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][email protected] 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
Visible links
147. http://www.gao.gov/special.pubs/gaopcie/
148. mailto:[email protected]
149. http://www.gao.gov/special.pubs/gaopcie/famcomment.htm
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