Department of Homeland Security

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Governmentwide Accounting
Presenter Jim Sturgill May 8, 2007
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Presentation Summary

• Where we are
• The future

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Where we are
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The Financial Report of the United States
Government (FR)

• Provides the President, Congress, and the
  American people with a comprehensive view of the
  Federal Governments financial results
• Discusses important financial issues and
  significant conditions that may affect future
  operations
• Presents the financial condition of the Federal
  Government using the accrual basis of accounting
• No opinion rendered for the 10th consecutive year
  from the Government Accountability Office (GAO)

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GAO Findings

• Three major impediments continue to
• prevent GAO from issuing an opinion
• Serious financial management problems
• at the Department of Defense (DoD)
• Inability to adequately reconcile
• intragovernmental activity and balances
• Ineffective process for preparing the FR

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DoD Financial Management

• Problems
• Financial statements were not auditable
• Efforts for improvement
• Continually to improve its system to
• correct its financial reporting problems
• and produce auditable statements
• Business Management Modernization
• Program

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Efforts to Reconcile Intragovernmental Activity
and Balances

• Problem
• Intragovernmental Out-of-Balance Condition
• Efforts for improvement
• Business Rules for Intragovernmental
• Activities
• Use of Central Accounting Data
• Inspector General Agreed Upon Procedures
• (IG AUP)

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Intragovernmental Out-of-Balance Condition
All Categories (In Millions)
247,129
99,595
97,630
Excludes agency activity that reported the
General Fund as its trading partner, intradept
activity, and benefits contributions activity
with trading partners other than OPM DOL
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Business Rules for Intragovernmental Activities

• Collaborative effort between the CFO Council,
  Treasury, and OMB
• Provide accounting guidance on the exchange of
  goods and services, transfers between Federal
  agencies, and for recording and reconciling
  nonexchange transactions with fiduciary agencies
  (BPD, FFB, DOL, OPM) by OMB and Treasury
• Established the need for the Dispute Resolution
  Committee to facilitate the resolution of
  accounting, reporting timing differences or
  contractual disputes between Federal entities

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Use of Central Accounting Data (UCAD)

• Purpose
• To Improve interagency eliminations by providing
  agencies a tool to reconcile transactions and
  balances directly to Treasury Central Accounting
  data
• Benefit
• Addresses the reporting inconsistencies by
  matching with the Treasury Central Accounting
  data (one-to-one relationship from Central
  Accounting System to year-end financial reporting)

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UCAD (contd)

• Authoritative Source
• FMS central accounting system acts as the
  bank for federal agencies. It is the
  authoritative source for

• FBWT
• CIHO
• Investments
• Borrowing Activity
• Net Outlays

• Non-Expenditure Transfers
• Appropriation Warrants

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IG AUP

• Purpose
• Supplements the audit of intragovernmental
  activity and balances
• Benefit
• Supports the process of eliminating
  intragovernmental activity and balances to the FR

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IG AUP (contd)

• Based upon results in FY 2006, agencies need to
• Update departmental policies and guidelines to
  ensure the accuracy of the intragovernmental
  reporting
• Resolve on-going reportable conditions
• Perform and complete all of the steps of the 3rd
  Quarter Audit Requirements to improve interagency
  eliminations by providing agencies a tool to
  reconcile transactions and balances

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FR Preparation Process Findings

• 1 Consistency with underlying information
• in agencies audited financial statements
• Resolution
• Developed the Closing Package methodology, which
  is a set of special purpose financial statements
  used to prepare the FR

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FR Preparation Process Findings (contd)

• 2 Address disclosures required by GAAP
• Resolution
• Modified the TFM to collect the disclosures
  required by GAAP
• in FY 2006
• Earmarked Funds Reporting requirement per FASAB
  SFFAS No. 27
• Social Insurance Reporting requirement per
  FASAB SFFAS No. 25, 26, 28

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FR Preparation Process Findings (contd)

• 3 Define reporting entity
• Resolution
• Developed the procedures to identify the entities
  to required to be consolidated into the FR

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FR Preparation Process Findings (contd)

• 4 Internal controls
• Resolution
• Developed and documented policies and procedures
• Instituted effective management reviews

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FR Preparation Process Findings (contd)

• 5 Reconciliation Statements
• Resolution
• Develop a process to fully identify and report
  the items needed to reconcile the operating
  results to the budget results

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The Future
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Fiduciary Funds Disclosure
Effective in FY 2009

• Include assets collected/received by agencies but
  that belong, by law, to non-federal entities
• FASAB requires
• These assets and related liabilities will not be
  in agencies balance sheets,
• These activities must be disclosed

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GWA Modernization Project Objectives

• Change the fundamental reconciliation process
• Streamline agency access and eliminate the
  redundant reporting process
• Provide a central location for accounting data
• Replace the current legacy Central Accounting
  System (STAR)

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CARMA

• Cash Accounting and Reporting Modernization
  Activity
• Internal system to define a strategy for General
  Ledger posting logic and to establish the logic
  and database relationships necessary to update
  General Ledger (GL) transactions
• To Implement and integrate the United States
  Standard General Ledger to record cash and other
  monetary assets and liabilities of the Federal
  Government with the existing GWA database

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FIRST

• Financial Information Reporting Standardization
• Replaces FACTS I and II, IFCS, IRAS, and part of
  TROR
• Provides a mechanism to implement the tie-points
  on a government-wide scale
• Tentatively scheduled for 3rd quarter FY 2011

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FIRST (contd)

• Impact on the reconciliation statements
• Collect both the budgetary and proprietary SGLs
• Apply edits at Treasury Account Symbol level
  based on SGL tie points
• Provide feedback to agencies