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Override Logging Table OLOG Reviews Unliquidated Obligation ULO Reviews UpwardDownward Adjustments

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Required annual certification of semi-annual reviews, by agency CFO's ... Three were unable to provide complete evidence of their reviews... – PowerPoint PPT presentation

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Title: Override Logging Table OLOG Reviews Unliquidated Obligation ULO Reviews UpwardDownward Adjustments


1
Override Logging Table (OLOG) ReviewsUnliquidated
Obligation (ULO) ReviewsUpward/Downward
Adjustments
  • Presented byHoward Campbell

2
Override Logging Table (OLOG) Reviews
3
Override Logging Table (OLOG) ReviewsWhat is
OLOG?
  • OLOG is an online table that maintains a record
    of all Foundation Financial Information System
    (FFIS) override activity
  • FFIS conducts edits on all transactions as they
    are processed, and rejects those that do not meet
    established criteria
  • FFIS users, with proper override authority, have
    the ability to override transaction errors
  • Non-Fatal Errors
  • Warnings (Do not require overrides)
  • Overrideable errors
  • Fatal Errors
  • Hard errors (Can not be overridden require
    corrective action)
  • Non-fatal errors range in severity from Level 1
    to Level 9

4
Override Logging Table (OLOG) ReviewsHistory
  • OLOG review requirement established in 2002
  • FFIS Security Administrator Handbook (June 2002)
  • Section 5.9.5
  • (OLOG) Table creates an audit trail for the
    Security Administrator to track users overriding
    errors in documents and batches...
  • This table must be monitored for users
    overriding errors with levels of 5-9. Violations
    and trends must be reported to the appropriated
    financial manager for immediate correction
  • Levels 5-9 included errors regarding budget
    execution, the general ledger, and project cost
    accounting, and the authority to override them
    should be limited to financial/resource managers,
    or similar.
  • All Foundation Financial Information System
    applications must have these logs activated for
    audit trail purposes. The data on the OLOG table
    will be retained for audit and reporting
    purposes

5
Override Logging Table (OLOG) ReviewsHistory
  • FFIS Bulletin 02-12 (October 2002) - Policy for
    Agencies to Implement a Monthly Review of the
    Override Logging Table to Track and Monitor Users
    Overriding Document Errors in the Foundation
    Financial Information System
  • Based on an OIG recommendation (June 2002)
  • All agencies must develop and implement
    procedures to review the OLOG table monthly. The
    agencies FFIS Security Administrator in
    conjunction with Financial Managers must review
    and certify that all overrides were recorded in
    accordance with the requirements contained in the
    Security Administrator Handbook
  • On a quarterly basis the override analysis
    shall be provided to the agency CFO for review
    and certification

6
Override Logging Table (OLOG) ReviewsProblem
  • FY 2006 Consolidated Financial Statement Audit
    Report
  • Section 2 Reportable Condition Finding 3
    Additional Financial Management Issues Warrant
    Attention
  • Our review disclosed that agencies had not
    adequately monitored overrides of document
    errors
  • Generally agencies did not provide evidence of
    reviews or the evidence provided did not
    demonstrate that overrides had been effectively
    reviewed
  • Recommendation 1 Ensure that agencies comply
    with FFIS Bulletin 02-12 by providing a standard
    and effective method of monitoring and reviewing
    overrides
  • FY 2007 Consolidated Financial Statement Audit
    Report
  • Section 2 Significant Deficiency Finding 3
    Improvements Needed In Certain Financial
    Management Practices and Processes
  • Last year we reported that agencies had not
    adequately monitored overrides of document
    errors

7
Override Logging Table (OLOG) ReviewsProblem
  • OLOG Table Limitations
  • Only 2 documents can be viewed online, at one
    time
  • No ad hoc query feature online
  • Users can only search by the tables key fields
    (BATCH ID, DOC ID, ERROR, and LEVEL)
  • OLOG data not available in the Financial Data
    Warehouse (FDW), for ad hoc reporting
  • The OLOG table updates did not include the actual
    error codes associated with the individual
    overrideable error conditions present on each
    document

8
Override Logging Table (OLOG) ReviewsSolution
  • FFIS Enhancement Implemented
  • The OLOG table updates now allow users to view
    the actual error codes associated with the
    individual overrideable error conditions present
    on each document
  • FDW Enhancements
  • The OLOG table added - allows users to perform ad
    hoc queries/reviews of override activity, as
    needed
  • The Error Table (ETAB) added - provides users
    with more descriptive information associated with
    the errors identified on the OLOG table.
  • Quarterly OLOG Review Report
  • Part of a standard Brio query, to be used by all
    FFIS agencies
  • Report combines OLOG data with data from the
    general ledger, to provide a snapshot of the
    volume (document count) and magnitude (dollar
    value) of override activity

9
Override Logging Table (OLOG) ReviewsSolution
  • OCFO Bulletin 08-02 (February 2008)
  • Supersedes FFIS Bulletin 02-12
  • Requires quarterly review of OLOG activity, at a
    minimum
  • Requires quarterly certification of OLOG activity
  • Quarterly OLOG Review Report
  • Must be initialed by Agency Security
    Administrator, or designee
  • To certify users have appropriate override
    authority, in accordance with the requirements of
    the Security Administrator Handbook
  • Must be signed by Agency Chief Financial Officer,
    or designee
  • To certify that override activity has not
    compromised the Agencys sound financial
    management principles and practices
  • Must be maintained as supporting documentation
    for audit purposes

10
Override Logging Table (OLOG) ReviewsResults
  • FY 2008 2nd Quarter Certifications
  • OCFO processed and distributed OLOG review
    queries and certification reports, for all FFIS
    applications
  • Submission of certifications to OCFO required to
    close open audit recommendation
  • OCFO has received certifications for 10 out of 17
    FFIS applications to date (59)
  • FY 2008 3rd Quarter Certifications
  • OCFO will process and distribute OLOG review
    queries and certification reports, for all FFIS
    applications
  • Submission of certifications to OCFO required
  • Future Quarterly Certifications
  • Agencies will process and review OLOG queries
  • Agencies will certify and maintain certification
    reports, for audit purposes

11
Unliquidated Obligations (ULO) Reviews
12
Unliquidated Obligations (ULO) ReviewsHistory
  • USDA DR 2300-001 (January 1984) - Improvement of
    Management Controls Over Unliquidated Obligations
  • Required at least an annual review of inactive
    unliquidated obligations
  • Inactive obligations were defined as projects or
    activities with no physical or fiscal activity
    for at least 12 months
  • USDA DR 2300-001 (Revised April 2002) - Reviews
    of Unliquidated Obligations
  • Required semi-annual review of inactive
    unliquidated obligations
  • Required annual certification of semi-annual
    reviews, by agency CFOs
  • Required that appropriate record of the reviews
    and certifications be retained, for audit purposes

13
Unliquidated Obligations (ULO) ReviewsProblem
  • FY 2005 Consolidated Financial Statement Audit
    Report
  • Section 2 Reportable Condition Finding 3
    Additional Financial Management Issues Warrant
    Attention
  • Our review disclosed that obligations were not
    always valid because agencies were not
    effectively reviewing all unliquidated (open or
    active) obligations and taking appropriate
    actions (de-obligating)
  • (90 percent) obligations reviewed were invalid
    and agencies indicated the items would be
    de-obligated
  • We also requested evidence of the March 31,
    2005 review from seven agencies. Three were
    unable to provide complete evidence of their
    reviews
  • Recommendation 7 Provide oversight to ensure
    that general ledgers reflect valid obligations
    and that agencies perform the required reviews of
    unliquidated obligations appropriately and
    effectively. Additionally, ensure that agencies
    maintain evidence of the reviews

14
Unliquidated Obligations (ULO) ReviewsProblem
  • FY 2006 Consolidated Financial Statement Audit
    Report
  • Section 2 Reportable Condition Finding 3
    Additional Financial Management Issues Warrant
    Attention
  • Our review again disclosed that obligations
    were not always valid because agencies were not
    effectively reviewing all unliquidated (open or
    active) obligations and taking appropriate
    actions (de-obligating)
  • This year(52 percent) of the obligations
    reviewed were invalid and agencies planned to
    de-obligate the items
  • FY 2007 Consolidated Financial Statement Audit
    Report
  • Section 1 Material Weakness Finding 1
    Improvements Needed In Overall Financial
    Management
  • We again noted that obligations were not always
    valid because agencies were not effectively
    reviewing all unliquidated (open or active)
    obligations and taking appropriate actions
    (de-obligating)
  • This year we selected a similar sample (48
    percent) of the obligations reviewed were invalid
    and agencies planned to de-obligate the items
  • In its FMFIA report for 2007, USDA reported an
    overall lack of a comprehensive review of
    unliquidated obligations accounts were not being
    de-obligated on a timely basisagencies need to
    implement effective and sustainable control
    procedures over the review and certification

15
Unliquidated Obligations (ULO) ReviewsCorrective
Actions
  • USDA DR 2300-001 (Revised August 2006) - Reviews
    of Unliquidated Obligations
  • Requires annual reviews and certifications of
    unliquidated obligation balances as of July 31,
    by August 31 each fiscal year
  • Requires written notification from program and/or
    procurement personnel
  • Requires obligations with no activity for the
    most recent 12 months to be de-obligated, unless
    there is a documented bona-fide purpose for the
    obligation to remain and a justification for the
    period of inactivity
  • Agency CFO, or equivalent, must retain
    documentation for a period of 5 years
  • Requires agency CFO, or equivalent, to submit
    annual certifications to OCFO by August 31
  • Requires OCFO to monitor agency compliance

16
Unliquidated Obligations (ULO) ReviewsCorrective
Actions
  • Aged Unliquidated Obligations Query
  • Standard Brio query, to be used by all FFIS
    agencies
  • Reports focus on inactive open obligations, where
    the last action taken falls into one of the
    following aging categories
  • 1 to 2 Years
  • 2 to 3 Years
  • 3 to 4 Years
  • 4 Years
  • Agencies expected to process and review as
    needed, to comply with DR 2300-001
  • Original distribution to FFIS agencies (April
    2007)
  • Revised query distribution to FFIS agencies
    (October 2007)

17
Upward/Downward Adjustments
18
Upward/Downward AdjustmentsChallenge
  • FFIS and Upward/Downward Adjustments
  • FFIS automatically posts upward/downward
    adjustments, if all of the following criteria are
    met
  • No Year flag on the FUND table is set to N
  • Fiscal Year is greater than Budget Fiscal
    Year
  • Obligations/expenditures are increased or
    decreased
  • Adjustments are posted for each transaction line,
    where the above criteria are met
  • Unlike recoveries for no-year and multi-year
    funds, there is no way for FFIS to offset an
    upward adjustment on one line of a document
    against a downward adjustment on another line
  • Upward/Downward Adjustments Inflation
  • When a single document increases both upward and
    downward adjustments
  • Accounting corrections
  • When routine business activities arent properly
    netted against each other
  • Accrual estimate reversals vs. actual activity

19
Upward/Downward AdjustmentsWhat Can You Do?
  • Detect Upward/Downward Adjustments Inflation
  • Routine review of activity in GL accounts 4871
    and 4881
  • Categorize transactions
  • Accounting Corrections
  • Balanced accounting adjustment vouchers (B2s,
    BVs, etc.)
  • Errant document entry subsequent
    cancellation/deletion
  • Correcting current fiscal year activity or prior
    fiscal year activity
  • Accrual/Period-End Estimate Reversal
  • Actual Activity
  • Is it associated with an accrual or estimate?
  • New Accrual/Period-End Estimate
  • Due to lack of actual activity

20
Upward/Downward AdjustmentsWhat Can You Do?
  • Correct Upward/Downward Adjustments Inflation
  • Process SV-97 (downward) and SV-98 (upward) as
    appropriate
  • Accounting Corrections
  • Always adjust for both upward and downward
    adjustments
  • Accrual/Period-End Estimate Reversal
  • Do not adjust (unless for offsetting
    obligation/expense estimates)
  • Actual Activity
  • When associated with an accrual or estimate
  • Always adjust for both upward and downward
    adjustments, in the amount of the actual activity
  • When NOT associated with an accrual or estimate
  • Do not adjust
  • New Accrual/Period-End Estimate
  • Due to lack of actual activity
  • Always adjust for both upward and downward
    adjustments, in the amount of the new
    accrual/estimate

21
Upward/Downward AdjustmentsExpected Results
  • Proper detection and correction of
    upward/downward adjustment inflation should lead
    to the following equation
  • Reversed accruals/period-end estimates
  • (without associated actual activity or new
    accruals/estimates)
  • Actual activity NOT associated with an
    accrual/estimate
  • Improved Financial Statement Reporting
  • Statement of Budgetary Resources (SBR) and SF-133
  • Particularly Lines 2 and 8

22
Contact Information
  • Howard Campbell
  • Office of the Chief Financial Officer, ACFO-FO
  • Systems Analysis and Requirements Division
  • Office 202-720-7975
  • Fax 202-720-5741
  • Email Howard.Campbell_at_USDA.GOV
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