits cash in its accounts in a fiduciary capacity
    for the U.S. Treasury or other entities. (SFFAS 1, par. 28 & 29)

    Other monetary assets consist of other items such as gold, special drawing
    rights, and U.S. reserves in the International Monetary Fund (IMF). (OMB
    Circular No. A-136, p. 37, Section II.4.3.3)
          30) Does the entity record all cash and
          monetary assets to include

                  a) cash such as coins, paper
                  currency, negotiable instruments,
                  and demand deposits,
                  b) cash available for agency use
                  such as petty cash and cash held
                  in revolving funds that will not
                  be transferred to the general
                  fund,
                  c) foreign currency, and
                  d) monetary assets such as gold,
                  special drawing rights, and
                  reserves in the IMF?

          (OMB Circular No. A-136, p. 86, Section
          II.4.10.4)
          31) Does the entity record separately any
          cash restrictions such as

                  a) non-entity cash,
                  b) escrow cash,
                  c) seized cash,
                  d) bid deposits, and
                  e) cash held in Earmarked Funds?

          (OMB Circular No. A-136, p. 86-87,
          Section II.4.10.4)

                     Inventory (32 - 53)                Yes, No, or  Explanation
                                                            N/A
    Inventory is tangible personal property that is (1) held for sale,
    including raw materials and work in process, (2) in process of production
    for sale, or (3) to be consumed in the production of goods for sale or in
    the provision of services for a fee. Inventory does not include other
    assets held for sale such as (1) stockpile materials, (2) seized and
    forfeited property, (3) foreclosed property, and (4) goods held under
    price support and stabilization programs. (SFFAS 3, par. 17; OMB Circular
    No. A-136, p. 38, section II.4.3.3)
          32) Is inventory recognized when title
          passes or when goods are delivered to the
          purchasing entity? (SFFAS 3, par. 19)
          33) Is inventory valued at historical cost,
          latest acquisition cost, or net realizable
          value? (SFFAS 3, par. 20 & 26)
          34) If inventory is valued at historical
          cost, does that cost include the purchase
          amount and all other costs, such as
          transportation and production costs,
          incurred to bring the inventory into its
          current condition and location? (SFFAS 3,
          par. 21)
          35) Are abnormal costs, such as excessive
          handling or rework costs, charged to
          operations for the period? (SFFAS 3, par.
          21)
          36) Is donated inventory valued at its fair
          value at the time of donation? (SFFAS 3,
          par. 21)
          37) Is inventory acquired through exchange
          of nonmonetary assets (e.g., barter) valued
          at the fair value of the asset received at
          the time of the exchange? (SFFAS 3, par. 21)
          38) For inventory acquired through exchange
          of nonmonetary assets, is any difference
          between the recorded amount of the asset
          surrendered and the fair value of the asset
          received recognized as a gain or loss?
          (SFFAS 3, par 21)
          39) Is one of the following historical cost
          flow assumptions used to value inventory

                  a) first-in, first out (FIFO), or
                  b) weighted average, or
                  c) moving average, or
                  d) any other valuation method (such
                  as a standard cost system) whose
                  results reasonably approximate "a",
                  "b", or "c" above?

          (SFFAS 3, par. 22)
          40) If the latest acquisition cost method of
          inventory valuation is used, is the latest
          invoice price (actual cost) applied to all
          like units held, including those acquired
          through donation or nonmonetary exchange?
          SFFAS 3, par. 23)
          41) Under the latest acquisition cost
          method, is the inventory revalued
          periodically (or at least by the end of the
          fiscal year)?^8 (SFFAS 3, par. 23)
          42) Under the latest acquisition cost
          method, is the ending balance of an
          allowance account to capture gains or losses
          (if used) the cumulative difference between
          the historical cost, based on estimated or
          actual valuation, and the latest acquisition
          cost of ending inventory? (SFFAS 3, par. 24)
          43) Under the latest acquisition cost
          method, is the balance for the gain/loss
          account adjusted each time the inventory
          balance is adjusted? (SFFAS 3, par. 24)
          44) Is the adjustment necessary to bring the
          allowance to the appropriate balance a
          component of the cost of goods sold as
          computed under the latest acquisition cost
          method?^9 (SFFAS 3, par. 24 & 25)
          45) If the latest acquisition cost method is
          used to value inventory, is the reported
          cost of goods sold adjusted by the
          difference between the beginning and ending
          unrealized holding gains and losses? (SFFAS
          3, par. 24 & 25)
          46) Does the entity value inventory at net
          realizable value when there is

                  a) an inability to determine
                  approximate cost, or
                  b) immediate marketability at quoted
                  prices, or
                  c) unit interchangeability (e.g.,
                  petroleum reserves)?

          (SFFAS 3, par. 26)
          47) Is excess, obsolete, and unserviceable
          inventory valued at its expected net
          realizable value? (SFFAS 3 par. 30)
          48) When inventory is declared excess,
          obsolete, or unserviceable, is the
          difference between the carrying amount and
          the expected net realizable value recognized
          as a loss (or gain)? (SFFAS 3, par. 30)
          49) For excess, obsolete, or unserviceable
          inventory, are any subsequent adjustments to
          the inventory's net realizable value or any
          loss (or gain) upon disposal recognized as
          losses (or gains)? (SFFAS 3, par. 30)
          50) When inventory is held for repair, is it
          valued using

                  a) the allowance method (valued at
                  the same value as a serviceable item
                  and a contra-asset repair allowance
                  account is established), or
                  b) the direct method (valued at the
                  same value as a serviceable item
                  less estimated repair costs)?

          (SFFAS 3, par. 32 & 33)
          51) If inventory is transferred to
          "inventory held for repair," are estimated
          prior period repair costs either credited to
          the repair allowance (under the repair
          allowance method) or to the inventory
          account (under the direct method) and
          reported as an adjustment to equity? (SFFAS
          3, par. 34)
          52) Is inventory held in reserve for future
          sale valued using the same basis as
          inventory held for sale in normal
          operations? (SFFAS 3, par. 27)
          53) Are items intended for sale that are
          held for remanufacture^10 valued in the same
          manner as items intended for sale or items
          held for repair, as applicable?
          (Interpretation No. 7, par. 10)

    ^8 Revaluation results in  recognition of unrealized holding  gains/losses
    in the  ending inventory  value. Upon  adjustment for  unrealized  holding
    gains/losses, the  latest  acquisition  cost method  then  results  in  an
    approximation of historical cost.

    ^9 Cost of goods sold under the latest acquisition cost method equals  (1)
    beginning inventory at  beginning-of-the period  latest acquisition  cost,
    less: beginning  allowance  for  unrealized  holding  gains/losses,  plus:
    actual purchases,  and (2)  resulting cost  of goods  available for  sale,
    less: ending inventory at end-of-the period latest acquisition cost, plus:
    ending allowance for unrealized holding gains/losses.

    ^10 Items  held for  remanufacture are  in the  process of  (or  awaiting)
    inspection, disassembly,  evaluation, cleaning,  rebuilding,  refurbishing
    and/or restoration  to  serviceable  or  technologically  updated/upgraded
    condition. Items may  consist of direct  materials, (including  repairable
    parts and subassemblies, also referred to as "carcasses" at the Department
    of Defense) and work-in-process (including labor costs).

                Operating Materials and Supplies          Yes, No, or
                                                              N/A     Explanation
                           (54 - 64)
    Operating materials and supplies are tangible personal property to be
    consumed in normal operations. (SFFAS 3, par. 36)
          54) Are operating materials and supplies
          recognized as assets when produced or purchased
          (the consumption method of accounting)? (SFFAS
          3, par. 38)
          55) Are operating materials and supplies
          expensed when purchased (purchase method) only
          if

                  a) amounts are not significant, and
                  b) they are in the hands of end users,
                  or
                  c) it is not cost-beneficial to apply
                  the consumption method of accounting?

          (SFFAS 3, par. 40)
          56) Are operating materials and supplies valued
          at historical cost, including all appropriate
          purchase and production costs incurred to bring
          the items to their current condition &
          location? (SFFAS 3, par. 42-43)
          57) Are donated operating materials and
          supplies valued at their fair value at the time
          of donation? (SFFAS 3, par. 43)
          58) Are operating materials and supplies
          acquired through exchange of nonmonetary assets
          (e.g., barter)

                  a) valued at the fair value of the
                  asset received at the time of exchange,
                  and
                  b) is any difference between the
                  recorded amount of the asset
                  surrendered and the fair value of the
                  asset received recognized as a gain or
                  loss?

          (SFFAS 3, par. 43)
          59) Is one of the following historical cost
          flow assumptions used to value operating
          materials and supplies

                  a) FIFO, or
                  b) weighted average, or
                  c) moving average, or
                  d) any other valuation method (such as
                  a standard cost system) whose results
                  reasonably approximate "a", "b", or "c"
                  above?

          (SFFAS 3, par. 42 & 44)
          60) Are excess, obsolete, and unserviceable
          operating materials and supplies valued at
          their estimated net realizable value? (SFFAS 3,
          par. 48)
          61) When operating materials and supplies are
          declared excess, obsolete, or unserviceable is
          the difference between the carrying amount
          before identification as excess, obsolete, or
          unserviceable and the estimated net realizable
          value recognized as a loss (or gain)? (SFFAS 3,
          par. 48)
          62) For excess, obsolete, or unserviceable
          operating materials and supplies, are any
          subsequent adjustments to the operating
          materials and supplies' estimated net
          realizable value or any loss (or gain) upon
          disposal recognized as losses (or gains)?
          (SFFAS 3, par. 48)
          63) Are items held for remanufacture that meet
          the definition of operating materials and
          supplies valued in the same manner as items
          held for repair or operating materials and
          supplies, as applicable? (Interpretation No. 7,
          par. 13)
          64) Are operating materials and supplies held
          in reserve for future use valued using the same
          basis as operating materials and supplies held
          for use in normal operations? (SFFAS 3, par.
          45)

                 Stockpile Materials (65 - 75)            Yes, No, or Explanation
                                                              N/A
    Stockpile materials are strategic and critical materials held due to
    statutory requirements for use in national defense, conservation, or
    national emergencies. (SFFAS 3, par. 51)
          65) Are stockpile materials recognized as
          assets when produced or purchased (i.e.,
          recognized as assets using the consumption
          method)? (SFFAS 3, par. 52)
          66) If the contract between the buyer and
          seller of the stockpile materials is silent
          regarding passage of the title, is title
          assumed to pass upon delivery of the goods?
          (SFFAS 3, par. 52)
          67) Are stockpile materials valued at
          historical cost, including all appropriate
          purchase, transportation, and production costs
          incurred to bring the items to their current
          condition and location? (SFFAS 3, par. 53)
          68) Are abnormal costs, such as excessive
          handling or rework costs, charged to operations
          for the period? (SFFAS 3, par. 53)
          69) Is one of the following historical cost
          flow assumptions used to value stockpile
          materials under the consumption method

                  a) FIFO,
                  b) weighted average,
                  c) moving average, or
                  d) any other valuation method (such as
                  a standard cost system) whose results
                  reasonably approximate "a", "b", or "c"
                  above?

          (SFFAS 3, par. 53)
          70) If stockpile materials have either suffered
          a permanent decline in value to an amount below
          cost, or have become damaged or decayed, has
          their value been reduced to expected net
          realizable value? (SFFAS 3, par. 54)
          71) Is the resultant decline in value
          recognized as a loss or expense in the period
          in which it occurs? (SFFAS 3, par. 54)
          72) When stockpile materials are authorized to
          be sold, are those materials reported as
          stockpile materials held for sale? (SFFAS 3,
          par. 55)
          73) Are stockpile materials authorized for sale
          valued using the same basis used before they
          were authorized for sale? (SFFAS 3, par. 55)
          74) If stockpile materials are sold, is the
          cost removed from stockpile materials and
          reported as a cost of goods sold? (SFFAS 3,
          par. 55)
          75) Is any gain (or loss) from the sale of
          stockpile materials recognized as a gain (or
          loss) at that time? (SFFAS 3, par. 55)

                Seized Property (76 - 82)          Yes, No, or N/A  Explanation
    Seized property includes monetary instruments, real property, and tangible
    personal property belonging to others in actual or constructive possession
    of the custodial agency. This includes illegal drugs, contraband, and
    counterfeit items seized by authorized law enforcement agencies (SFFAS 3,
    par. 59)

    There may be as many as three government entities involved with seized
    property: (1) the seizing agency, (2) the custodial agency, and (3)
    another agency with a "central fund" set up for financial recordkeeping of
    seizure activities. (SFFAS 3, par. 57)
          76) Is seized property accounted for by
          the entity that is operating as the
          central fund? (SFFAS 3, par. 60)
          77) Are seized monetary instruments
          recognized as seized assets when seized?
          (SFFAS 3, par. 61)
          78) If monetary instruments are seized,
          are seized assets recognized at market
          value of the monetary instruments, and a
          liability equal to the seized asset
          value established? (SFFAS 3, par. 61 &
          65)
          79) Is the existence of seized property
          other than monetary instruments
          accounted for in the entity's property
          management records? (SFFAS 3, par. 62)
          80) Is seized property valued at its
          market value when seized (or as soon
          thereafter as reasonably possible if the
          market value cannot be readily
          determined)? (SFFAS 3, par. 63)
          81) If no active market exists for the
          property in the general area in which it
          was seized, is a value in the principal
          market nearest the place of seizure
          used? (SFFAS 3, par. 63)
          82) Is the valuation of property seized
          under the Internal Revenue Code based on
          the taxpayer's equity (market value less
          any third-party liens)? (SFFAS 3, par.
          64)

                 Forfeited Property (83 - 95)            Yes, No, or  Explanation
                                                             N/A
    Forfeited property consists of (a) property (i.e., monetary instruments,
    intangible property, real property, and tangible personal property)
    acquired through forfeiture proceedings, (b) property acquired to satisfy
    a tax liability, and (c) unclaimed and abandoned merchandise. (SFFAS 3,
    par. 67 & 68)
          83) When a forfeiture judgment is obtained for
          seized monetary instruments

                  a) are they reclassified as forfeited
                  monetary instruments at the current
                  market value,
                  b) is revenue recognized in an amount
                  equal to the value of the monetary
                  asset, and
                  c) is the liability associated with
                  the seized monetary instrument
                  classification removed?

          (SFFAS 3, par. 69)
          84) When a forfeiture judgment is obtained for
          real, tangible, and intangible property

                  a) is the property recorded as an
                  asset at its fair value at the time of
                  forfeiture,
                  b) is an allowance account
                  (contra-asset account) established for
                  liens or claims from third party
                  claimants against forfeited property,
                  and
                  c) is offsetting deferred revenue
                  recognized?

          (SFFAS 3, par. 70)
          85) Does the entity not recognize the
          financial value concerning the composition,
          valuation, and disposition of forfeited
          property that cannot be sold due to legal
          restrictions, but may be either donated or
          destroyed (such as ivory)? (SFFAS 3, par. 71)
          86) Is revenue from the sale of forfeited
          property recognized when sold? (SFFAS 3, par.
          72)
    Forfeited property not held for sale may be placed into official use,
    transferred to another federal agency, distributed to a state or local law
    enforcement agency, or distributed to a foreign government. (SFFAS 3, par.
    73)
          87) When a determination is made that
          forfeited property will not be held for sale,
          but distributed in one of the manners
          described above, is the property reclassified
          as forfeited property held for donation or
          use? (SFFAS 3, par. 74)
          88) Is revenue associated with property not
          disposed of through sale recognized upon
          approval of distribution and the previously
          established deferred revenue reversed? (SFFAS
          3, par. 74)
          89) Is a distinction maintained in the
          entity's accounting reports between revenue
          arising from the sale of forfeited property
          and revenue arising from forfeited property
          being transferred, donated, or placed into
          official use? (SFFAS 3, par. 72-75 & Table 1)
          90) Is property acquired by the government to
          satisfy a taxpayer's liability recorded when
          title to the property passes to the federal
          government, and is a credit made to the
          related account receivable? (SFFAS 3, par. 76)
          91) Is the property acquired in satisfaction
          of a taxpayer's liability valued at its market
          value less any third party liens? (SFFAS 3,
          par. 76)
          92) Upon sale of forfeited property acquired
          in satisfaction of a taxpayer's liability, is
          revenue recognized in the amount of the sale
          proceeds, and are the property and third party
          liens removed from the accounts? (SFFAS 3,
          par. 76)
          93) Is unclaimed and abandoned merchandise
          recorded with an offsetting deferred revenue
          when statutory and/or regulatory requirements
          for forfeiture have been met? (SFFAS 3, par.
          77)
          94) Is unclaimed and abandoned merchandise
          valued at its market value? (SFFAS 3, par. 77)
          95) Upon the sale of unclaimed and abandoned
          merchandise, is revenue recognized in the
          amount of the sale proceeds, and the
          merchandise and the deferred revenue removed
          from the accounts? (SFFAS 3, par. 77)

             Goods Held Under Price Support and        Yes, No, or   Explanation
              Stabilization Program (96 - 107)             N/A
    Goods acquired under price support and stabilization programs (i.e.,
    commodities) are items of commerce or trade (usually farm commodities)
    having an exchange value. Producers of the goods (1) are either given
    nonrecourse loans under which they can, at their option, repay the loan
    with interest or surrender their commodity pledged as collateral for the
    loan, or (2) may enter into purchase agreements that allow the producer of
    the option to sell commodities to the government (the Commodity Credit
    Corporation) at the price support rate. (SFFAS 3, par. 92, 93, & 94)
          96) Are nonrecourse loans recognized as
          assets when the loan principal is disbursed
          and recorded at the amount of the loan
          principal? (SFFAS 3, par. 96)
          97) Is interest accrued on nonrecourse
          loans? (SFFAS 3, par. 96)
          98) When the entity has entered into a
          purchase agreement and there is an expected
          loss

                  a) is a loss^11 recognized if it is
                  probable that a loss has been
                  incurred on purchase agreements
                  outstanding and the amount of the
                  loss can be reasonably measured,
                  and
                  b) is a corresponding liability
                  recognized?

          (SFFAS 3, par. 97 & 103)
          99) When commodities are acquired to
          satisfy a nonrecourse loan or purchase
          agreement, are they recognized as assets at
          the lower of cost or net realizable value?
          (SFFAS 3, par. 99 & 104)
          100) When commodities acquired to satisfy
          the terms of a nonrecourse loan or purchase
          agreement are sold

                  a) are revenues recognized, and
                  b) is the carrying amount of the
                  commodities removed from the asset
                  account and reported as a cost of
                  goods sold?

          (SFFAS 3, par. 100)
          101) When commodities are held for purposes
          other than sale, is the carrying amount
          reported as an expense and removed from the
          commodity asset account upon transfer?
          (SFFAS 3, par. 101)
          102) Are all nonrecourse loans recorded at
          their face amounts, and is a valuation
          allowance set up to recognize losses on
          such loans when it is "more likely than
          not" (i.e., more than a 50 percent chance)
          that loans will not be totally collected?
          (SFFAS 3, par. 102)
          103) Is this allowance reestimated on each
          financial reporting date? (SFFAS 3, par.
          102)
          104) Does the cost for the commodities
          acquired through a nonrecourse loan
          settlement include the following amounts

                  a) loan principal (excluding
                  interest),
                  b) processing and packaging costs
                  incurred after acquisition, and
                  c) other costs (e.g.,
                  transportation) incurred in taking
                  title to the commodity?

          (SFFAS 3, par. 105)
          105) Does the cost for commodities acquired
          though a purchase agreement include the
          following amounts

                  a) the unit price agreed upon in
                  the purchase agreement multiplied
                  by the number of units purchased,
                  and
                  b) other costs incurred in taking
                  title to the commodity?

          (SFFAS 3, par. 106)
          106) Is any adjustment necessary to reduce
          the carrying amount of the acquired
          commodities to the lower of cost or net
          realizable value recognized

                  a) as a loss on farm price support
                  in the current period, and
                  b) recorded in a commodity
                  valuation allowance?

          (SFFAS 3, par. 107)
          107) Are recoveries of losses recognized up
          to the point of any previously recognized
          losses on the commodities, and is the
          commodity valuation allowance reduced
          accordingly in the current period? (SFFAS
          3, par. 107)

    ^11 The loss amount is the  difference between the contract price and  the
    net realizable value of the commodities.

        General Property, Plant, & Equipment (Net) (108 -   Yes, No,  Explanation
                               152)                          or N/A
    General property, plant, and equipment (PP&E) are any property, plant, and
    equipment used in providing goods or services. (SFFAS 6, par. 23)
          108) Has the entity established and consistently
          followed PP&E capitalization thresholds suitable
          to its financial and operational conditions?
          (SFFAS 6, par. 13)
          109) Does PP&E consist of tangible assets,
          including land, which

                  a) have estimated useful lives of 2 years
                  or more,
                  b) are not intended for sale in the
                  ordinary course of operations, and
                  c) are acquired or constructed with the
                  intention of being used or being
                  available for use by the entity?

          (SFFAS 6, par. 17)
          110) Does PP&E include

                  a) assets acquired through capital
                  leases, including leasehold improvements,
                  b) property owned by the reporting entity
                  in the hands of others (e.g., state and
                  local governments, colleges and
                  universities, federal contractors), and
                  c) land rights?

          (SFFAS 6 par. 18)
          111) Does general PP&E exclude

                  a) items held in anticipation of physical
                  consumption such as operating materials
                  and supplies, and
                  b) items the federal entity has a
                  reversionary interest in?

          (SFFAS 6, par. 19 & 21)
          112) In determining which categories to place
          PP&E, has the entity considered

                  a) the cost of maintaining different
                  accounting methods for property and the
                  usefulness (benefit) of the information,
                  b) the diversity of the PP&E (e.g.,
                  useful lives, value, alternative uses),
                  c) the programs being served by the PP&E,
                  and
                  d) future disposition of the PP&E?

          (SFFAS 6, par. 22)
          113) Does the entity categorize an asset under
          general PP&E if it has one or more of the
          following characteristics

                  a) it could be used for alternative
                  purposes (e.g., by other federal
                  programs, state or local governments,
                  nongovernmental entities) but is used to
                  produce goods or services or to support
                  the mission of the entity,
                  b) it is used for business-type
                  activities,^12 and
                  c) it is used by entities in activities
                  whose costs can be compared to those of
                  other entities performing similar
                  activities (e.g., federal hospital
                  services in comparison to other
                  hospitals)?

          (SFFAS 6, par. 23)
          114) Is PP&E of entities operating as
          business-type activities categorized as general
          PP&E whether or not it meets the definition of
          other PP&E categories (e.g., heritage assets)?
          (SFFAS 6, par. 24)
          115) Are land and land rights specifically
          acquired for or in connection with other general
          PP&E included in general PP&E? (SFFAS 6, par. 25)
          116) Is all general PP&E recorded at cost? (SFFAS
          6, par. 26)
          117) Does the cost of general PP&E include all
          costs to bring it to a form and location suitable
          for its intended use to include

                  a) amounts paid to vendors,
                  b) transportation charges to the point of
                  initial use,
                  c) handling and storage costs,
                  d) labor and other direct or indirect
                  production costs (for assets produced or
                  constructed),
                  e) costs of engineering, architectural,
                  and other outside services for designs,
                  plans, specifications, and surveys,
                  f) acquisition and preparation costs of
                  buildings and other facilities,
                  g) an appropriate share of the cost of
                  the equipment and facilities used in
                  construction work,
                  h) fixed equipment and related
                  installation costs required for
                  activities in a building or facility,
                  i) direct costs of inspection,
                  supervision, and administration of
                  construction contracts and construction
                  work,
                  j) legal and recording fees and damage
                  claims,
                  k) fair value of facilities and equipment
                  donated to the government, and
                  l) material amounts of interest costs
                  paid?

          (SFFAS 6, par. 26)
          118) Is the cost of general PP&E acquired through
          donation, devise, or judicial process, excluding
          forfeiture, capitalized at estimated fair value
          at the time acquired by the entity? (SFFAS 6,
          par. 30)
          119) Is general PP&E transferred from other
          federal entities capitalized at the book amount
          recorded by the transferring entity? (SFFAS 6,
          par. 31)
          120) Is general PP&E transferred from other
          federal entities capitalized at the fair value at
          the time of the transfer, if the receiving entity
          cannot reasonably ascertain the book amount of
          the PP&E being transferred? (SFFAS 6, par. 31)
          121) If general PP&E is acquired through exchange
          between a federal entity and a nonfederal entity,
          is it capitalized at the fair value of the PP&E
          surrendered at the time of the exchange? (SFFAS
          6, par. 32)
          122) If general PP&E is acquired through exchange
          between a federal entity and a nonfederal entity
          and the fair value of the PP&E is more readily
          determinable than that of the PP&E surrendered,
          is the acquired general PP&E capitalized at its
          fair value? (SFFAS 6, par. 32)
          123) If general PP&E is acquired through exchange
          between a federal entity and a nonfederal entity
          and neither the fair value of the PP&E acquired
          or surrendered is determinable, is the acquired
          general PP&E capitalized at the book amount of
          the PP&E surrendered? (SFFAS 6, par. 32)
          124) If cash is included in an exchange of
          general PP&E between a federal entity and a
          nonfederal entity, is the cost of PP&E acquired
          increased by the amount of cash surrendered or
          decreased by the amount of cash received? (SFFAS
          6, par. 32)
          125) For general PP&E acquired through exchange
          between a federal entity and a nonfederal entity,
          is any difference between the net recorded amount
          of the PP&E surrendered and the cost of the PP&E
          acquired recognized as a gain or loss? (SFFAS 6,
          par. 32)
          126) Is PP&E recognized when title passes to the
          acquiring entity or when PP&E is delivered to the
          entity or to an agent of the entity? (SFFAS 6,
          par. 34)
          127) If general PP&E is under construction, is it
          recorded as construction work in process until it
          is placed into service and transferred to general
          PP&E? (SFFAS 6, par. 34)
    Depreciation expense is calculated through the systematic and rational
    allocation of the cost of general PP&E, less its estimated salvage or
    residual value over its estimated useful life. (SFFAS 6, par. 35)
          128) Is depreciation expense recognized on all
          general PP&E, except land and land rights of
          unlimited duration? (SFFAS 6, par. 35)
          129) Do estimates of useful life of general PP&E
          consider such factors as physical wear and tear
          and technological change? (SFFAS 6, par. 35)
          130) Are changes in estimated useful life or
          salvage and residual value of general PP&E
          accounted for in the period of change and future
          periods? (SFFAS 6, par. 35)
          131) Is the depreciation method systematic,
          rational, and best reflective of the use of the
          PP&E, including the use of a composite or a group
          methodology^13 where the costs of PP&E are
          allocated using the same allocation rate? (SFFAS
          6, par. 35; SFFAS 23, par. 9(f))
          132) Are depreciation and amortization expenses
          accumulated in contra-asset accounts? (SFFAS 6,
          par. 36)
          133) Are costs that either extend the useful life
          of existing general PP&E or enlarge or improve
          its capacity capitalized and
          depreciated/amortized over the remaining useful
          life of the asset? (SFFAS 6, par. 37)
          134) When general PP&E is disposed of, retired,
          or removed from service, is the asset removed
          from the asset accounts along with the associated
          accumulated depreciation/amortization? (SFFAS 6,
          par. 38)
          135) When general PP&E is disposed of, retired,
          or removed from service, is the difference
          between the book amount of the PP&E and any
          amount realized from its sale, scrap, or exchange
          recognized as a gain or loss in the period of
          disposal? (SFFAS 6, par. 38)
          136) Is general PP&E removed from general PP&E
          accounts along with associated accumulated
          depreciation/amortization if prior to disposal,
          retirement, or removal from service, it no longer
          provides service in the operations of the entity?
          (SFFAS 6, par. 39)
          137) Is PP& E that has been removed from the
          asset accounts recorded in an appropriate asset
          account at its expected net realizable value?
          (SFFAS 6, par. 39)
          138) Is any difference in the book amount and its
          expected net realizable value of about-to-be
          disposed, retired, or removal-from-service PP&E
          recognized as a gain or loss in the period of
          adjustment? (SFFAS 6, par. 39)
          139) Is the expected net realizable value of such
          PP&E assets adjusted at the end of each
          accounting period, and are any further
          adjustments in value recognized as a gain or
          loss? (SFFAS 6, par. 39)
          140) If historical cost information for existing
          general PP&E has not been maintained, are cost
          estimates based on

                  a) the cost of similar assets at the time
                  of acquisition, or
                  b) the current cost of similar assets
                  discounted for inflation since the time
                  of acquisition?

          (SFFAS 6, par. 40)
          141) For general PP&E previously considered
          national defense PP&E, is the initial
          capitalization amount for these assets the
          initial historical cost for the items including
          any major improvements or modifications? (SFFAS
          23, par. 10)
          142) For general PP&E previously considered
          national defense PP&E where obtaining initial
          historical cost is not practical, is estimated
          historical cost used, based on

                  a) current replacement cost of similar
                  items, deflated through the use of
                  price-level indexes to the acquisition
                  year or estimated acquisition year if the
                  actual year is unknown,
                  b) other information indicating amount
                  expended, such as budget, appropriation,
                  or engineering documents and other
                  reports reflecting amounts expended, or
                  c) other reasonable approaches for
                  estimating historical cost?^14

          (SFFAS 23, par. 12 & 13)
          143) For general PP&E previously considered
          national defense PP&E that was in service upon
          implementation of SFFAS 23, are cleanup cost
          liabilities adjusted as needed?^15 (SFFAS 23,
          par. 15)
          144) Is accumulated depreciation/amortization
          recorded based on

                  a) the estimated cost of the PP&E and the
                  number of years the PP&E has been in use
                  relative to its estimated useful life,
                  b) the PP&E's estimated net remaining
                  cost^16 and the depreciation or
                  amortization charged over the remaining
                  life based on that net remaining cost, or
                  c) a composite or a group methodology
                  whereby the costs of PP&E are allocated
                  using the same allocation rate?

          (SFFAS 6, par. 41; SFFAS 23, par. 9(f))
          145) If general PP&E would have been
          substantially depreciated or amortized had it
          been recorded upon acquisition, does the entity
          weigh materiality and cost-benefit to

                  a) record only improvements made during
                  the period beyond the initial expected
                  useful life of general PP&E, or
                  b) make an aggregate entry for whole
                  classes of PP&E (e.g., entire facilities
                  rather than a building-by-building
                  estimate)?

          (SFFAS 6, par. 42)
          146) In recording existing general PP&E, is the
          difference in amounts added to asset and
          contra-accounts credited (or charged) to the net
          position of the entity? (SFFAS 6, par. 43)
          147) In recording existing general PP&E
          previously identified as national defense PP&E,
          is the difference in amounts added to asset and
          contra accounts reported as a "change in
          accounting principle"? (SFFAS 23, par. 10 & 16)
    Capital leases are leases that transfer substantially all the benefits and
    risks of ownership to the lessee. Operating leases are leases in which the
    federal entity does not assume the risks of ownership of PP&E. Multiyear
    service contracts and multiyear purchase agreements for expendable
    commodities are not capital leases. (SFFAS 6, par. 20, footnote 22; SFFAS
    5, par. 43)
          148) Does the entity classify a lease as a
          capital lease if at its inception the lease
          either

                  a) transfers ownership of the property to
                  the lessee by the end of the lease term,
                  b) contains an option to purchase the
                  leased property at a bargain price,
                  c) has a term is equal to or greater than
                  75 percent of the estimated economic life
                  of the leased property, and the beginning
                  of the lease term does not fall within
                  the last 25 percent of the total
                  estimated economic life of the property,
                  or
                  d) the present value of rental and other
                  minimum lease payments, excluding that
                  portion of the payments representing
                  executory cost, equals or exceeds 90
                  percent of the fair value of the leased
                  property, and the beginning of the lease
                  term does not fall within the last 25
                  percent of the total estimated economic
                  life of the property?

          (SFFAS 6, par. 20; SFFAS 5, par. 43)
          149) Is the cost of general PP&E acquired under a
          capital lease equal to the amount recognized as a
          liability^17 for the capital lease at its
          inception? (SFFAS 6, par. 29)
    Property, plant, and equipment are classified as heritage assets if they
    have (1) historical or natural significance; (2) cultural, educational, or
    artistic importance; or (3) significant architectural characteristic.
    (SFFAS 29, par. 15)

    Multiuse heritage assets are heritage assets that are predominately used
    in general government operations (e.g., buildings such as the main
    Treasury building, which is used as an office building). (SFFAS 29, par.
    22)
          150) Is the cost of acquisition, improvement,
          reconstruction or renovation of multi-use
          heritage asset(s) capitalized as general PP&E and
          depreciated over its estimated useful life?
          (SFFAS 29, par. 22)
          151) Are multiuse heritage assets acquired
          through donation or devise recognized as general
          PP&E at the assets' fair value? (SFFAS 29, par.
          23)
          152) For multiuse heritage assets acquired
          through donation or devise, are the assets fair
          value also recognized as "nonexchange revenue,"
          as defined in SFFAS 7? (SFFAS 29, par. 23)

    ^12 A business-type activity is defined as a significantly self-sustaining
    activity that  finances its  continuing cycle  of operations  through  the
    collection of exchange revenue.

    ^13 The composite methodology is a method of calculating depreciation that
    applies a single  average rate to  a number of  heterogeneous assets  that
    have dissimilar characteristics and  service lives. The group  methodology
    is a method  of calculating  depreciation that applies  a single,  average
    rate to a number of  homogenous assets having similar characteristics  and
    service lives.

    ^14 For  example,  the latest  acquisition  cost may  be  substituted  for
    current replacement cost in some situations.

    ^15 This adjustment may  be needed because the  Department of Defense  may
    have already recognized the total  estimated cleanup costs as a  liability
    and expense for some military equipment (SFFAS 6.101).

    ^16 Net  remaining  cost  is the  original  cost  of the  asset  less  any
    accumulated depreciation/amortization to date (i.e., book value).

    ^17 The liability is  the net present value  of lease payments unless  the
    net present value  of the  lease payments exceeds  the fair  value of  the
    asset, in which  case the amount  recorded as the  liability would be  the
    fair value of the asset. (SFFAS 5, par. 44)

                      Software (153 - 180)                Yes, No, or Explanation
                                                              N/A
    Software includes the application and operating system programs,
    procedures, rules, and any associated documentation pertaining to the
    operation of a computer system or program.

    "Internal use software" is software that is purchased from commercial
    vendors "off the shelf," internally developed, or contractor-developed
    solely to meet the entity's internal or operational needs. (SFFAS 10, par.
    8)
          153) Does the entity capitalize the cost of
          software when it is

                  a) specifically identifiable,
                  b) has a determinate life of 2 years or
                  more,
                  c) not intended for sale in the
                  ordinary course of operations,
                  d) acquired or developed with the
                  intention of being used by the entity,
                  and
                  e) meets the criteria for general
                  property, plant, and equipment in that
                  it is used in providing goods and
                  services?

          (SFFAS 6, par. 17; SFFAS 10, par. 15)
          154) Does the capitalized cost of internally
          developed software include the full cost (i.e.,
          direct and indirect costs) incurred during the
          software development stage? (SFFAS 10, par. 16)
          155) Are capitalized internally developed
          software development costs limited to costs
          incurred after

                  a) management authorizes and commits to
                  a computer software project and
                  believes that it is more likely than
                  not that the project will be completed,
                  b) the software will be used to perform
                  the intended function with an estimated
                  service life of 2 years or more, and
                  c) the conceptual formulation, design,
                  and testing of possible software
                  project alternatives (i.e., preliminary
                  design stage) have been completed?

          (SFFAS 10, par. 16)
          156) Do software capitalization costs include
          costs for new software^18 and documentation
          manuals? (SFFAS 10, par. 17)
          157) Do the capitalized costs for commercial
          off-the-shelf (COTS) software include the
          amount paid to the vendor? (SFFAS 10, par. 18)
          158) Do the capitalized costs for
          contractor-developed software include the
          amount paid to a contractor to design, program,
          install, and implement the software? (SFFAS 10,
          par. 18)
          159) Does the entity capitalize internal costs
          incurred to implement the COTS or
          contractor-developed software and otherwise
          make it ready for use? (SFFAS 10, par. 18)
          160) Does the entity expense as incurred all
          data conversion costs for internally developed,
          contractor-developed, or COTS software as well
          as the cost to develop or obtain software that
          allows for access or conversion of existing
          data to the new software? (SFFAS 10, par. 19)
          161) Does the entity expense costs incurred
          after the completion of final acceptance
          testing? (SFFAS 10, par. 20)
          162) Does the entity treat software that serves
          both internal uses and stewardship purposes^19
          as internal use software and capitalize it to
          the extent such software meets criteria for
          general PP&E? (SFFAS 10, par. 21)
          163) Is computer software that is integrated
          into and necessary to operate general PP&E,^20
          rather than perform a separate application,
          considered part of the PP&E of which it is an
          integral part, and is it capitalized and
          depreciated? (SFFAS 10, par. 22)
          164) If the entity purchased software as part
          of a package of products and services, does it
          use a reasonable estimate of the relative fair
          value of the individual elements in allocating
          the cost as capitalizable or noncapitalizable
          (i.e., expense) elements? (SFFAS 10, par. 23)
          165) If the entity purchased software as part
          of a package of products and services, does it
          expense software costs that are not susceptible
          to allocation between maintenance and
          relatively minor enhancements? (SFFAS 10, par.
          23)
          166) Has the entity established capitalization
          thresholds for its internal-use software
          including bulk purchases of software programs
          and modules or components of a total software
          system? (SFFAS 10, par. 24)
          167) Does the entity capitalize the acquisition
          cost of enhancements to existing internal-use
          software, as well as related modules, when it
          is more likely than not that they will result
          in significant additional capabilities? (SFFAS
          10, par. 25)
          168) Does the entity expense, in the period
          incurred, the cost of minor enhancements
          resulting from ongoing systems maintenance as
          well as the purchase of enhanced versions of
          software for a minimal charge? (SFFAS 10, par.
          26)
          169) Are costs incurred solely to repair a
          design flaw or to perform minor upgrades that
          may extend the useful life of the software
          without adding capabilities expensed?^21 (SFFAS
          10, par. 27)
          170) Does the entity recognize a loss upon
          impairment of computer software when
          post-implementation or operational conditions
          apply where

                  a) the software is no longer expected
                  to provide substantive service
                  potential and will be removed from
                  service, or
                  b) a significant reduction occurs in
                  the capabilities, functions, or uses of
                  the software (or module thereof)?

          (SFFAS 10, par. 28 & 29)
          171) If impaired software is to remain in use,
          is the loss due to impairment measured as the
          difference between the book value and

                  a) the cost to acquire software that
                  would perform similar remaining
                  functions (i.e., unimpaired), or
                  b) the portion of book value
                  attributable to the remaining
                  functional elements of the software?

          (SFFAS 10, par. 29)
          172) If the loss due to impairment cannot be
          determined, is the book amount of the software
          amortized over the remaining useful life of the
          software? (SFFAS 10, par. 29)
          173) If impaired software is to be removed from
          use, is the loss due to impairment measured as
          the difference between the book amount and any
          net realizable value (NRV)? (SFFAS 10, par. 30)
          174) In situations of impaired software to be
          removed from use, does the entity transfer the
          NRV, if any, to an appropriate asset account
          until such time as the software is disposed of
          and the NRV realized? (SFFAS 10, par. 30)
          175) If the entity's managers conclude that it
          is no longer "more likely than not" that
          developmental software or a module thereof will
          be completed and placed in service, is the
          accumulated book value or the balance in a work
          in process account, if applicable, reduced to
          reflect the expected NRV and a loss recognized?
          (SFFAS 10, par. 31)
          176) Does the entity amortize capitalized
          internal use software systematically and
          rationally over the estimated useful life of
          the software? (SFFAS 10, par. 32)
          177) Does amortization of each module or
          component of a software project begin when that
          module or component has been successfully
          tested? (SFFAS 10, par. 33)
          178) If the use of a module is dependent on the
          completion of another module(s), does the
          amortization begin only when both that module
          and the other module(s) have been successfully
          tested? (SFFAS 10, par. 33)
          179) Are additions to the book value or changes
          in useful life of capitalized software treated
          prospectively (i.e., during the period of
          change and future periods only) when the
          software is amortized? (SFFAS 10, par. 34)
          180) When the entity replaces existing
          internal-use software with new software, is the
          unamortized cost of the old software expensed
          when the new software has been successfully
          tested? (SFFAS 10, par. 34)

    ^18 Examples  of  costs for  new  software are  salaries  of  programmers,
    systems  analysts,   project  managers,   and  administrative   personnel;
    associated  employee  benefits;  outside  consultants'  fees;  rent;   and
    supplies.

    ^19 Software that serves  both internal uses  and stewardship purposes  is
    referred to  as multiuse  software.  An example  is a  global  positioning
    system used in  connection with  national defense  activities and  general
    operating activities and services.

    ^20 For example, such software could include software necessary to operate
    airport radar and computer operated lathes.

    ^21  SFFAS  10  provides  that  material  expenditures  to  add   software
    capability/functionality would be capitalized  but that expenditures  that
    result in extending useful life or capacity would be expensed. (SFFAS  10,
    par. 42 & 43)

                 Other Assets (181 - 183)            Yes, No, or    Explanation
                                                         N/A
    Advances are cash outlays made by a federal entity to its employees,
    contractors, grantees, or others to cover the recipient's anticipated
    expenses or as advance payments for the costs of goods and services
    acquired by an entity. (SFFAS 1, par. 57)

    Prepayments are payments made by a federal entity to cover certain
    periodic expenses before those expenses are incurred (SFFAS 1, par. 58)

    Progress payments on work in progress are not included in advances and
    prepayments (OMB Circular No. A-136, p. 41, section II.4.3.3)
          181) Are amounts of advances or
          prepayments that are subject to a refund
          transferred to accounts receivable?
          (SFFAS 1, par. 59)
          182) Are advances and prepayments paid
          out reported separately as assets and not
          netted against the liability for advances
          and prepayments that the entity received?
          (SFFAS 1, par. 60)
          183) Are advances and prepayments that
          are made to federal entities accounted
          for separately from those made to
          nonfederal entities? (SFFAS 1, par. 61)

      Section IV -  Liabilities

    Questions related to accounting for liabilities in the financial
    statements are presented below.

    Caption                                                   Question Numbers
    Liabilities in General                                         1 - 2
    Accounts Payable and Interest Payable                          3 - 8
    Capital Lease Liabilities                                      9 - 12
    Federal Debt and Related Interest                             13 - 19
    Pensions, Other Retirement Benefits, and Postemployment       20 - 24
    Benefits
    Other Liabilities                                             25 - 48

                Liabilities in General (1 - 2)            Yes, No,   Explanation
                                                           or N/A
    Liabilities of the federal agencies are reported under two major
    categories: (1) liabilities covered by budgetary resources^22 and (2)
    liabilities not covered by budgetary resources.^23 Within each of these
    two categories, liabilities are classified as (1) intra-governmental
    liabilities, which are amounts owed to other federal entities or (2)
    governmental liabilities, which are amounts owed to nonfederal entities by
    the federal government or an entity within the federal government. (SFFAS
    1, par. 21; SFFAS 5, footnote 1 in summary)
          1) Does the federal entity recognize a
          liability for probable^24 and measurable^25
          future outflows or other sacrifices of
          resources arising from one or more events from

                  a) past exchange transactions,
                  b) government-related events, such as
                  a federal entity accidentally causing
                  damage to private property,
                  c) government-acknowledged events,
                  such as natural disasters, for which
                  the government has taken formal
                  responsibility for the related costs,
                  and
                  d) nonexchange transactions that,
                  according to current law and
                  applicable policy, are unpaid amounts
                  due as of the reporting date?

          (SFFAS 5, par. 19)
          2) Are liabilities recognized when incurred
          regardless of whether they are covered by
          available budgetary resources (including those
          liabilities related to appropriations canceled
          under "M" account legislation (P.L. 101-510,
          section 1405)? (OMB Circular A-136, p. 41,
          section II.4.3.4)

    ^22 Liabilities covered by budgetary resources are liabilities covered  by
    realized budgetary  resources  as of  the  balance sheet  date.  Budgetary
    resources include (1)  new budget authority,  (2) unobligated balances  of
    budgetary resources at the beginning of the year or net transfers of prior
    year balances  during the  year, (3)  spending authority  from  offsetting
    collections (credited to an appropriation or fund account), (4) recoveries
    of unexpired budget authority through  downward adjustments of prior  year
    obligations, and  (5)  permanent indefinite  appropriations  or  borrowing
    authority, which have been enacted and  signed into law as of the  balance
    sheet date, provided that the resources may be apportioned by OMB  without
    further action by the Congress and without a contingency having to be met.

    ^23 Liabilities not  covered by  budgetary resources  are liabilities  for
    which congressional action  is needed  before budgetary  resources can  be
    provided.

    ^24 Probable  refers  to that  which  can  be reasonably  expected  or  is
    believed to be more likely than not on the basis of available evidence  or
    logic. However, in  the context  of assessing  the outcome  of matters  of
    pending or threatened litigation and unasserted claims and recognizing  an
    associated liability, "probable" refers  to that which  is likely, not  to
    that which is "more likely than not."

    ^25 Measurable refers to  that which can be  quantified in monetary  units
    with sufficient reliability to be reasonably estimable.

             Accounts Payable and Interest Payable        Yes, No, or
                                                              N/A     Explanation
                            (3 - 8)
    Accounts payable are amounts owed by a federal entity for goods and
    services received, progress in contract performance, and rents due to
    other entities. (SFFAS 1, par. 74)
          3) Do accounts payable exclude amounts related
          to ongoing continuous expenses, such as salary
          and related benefits expense, which are
          classified as other current liabilities? (SFFAS
          1, par. 75)
          4) When an entity accepts title to goods,
          whether the goods are delivered or in transit,
          does the entity recognize a liability for the
          unpaid cost of goods? (SFFAS 1, par. 77)
          5) If invoices for goods, for which the entity
          has accepted the title, are not available, does
          the entity estimate the amount owed? (SFFAS 1,
          par. 77)
          6) For facilities or equipment constructed or
          manufactured by contractors or grantees
          according to agreements or contract
          specifications, are amounts recorded as payable
          based on an estimate of work completed under
          the contract or the agreement in accordance
          with the federal entity's engineering and
          management evaluation of actual performance
          progress and incurred costs? (SFFAS 1, par. 78
          & 79)
          7) Is interest incurred, but unpaid on borrowed
          funds, late payments, and refunds recognized as
          interest payable and reported as a liability at
          the end of each period? (SFFAS 1, par. 81)
          8) Is interest payable to federal entities
          accounted for separately from interest payable
          to the public? (SFFAS 1, par. 82)

               Capital Lease Liabilities (9 - 12)          Yes, No or Explanation
                                                              N/A
    Capital leases are leases that transfer substantially all of the benefits
    and risks of ownership to the lessee. (SFFAS 5, par. 43)
          9) Is the amount recorded by the lessee as a
          liability under a capital lease arrangement the
          present value of rental and other minimum lease
          payments (excluding executory costs) during the
          lease term? (SFFAS 5, par. 44)
          10) If the present value of the rental and other
          minimum lease payments during the lease term
          exceeds the fair value of the leased property,
          is the liability recorded as the fair value^26
          of the property at the inception of the lease?
          (SFFAS 5, par. 44)
          11) Does the entity use the applicable Treasury
          borrowing rate to determine the discount rate
          charged on a capital lease unless

                  a) it is practicable for the lessee to
                  learn the implicit rate computed by the
                  lessor, and
                  b) the implicit rate is less than the
                  Treasury borrowing rate?

          (SFFAS 5, par. 45)
          12) During the lease term, is each minimum lease
          payment allocated between a reduction of the
          obligation and interest expense so as to produce
          a constant periodic rate of interest on the
          remaining balance of the liability? (SFFAS 5,
          par. 46)

    ^26 Fair value is the price for which  an asset could be bought or sold  in
    an arm's-length transaction between unrelated  parties. Roman L. Well  and
    Patrick C. O'Brien,  Accounting: The  Language of Business,  9th ed.  (Sun
    Lakes, Arizona: Thomas Horton and Daughters, 1994).

               Federal Debt and Related Interest          Yes, No, or
                                                              N/A     Explanation
                           (13 - 19)
    Debts are amounts borrowed from the Treasury, the Federal Financing Bank,
    other federal agencies, or the public under general or special financing
    authority such as Treasury bills, notes, bonds, and Federal Housing
    Administration (FHA) debentures. (SFFAS 5, par. 47)
          13) Does the entity accounting for federal debt
          identify the amount of the outstanding debt
          liability at any given time and the related
          interest cost for each accounting period?
          (SFFAS 5, par. 48)
          14) Are fixed-value securities with known
          redemption or maturity amounts at time of issue
          valued at their original face (par) value net
          of any unamortized discount or premium? (SFFAS
          5, par. 50)
          15) For fixed-value securities, is the interest
          method^27 used for amortizing any discount or
          premium? (SFFAS 5, par. 51)
          16) If the interest method is not used, is the
          straight line method of discount or premium
          amortization used for

                  a) short-term securities with a
                  maturity of 1 year or less, and
                  b) longer term securities, where the
                  difference between the amount of
                  amortization under the interest and
                  straight-line methods is immaterial?

                  (SFFAS 5, par. 50)
          17) If the entity has issued variable value
          securities of unknown redemption or maturity
          values, are they appraised at their original
          value and periodically revalued on the basis of
          the regulations or offering language? (SFFAS 5,
          par. 52)
          18) Are old currencies issued by the federal
          government and not yet redeemed or written off
          identified as a noninterest bearing federal
          debt liability at face value? (SFFAS 5, par.
          55)
          19) Is all debt owed to federal entities
          recorded separately from debt owed to the
          public? (SFFAS 1, par. 18-24)

    ^27 The interest method for amortizing  a bond premium or discount  reduces
    the discount or premium by  the difference between the effective  interest
    and stated interest on the bond. (SFFAS 1, app B, tables 1 & 2)

        Pensions, Other Retirement Benefits, and   Yes, No, or N/A  Explanation
            Postemployment Benefits (20 - 24)
    Federal employee and veterans benefits include the actuarial portion of
    pensions, other retirement benefits, and other postemployment benefits.
    (SFFAS 1, par. 83 & 84; SFFAS 5, par. 56)

    In the context of accounting for pensions, other retirement benefits
    (ORB), and other postemployment benefits, the "administrative entity"
    manages and accounts for the pension or other employee plan, while the
    "employer entity" employs federal workers and generates employee costs,
    for which it would typically receive a salary and expense appropriation.
    (SFFAS 5, par. 57, footnote 38)

    The "aggregate entry age normal" actuarial cost method is one under which
    the expenses or liabilities arising from the actuarial present value of
    projected pension benefits are allocated on a level basis over the
    earnings or the service of the group between entry age and assumed exit
    ages. The portion of the actuarial present value allocated to a valuation
    year is called "normal cost." (SFFAS 5, par. 64)
          20) Is the aggregate entry age normal
          actuarial cost method used to calculate,
          for the administrative entity financial
          statements, the liabilities arising from
          pension and ORB expenses? (SFFAS 5, par.
          64 & 82)
          21) If other actuarial cost methods are
          used because the results are not
          materially different, does the entity
          provide an explanation why aggregate
          entry age normal is not used? (SFFAS 5,
          par. 64 & 82)
          22) Does the administrative entity
          report pension and ORB assets separately
          from liabilities as opposed to netting
          them? (SFFAS 5, par. 68 & 85)
          23) Does the administrative entity carry
          pension and ORB assets at their
          acquisition cost, adjusted for
          amortization, if appropriate? (SFFAS 5,
          par. 85)
          24) Does the employer entity recognize
          the long-term other postemployment
          benefits liability as the present value
          of future payments discounted at the
          Treasury borrowing rate for securities
          of similar maturity? (SFFAS 5, par. 95)

                Other Liabilities (25 - 48)            Yes, No, or   Explanation
                                                           N/A
    Unless they are reported separately, other liabilities include liabilities
    not recognized in other categories. They may include, but are not limited
    to: capital leases, insurance, advances and prepayments, deposit funds
    held in escrow, accrued liabilities related to ongoing continuous expenses
    such as federal employee salaries and accrued employee annual leave, and
    estimated losses for claims and other contingencies. Claims and other
    contingencies include indemnity agreements, adjudicated claims, and
    commitments to international institutions. (SFFAS 1, par. 83-86)
          25) Do all federal insurance and guarantee
          programs (except social insurance and loan
          guarantee programs) recognize a liability
          for unpaid claims incurred resulting from
          insured events that have occurred as of the
          reporting date? (SFFAS 5, par. 104)
          26) Do federal insurance programs accrue a
          liability when an existing condition,
          situation, or set of circumstances
          involving uncertainty as to possible loss
          exists, and where

                  a) the uncertainty will be resolved
                  when one or more probable future
                  events either occur or fail to
                  occur, and
                  b) future outflow or other
                  sacrifice of resources is probable
                  and measurable?

          (SFFAS 5, par. 104 & 108)
          27) Is a liability recognized for future
          life insurance policy benefits (such as
          death or disability)? (SFFAS 5, par. 104)
          28) When insurance payments and losses
          extend beyond the current year, does the
          liability at the end of the year represent
          net losses calculated on a present-value
          basis to reflect the time value of money?
          (SFFAS 5, par. 109)
    The liability for future policy benefits is the present value of future
    outflows to be paid to (or on behalf of) policyholders, less the present
    value of future related premiums. In general, for whole life policies, the
    liability for future policy benefits should be no less than the cash
    surrender value that accrues to the benefit of the policyholder. (SFFAS 5,
    par. 116)
          29) Are liabilities for future benefits of
          whole life insurance policies recorded as
          prescribed by private sector standards
          (i.e., Financial Accounting Standards Board
          (FASB) Statement of Accounting Standards
          (SFAS) 60, 97, & 120; American Institute of
          Certified Public Accountants (AICPA)
          Statement of Position (SOP) 95-1)? (SFFAS
          5, par. 117)
          30) Does the liability for future benefits
          relating to participating life insurance
          contracts equal the sum of

                  a) the net level premium reserve
                  for death and endowment policy
                  benefits,
                  b) liability for terminal
                  dividends, and
                  c) any premium deficiency?^28

          (SFFAS 5, par. 118 & 120)
          31) Has the entity compared the liability
          for future policy benefits using actuarial
          assumptions applicable at the time the
          contract was made (contract assumptions)
          with the liability for future policy
          benefits using assumptions that consider

                  a) current economic conditions
                  (i.e., current and expected
                  investments and expected long-term
                  yields), and
                  b) experience (i.e., mortality,
                  morbidity, and termination rates)?

          (SFFAS 5, par. 119)
          32) Does the agency record "unearned
          revenue" as a liability if it receives
          advances or progress payments prior to
          receipt of cash, and it records the
          amounts? (SFFAS 7, par. 37)
          33) Are amounts payable for refunds, refund
          offsets,^29 and drawbacks^30 recognized as
          liabilities when measurable and legally
          payable under established processes of the
          collecting entity? (SFFAS 7, par. 57)
          34) Do amounts payable for refunds include
          refund claims filed by the taxpayer when
          the government has determined the amount
          refundable and identified the payee? (SFFAS
          7, par. 57)
          35) Are amounts payable for refunds with
          respect to returns or claims filed as of
          the end of the reporting period included in
          accounts payable for refunds if they do not
          require specific approval before payment?
          (SFFAS 7, par. 57)
          36) For claims filed for refunds where
          specific administrative actions are
          required before payments can be made, are
          the amounts excluded from being recognized
          as a liability if the required
          administrative actions are not yet complete
          as of the close of the reporting period,
          even if reasonably estimable? (SFFAS 7,
          par. 58.A)
          37) Are unasserted claims for refunds by
          taxpayers or importers, such as unfiled
          claims for refunds or drawbacks for which
          no claim has been filed, excluded from
          liabilities, even if reasonably estimable?
          (SFFAS 7, par. 58.B)
          38) Are amounts voluntarily made as
          deposits, such as those made to stop the
          accrual of interest or those made pending
          settlements and judgments, separately
          recognized as deposit liabilities? (SFFAS
          7, par. 59)
    A loss contingency is an existing condition, situation, or set of
    circumstances involving uncertainty as to possible loss to an entity. The
    uncertainty should ultimately be resolved when one or more future events
    occur or fail to occur. (SFFAS 5, par. 35)
          39) Does the entity recognize estimated
          losses for claims or other contingencies if
          all of the following conditions apply

                  a) a past event or exchange
                  transaction has occurred,
                  b) a future outflow or other
                  sacrifice of resources is
                  probable,^31 and
                  c) the future outflow or sacrifice
                  of resources is measurable (e.g.,
                  the federal entity's management
                  determines an estimated settlement
                  amount)?

          (SFFAS 5, par. 38; SFFAS 6, par. 91; SFFAS
          12, par. 10 & 11)
          40) When determining an estimated
          contingent liability, if some amount within
          a range of amounts is a better estimate
          than any other amount within the range, is
          that amount recognized? (SFFAS 5, par. 39)
          41) When determining an estimated
          liability, if no amount within a range of
          amounts is a better estimate than any other
          amount, is the minimum amount in the range
          recognized? (SFFAS 5, par. 39)
          42) Does the entity separately recognize a
          liability for environmental clean-up
          costs^32 for PP&E if

                  a) they are related to a past
                  transaction or event, and
                  b) the related costs are probable
                  and measurable?

          (SFFAS 5, par. 38 & SFFAS 6, par. 91-93)
          43) When clean-up costs are paid, are the
          payments recognized as a reduction in the
          liability for clean-up costs? (SFFAS 6,
          par. 100)
          44) If clean-up costs have not been
          previously recognized, is a liability
          recognized for the portion of the estimated
          total clean-up cost that is attributable to
          either the portion of the physical capacity
          used or the portion of the estimated useful
          life that has passed since the PP&E was
          placed into service? (SFFAS 6, par.
          104-106)
          45) Are any subsequent changes (made in
          periods following implementation) in
          estimated total clean-up cost immediately
          expensed (if costs are to be recovered
          though user charges) and included in the
          related liability balance? (SFFAS 6, par.
          104)
          46) When clean-up costs are recognized for
          the first time, is the offsetting charge
          for any liability for clean-up costs shown
          as a "prior-period adjustment?" (SFFAS 6,
          par. 105; SFFAS 21, par. 13)
    Social insurance programs provide for the maintenance and distribution of
    incomes and medical benefits during periods of unemployment, disability,
    and retirement. These programs are Social Security, Medicare, Railroad
    Retirement Benefits, Black Lung Benefits, and Unemployment Insurance.
    Expense and liability recognition for these programs is the same for both
    the consolidated governmentwide entity and for the component entities.
    (SFFAS 17, par. 2, 4, 14, 15, 19, 30, & app. D, glossary)
          47) Does the entity recognize a liability
          for social insurance benefits due and
          payable including claims incurred but not
          reported? (SFFAS 17, par. 22)
          48) Does the liability for unemployment
          insurance include

                  a) amounts due to states and
                  territories for benefits they have
                  paid to beneficiaries but for which
                  they have not withdrawn funds from
                  the federal Unemployment Trust Fund
                  (UTF) as of the fiscal year end,
                  and
                  b) estimated amounts to be
                  withdrawn from UTF and benefits
                  paid by states and territories
                  after fiscal year end for
                  compensatory days occurring prior
                  to fiscal year end?

          (SFFAS 17, par. 23)

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

    29 Refund offsets  are amounts withheld  from refunds on  behalf of  other
    agencies. (See also  OMB Circular  No. A-129  (revised), app.  A, Part  V,
    section 2.c.i. (1))

    30 Drawbacks are refunds payable on all or part of duties paid on imported
    goods that  are subsequently  exported  or destroyed.  (SFFAS 7,  app.  C,
    glossary)

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

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

      Section V -  Net Position and Related Changes

    Questions related to accounting for net position and related changes in
    the financial statements are presented below.

    Caption                                                   Question Numbers
    Unexpended Appropriations & Cumulative Results of              1 - 2
    Operation
    Budgetary Financing Sources                                    3 - 18
    Other Financing Sources                                       19 - 27
    Earmarked Funds                                               28 - 32

    Unexpended Appropriations & Cumulative Results of  Yes, No,   Explanation
                      Operations (1 - 2)                   or N/A
    Net position is affected by changes to its two components: Cumulative
    Results of Operations and Unexpended Appropriations. They are broken out
    into two separate columns in the Statement of Changes in Net Position.
    (OMB Circular No. A-136, p. 51, sections II.4.5.1)
          1) Does the line item "unexpended
          appropriations" include both the portion of
          the entity's appropriation represented by
          undelivered orders and unobligated balances?
          (OMB Circular No. A-136, p. 45, section
          II.4.3.5)
          2) Does the line item "cumulative results of
          operations" include

                  a) the net results of operations since
                  inception,
                  b) the cumulative amount of
                  prior-period adjustments, and
                  c) the cumulative amount of donations
                  and transfers of assets in and out
                  without reimbursement?

          (OMB Circular No. A-136, p. 45, section
          II.4.3.5)

            Budgetary Financing Sources (3 - 18)       Yes, No, or   Explanation
                                                           N/A
    Budgetary Financing Sources displays financing sources and nonexchange
    revenue that are also budgetary resources, or adjustments to these
    resources, as reported on the Statement of Budgetary Resources and defined
    as such by OMB Circular No. A-11, Preparation, Submission and Execution of
    the Budget, as amended. (OMB Circular No. A-136, p. 57, section II.4.5.6)
          3) Are unexpended appropriations reduced as
          appropriations are used? (SFFAS 7, par. 71)
          4) Are unexpended appropriations adjusted
          for other changes in budgetary resources,
          such as rescissions and transfers? (SFFAS
          7, par. 71)
          5) Do "appropriations transferred in/out
          (+/-)" equal the amount of appropriations
          received in the current or prior year(s)
          that have been transferred in or out during
          the current reporting year? (OMB Circular
          No. A-136, p. 58, section II.4.5.6)
          6) Do "other adjustments^33 (rescissions,
          etc.) (+/-)" include adjustments to either
          cumulative results of operations or
          unexpended appropriations? (OMB Circular
          No. A-136, p. 58, section II.4.5.6)
          7) Are appropriations used by collecting
          entities to provide refunds of monies
          deposited to Treasury and trust funds
          reported under "other adjustments
          (rescissions, etc. (+/-))" rather than as
          an "appropriations used?" (OMB Circular No.
          A-136, p. 58, section II.4.5.6)
          8) Are "appropriations used" recognized as
          a financing source when goods and services
          are received or when benefits and grants
          are provided?^34 (SFFAS 7, par. 72)
          9) Is the amount of appropriations used
          subtracted from unexpended appropriations
          and added to cumulative results of
          operations for a net zero effect on net
          position as a whole? (OMB Circular No.
          A-136, p. 58, section II.4.5.6)
          10) Do "appropriations^35 used" exclude

                  a) undelivered orders, and
                  b) unobligated appropriations?

          (OMB Circular No. A-136, p. 58, section
          II.4.5.6)
          11) Is nonexchange revenue recognized by
          the recipient entity as a financing source
          (and not as a deduction in determining the
          net cost of operations)? (SFFAS 7, par. 60)
          12) Does the entity recognize nonexchange
          revenues, such as taxes, if legally
          entitled to the revenue? (SFFAS 7, par. 48
          & 49)
          13) Is nonexchange revenue recognized when
          the government's claim to resources can be
          characterized as

                  a) specifically identifiable,
                  b) legally enforceable,
                  c) reasonably estimable, and
                  d) more likely than not
                  collectable?

          (SFFAS 7, par. 48)
          14) Is revenue recognized by recipient
          entities the sum of

                  a) cash or cash equivalents
                  transferred to them by the
                  collecting entities, and
                  b) the net change in any related
                  inter-entity balances between the
                  collecting and the receiving
                  entities (i.e., the amount to be
                  transferred to the recipient
                  entities from the collecting entity
                  or vice versa)?

          (SFFAS 7, par. 60)
          15) Do "donations and forfeitures of cash
          and cash equivalents" include voluntary
          gifts and involuntary forfeitures of
          resources to the federal government by
          nonfederal entities? (OMB Circular No.
          A-136, p. 58, section II.4.5.6)
          16) Do "transfers-in/out without
          reimbursement (+/-)" under "budgetary
          financing sources" include
          intra-governmental nonappropriated^36
          balance transfers in or out during the
          current reporting year? (OMB Circular No.
          A-136, p. 58, section II.4.5.6)
          17) Is exchange revenue (included in
          calculating an entity's net cost of
          operations) required to be transferred to
          the Treasury or another federal entity
          recognized as a transfer out? (OMB Circular
          No. A-136, p. 58, section II.4.5.6)
          18) Do "other budgetary financing sources"
          include other financing sources that affect
          budgetary resources that have not been
          covered by the preceding questions? (OMB
          Circular No. A-136, p. 58, section
          II.4.5.6)

    33 Some examples of adjustments include rescissions of appropriations  and
    cancellations of expired appropriation  expenditure accounts, which  would
    also be included in line 6,  "Permanently not Available" on the  Statement
    of Budgetary Resources.

    34 This is true whether the  goods, services, and benefits are payable  or
    paid as of the reporting date and whether the appropriations are used  for
    items that are expensed or capitalized.

    35 Appropriations used does  not increase net  position. It is  subtracted
    from "unexpended  appropriations"  and  added to  "cumulative  results  of
    operations," which are line items on the balance sheet.

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

               Other Financing Sources (19 - 27)          Yes, No, or Explanation
                                                              N/A
    Other Financing Sources displays financing sources and nonexchange revenue
    that do not represent budgetary resources as reported on the Statement of
    Budgetary Resources and defined as such by OMB Circular No. A-11, as
    amended (OMB Circular A-136, p. 59, section II.4.5.7)
          19) Is revenue arising from donations of
          property measured at the estimated fair value
          of the contribution at the time of the
          donation? (SFFAS 6, par. 30; SFFAS 7, par. 62)
          20) Are transferred assets recorded at the book
          amount of the transferring entity, or, if the
          receiving entity does not know the book amount,
          is the asset recorded at its estimated fair
          value as of the date of the transfer? ^37
          (SFFAS 7, par. 74)
          21) When assets^38 are transferred in or out by
          entities without reimbursement

                  a) does the receiving entity recognize
                  the transfer-in as an increase in
                  financing sources in its statement of
                  net position, and
                  b) does the transferring entity
                  recognize the transfer out as a
                  decrease in financing sources in its
                  statement of changes in net position?

          (SFFAS 7, par. 74)
          22) Does the reporting entity recognize an
          imputed financing source for costs funded
          through other federal entities, as well as
          nonreimbursed costs of goods and services
          provided by other federal entities? (SFFAS 4,
          par. 109; SFFAS 7, par. 73)
          23) Do "other financing sources" include other
          financing sources that do not represent
          budgetary resources and that have not been
          covered by the preceding questions? (OMB
          Circular No. A-136, p. 59, section II.4.5.7)
          24) Is exchange revenue transferred to another
          government entity or to the Treasury recognized
          as a "transfer out" in determining the net
          results of operations? (SFFAS 7, par. 75)
          25) Are assets included in general PP&E that
          are transferred to another federal entity for
          use as heritage assets or stewardship land
          recognized as a transfer-out of capitalized
          assets? (SFFAS 29 par. 21 & 39)
          26) For transfers of multi-use heritage assets
          from one federal entity to another, does the
          receiving entity recognize a transfer-in at the
          transferring entity's book value or at its
          estimated fair value if book value is not
          provided? (SFFAS 29, par. 24)
          27) For transfers of multi-use heritage assets
          from one federal entity to another, does the
          transferring entity recognize a transfer-out at
          the transferring entity's book value? (SFFAS
          29, par. 24)

    37 FASAB Technical Bulletin 2003-1  offers specific guidance dealing  with
    transfers arising from the creation of the Department of Homeland Security
    and other transfers of operations between federal entities directed by the
    Homeland Security Act of 2002 (P.L. 107-296).

    38 This  amount includes  intra-governmental  transfers in  to or  out  of
    capitalized assets during the current reporting year.

              Earmarked Funds (Items 28 - 32)         Yes, No, or    Explanation
                                                          N/A
    Earmarked funds are financed by specifically identified revenues, often
    supplemented by other financing sources, which remain available over time.
    These specifically identified revenues and other financing sources are
    required by statute to be used for designated activities, benefits or
    purposes, and must be accounted for separately from the entity's general
    revenues. (SFFAS 27, par. 11)
          28) Are earmarked funds accounted for
          separately from the entity's general
          revenues? (SFFAS 27, par.11)
          29) Do funds designated as earmarked meet
          these criteria

                  a) a statute committing the
                  federal government to use
                  specifically identified revenues
                  and other financing sources only
                  for designated activities,
                  benefits or purposes,
                  b) explicit authority for the
                  earmarked fund to retain revenues
                  and other financing sources not
                  used in the current period for
                  future use to finance the
                  designated activities, benefits,
                  or purposes, and
                  c) a requirement to account for
                  and report on the receipt, use,
                  and retention of the revenues and
                  other financing sources that
                  distinguishes the earmarked fund
                  from the Government's general
                  revenues?

          (SFFAS 27, par.11)
          30) Are intra-governmental funds, credit
          financing accounts, and fiduciary funds
          not characterized as earmarked funds?
          (SFFAS 27, par.18)
          31) If more than one component entity is
          responsible for carrying out the program
          financed with earmarked revenues and other
          financing sources, can each portion

                  a) be clearly identified and the
                  entity includes its respective
                  portion, or
                  b) not be clearly identified and
                  the entity with program management
                  responsibility report the entire
                  fund?

          (SFFAS 27, par. 20)
          32) Does the quantitative and qualitative
          criteria used to present individual
          earmarked funds include

                  a) percentages of the reporting
                  entity's earmarked revenues or
                  cumulative results of operations
                  from earmarked funds,
                  b) whether an earmarked fund is of
                  immediate concern to constituents
                  of the fund,
                  c) whether it is politically
                  sensitive or controversial,
                  d) whether it is accumulating
                  large balances, and
                  e) whether the information
                  provided in the financial
                  statements would be the primary
                  source of financial information
                  for the public?

          (SFFAS 27, par. 24)

      Section VI -  Net Cost

    Questions related to accounting for net cost in the financial statements
    are presented below.

    Caption                                                   Question Numbers
    Cost Accounting - Overall Requirements                         1 - 7
    Cost Accounting - Responsibility Segments                      8 - 10
    Cost Accounting - Full Cost                                   11 - 18
    Cost Accounting - Inter-entity Costs                          19 - 23
    Cost Accounting - Costing Methodology                         24 - 30
    Revenues                                                      31 - 44
    Pensions  and   Other  Retirement   and   Postemployement     45 - 68
    Benefits Costs
    Inventory, Materials, Supplies, and Commodities Costs         69 - 77
    Property, Plant, and Equipment Costs                          78 - 92
    Clean-up Costs                                                93 - 100
    Interest Costs                                               101 - 102
    Insurance and Subsidies Costs                                103 - 106

            Cost Accounting - Overall Requirements      Yes, No, or
                                                            N/A      Explanation
                           (1 - 7)
    Managerial cost accounting is the process of accumulating, measuring,
    analyzing, interpreting, and reporting cost information useful to both
    internal and external groups concerned with the way in which the
    organization uses, accounts for, safeguards, and controls its resources to
    meet its objectives. (SFFAS 4, par. 42)

    A cost accounting "system" is a continuous and systematic cost accounting
    process that may be designed to accumulate and assign costs to a variety
    of objects routinely or as desired by management. (SFFAS 4, par. 74)

    Cost finding is a method for determining the cost of producing goods or
    services using appropriate procedures, for example, special cost studies
    or analyses. (SFFAS 4, par. 76)
          1) Are costs related to the production of
          outputs recorded separately from costs that
          are not related to the production outputs
          (i.e., nonproduction costs)? (OMB Circular
          No. A-136, p. 49, section II.4.4.3)
          2) Has the entity established appropriate
          procedures and practices to enable the
          consistent and regular collection,
          measurement, accumulation, analysis,
          interpretation, and communication of cost
          information? (SFFAS 4, par. 68-70)
          3) As a means of providing cost information
          in an efficient and reliable manner on a
          continuing basis, does the entity regularly
          accumulate and report the costs of its
          activities either by means of cost accounting
          systems or cost finding techniques? (SFFAS 4,
          par. 68-70)
          4) Does the reporting entity's cost
          accounting system or cost finding technique,

                  a) collect cost information by
                  responsibility segments identified by
                  management,
                  b) define outputs for each
                  responsibility segment,
                  c) measure the full cost (including
                  the cost of goods or services
                  provided by other entities) of
                  outputs so that total operational
                  costs and total unit costs of outputs
                  can be determined,
                  d) use a costing methodology (e.g.,
                  activity-based, job order, standard
                  costing) that is appropriate for
                  management's needs and the operating
                  environment,
                  e) provide information needed to
                  determine and report service efforts
                  and accomplishments and information
                  necessary to meet the requirements of
                  GPRA (or interface with a system that
                  provides such information),
                  f) report cost information in a
                  timely manner and on a regular basis
                  consistent with the needs of
                  management and budgetary and
                  financial reporting requirements,
                  g) rely on the United States Standard
                  General Ledger as a basis for
                  integrating its cost information with
                  its financial accounting,
                  h) supply cost data precise enough to
                  provide reliable and useful
                  information to internal and external
                  users in making evaluations or
                  decisions but also avoid unnecessary
                  precision and refinement of data, and
                  i) accommodate management's cost
                  information needs?

          (SFFAS 4, par. 71)
          5) Are all managerial cost accounting
          activities, processes, and procedures
          documented? (SFFAS 4, par. 71)
          6) In determining the appropriate detail for
          its cost accounting processes and procedures,
          has the reporting entity evaluated

                  a) nature of its operations,
                  b) precision desired and needed in
                  cost information,
                  c) practicality of data collection
                  and processing,
                  d) availability of electronic
                  data-handling facilities,
                  e) cost of installing, operating, and
                  maintaining the cost accounting
                  processes, and
                  f) specific information needs of
                  management?

          (SFFAS 4, par. 72)
          7) Has the entity used similar or compatible
          cost accounting processes throughout its
          component units? (SFFAS 4, par. 73)

    Cost Accounting - Responsibility Segments (8 -   Yes, No, or  Explanation
                             10)                            N/A
    A responsibility segment is a component of a reporting entity that is
    responsible for carrying out a mission, conducting a major line of
    activity, or producing one or a group of related products or services.
    (SFFAS 4, par. 78)
          8) Has the entity defined and established
          responsibility segments? (SFFAS 4, par. 77)
          9) Does management designate or establish
          responsibility segments based on

                  a) the entity's organizational
                  structure,
                  b) its lines of responsibility and
                  missions,
                  c) its output (goods or services it
                  delivers), and
                  d) budget accounts and funding
                  authorities?

          (SFFAS 4, par. 86)
          10) For each responsibility segment, does
          the entity

                  a) define and accumulate outputs
                  and, if feasible, quantify each type
                  of output in units,
                  b) accumulate costs and quantitative
                  units of resources consumed in
                  producing the outputs,
                  c) assign costs to outputs and
                  calculate the cost per unit of each
                  type of output, and
                  d) establish cost centers within
                  responsibility segments?

          (SFFAS 4, par. 79 & 88)

                Cost Accounting - Full Cost            Yes, No, or
                                                           N/A       Explanation
                         (11 - 18)
    Full cost is the sum of all costs that contribute to an output and
    includes direct and indirect costs regardless of funding sources. It also
    includes the costs of supporting services provided by other responsibility
    segments or entities. (SFFAS 4, par. 89)

    Output is any product or service generated from the consumption of
    resources. (SFFAS 4, par. 89) Direct costs are costs that can be
    specifically identified with an output. (SFFAS 4, par. 90) Indirect costs
    are costs of resources that are jointly or commonly used to produce two or
    more types of outputs, but are not specifically identifiable with any of
    the outputs. (SFFAS 4, par. 91)
          11) Does the entity include all direct
          costs in the full cost of outputs,
          including

                  a) salaries and other benefits for
                  employees who work directly on the
                  output,
                  b) materials and supplies used in
                  the work,
                  c) various costs associated with
                  office space, equipment,
                  facilities, and utilities that are
                  used exclusively to produce the
                  output, and
                  d) costs of goods or services
                  received from other segments or
                  entities that are used to produce
                  the output?

          (SFFAS 4, par. 90)
          12) In the full cost of outputs, does the
          reporting entity include

                  a) indirect costs incurred within a
                  responsibility segment, and
                  b) the costs of support services
                  that a responsibility segment
                  receives from other segments or
                  entities?

          (SFFAS 4, par. 91, 122, & 123)
          13) Are the costs of employee benefits^39
          included as part of the cost of outputs?
          (SFFAS 4, par. 93-97)
          14) Are the costs of other postemployment
          benefits reported as expenses for the
          period during which a future outflow or
          other sacrifice of resources is probable
          and measurable on the basis of an event
          occurring on or before the accounting date?
          (SFFAS 4, par. 96-97)
          15) Are the full costs of transfer payments
          for welfare, insurance, grants, and other
          public assistance programs separately
          identified from the costs of operating such
          programs? (SFFAS 4, par. 98-101)
          16) Is depreciation expense incurred by
          responsibility segments on general PP&E
          included in the full costs of the goods and
          services that the segments produce? (SFFAS
          4, par. 102)
          17) Are the costs of acquiring or
          constructing heritage assets excluded from
          the full cost of goods and services and
          treated as a program cost^40 or period
          expense? (SFFAS 4, par. 103)
          18) Are nonproduction costs incurred by
          responsibility segments, such as
          reorganization costs and nonrecurring
          clean-up costs resulting from facility
          abandonment, excluded from the full cost of
          outputs and treated as current-period
          expenses? (SFFAS 4, par. 104)

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

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

              Cost Accounting - Inter-entity Costs        Yes, No, or
                                                              N/A     Explanation
                           (19 - 23)
    Within the federal government, some reporting entities rely on other
    federal entities to help them achieve their missions. Often, this involves
    support services, but may include the provision of goods. The reporting
    entity generally should account for the full cost of goods or services
    provided to or received from other federal entities. (SFFAS 4, par.
    105-108)

    Costs between reporting entities that are part of the same department or
    larger reporting entity (such as bureaus, components or responsibility
    segments within a department) are considered intra-departmental costs.
    Reporting entities should account for imputed intra-departmental costs in
    accordance with the full cost provisions of SFFAS 4. (FASAB Interpretation
    No. 6, par. 4 & 8)
    Question 19 is effective for reporting periods beginning prior to
    September 30, 2008.
          19) Does the entity recognize specific
          inter-entity costs as identified by OMB whether
          or not the entity is fully reimbursed?^41
          (SFFAS 4, par 110)
    Question 20 is effective for reporting periods beginning after September
    30, 2008. Early implementation is encouraged.
          20) Does the entity recognize all material
          inter-entity costs whether or not the entity is
          fully reimbursed?^42 ( SFFAS 4, par 111-112;
          SFFAS 30, par. 23; OMB Circular No. A-136, p.
          49, section II.4.4.3)
          21) Is recognition of inter-entity costs that
          are not fully reimbursed limited to material
          items based on an assessment of the importance
          of the individual inter-entity transaction in
          light of

                  a) significance to the entity,
                  b) directness of relationship to the
                  entity's operations, and
                  c) identifiability?

          (SFFAS 4, par. 112)
          22) Are the costs of broad, general support
          services provided by a federal entity to other
          federal entities excluded from the costs of the
          recipient entity unless such services are
          integral to the receiving entity (e.g.,
          Treasury check-writing services provided for
          the Social Security Administration)? (SFFAS 4,
          par. 112)
          23) If the receiving entity cannot get complete
          information on the full cost of goods or
          services provided by another reporting entity,
          does the receiving entity use a reasonable
          estimate of the cost of the goods or services
          received or the market value of the goods or
          services received if an estimate of the cost
          cannot be made? (SFFAS 4, par. 109)

    41 Examples of unreimbursed costs that reporting entities are required  to
    recognize include  (but  are  not limited  to):  (1)  employees'  pension,
    post-retirement  health   and   life   insurance   benefits,   (2)   other
    post-employment benefits for retired, terminated, and inactive  employees,
    which includes  unemployment and  workers compensation  under the  Federal
    Employees' Compensation  Act, as  amended, and  (3) losses  in  litigation
    proceedings (see  FASAB  Interpretation  No. 2,  Accounting  for  Treasury
    Judgment Fund Transactions). In the case of employee benefits, the imputed
    amount is the difference  between employer/employee contributions and  the
    total cost of the benefit. (OMB Circular A-136, p. 49, section II.4.4.3)

    42 See footnote above.

           Cost Accounting - Costing Methodology      Yes, No, or
                                                          N/A        Explanation
                         (24 - 30)
    Cost accumulation is the process of collecting cost data in an organized
    way by responsibility segment. (SFFAS 4, par. 117) Cost assignment is a
    process that identifies accumulated costs with reporting periods and cost
    objects. Three methods of cost assignment are direct tracing, cause and
    effect, and allocating costs on a reasonable and consistent basis. (SFFAS
    4, par. 120) Cost object or cost objective is an activity, output, or item
    the cost of which is to be measured. (SFFAS 4, par. 121)

    Entities are not required to use a particular costing system or costing
    methodology, but the costing system or methodology used should be
    appropriate to the entity's operating environment and used consistently.
    Four examples of acceptable (but not necessarily mutually exclusive)
    costing methodologies are activity-based costing, job order costing,
    process costing, and standard costing. (SFFAS 4, par. 144-147)
          24) Is the entity's accounting system
          capable of identifying costs within
          responsibility segments? (SFFAS 4, par.
          118)
          25) Are the costs of resources used by
          responsibility segments classified by type
          of resource, such as costs of employees,
          materials, capital, utilities, and rent?
          (SFFAS 4, par. 119)
          26) Are data on the quantity of units
          (e.g., staff days, gallons of gasoline
          consumed) related to the various cost
          categories maintained, when appropriate
          and feasible? (SFFAS 4, par. 119)
          27) How are costs assigned to outputs

                  a) directly tracing costs used in
                  the production of an output,
                  wherever economically feasible,^43
                  or
                  b) assigning costs on a
                  cause-and-effect basis, or
                  c) allocating costs on a
                  reasonable and consistent basis?

          (SFFAS 4, par. 124)
          28) For cost allocation purposes, do
          indirect costs assigned to a given cost
          pool have similar characteristics? (SFFAS
          4, par. 136)
          29) Are common costs^44 assigned to
          activities either on a cause-and-effect
          basis, if feasible, or through reasonable
          allocations? (SFFAS 4, par. 140)
          30) Are the full costing methodologies
          that are appropriate to a segment's
          operating environment used and
          consistently followed, and any changes
          documented and explained? (SFFAS 4, par.
          145 & 146)

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

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

                       Revenues (31 - 44)                 Yes, No, or Explanation
                                                              N/A
    Revenues are inflows of resources that the government demands, earns, or
    receives by donation. Revenue comes from two sources: exchange
    transactions and nonexchange transactions. (SFFAS 7, par. 30)

    Exchange (or earned) revenues arise when a government entity provides
    goods or services to the public or to another government entity for a
    price. (SFFAS 7, par. 30) Nonexchange revenues arise primarily from the
    government's sovereign power to demand payments from the public (e.g.,
    taxes, duties, fines), and also include donations. (SFFAS 7, par. 30)

    The net cost of a program is the difference between its gross costs and
    related exchange revenues. (OMB Circular A-136, p. 50, section II.4.4.5)
    The net cost of operations by a reporting entity consists of gross cost
    incurred by the reporting entity less any exchange revenue earned from its
    activities. (OMB Circular No. A-136, p. 50, section II.4.4.8)
          31) Is collected custodial nonexchange revenue
          that is legally retained by the collecting
          entity as reimbursement for the cost of
          collection, recognized as exchange revenue?
          (SFFAS 7, par. 60.3)
          32) Is revenue received from the public or
          other government entity in return for
          providing goods or services recognized as
          exchange revenue? (SFFAS 7, par. 34)
          33) If an exchange transaction is unusual or
          nonrecurring for a particular entity, is a
          gain or loss recognized rather than a revenue
          or expense? (SFFAS 7, par. 35)
          34) Is exchange revenue recognized when
          services are performed for transactions in
          which services are provided to the public or
          another government entity? (SFFAS 7, par. 34 &
          36 (a))
          35) If specific goods or services are made to
          order under terms of a contract, is exchange
          revenue (and any probable loss) recognized in
          proportion to estimated total cost when goods
          and services are acquired to fulfill the
          contract? (SFFAS 7, par. 36(b))
          36) When goods are kept in inventory so that
          they are available to customers when ordered,
          is exchange revenue recognized when the goods
          are delivered to the customer? (SFFAS 7, par.
          36(c))
          37) If services are rendered continuously or
          the right to use an asset extends continually
          over time, is exchange revenue recognized in
          proportion to the passage of time or the use
          of the asset? (SFFAS 7, par. 36(d))
          38) Is interest received on intra-governmental
          loans recognized as exchange revenue if the
          source of borrowed funds is predominately
          exchange revenue? (SFFAS 7, par. 36(d))
          39) When an asset other than inventory is
          sold, is any gain (or loss) recognized when
          the asset is delivered to the purchaser?
          (SFFAS 7, par. 36(e))
          40) When advance fees or payments are
          received, such as for large-scale, long-term
          projects, is revenue recognized only as the
          cost of providing the corresponding goods and
          services are incurred? (SFFAS 7, par. 37)
          41) Is the measurement of revenue from
          exchange transactions based on the actual
          price received or receivable under established
          pricing arrangements? (SFFAS 7, par. 38)
          42) To the extent that realization of the full
          amount of exchange revenue is not probable due
          to credit losses (caused by the failure of the
          debtor to pay the established or negotiated
          price), is an expense recognized and the
          allowance for bad debts increased, if the bad
          debts can be reasonably estimated? (SFFAS 7,
          par. 40)
          43) If the realization of the full amount of
          exchange revenue is not probable for reasons
          apart from credit losses (e.g., returns and
          allowances), is a provision made to reduce the
          recognized revenue (if amounts can be
          reasonably estimated), with the provision
          recognized as a revenue adjustment? (SFFAS 7,
          par. 41)
          44) Is exchange revenue recognized regardless
          of whether the entity retains the revenue for
          its own use or transfers it to other entities?
          (SFFAS 7, par. 43)

    Pensions, Other Retirement, and Post Employment  Yes, No, or  Explanation
                   Benefit Costs (45 - 68)                  N/A
    Pension benefits include all retirement, disability, and survivor benefits
    financed through a pension plan, including unfunded pension plans.
    Required federal payments to social insurance plans (i.e., Social Security
    and Medicare) and matching federal payments to defined contribution
    pension plans are also considered to be plan expenses. (SFFAS 5, par. 61)

    Costs of pensions and other retirement benefits (ORB), whether they are
    paid for in part or in total by other governmental entities, are included
    in the costs of program outputs. (SFFAS 4, par. 95)) Recognition of other
    postemployment benefits (OPEB) is linked to the occurrence of an OPEB
    event rather than the production of an output. OPEB costs are generally
    treated as period expenses. Special-purpose cost studies may distribute
    OPEB costs over a number of prior years to determine the cost of outputs
    OPEB recipients helped produce. (SFFAS 4, par. 96 & 97)

    In accounting for pensions, ORB, and OPEB, the "administrative entity,"
    typically manages and accounts for the related assets and liabilities. The
    "employer entity" accounts for the related costs of pensions, ORB, and
    OPEB. For these costs the employer entity receives a salary and expense
    appropriation, imputes a financing source, or both. (SFFAS 5, par. 57,
    footnote 38)

    The "aggregate entry age normal" actuarial cost method is one under which
    the expenses or liabilities arising from the actuarial present value of
    projected pension benefits are allocated on a level basis over the
    earnings or the service of the group between entry age and assumed exit
    ages. The portion of the actuarial present value of pension plan and
    benefits and expenses that is allocated to a valuation year is called
    "normal cost." (SFFAS 5, par. 64)
          45) Are pensions and ORB recognized as
          expenses at the time the employee's services
          are rendered? (SFFAS 5, par. 59)
          46) Are postemployment benefits recognized as
          expenses at the time the accountable event
          occurs? (SFFAS 5, par. 59)
          47) Is the "aggregate entry age normal"
          actuarial cost method (or other actuarial
          cost method, if the results are not
          materially different and an explanation is
          provided) used to calculate pension expense,
          the liability for the administrative entity
          financial statements, and the expense for the
          employer entity financial statements? (SFFAS
          5, par. 64)
          48) When using the "aggregate entry age
          normal" actuarial cost method, does the
          entity allocate pension expenses on the basis
          of a level percentage of earnings? (SFFAS 5,
          par. 64)
          49) Does the administrative entity base its
          actuarial assumptions for pension plans on
          the experience of the covered groups,
          long-term trends, and guidance of the
          Actuarial Standards Board? (SFFAS 5, par. 65)
          50) Does the administrative entity base its
          interest rate assumptions on the estimated
          long-term investment yield for the pension
          plan or, if the plan is not being funded, on
          some other appropriate long-term assumption
          (e.g., the federal long-term borrowing rate)?
          (SFFAS 5, par. 66)
          51) When a new pension plan is initiated or a
          current one amended, does the administrative
          entity recognize all past and prior service
          costs^45 or gains immediately, without
          amortization? (SFFAS 5, par. 69)
          52) Does the administrative entity recognize
          actuarial gains and losses^46 immediately,
          without amortization? (SFFAS 5, par. 69)
          53) Does the administrative entity report
          pension plan revenue for the sum of
          contributions from

                  a) the employer,
                  b) its employees,^47 and
                  c) interest on the plan's
                  investments?

          (SFFAS 5, par. 73)
          54) Does the employer entity recognize a
          pension expense that equals the service cost
          (normal cost) for its employees for the
          accounting period, less the amount
          contributed by the employees, if any? (SFFAS
          5, par. 74)
          55) Is the employer entity's pension expense
          balanced by (1) a decrease to its "fund
          balance with Treasury" for the amount of its
          contribution to the pension plan, if any; and
          if this does not equal the full pension
          expense, by (2) an increase to an account
          representing an intra-governmental financing
          source (e.g., "imputed financing- expenses
          paid by other agencies)?" (SFFAS 5, par. 75)
          56) If the employer entity is also the
          administrative entity, does it also report
          the liability^48 and recognize the expense
          for all components of the pension plan's
          cost? (SFFAS 5, par. 71 & 76)
    ORB includes all retirement benefits other than pension benefits. The
    predominant ORB expense in the federal government is retirement health
    benefits. (SFFAS 5, par. 58 & 79)
          57) Is the "aggregate entry age normal"
          actuarial cost method (or other actuarial
          cost method, if the results are not
          materially different and an explanation is
          provided) used to calculate the ORB expense
          and liability for the administrative entity
          financial statements and the expense for the
          employer entity financial statements? (SFFAS
          5, par. 82)
          58) Are expenses and other liabilities
          attributable to ORB expenses allocated based
          on the service provided by each employee?
          (SFFAS 5, par. 82)
          59) Do the amounts calculated for financial
          reports prepared for ORB plans reflect

                  a) general actuarial and economic
                  assumptions that are consistent with
                  those used for pensions, and
                  b) a health care cost trend
                  assumption that is consistent with
                  Medicare projections or other
                  authoritative sources appropriate for
                  the population covered by the plan?

          (SFFAS 5, par. 83)
          60) Does the administrative entity discount
          the projected ORB costs at the rate of
          expected return of plan assets, if the plan
          is being funded, or on some other long-term
          assumptions (e.g., the long-term federal
          government borrowing rate) for unfunded
          plans? (SFFAS 5, par. 83)
          61) Is the accrual period for ORB based on
          the expected retirement age rather than the
          age when the employee first becomes eligible
          for retirement benefits? (SFFAS 5, par. 84)
          62) When a new ORB plan is initiated or a
          current one amended, does the administrative
          entity recognize all past and prior service
          costs or gains immediately, without
          amortization? (SFFAS 5, par. 86 & 87)
          63) Does the administrative entity recognize
          all actuarial gains and losses from changes
          in the ORB liability immediately, without
          amortization? (SFFAS 5, par. 86 & 87)
          64) Does the administrative entity report ORB
          revenue for the sum of contributions from the
          employer entity and its employees? (SFFAS 5,
          par. 89)
          65) Does the employer entity report ORB
          expenses equal to the service cost (normal
          cost) for its employees for the accounting
          period, less the amount contributed by the
          employees? (SFFAS 5, par. 90)
          66) Is the employer entity's ORB expense
          balanced by either

                  a) a decrease to its "fund balance
                  with Treasury" for the amount of its
                  contribution to the ORB plan, if any,
                  or
                  b) an increase to an account
                  representing an intra-governmental
                  imputed financing source (e.g.,
                  "imputed financing-expenses paid by
                  other entities")?

          (SFFAS 5, par. 91)
          67) If the employer entity is also the
          administrative entity, does it also report
          the liability^49 and recognize the expense
          for all components of the ORB's cost? (SFFAS
          5, par. 88 & 92)
    OPEB are provided to former or inactive employees, beneficiaries, and
    covered dependents outside pension or ORB plans. Postemployment benefits
    can include salary continuation, severance benefits, counseling and
    training, continuation of health care or other benefits, unemployment
    workers' compensation, and veterans' disability compensation benefits paid
    by the employer. (SFFAS 4, par. 96; SFFAS 5, par. 57 & 94)
          68) Does the employer recognize an expense
          and a liability for OPEB when a future
          outflow or other sacrifice of resources is
          probable (i.e., more likely than not) and
          measurable? (SFFAS 5, par. 95)

    45 Past service costs result from retroactive benefits granted when a  new
    plan is initiated.  Prior service costs  result from retroactive  benefits
    granted in a plan amendment.

    46 Actuarial gains and  losses are changes in  the balance of the  pension
    liability that result  from (1) deviations  between actual experience  and
    the actuarial assumptions used or (2) changes in actuarial assumptions.

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

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

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

        Inventory, Materials, Supplies, and Commodities   Yes, No, or Explanation
                        Costs (69 - 77)                       N/A
    Upon sale of inventory (when the title passes or the goods are delivered)
    or upon use in the provision of a service, the related expense shall be
    recognized and the cost of those goods shall be removed from inventory.
    (SFFAS 3, par. 19)

    The cost of goods shall be removed from operating materials and supplies
    (i.e., the asset account) and reported as an operating expense in the
    period they are issued to an end user for consumption in normal
    operations. (SFFAS 3, par. 39)
          69) Upon sale or use of inventory, is the
          related expense recognized and the cost of
          those goods removed from the inventory asset
          account? (SFFAS 3, par. 19)
          70) To arrive at the historical cost of ending
          inventory and cost of goods sold, is one of the
          following cost flow assumptions used

                  a) FIFO,
                  b) weighted average,
                  c) moving average, or
                  d) any other valuation method (such as
                  a standard cost system) whose results
                  reasonably approximate one of the above
                  historical cost methods?

          (SFFAS 3, par. 22)
          71) Are operating materials and supplies
          expensed using the consumption method (i.e.,
          reported as an operating expense when they are
          issued to the end user for consumption in
          normal operations)? (SFFAS 3, par. 38 & 39)
          72) Are operating materials and supplies
          expensed upon purchase (purchase method) if

                  a) they are of insignificant amounts,
                  and
                  b) they are in the hands of the end
                  user for use in normal operations, or
                  c) it is not cost beneficial to apply
                  the consumption method?

          (SFFAS 3, par. 40 & 41)
          73) Are inventory and operating materials and
          supplies acquired through a nonmonetary
          exchange valued at the fair value of the items
          received at the time of the exchange, and is
          the difference between the fair value of the
          acquired items and the recorded amount
          surrendered reported as a gain or loss? (SFFAS
          3, par. 21 & 43)
          74) Are abnormal costs associated with
          inventory and operating materials and supplies,
          such as excessive handling or rework costs,
          charged to operations of the period? (SFFAS 3,
          par. 21 & 43)
          75) Are any unrealized gains or losses
          resulting from periodic revaluations of
          inventory captured in a designated allowance
          account? (SFFAS 3, par. 23 & 24)
          76) Is the cost of stockpile materials removed
          from the corresponding asset account and
          reported as an operating expense when issued
          for use or sale? (SFFAS 3, par. 52)
          77) Are abnormal costs of stockpile materials,
          such as excessive handling and rework costs,
          expensed in current operations? (SFFAS 3, par.
          53)

             Property, Plant, and Equipment Costs        Yes, No, or
                                                             N/A      Explanation
                           (78 - 92)
    A common expense related to PP&E that is included in the Statement of Net
    Cost is depreciation. Other PP&E-related expenses that are reported in the
    Statement of Net Cost include all current costs of acquiring and
    maintaining stewardship land and heritage assets (other than multiuse
    heritage assets.) (SFFAS 6, par. 35, & 69; SFFAS 16, par. 8)

    Depreciation expense is calculated through systematic and rational
    allocation of the cost of PP&E, less its estimated salvage or residual
    value, over its estimated useful life. A composite or group
    methodology,^50 whereby the costs of PP&E are allocated using the same
    allocation rate, is permissible. (SFFAS 6, par. 35; SFFAS 23, par. 9, item
    f)
          78) Is depreciation expense recognized on all
          general PP&E? (SFFAS 6, par. 35)
          79) If historical cost information has not
          been maintained for PP&E, does the entity
          depreciate or amortize the estimated net
          remaining cost over its remaining useful life
          in a systematic and rational manner? (SFFAS 6,
          par. 35, 40, & 41)
          80) In an exchange transaction with a
          nonfederal entity, is the difference between
          the book value (i.e., cost less accumulated
          depreciation) of PP&E surrendered and the cost
          of PP&E acquired^51 recognized as either a
          gain or a loss? (SFFAS 6, par. 32)
          81) In the event that cash consideration is
          included in the exchange transaction with a
          non federal entity, is the cost of PP&E
          acquired either increased by the amount of
          cash consideration surrendered or decreased by
          the amount of cash consideration received?
          (SFFAS 6, par. 32)
          82) When assets have been removed from PP&E in
          anticipation of disposal, retirement, or
          removal from service, has the entity stopped
          recording depreciation and amortization
          expenses for such assets? (SFFAS 6, par. 38 &
          39)
          83) For general PP&E that is disposed of,
          retired or removed from service, is any
          difference between the book value of the PP&E
          and amounts realized recognized as a gain or a
          loss in the period of disposal, retirement, or
          removal from service? (SFFAS 6, par. 38)
          84) For PP&E assets removed from general PP&E
          accounts prior to disposal, retirement or
          removal from service, is the expected net
          realizable value of these assets adjusted at
          the end of each accounting period, and is any
          adjustment made recognized as either a gain or
          loss? (SFFAS 6, par. 39)
          85) Are costs to acquire, improve,
          reconstruct, or renovate heritage assets,
          other than multiuse heritage assets,
          recognized for the period in which the costs
          are incurred? (SFFAS 29, par. 19)
          86) Do the recognized costs of heritage assets
          also include all costs incurred during the
          period to bring the item(s) to their current
          condition? (SFFAS 29, par. 19)
          87) Are amounts for heritage assets acquired
          through donation or devise excluded from the
          cost of heritage assets with the exception of
          multi-use heritage assets? (SFFAS 29, par. 20)
          88) Are amounts for stewardship land acquired
          through donation or devise excluded from the
          cost of stewardship land? (SFFAS 29, par. 38)
          89) Is the cost of acquisition of stewardship
          land, including all costs to prepare
          stewardship land for its intended purpose
          (e.g., razing a building), recognized for the
          period in which the cost is incurred? (SFFAS
          29, par. 37)
          90) If stewardship land is acquired along with
          existing structures and the structure is
          deemed a heritage asset that is significant,
          does the entity treat the acquisition cost as
          either the cost of stewardship land, heritage
          asset, or both based on its judgment? (SFFAS
          29, par. 37a)
          91) If stewardship land is acquired along with
          existing structures and the structure is to be
          used in operations (e.g., as general PP&E) but
          the value is significant or its acquisition is
          merely a byproduct of the acquisition of the
          land, is the cost treated as an acquisition of
          stewardship land? (SFFAS 29, par. 37b)
          92) If stewardship land is acquired along with
          existing structures and the structure is
          significant and has an operating use (e.g., a
          constructed hotel or employee housing block),
          is the structure treated as general PP&E by
          identifying the cost attributable to general
          PP&E and segregated from the cost of the
          stewardship land acquired? (SFFAS 29, par.
          37c)

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

    51 The cost  of the  PP&E acquired  is recorded at  the cost  of the  PP&E
    surrendered net of any accumulated  depreciation or amortization when  the
    fair value of the PP&E surrendered or acquired is not determinable.

                 Clean-up Costs (93 - 100)             Yes, No, or   Explanation
                                                           N/A
    Clean-up costs are the costs of removing, containing, and/or disposing of
    (1) hazardous waste from property or (2) material and/or property that
    consists of hazardous waste upon permanent or temporary closure or
    shutdown of associated PP&E. Clean-up costs may include, but are not
    limited to, decontamination, decommissioning, site restoration, site
    monitoring, closure, and postclosure costs. (SFFAS 6, par. 85 & 87)
          93) When PP&E is placed into service, does
          the entity estimate the associated clean-up
          costs? (SFFAS 6, par. 94)
          94) In estimating clean-up costs and
          liability, has the entity evaluated

                  a) the level of restoration to be
                  performed,
                  b) current legal and regulatory
                  requirements,
                  c) current technology, and
                  d) current costs (i.e., amount that
                  would be paid if all goods and
                  services included in the clean-up
                  estimate were acquired in the
                  current period)?

          (SFFAS 6, par. 95)
          95) Are estimated clean-up costs
          periodically revised to account for
          material changes due to inflation or
          deflation and changes in regulations,
          plans, and/or technology? (SFFAS 6, par.
          96)
          96) When PP&E is placed into service, does
          the entity recognize cleanup costs during
          each period that general PP&E is in
          operation, in a systematic and rational
          manner based on either

                  a) physical capacity of the PP&E,
                  (e.g., expected usable landfill
                  area), or
                  b) the estimated useful life of the
                  associated PP&E (if physical
                  capacity is not applicable or
                  estimable)?

          (SFFAS 6, par. 97)
          97) Does recognition of the cleanup costs
          and the accumulation of the related
          liability begin on the date that the
          associated PP&E is placed into service,
          continue in each period that operation
          continues, and end when the PP&E ceases
          operation? (SFFAS 6, par. 98)
          98) If clean-up costs are reestimated, are
          the cumulative effects of changes in total
          estimated cleanup costs related to current
          and past operations of PP&E immediately
          recognized as an expense and is the
          corresponding liability adjusted? (SFFAS 6,
          par. 99)
          99) When stewardship PP&E is placed into
          service, does the entity expense the total
          estimated clean-up costs and establish a
          liability in the period the asset is placed
          into service? (SFFAS 6, par. 101)
          100) If clean-up costs for stewardship PP&E
          are reestimated, are any adjustments to the
          liability associated with clean-up costs
          expensed in the period of the change in
          estimate? (SFFAS 6, par. 102)

                   Interest Costs (101 - 102)             Yes, No. or Explanation
                                                              N/A
    Interest incurred results from borrowing funds from Treasury, Federal
    Financing Bank, other federal entities, or the public. Interest also
    should be recorded on late payment of bills by the federal entity and on
    refunds. (SFFAS 1, par. 81)

    Interest costs are generally related to securities and other debt
    instruments issued by the U.S. Treasury or other federal agencies. (SFFAS
    5, par. 47-48)
          101) Does the related interest cost of federal
          debt include

                  a) the accrued (prorated) share of the
                  interest incurred during the accounting
                  period,
                  b) the amortized discounts or premiums
                  for each accounting period for fixed
                  value securities, and
                  c) the amount of change in the current
                  value for the accounting period for
                  variable value securities?

          (SFFAS 5, par. 53)
          102) If securities are retired before maturity,
          is the difference between the reacquisition
          price and net carrying value of the
          extinguished debt recognized in the period of
          extinguishment as a gain or loss? (SFFAS 5,
          par. 54)

         Insurance and Subsidies Costs (103 - 106)    Yes, No, or    Explanation
                                                          N/A
    Federal insurance and guarantee programs are established to assume risks
    that private sector entities are unwilling or unable to assume or to
    subsidize the provision of insurance to achieve social objectives. For
    life insurance, a premium deficiency occurs if the liability for future
    policy benefits using current conditions exceeds the liability for future
    policy benefits using contract conditions. (SFFAS 5, par. 97 & 120)
          103) If an insured event has occurred as
          of the financial statement reporting date,
          has the federal entity recognized an
          expense for all claims incurred during the
          period, including, when appropriate, those
          incurred but not reported (IBNR) and
          contingencies that meet the criteria for
          recognition? (SFFAS 5, par. 104 & 109)
          104) Are changes in estimates of claim
          cost resulting from

          (1) the present value calculations,

          (2) the continuous review process, and

          (3) differences between the estimates and
          actual payments for claims,

          recognized as charges against operations
          of the period in which the estimates are
          changed or payments are made?

          (SFFAS 5, par. 109)
          105) If the liability for future [life
          insurance] policy benefits using current
          conditions exceeds the liability for
          future policy benefits under contract
          conditions (resulting in a premium
          deficiency), is the difference recognized
          as a charge to operations in the current
          period? (SFFAS 5, par. 120)
          106) Does the entity recognize an expense
          for social insurance^52 benefits paid
          during the reporting period plus any
          increase (or less any decrease) in the
          liability for social insurance benefits
          due and payable to or on behalf of
          beneficiaries, from the end of the prior
          period to the end of the current period?
          (SFFAS 17, par. 22)

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

      Section VII -  Budgetary Resources

    There are five questions in this section which relate to accounting for
    budgetary resources in the Statement of Budgetary Resources (SBR).

               Budgetary Resources (1 - 5)           Yes, No, or    Explanation
                                                         N/A
    Offsetting receipts are collections that are credited to general fund,
    special fund, or trust fund receipt accounts and that offset gross
    outlays. Unlike offsetting collections, which are credited to expenditure
    accounts and offset outlays at the account level, offsetting receipts are
    credited to receipt accounts and offset outlays at the agency or
    governmentwide level.

    Offsetting receipts may be distributed or undistributed to agencies.
    Distributed offsetting receipts offset the outlays of the agency, while
    undistributed offsetting receipts offset governmentwide outlays.
    Distributed offsetting receipts typically offset the outlays of the agency
    that conducts the activity, generating the receipts and the subfunction to
    which the activity is assigned. Offsetting receipts are composed of
    proprietary receipts from the public, receipts from intra-governmental
    transactions, and offsetting governmental receipts. (OMB Circular No.
    A-136, p. 67, section II.4.6.9)
          1) Do offsetting receipts include all
          distributed offsetting receipts for the
          entity?^53 (OMB Circular No. A-136, p.
          67, section II.4.6.9)
          2) Do offsetting receipts include receipt
          accounts for the entity contained in
          Treasury Combined Statement (TCS) Part
          Four, Other Information/Receipts by
          Department Listing for

                  a) Proprietary Receipts from the
                  Public,
                  b) Intrabudgetary Receipts
                  Deducted by Agencies, and
                  c) Offsetting Governmental
                  Receipts?

          (OMB Circular No. A-136, p. 67, section
          II.4.6.9)
          3) Is the amount of distributed
          offsetting receipts the aggregate of cash
          collected in these receipt accounts and
          reported to Treasury on a monthly
          basis?^54 (OMB Circular No. A-136, p. 67,
          section II.4.6.9)
          4) Does the entity credit undistributed
          offsetting receipts to governmentwide
          outlay totals which results in an
          exclusion from the SBR? (OMB Circular No.
          A-136, p. 67, section II.4.6.9)
          5) In order to have consistency between
          the information presented in the SBR and
          the Budget of the United States
          Government, does the entity

                  a) post all changes, whether
                  material or not, to OMB's MAX
                  A-11 budget preparation system
                  during the time frames provided
                  by OMB, and
                  b) post all changes, whether
                  material or not, to the Federal
                  Agencies Centralized
                  Trial-balance System II (FACTS
                  II) during the time period
                  specified for posting corrections
                  to the budget information?

          (OMB Circular No. A-136, p. 32, section
          II.4.2, item 6)

    53 A list of distributed offsetting  receipt accounts can be found in  the
    Treasury Annual Report Appendix, Part 4, Other Information.

    54 Agencies use the SF 224, Statement of Transactions; SF 1219,  Statement
    of Accountability; and SF 1220, Statement of Transactions.

      Section VIII -  Custodial Activity

    Questions related to accounting for custodial activity in the financial
    statements are presented below.

    Caption                                                  Question Numbers
    General                                                         1
    Sources of Collections                                        2 - 7
    Dedicated Collections and Other Accompanying Information      8 - 12

                        General (1)                   Yes, No, or N/A Explanation
    Collecting entities do not recognize as revenue those collections that
    have been or should be transferred to others as revenues.^55 Rather, they
    shall account for sources and disposition of the collections as custodial
    activities.

    Custodial collections are normally nonexchange revenues, such as taxes and
    duties collected by the Internal Revenue Service and the U.S. Customs and
    Border Protection. (OMB Circular No. A-136, p. 75, section II.4.8.1)
          1) If the entity collects exchange revenue
          (e.g., rents and royalties) on behalf of
          other entities and recognizes virtually no
          costs in connection with earning that
          revenue, does the entity account for it as
          a custodial activity? (SFFAS 7, par. 45)

    55 Revenue collected is not revenue that the collecting entity can use  in
    its operations and is thus not recognized. The sources of cash  collection
    are reported  by  type  as  indicated  in  the  illustrated  statement  of
    custodial activity. (OMB Circular A-136, p. 75, section II.4.8.2)

                 Sources of Collections (2 - 7)           Yes, No, or Explanation
                                                              N/A
          2) Are transactions recognized as taxes and
          other nonexchange revenues from the public for

                  a) individual and corporate income
                  taxes, social insurance taxes and
                  contributions, excise taxes, estate and
                  gift taxes, and customs duties,
                  b) social insurance taxes and
                  contributions paid by federal
                  employees,
                  c) deposits by states for unemployment
                  trust funds,
                  d) user fees and harbor maintenance
                  trust fund payments,
                  e) customs service fees,
                  f) deposits of earnings from the
                  Federal Reserve System,
                  g) donations, except types of PP&E that
                  are expensed,
                  h) fines and penalties,
                  i) penalties due to delinquent taxes in
                  connection with custodial activity, and
                  j) forfeitures?

          (SFFAS 7, par. 49; SFFAS 7, Appendix B, par.
          242 - 264)
          3) Does the collecting entity measure taxes and
          duties on a cash basis and then modify that
          with an accrual adjustment to determine the
          amount of revenue to be recognized? (SFFAS 7,
          par. 49 & 52)
          4) Except for deposits, are cash collections^56
          based on amounts actually received during the
          fiscal period including withholdings, estimated
          payments, final payments, and collections of
          receivables? (SFFAS 7, par. 50 & 59)
          5) Are the components of cash collections
          classified by source and nature of collection,
          such as by type of tax or duty? (OMB Circular
          No. A-136, p. 77, section II.4.8.3)
          6) Are cash refunds of nonexchange revenue
          based on refunds of taxes and duties during the
          period? (SFFAS 7, par. 51)
          7) Do cash refunds of nonexchange revenue for
          taxes and duties include refund offsets^57 and
          drawbacks?^58 (SFFAS 7, par. 51)

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

    57 Refund offsets  are amounts withheld  from refunds on  behalf of  other
    agencies and paid to such agencies.

    58 Drawbacks  are  refunds of  duties  paid  on imported  goods  that  are
    subsequently exported or destroyed.

        Dedicated Collection and Other Accompanying   Yes, No, or    Explanation
                   Information (8 - 12)                   N/A
    Dedicated collections are funds held with the expectation that they will
    be applied to the purposes for which the funds were dedicated. Such funds
    include all funds within the budget classified as trust funds, those funds
    within the budget that are classified as "special funds" but that are
    similar in nature to trust funds, and those funds (inside or outside the
    budget) that are fiduciary in nature. (SFFAS 7, par. 83)
    Questions 8 - 10 are applicable to funds not meeting the definition of
    earmarked funds defined in SFFAS 27.
          8) Does the management of a reporting
          entity identify and track the receipts and
          expenditures of dedicated trust funds,
          "special funds," and fiduciary or deposit
          funds (both inside and outside the budget)
          for which it is responsible? (SFFAS 7,
          par. 83)
          9) If revenues, other financing sources,
          or costs are associated with, but not
          legally allowable to a fund, does the
          larger reporting entity of which the fund
          is a component recognize them? (SFFAS 7,
          par. 86)
          10) If more than one reporting entity is
          responsible for carrying out a program
          financed with dedicated collections, does
          the entity with the largest share of the
          activity take responsibility for reporting
          all revenues, other financing sources,
          assets, liabilities, and costs of the
          fund? (SFFAS 7, par. 87)
          11) If information on actual collections
          is not currently available from the
          collecting entity, do the trust funds that
          are legally entitled to receive only
          excise taxes that are actually collected
          by the collecting entity recognize revenue
          from excise taxes on the basis of
          assessments in lieu of excise taxes
          actually collected? (SFFAS 7, par. 60.1)
          12) Is the amount of revenue recognized by
          the social security trust fund based on
          the best available information (i.e., on
          the basis of the higher of the amount of
          Internal Revenue Service (IRS) assessments
          or the amounts actually reported by
          employers to Social Security
          Administration)? (SFFAS 7, par. 60.2)

      Section IX -  Required Supplementary Stewardship Information

    Questions related to accounting for stewardship investments in the
    financial statements are presented below.

               Stewardship Investments (1 - 14)         Yes, No, or  Explanation
                                                            N/A
    Stewardship investments are substantial investments made by the federal
    government for the benefit of the nation. When incurred, they are treated
    as expenses in calculating net cost, but they are also separately reported
    as RSSI to highlight the extent of investments that are made for long-term
    benefit. (SFFAS 8, par. 12) Stewardship investments include:

          o nonfederal physical property: federally financed (but not federally
          owned) purchases, construction, or major renovation of physical
          property owned by state and local governments, including major
          additions, alterations, and replacements, the purchase of major
          equipment; and the purchase or improvement of other physical assets.^59
          o human capital: expenses incurred for programs for education and
          training of the public^60 that are intended to increase or maintain
          national productive capacity and that produce outputs and outcomes that
          provide evidence of maintaining or increasing national productive
          capacity.
          o research and development: expenses incurred to support the search for
          new or refined knowledge and ideas and for the application or use of
          such knowledge and ideas for the development of new or improved
          products and processes with the expectation of maintaining or
          increasing national productive capacity or yielding other future
          benefits. (SFFAS 8, par. 12, 83, 89, 90, & 96)
          1) Are nonfederal physical property
          investments reported in nominal dollars on
          the basis of "expenses incurred" and measured
          on the same basis of accounting used for
          financial statement purposes, including
          appropriate accrual adjustments, general and
          administrative overhead, and costs of
          facilities? (SFFAS 8, par. 84)
          2) Are investments in nonfederal physical
          property and related cash grants reported as
          expenses in arriving at the net cost of
          operations? (SFFAS 8, par. 85)
          3) Are expenses incurred for nonfederal
          physical property program costs, contracts,
          or grants with split purposes^61 reported in
          RSSI on the basis of a logical allocation?
          (SFFAS 8, par. 86)
          4) If an allocation of nonfederal physical
          property program costs, contracts, or grants
          with split purposes is not feasible, is the
          investment reported on the basis of the
          predominant application of the expenses
          incurred? (SFFAS 8, par. 86)
          5) Are investments in human capital reported
          in nominal dollars on the basis of "expenses
          incurred" and measured on the same basis of
          accounting as financial statements, including
          appropriate accrual adjustments, general and
          administrative overhead, and costs of
          facilities? (SFFAS 8, par. 91)
          6) Are expenses incurred for human capital
          program costs, contracts, or grants with
          split purposes^62 reported in RSSI on the
          basis of a logical allocation? (SFFAS 8, par.
          92)
          7) If an allocation of human capital program
          costs, contracts, or grants with split
          purposes is not feasible, is the investment
          reported on the basis of the predominant
          application of the expenses incurred? (SFFAS
          8, par. 92)
          8) Does the entity link its investments in
          human capital to outcomes that can be
          described in financial, economic, or
          quantitative terms? (SFFAS 8, par. 93)
          9) If outcome data are not available, does
          the reporting entity report output data that
          best provide indications of the intended
          program outcomes? (SFFAS 8, par. 93)
          10) Is the investment in research and
          development reported in nominal dollars on
          the basis of "expenses incurred" and measured
          on the same basis of accounting used for
          financial statement purposes, including
          appropriate accrual adjustments, general and
          administrative overhead, and costs of
          facilities? (SFFAS 8, par. 97)
          11) Are expenses incurred for research and
          development program costs, contracts, or
          grants with split purposes^63 reported in
          RSSI on the basis of a logical allocation?
          (SFFAS 8, par. 98)
          12) If an allocation of research and
          development program costs, contracts, or
          grants with split purposes is not feasible,
          is the investment reported on the basis of
          the predominant application of the expenses
          incurred? (SFFAS 8, par. 98)
          13) Does the entity link its investments in
          research and development to program outcome
          data via a narrative discussion of the major
          results achieved by the program during the
          year for

                  a) basic research, which refers to an
                  identification of any major new
                  discoveries that were made during the
                  year,
                  b) applied research, which refers to
                  an identification of any major new
                  applications that were developed
                  during the year, and
                  c) development, which refers to the
                  progress of major developmental
                  projects including the results with
                  respect to projects completed or
                  otherwise terminated during the year
                  and the status of projects that will
                  continue?

          (SFFAS 8, par. 99)
          14) If outcome data are not available, does
          the reporting entity use output data^64 that
          best provide indications of the intended
          program outcomes? (SFFAS 8, par. 99)

    59 Grants for maintenance and operations are not investments in nonfederal
    physical property.

    60 The definition  excludes education  and training  expensed for  federal
    civilian and military personnel.

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

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

    63 ibid.

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

      Section X -  Social Insurance

    Questions related to accounting for social insurance programs in the
    Statement of Social Insurance (SOSI) are presented below.

              Statement of Social Insurance        Yes, No, or N/A
                                                                    Explanation
                      (Items 1 - 7)
    Reporting on stewardship responsibilities aids in assessing the federal
    government's financial condition and the sufficiency of future budgetary
    resources to sustain public services and meet obligations as they become
    due. Information for social insurance programs is to be reported to
    address fundamental questions about the current and future financial
    condition of these programs. These fundamental questions include whether
    scheduled expenditures are sustainable with current scheduled income.
    Information required to be disclosed for social insurance programs is
    intended to facilitate an assessment of the long-term sustainability of
    the program as well as the ability of the program to raise resources from
    future program participants to pay for benefits to present participants.

    For the programs listed as social insurance, the entity should present the
    actuarial present value for the projection period of all future
    contributions and tax income (excluding interest) received from or on
    behalf of current and future participants; the actuarial present value for
    the projection period of estimated future scheduled expenditures paid to
    or on behalf of current and future participants; and the actuarial present
    value for the projection period of the estimated future excess of
    contributions and tax income (excluding interest) over future scheduled
    expenditures. The entity should provide such information for the current
    year and separate estimates for each of the preceding four years. (SFFAS
    17, par. 1; OMB Circular No. A-136, p. 78, section II.4.9.1)
          1) Are projections and estimates based
          on the entity's best estimates of
          demographic and economic assumptions?
          (SFFAS 17, par. 25)
          2) Are future changes mandated by
          current law incorporated into the
          entity's demographic and economic
          assumptions? (SFFAS 17, par. 24)
          3) Are all projections and estimates
          made as of a date (i.e., the valuation
          date) as close to the end of the fiscal
          year (i.e., current year) being reported
          on as possible and no more than 1 year
          prior to the end of the current year?
          (SFFAS 17, par. 26)
          4) Is the valuation date consistently
          followed from year to year? (SFFAS 17,
          par. 26)
          5) Are benefits paid during the
          reporting period plus any increase (or
          less any decrease) in the liability from
          the end of the prior period to the end
          of the current period recognized as an
          expense for the reporting period? (SFFAS
          17, par. 22)
          6) Are social insurance benefits due and
          payable to or on behalf of beneficiaries
          at the end of the reporting period,
          including claims incurred but not
          reported (IBNR) recognized as a
          liability? (SFFAS 17, par. 22)
          7) For Unemployment Insurance (UI), are
          liabilities recognized for

                  a) amounts due to states and
                  territories for benefits they
                  have paid to beneficiaries but
                  for which they have not
                  withdrawn funds from the federal
                  Unemployment Trust Fund (UTF) as
                  of fiscal year end, and
                  b) estimated amounts to be
                  withdrawn from UTF and benefits
                  paid by states and territories
                  after fiscal year end for
                  compensable days occurring prior
                  to fiscal year end?

          (SFFAS 17, par. 23)

      Section XI -  Credit Reform

    Questions related to accounting for credit reform in the financial
    statements are presented below.

    Caption                         Question Numbers
    Credit Program Receivables           1 - 29
    Liabilities for Loan Guarantees     30 - 37
    Credit Program Costs                38 - 75
    Other Financing Sources             76 - 81

            Credit Program Receivables (1 - 29)        Yes, No, or   Explanation
                                                           N/A
    The Federal Credit Reform Act (FCRA) of 1990, as amended, divides loans
    and loan guarantees into two groups: pre-1992 and post-1991. Pre-1992
    refers to direct loan obligations or loan guarantee commitments made prior
    to fiscal year 1992. Post-1991 refers to direct loan obligations or loan
    guarantee commitments made after fiscal year 1991.^65 (OMB Circular No.
    A-136, p. 98, section II.4.10.8, instructions item A)
          1) Are credit program receivables
          considered an entity asset if

                  a) the entity has the authority to
                  determine the use of the funds
                  collected, or
                  b) the entity is legally obligated
                  to use the funds to meet entity
                  obligations (e.g., loans payable to
                  Treasury)?

          (OMB Circular No. A-136, p. 38, section
          II.4.3.3)
          2) If a loan guarantee program, which
          guarantees a loan, is generating a negative
          subsidy and the lender has not disbursed
          the loan as of the balance sheet date, does
          the entity include this amount as part of
          the total undelivered orders?^66 (OMB
          Circular No. A-136, p. 38, section
          II.4.3.3)
    For post-1991 direct loans and guarantees, a subsidy expense is recognized
    in the year they are disbursed. For pre-1992 direct loans and guarantees,
    a loss and liability need not be recognized until it is more likely than
    not that a loan (either direct or guaranteed) will go into default. (SFFAS
    2, par. 24 & 39)
          3) Are post-1991 direct loans disbursed and
          outstanding recognized as assets at the
          present value (discounted at a comparable
          Treasury rate) of their estimated net cash
          inflows? (SFFAS 2, par. 22 & app. B, part I
          A)
          4) Is the difference between the
          outstanding principal of post-1991 direct
          loans and the present value of their net
          cash inflows recognized as a subsidy cost
          allowance? (SFFAS 2, par. 22 & app. B, part
          I A)
          5) When post-1991 direct loans are written
          off, is the unpaid principal removed from
          unpaid loans receivable and charged against
          the allowance for subsidy costs? (SFFAS 2,
          par. 61)
          6) Are losses of pre-1992 direct loans
          obligated recognized (and a corresponding
          allowance amount set up) when it is more
          likely than not that the direct loans will
          not be totally collected? (SFFAS 2, par. 39
          & app. B, part II A)
          7) Are allowances for uncollectible
          pre-1992 loans reestimated each year?
          (SFFAS 2, par. 39)
    A loan modification is a federal government action that directly or
    indirectly alters the estimated subsidy cost and the present value of
    outstanding direct loans or the liability of loan guarantees. A direct
    modification changes the subsidy cost by altering the terms of existing
    contracts or through the sale of direct loans. An indirect modification
    changes the subsidy costs by altering the way loans and loan guarantees
    are administered. A modification does not include subsidy cost
    reestimates, routine administrative workouts of troubled loans, and other
    actions permitted within existing contract terms. (SFFAS 2, par. 41-44)
          8) When post-1991 loans are modified, is
          the existing book amount changed to an
          amount equal to the present value of the
          loans' net cash inflows that are projected
          under the modified terms from the time of
          the modification to the loans' maturity and
          discounted at the original rate? (SFFAS 2,
          par. 46 & app. B, part I D (4))
          9) When pre-1992 loans are directly
          modified, are they

                  a) transferred from the liquidating
                  account to a financing account, and
                  b) recorded at their
                  post-modification value?

          (SFFAS 2, par. 47 & app. B, part II B (4))
          10) Are subsequent (direct) modifications
          of pre-1992 loans treated as a modification
          of post-1991 loans? (SFFAS 2, par. 47)
          11) When pre-1992 loans are indirectly
          modified, are they

                  a) kept in a liquidating account,
                  and
                  b) reassessed and adjusted to
                  reflect amounts that would not be
                  collected due to the modification?

          (SFFAS 2, par. 47)
          12) When post-1991 and pre-1992 loans are
          sold, is the sale treated as a direct
          modification if the agency did not assume
          sales proceeds in the cash flow estimates
          for the initial subsidy calculation? (SFFAS
          2, par. 53 & App. B, Part I F, footnote 23)
    Foreclosed property is any asset, which is assumed to be held for sale,
    that is either received in satisfaction of a loan receivable or as a
    result of payment of a claim under a guaranteed or insured loan (excluding
    commodities acquired under price support programs). Pre-1992 foreclosed
    property refers to property associated with direct loans obligated or loan
    guarantees committed before October 1, 1991. Post-1991 foreclosed property
    refers to property associated with direct loans obligated or loan
    guarantees committed after September 30, 1991. (SFFAS 3, par. 79 & 80)
          13) Is post-1991 foreclosed property valued
          at the net present value of the projected
          future cash flows associated with the
          property? (SFFAS 3, par. 81)
          14) Is pre-1992 foreclosed property
          recorded at cost and adjusted to the lower
          of cost or net realizable value with any
          difference between cost and net realizable
          value carried in a valuation allowance?
          (SFFAS 3, par. 81)
          15) In determining net present value, does
          the entity project future cash flows to
          include estimates of

                  a) sales proceeds,
                  b) rent, management expense, and
                  repair costs during the holding
                  period, and
                  c) selling expense (i.e.,
                  advertising and commissions)?

          (SFFAS No. 3, par. 82)
          16) In estimating sales proceeds for
          projecting the future cash flows associated
          with the property in determining net
          present value, has the entity considered
          its historical experience in selling
          property as well as the nature of the sale?
          (SFFAS 3, par. 82)
          17) Were the estimated future cash flows of
          post-1991 foreclosed property or acquired
          loans discounted at the original (or
          Treasury) discount rate in effect at the
          time the underlying loan or guarantee was
          granted? (SFFAS 2, par. 57& 59; SFFAS 3,
          par. 83; SFFAS 19, par. 7(e))
          18) Is the net present value of post-1991
          foreclosed property adjusted periodically
          to recognize both changes in the expected
          future cash flows and accrual of interest
          due to the passage of time? (SFFAS 3, par.
          84)
          19) Are any adjustments in the carrying
          amounts of post-1991 foreclosed property
          included in the presentation of "interest
          income" and the reestimate of "subsidy
          expense?" (SFFAS 3, par. 84)
          20) Is post-1991 foreclosed property
          accounted for by

                  a) recording third party claims at
                  their net present value at the time
                  of the foreclosure, using the same
                  discount rate that applies to
                  related foreclosed property, and
                  b) including any periodic changes
                  in net present value of the claim
                  in "interest income" and "subsidy
                  expense"?

          (SFFAS 3, par. 87)
          21) Are receipts or disbursements
          associated with acquiring and holding
          post-1991 foreclosed property charged or
          credited to foreclosed property? (SFFAS 3,
          par. 88)
          22) When foreclosed assets are acquired in
          full or partial settlement of post-1991
          direct loans or guarantees, is the present
          value of the government's claim against the
          borrowers reduced by the amount settled as
          a result of the foreclosure? (SFFAS 2, par.
          60)
          23) If a lender, debtor, or other third
          party has a legitimate claim to a post-1991
          foreclosed asset, is the net present value
          of the estimated claim recognized as a
          special contra-valuation allowance? (SFFAS
          2, par. 58; SFFAS 3, par. 87)
          24) Is pre-1992 foreclosed property
          recorded at cost and adjusted, if
          necessary, to the lower of cost or net
          realizable value? (SFFAS 3, par. 81 & 85)
          25) Is the net realizable value based on an
          estimate of the market value of the
          property adjusted for any expected losses
          consistent with historical experience,
          abnormal market conditions, and time
          limitations as well as any other costs of
          the sale? (SFFAS 3, par. 85 & 86)
          26) Is the estimate of market value based
          on

                  a) the market value of the property
                  if an active market exists,
                  b) the market value of similar
                  properties if no active market
                  exists, or
                  c) a reasonable forecast of
                  expected cash flows adjusted for
                  estimates of all holding costs,
                  including any cost of capital?

          (SFFAS 3, par. 85)
          27) For pre-1992 foreclosed property, are
          third-party claims recorded at the expected
          amount of cash required to settle the
          claims? (SFFAS 3, par. 87)
          28) If foreclosed property is not sold but
          placed into operation, is the asset removed
          from foreclosed property? (SFFAS 3, par.
          90)
          29) If reimbursement for the transfer of
          assets from one program to another is made,
          are the proceeds from the transfer treated
          in the same manner as a sale to a third
          party? (SFFAS 3, par. 90)

    65 Section 506 (a) of the  Federal Credit Reform Act, as amended,  exempts
    the credit activities  of certain  agencies, such as  the Federal  Deposit
    Insurance Corporation  (FDIC) and  the Tennessee  Valley Authority  (TVA).
    These agencies can report in accordance with other requirements.

    66 Undelivered orders  are the  value of  goods and  services ordered  and
    obligated but not yet received.

           Liabilities for Loan Guarantees (30 - 37)      Yes, No, or Explanation
                                                              N/A
    A loan guarantee is any guarantee, insurance (but not deposit insurance),
    or other pledge with respect to the payment of all or part of the
    principal or interest on any debt obligation of a nonfederal borrower to a
    nonfederal lender. (SFFAS 2, app. C)

    The Federal Credit Reform Act of 1990 requires federal entities to
    estimate and budget for the costs arising from default of guaranteed loans
    made after fiscal year (FY) 1991 (i.e., post 1991). (SFFAS 2, par. 7)
          30) Is the present value of estimated net cash
          outflows from post-1991 (i.e., committed after
          September 30, 1991) loan guarantees recognized
          as a liability? (SFFAS 2, par. 23)
          31) Is a liability for a pre-1992 (i.e.,
          committed before October 1, 1991) loan
          guarantee recognized when it is more likely
          than not that the loan guarantee will require a
          future cash outflow to pay a default claim?
          (SFFAS 2, par. 39 & app. B, part IV A)
          32) Are the liabilities for the pre-1992 loan
          guarantees reestimated each year as of the date
          of the financial statements? (SFFAS 2, par. 39)
          33) When post-1991 loan guarantees are
          modified, is the existing book amount of the
          related liability changed to an amount equal to
          the present value of net cash outflows that are
          projected under the modified terms from the
          time of the modification to the loan's
          maturity, and discounted at the original
          discount rate?^67 (SFFAS 2, par. 50 & app. B,
          part III D(4); SFFAS 19, par. 7(d))
          34) When pre-1992 loan guarantees are directly
          modified, are

                  a) the loan guarantees transferred from
                  the liquidating account to a financing
                  account, and
                  b) the existing book value of the
                  liability of the modified loan
                  guarantees changed to an amount equal
                  to its postmodification liability
                  (i.e., the present value of the net
                  cash outflows under postmodification
                  terms discounted at the current
                  Treasury rate)?

          (SFFAS 2, par. 51 & app. B, part IV B (2) &
          (4))
          35) When pre-1992 loan guarantees are
          indirectly modified, are

                  a) the loan guarantees kept in a
                  liquidating account, and
                  b) the related liability reassessed and
                  adjusted to reflect any change in the
                  liability resulting from the
                  modification?

          (SFFAS 2, par. 51)
          36) Are subsequent modifications of pre-1992
          loan guarantees treated as modifications of
          post-1991 loan guarantees? (SFFAS 2, par. 51)
          37) If a post-1991 or pre-1992 loan is sold
          with a recourse provision, is the present value
          (discounted at the Treasury rate in effect at
          the time of the sale) of the estimated losses
          recognized as a subsidy expense and a loan
          guarantee liability? (SFFAS 2, par. 54 & app.
          B, part I F(3))

    67 The original  discount rate  is the rate  that was  originally used  to
    calculate the present  value of  the liability when  the guaranteed  loans
    were disbursed, after adjusting for the interest rate reestimate.

              Credit Programs Costs (38 - 75)         Yes, No, or    Explanation
                                                          N/A
    In accordance with the Federal Credit Reform Act of 1990, as amended, a
    subsidy expense is recognized for direct or guaranteed loans disbursed
    during the fiscal year. The amount of the subsidy expense equals the
    present value of estimated cash outflows over the life of the loans minus
    the present value of the estimated cash inflows. The discount rate used to
    calculate the present value is the average interest rate on marketable
    Treasury securities of similar maturity to the cash flows of the direct
    loan or loan guarantee for which the estimate is being made. (SFFAS 2,
    par. 6, 7, 24, 30, & 31; SFFAS 19, par. 6 & 7)
          38) For post-1991 direct or loan guarantee
          programs, is the present value of
          estimated cash outflows over the life of
          the loans minus the present value of
          estimated cash inflows discounted at the
          interest rate of marketable Treasury
          securities with similar maturity to the
          cash flows? (SFFAS 2, par. 24; SFFAS 19,
          par. 6)
          39) For post-1991 direct or loan guarantee
          programs, are the net present values
          recognized as subsidy expense in the year
          the loan is disbursed? (SFFAS 2, par. 24;
          SFFAS 19, par. 6)
          40) Are the components of estimated
          subsidy costs (and offsetting receipts) of
          post-1991 loans and guarantees separately
          recognized for

                  a) interest subsidy costs,^68
                  b) default costs,^69
                  c) present value of fees and other
                  collections, and
                  d) other subsidy costs?

          (SFFAS 2, par. 25-29)
          41) Is the subsidy cost allowance for
          post-1991 direct loans amortized using the
          interest method? ^70 (SFFAS 2, par. 30,
          31, and app. B, part I B (2); SFFAS 19,
          par. 7(a))
          42) If the effective interest for
          post-1991 direct loans is less than the
          nominal interest, is the subsidy cost
          allowance increased by the difference and
          recognized as a reduction in interest
          income? (SFFAS 2, par. 30 & app. B, part I
          B (2); SFFAS 19, par. 7(a))
          43) If the effective interest for
          post-1991 direct loans is greater than the
          nominal interest, is the subsidy cost
          allowance decreased by the difference and
          recognized as an increase in interest
          income? (SFFAS 2, par. 30 & app. B, part I
          B (2); SFFAS 19, par. 7(a))
          44) Is interest accrued and compounded on
          the liabilities of post-1991 loan
          guarantees at the interest rate that was
          originally used to calculate the present
          value of the loan guarantee liabilities
          when the guaranteed loans were disbursed,
          after adjusting for the interest
          reestimate? (SFFAS 2, par. 31 & app. B,
          part III B (2); SFFAS 19, par. 7(b))
          45) Is the interest accrued and compounded
          on the liabilities of post-1991 loan
          guarantees recognized as an interest
          expense? (SFFAS 2, par. 31 & app. B, part
          III B (2))
    Two kinds of reestimates for the subsidy cost allowance for outstanding
    direct loans and the liability for outstanding loan guarantees are (1)
    interest rate reestimates and (2) technical/default reestimates. An
    interest rate reestimate is due to a change in the interest rates from
    those that were assumed in budget preparation and used in calculating the
    subsidy expense to the interest rates that are prevailing during the
    periods in which the direct or guaranteed loans are disbursed. A
    technical/default reestimate is due to changes in projected cash flows of
    outstanding direct loans and loan guarantees after reevaluating the
    underlying assumptions and other factors (except for interest rate
    reestimates) that affect cash flow projections as of the financial
    statement date. (SFFAS 18, par. 9)
          46) Does the entity measure reestimates of
          allowances for subsidy costs of post-1991
          loans and liabilities for guarantees in
          two components separately, specifically:
          the interest rate reestimate and the
          technical/default reestimate? (SFFAS 18,
          par. 9)
          47) Is any increase (or decrease) in the
          subsidy cost allowance of post-1991 direct
          loans or loan guarantee liabilities
          resulting from the interest rate and
          technical /default reestimates recognized
          as a subsidy expense (or a reduction in
          subsidy expense)? (SFFAS 2, par. 32; SFFAS
          18, par. 9)
          48) If the assumed interest rates used in
          calculating the subsidy expenses for
          cohorts^71 from which direct or guaranteed
          loans are disbursed differ from the rates
          prevailing at the time of the loan
          disbursement, is an interest rate
          reestimate for those cohorts made as of
          the date of the financial statements?
          (SFFAS 2, par. 32 (A); (A)SFFAS 18, par. 9
          (A))
          49) Do technical/default reestimates take
          into consideration all factors that may
          have affected various components of
          projected cash flows, including defaults,
          delinquencies, recoveries, and
          prepayments? (SFFAS 2, par. 32 (B); SFFAS
          18, par. 9 (B))
          50) Are technical/default reestimates made
          each year as of the date of the financial
          statements? (SFFAS 18, par. 9 (B))
          51) For direct loans, do other adjustments
          include loan modifications, fees received,
          loans written off, foreclosed property or
          other recoveries acquired, and subsidy
          allowance amortization? (SFFAS 18, par.
          10)
          52) For loan guarantees, do other
          adjustments include loan guarantee
          modifications, fees received, interest
          supplements paid, claim payments made to
          lenders, foreclosed property or other
          recoveries acquired, and interest
          accumulated on the loan guarantee
          liability? (SFFAS 18, par. 10)
          53) Are default costs estimated and
          periodically reestimated for each
          post-1991 loan and loan guarantee program
          on the basis of separate cohorts and risk
          categories? (SFFAS 2, par. 33)
          54) In estimating default costs, did the
          entity evaluate

                  a) loan performance experience,
                  b) the current and forecasted
                  international, national, or
                  regional economic conditions that
                  may affect the performance of the
                  loans,
                  c) financial and other relevant
                  characteristics of borrowers,
                  d) the value of collateral to loan
                  balance,
                  e) changes in recoverable value of
                  collateral,
                  f) newly developed events that
                  could affect the loans'
                  performance, and
                  g) improvements in methods to
                  reestimate defaults?

          (SFFAS 2, par. 34)
          55) In estimating and reestimating future
          default costs for each group, cohort, and
          risk category of loan and guarantee, has
          the agency used a systematic methodology
          based on experience? (SFFAS 2, par. 35 &
          36)
          56) Is interest (at the discount rate in
          effect when the loans were first
          disbursed) accrued on post-1991 direct
          loans, including amortized interest,
          recognized as interest income? (SFFAS 2,
          par. 37 & app. B, part I B (2) & C)
          57) Is interest (at the original discount
          rate) accrued on debt to the Treasury
          arising from post-1991 direct loans
          recognized as interest expense? (SFFAS 2,
          par. 37 & app. B, part I B (2) & C)
          58) Is interest (at the discount rate in
          effect when the loans were first
          disbursed) accrued on liability of
          post-1991 loan guarantees recognized as
          interest expense? (SFFAS 2, par. 37 & app.
          B, part III B (2) & C)
          59) Is interest (at the original discount
          rate) due from the Treasury on uninvested
          funds associated with post-1991 loan
          guarantee liabilities recognized as
          interest income? (SFFAS 2, par. 37 & app.
          B, part III B (2) & C)
          60) Are costs for administering credit
          activities (such as salaries, legal fees,
          and servicing) that are incurred in
          support of direct loan and guaranteed loan
          programs recognized as administrative
          expenses and not included in direct loan
          and loan guarantee subsidy costs? (SFFAS
          2, par. 38)
          61) Are losses (as well as valuation
          allowances and corresponding liabilities)
          of direct loans obligated and loan
          guarantees committed before October 1,
          1991, recognized when it is more likely
          than not that the direct loans will not be
          totally collected or that the loan
          guarantees will require a future cash
          outflow to pay default claims? (SFFAS 2,
          par. 39)
    Foreclosed properties are assets received in satisfaction of a loan
    receivable or as a result of payment of a claim under a guaranteed or
    insured loan (excluding commodities acquired under price support
    programs.) All properties included in foreclosed property are assumed to
    be held for sale. Pre-1992 foreclosed property refers to property
    associated with direct loans obligated or loan guarantees committed before
    October 1, 1991. Post-1991 foreclosed property refers to property
    associated with direct loans obligated or loan guarantees committed after
    September 30, 1991. (SFFAS 3, par. 79 & 80)
          62) If, at the time of the foreclosure,
          the expected net realizable value of
          pre-1992 foreclosed property is less than
          the cost (i.e., the carrying amount of the
          loan, or for a loan guarantee, the amount
          of the claim paid), is the loss charged to
          operations and tracked in a valuation
          allowance account? (SFFAS 3, par. 86)
          63) If the pre-1992 foreclosed asset's net
          realizable value subsequently increases or
          decreases, does the entity credit or
          charge this amount to results of
          operations and adjust the valuation
          allowance? (SFFAS 3, par. 86)
          64) Upon sale of foreclosed property, is
          any difference between the net carrying
          amount of foreclosed property and the net
          proceeds of the sale recognized as a
          component of operating results? (SFFAS 3,
          par. 89)
          65) For post-1991 foreclosed property, is
          interest income accrued from the previous
          periodic adjustment in the carrying amount
          up to the sale date? (SFFAS 3, par. 89)
          66) For post-1991 foreclosed property, is
          the resulting difference between the
          adjusted carrying amount and the net sales
          proceeds recognized as a reestimate of
          "subsidy expense"? (SFFAS 3, par. 89)
          67) For pre-1992 foreclosed property, is
          the difference between the adjusted
          carrying amount and net sales proceeds
          recognized as a gain or a loss on the sale
          of foreclosed property? (SFFAS 3, par. 89)
    The term modification, as it applies to direct loans and loan guarantees,
    means a federal government action, including new legislation or
    administrative action that directly or indirectly alters the estimated
    subsidy cost and the present value of outstanding direct loans, or the
    liability of loan guarantees. The cost of the modification is the excess
    of the premodification value of a direct loan (or postmodification
    liability of loan guarantees) over the postmodification value of a direct
    loan (or premodification liability of loan guarantees), both of which have
    been discounted at the Treasury rate in effect when the modification
    occurred. (SFFAS 2, par. 41; SFFAS 2, par. 45, notes 3 & 4 & par. 49,
    notes 6 & 7; SFFAS 19, par. 6)

    The book value of the loan or guarantee is discounted at the Treasury rate
    originally used to calculate the present value of the direct loan or loan
    guarantee liability when the loan was originally disbursed. (SFFAS 2, par.
    48 & 50, app. B parts I D (4 & 5), II B (4), III B (4), & IV B (4))

    The sale of post-1991 and pre-1992 direct loans is treated as a direct
    modification of the loans sold if the sale proceeds were not included in
    the cash flows estimates for the initial subsidy calculation. The cost of
    modification is determined on the basis of the premodification value of
    the loans sold. However, if sale proceeds were included in the cash flow
    estimates for the initial subsidy calculation, the effect of the loan sale
    on the cost of the program is recognized in the reestimates. (SFFAS 2,
    par. 53, Appendix B. par 1F)
          68) If pre-1992 or post-1991 direct loans
          are modified, is the excess of the
          premodification value^72 over the
          postmodification value^73 recognized as a
          modification expense? (SFFAS 2, par. 45 &
          app. B, parts I D (1-3) & II B (1-3))
          69) If the cost of modifying pre-1992 or
          post-1991 loans is either greater or less
          than the decrease in the loans' book
          value, is the difference recognized as
          either a gain or loss? (SFFAS 2, par. 48 &
          app. B, parts I D (4 & 5) & II B (4 & 5))
          70) If pre-1992 or post-1991 loan
          guarantees are modified, is the excess of
          the postmodification liability^74 over the
          premodification liability^75 recognized as
          a modification expense? (SFFAS 2, par. 49
          & app. B, parts III D (1-3), & IV B (1-3))
          71) If the cost of modifying pre-1992 or
          post-1991 loan guarantees is either
          greater or less than the increase in the
          book value of the related loan guarantee
          liabilities, is the difference recognized
          as a either a gain or loss? (SFFAS 2, par.
          52 & app. B, parts III D (4 & 5), & IV B
          (5))
          72) If the premodification value of
          post-1991 and pre-1992 loans sold^76
          exceeds the net proceeds from the sale, is
          the excess treated as the cost of
          modification and recognized as a
          modification expense? (SFFAS 2, par. 45 &
          53 & app. B, part I F (1))
          73) If a loan is sold with recourse, is
          the present value of estimated losses
          under the recourse or guarantee
          obligations recognized as a subsidy
          expense and as a loan guarantee liability?
          (SFFAS 2, par. 54)
          74) If the modification expense arising
          from a loan sale is greater than the book
          value loss, is the difference recognized
          as a gain? (SFFAS 2, par. 55 & app. B,
          part I F (2))
          75) If the modification expense arising
          from a loan sale is less than the book
          value loss, is the difference recognized
          as a loss? (SFFAS 2, par. 55 & app. B,
          part I F (2))

    68 The interest subsidy cost of direct  loans is the excess of the  amount
    of the  loans  disbursed  over  the present  value  of  the  interest  and
    principal payments required by loan contracts discounted at the applicable
    Treasury rate; for loan  guarantees it is the  present value of  estimated
    interest supplement payments.

    69 The default cost of direct loans or loan guarantees is measured at  the
    present value  of  projected  payment delinquencies  and  omissions  minus
    projected net recoveries.

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

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

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

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

    74 This is the present value of the net cash flows under  postmodification
    terms discounted at the current Treasury rate.

    75 This is the present value  of the net cash flows under  premodification
    terms discounted at the current Treasury rate.

    76 This is the present value of the loans' net cash inflows discounted  at
    the current discount rate.

               Other Financing Sources (76 - 81)          Yes, No, or Explanation
                                                              N/A
          76) Is a gain^77 from the modification^78 of
          post-1991 loans reported as a reduction in
          financing source and paid to the Treasury as a
          "modification adjustment transfer?" (SFFAS 2,
          par. 48, & app. B, part I D (5))
          77) Is a loss^79 from the modification of
          post-1991 loans reported as a financing source
          when the reporting entity receives from the
          Treasury a "modification adjustment transfer?"
          (SFFAS 2, par. 48 & app. B, part I D (5))
          78) Is a gain^80 resulting from a modification
          of post-1991 loan guarantees reported as a
          reduction in financing source and paid to the
          Treasury as a "modification adjustment
          transfer?" (SFFAS 2, par. 52 & app. B, part III
          D (5))
          79) Is a loss^81 resulting from a modification
          of post-1991 loan guarantees reported as a
          financing source when the reporting entity
          receives from the Treasury a "modification
          adjustment transfer" to offset the difference?
          (SFFAS 2, par. 52 & app. B, part III D (5))
          80) Is a gain on the sale of a post-1991 loan
          reported as a reduction in financing source and
          paid to the Treasury as a "modification
          adjustment transfer?" (SFFAS 2, par. 55 & app.
          B, part I F (2))
          81) Is a loss on the sale of a post-1991 loan
          reported as a financing source when the
          reporting entity receives from the Treasury a
          "modification adjustment transfer?" (SFFAS 2,
          par. 55 & app. B, part I F (2))

    77 The excess of the  cost of the modification  over the decrease in  loan
    book value discounted at the Treasury rate.

    78 A  modification  means  a  federal  government  action,  including  new
    legislation or administration action, which directly or indirectly  alters
    the estimated subsidy cost and present  value of outstanding loans or  the
    liability of loan guarantees. (SFFAS 2, par. 41)

    79 The  excess of  the decrease  in  loan book  value, discounted  at  the
    Treasury rate, over the cost of the modification.

    80 The  excess  of the  cost  of the  modification  over the  increase  in
    liability discounted at the Treasury rate.

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

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    References

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