oversight

Civil Financial Audits Issue Area: Active Assignments

Published by the Government Accountability Office on 1997-04-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Accounting
                  Managementand Information
                             Division



April 1997 -A
                  Civil Financial Audits
                  Issue Area
                  Active Assignments




GAO/AA-97-24(2)
I




    I
Foreword


           This report was prepared primarily to inform Congressional members and
           key staff of ongoing assignments in the General Accounting Office's Civil
           Financial Audits issue area. This report contains assignments that were
           ongoing as of April 15, 1997, and presents a brief background statement
           and a list of key questions to be answered on each assignment. The report
           will be issued quarterly.

           This report was compiled from information available in GAO'S internal
           management information systems. Because the information was
           downloaded from computerized data bases intended for internal use, some
           information may appear in abbreviated form.

           If you have questions or would like additional information about
           assignments listed, please contact Gregory Holloway, Director, on
           (202) 512-3406; or Linda Calbom, Director, on (202) 512-8341; or Robert
           Dacey, Associate Director, on (202) 512-3317; or William Hunt, Associate
           Director, on (202) 512-2711.




           Page 1                                                     GAO/AA-97-24(2)
Contents

                                                                                                       Page
FINANCIAL AUDITS
            ,FINANCIAL AUDIT OF THE INTERNAL REVENUE SERVICE FOR FISCAL YEAR 1996.                        1
HIGH RISK-CIVIL
    New .HRA 15:REVIEW OF CUSTOMS'SERVICE FINANCIAL OPERATIONS.                                           I
    New  COORDINATION OF GOVERNMENTWIDE CONSOLIDATED FINANCIAL STATEMENT AUDIT.                           I
FINANCUIL CONDMTION--GGD & GOV'TWIDE
    New         FINANCIAL STATEMENT AUDIT OF THE PUBLIC DEBT.                                             2
            .CONSOLIDATED FINANCIAL STATEMENT AUDIT OF CASH LINE ITEM - FY 1996.                          2
    New     S   EVALUATE FMS' EFFORTS TO MANAGE THE FEDERAL GOVERNMENTS CASH.                             2
            .RECONCILIATION OF AGENCIES' FUND BALANCES WITH TREASURY.                                     3
            . OTHER MONETARY ASSETS.                                                                      3
    New     .FY 97 GOVERNMENT-WIDE CONSOLIDATION FINANCIAL STATEMENT AUDIT - ADMINISTRATION OF            3
                JUSTICE.
    New     , PREPARING FOR THE FY 1997 CONSOLIDATED AUDIT OF SOCIAL SECURIIYBENEFIT COSTS.               4
            *FMS' ABILITY TO COMPILE AGENCY DATA.                                                         4
    New     , REVIEW OF THE ELIMINATION OF INTRAGOVERNMENTAL TRANSACTIONS ON THE CONSOLIDATED             4
              FINANCIAL STATEMENTS.
    New     .013 - FEDERAL EMPLOYEES PENSIONS AND OTHER BENEFITS LINE ITEM.                               5
FINANCIAL OPERATIONS--GGD & GOV'TWIDE
    New     SHRA I:STATUS ON THE NEW WASHINGTON CONVENTION CENTER DEVELOPMENT.                            5
     ANer       CA).TAT'l A1T'-T.       :INANC.T   MAEECam          IT   TD,5      P                      -
    New     *REVIEW OF THE FY 1995 AND 1996 DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND             6
             MANAGEMENT ASSISTANCE AUTHORITYS FINANCIAL STATEMENTS.
FINANCIAL COND1TION--HEHS
                PREPARING FOR THE FY 1997 AUDIT OF EDUCATION, TRAINING, EMPLOYMENT & SOCIAL SERVICES      6
                EXPENSES.
    New     e PREPARING     FOR THE FY 1997 GOVERNMENTWIDE AUDIT OF MEDICARE.                             6
            .HRA 1: PREPARING FOR THE FY 1997 AUDIT OF INCOME SECURITY EXPENSES.                          7
                PREPARING FOR THE AUDIT OF VETERANS BENEFITS AND SERVICES.                                7
FINANCIAL CONDITION-RCED
    New     *REVIEW OF THE FEDERAL GOVERNMENTS FINANCIAL EXPOSURE AND SUBSIDIES RELATED TO                7
             ELECTRIC UTILITY ACTIVITIES.
    New     *THE IMPACT OF THE SALE OR RESTRUCTURING OF BONNEVILLE ON BPA!S AND THE FEDERAL               8
             GOVERNMENTS RESPONSIBILITIES FOR BPAS WPPSS DEBT.
    New     *HIGHLIGHTS OF ERNST & YOUNG REORT ON OMB'S CREDIT SUBSIDY MODEL.                             8
            ,LOANS RECEIVABLE LINE ITEM FOR GOVERNMENTWIDE FINANCIAL STATEMENT AUDIT.                     8
            OLIABILITY FOR LOAN GURANTEES LINE ITEM FOR THE GOVERNMENWIDE FINANCIAL STATEMENT             9
             AUDIT.
            *ENVIRONMENTAL LIABILiTIES LINE ITEM FOR GOVERNMENTWIDE FINANCIAL STATEMENT AUDIT.            9
                TRANSPORTATION EXPENSE FOR GOVERNMENT-WIDE EXPENSE FINANCIAL STATEMENT AUDIT.             9
            *ENERGY, NATRUAL RESOURCES AND ENVIRONMENT. NET COSTS.                                       10
                COMMITMENTS & CONTINGENCIES FOOTNOTE FOR GOVERNMENTWIDE FINANCIAL STATEMENT              10
                AUDIT.
            ,CONSOLIDATED AUDIT OF STEWARDSHIP LAND.                                                     10
            ,CONSOLIDATED AUDIT OF HERITAGE ASSETS.                                                      11
    New         CONSOLIDATED AUDIT OF NON-EXCHANGE REVENUES.                                              11
            . IMPROVING THE FINANCIAL INFORMATION FOREST SERVICE.                                         11
Contents




                                                                                                    Page
FINANCIAL CONDITION-RCED
    New    *REVIEW OF GOVERNNTWIDE ENVIRONMENTAL CLEANUP COSTS.                                        12
    New    SCFS WORK ON USDA/NFC GOVERNMENT-WIDE PAYROLL.                                              12
OTHER ISSUE AREA WORK - CA
           ,ANALYSIS OF THE DISTRICTS BUDGET AND FINANCIAL CONDITION.                                  12
    New    ,REVIEW OF SUPERFUND TRUST FUND INDIRECT AND DIRECT CHARGES.                                13
    New    OREVIEW OF THE STATUS OF TRIBES RESPONSES TO THEIR RECONCILED TRIBAL ACCOUNT BALANCES.      13
    New    .EDP CONTROLS AT AGENCIES UNDER GOVERNMENTWDE AUDITS: THEIR EFFECTIVENESS AND               13
            RELATED IG AUDIT PROCEDURES.
           ,PREPARING FOR THE FY97 GOVERNMENTWIDE AUDIT OF ACCOUNTS PAYABLE.                           14
           ,PREPARING FOR THE FY97 CONSOLIDATED AUDIT OF HEALTH.                                       14
    New    EDP CONTROLS AT HEHS AGENCIES: THESE EFFECTIVENESS AND RELATED IG AUDIT PROCEDURES.
           E                                                                                           14
    New    *NON CFO AGENCY PROFILES.                                                                   15
    New    *EDP CONTROLS AT RCED AGENCIES: THEIR EFFECTIVENESS AND RELATED IG AUDIT PROCEDURES.        15
    New    ,EDP CONTROLS AT AGENCIES UNDER DEFENSE AUDITS: THEIR EFFECTIVENESS AND RELATED IG          15
            AUDIT PROCEDURES.
    New    *EDP CONTROLS AT NON-CFO AGENCIES: THEIR EFFECTIVENESS AND RELATED IG AUDIT                 16
            PROCEDURES.
Civil Audits




FINANCIAL AUDITS
     TTILE: FlNANCIAL AUDIT OF THE INTERNAL REVENUE SERVICE FOR FISCAL YEAR 1996 (901702)

              BACKGROUND: Under the CFO Act of 1990, IRS is required to prepare financial statements for fiscal year
              1996. This is the fifth year in which GAO will perform the audit of IRS' financial statements.
              KEY QUESTIONS: 1) Are the financial management and internal controls effective? 2) Are the financial
              statements reliable, free of misstatements, and presented in conformity with applicable accounting principles?
              3) Is IRS in compliance with laws and regulations?


HIGH RISK-CIVL
     TITLE: HRA 15:REVIEW OF CUSTOMS'SERVICE FINANCIAL OPERATIONS (901750)

              BACKGROUND: The Customs Service is responsible for collecting about $20 billion in federal revenues. In
              1992, GAO pointed out weaknesses in Customs' management and organizational structure that, among other
              things, diminished Customs' ability to collect duties, taxes, fees, and penalties; control financial resources; and
              report on financial operations.
              KEY QUESTIONS: 1) What actions, if any, has Customs taken to correct its financial management and internal
              control system weaknesses?



     TITLE:   COORDINATION OF GOVERNMENTWIDE CONSOLIDATED FINANCIAL STATEMENT AUDIT (919001)

              BACKGROUND: The 24 major exec branch agencies are required to prepare agencywide financial statements
              (F/S) for FY 96. GAO is required to audit & issue an opinion on the gov'twide consolidated F/S (CFS) for FY
              97. This code is for the overall coordination & gov'twide consolidation efforts during fiscal year 1997.
              KEY QUESTIONS: 1) What should be the form & content and related footnote disclosures of the gov'twide
              F/S, 2) what type of information should be included in supplementary info to the F/S, 3) how will eliminations
              of intergovermentaltransactions be audited, 4) how will Treasury compile the consolidated financial statements
              & what agencies will be consolidated.
Civil Audits




FINANCIAL CONDlTION--GGD & GOV'TVIDE
     TITLE: FINANCIAL STATEMENT AUDIT OF THE PUBLIC DEBT (919002)

            BACKGROUND: The Bureau of Public Debt is responsible for managing and reporting essentially all of the
            federal debt and related unamortized discount, interest payable, and interest expense. Federal debt securities
            will likely be the largest single item on the consolidated governmentwide financial statements and has never
            been subject to a financial audit.
            KEY QUESTIONS: I)Is BPD accurately accounting for principal and interest on securities? 2)Are the BPD's
            and FRB's oversight and controls adequate to ensure that securities are effectively accounted for and properly
            disclosed and that the government's interests are sufficiently protected? 3)Are securities maintained in
            accordance with applicable laws and regs?



    TITLE: CONSOLIDATED FINANCIAL STATEMENT AUDIT OF CASH LINE ITEM - FY 1996 (919013)

            BACKGROUND: GMRA requires GAO to audit the governmentwideconsolidated financial statements for FY
            97. Treasury's Financial Management Service (FMS) compiles the statements and in addition, FMS, with the
            Federal Reserve, functions as the central bank for the federal government. *NOTE: $500,000 contract cost
            already allocated.
            KEY QUESTIONS: 1) Are the 9/30/96 cash balances reliable in all material respects? (a) What are Treasury's
            processes and key internal controk includina FDP, over disbursements and collections and what are, the risks?



    TITLE: EVALUATE FMS' EFFORTS TO MANAGE THE FEDERAL GOVERNMENTS CASH (919014)

            BACKGROUND: GMRA requires GAO to audit the governmentwide consolidated financial statements for FY
            97. Treasury and FMS are responsible for managing the federal government's banking relationships and cash
            position, including ensuring that the mandated debt ceiling is not exceeded. FMS uses non-interest bearing time
            deposits to compensate banks for services provided.
            KEY QUESTIONS: l)Does the cash mgt. process ensure that cash is adequately safeguarded and that the fedl
            gov't can meet its obligations without exceeding the mandated debt ceiling? 2)What is the nature, purpose and
            use of compensating balances, and are the balances and related revenues and expenses properly identified,
            accounted for, safeguarded and reported?




                                                                 2
Civil Audits




FINANCIAL COND1TION--GGD & GOV'TWIDE
     THILE: RECONCILIATION OF AGENCIES' FUND BALANCES WITH TREASURY (919015)

            BACKGROUND: GMRA requires GAO to audit the governmentwide consolidated financial statements (CFS)
            for FY 97. A key internal control over receipts and disbursements processed by Treasury's Financial
            Management Service (FMS), for federal agencies, is the monthlyreconcilation between FMS and agency
            records. Prior AIMD & OIG work shows serious problems in how this key control is working.
            KEY QUESTIONS: (1) Is FMS' reconciliation process effective in ensuring that receipts and disbursementsare
            properly reported? (2) Are agencies properly and timely reconciling differences and, if not, what is the effect on
            agency statements, CFS, and the budget? (3) What initiatives have been taken to clear outstanding differences
            and improve the reconciliation process?



     TITLE: OTHER MONETARY ASSETS (919016)
            BACKGROUND: As part of the governmentwide financial statement audit, we will audit other monetary
            assets, including gold, special drawing rights (SDRs), US reserve position in the IMF, and foreign currencies.
            Treasury's OIG audits gold in custody of the Mint, and SDRs and foreign currencies in their audit of the ESF.
            Gold at FRBNY and the US reserve position have never been audited.
            KEY QUESTIONS: 1) What is the nature, purpose, and use of other monetary assets? 2) Are other monetary
            assets properly identified, accounted for, safeguarded. and reported?



     TITLE: FY 97 GOVERNMENT-WIDE CONSOLIDATION FINANCIAL STATEMENT AUDIT - ADMINISTRATION OF
            JUSTICE (919019)

            BACKGROUND: In connection with GAO's FY 97 government-wide consolidated audit, we will be reviewing
            the audit work performed by the Justice and Treasury OIGs and their IPAs in the law enforcement area. The
            material line items include the Admin of Justice on the Stint of Net Costs and seized and forfeited property
            included in the inventory line item on the Stint of Financial Position.
            KEY QUESTIONS: (1) Are the law enforcement related line items--Administration of Justice and seized and
            forfeited property--in the CFS reliable in all material respects, are related laws and regulations being complied
            with, and are internal controls operating effectively? (2) Can DOJ effectively consolidate and report
            departmentwide financial data from each bureau?




                                                                 3
Civil Audits



FINANCIAL CONDmON--GGD & GOV'TWIDE
     TITLE: PREPARING FOR THE FY 1997 CONSOLIDATED AUDIT OF SOCIAL SECURITYBENEFIT COSTS (919026)

            BACKGROUND: GMRA requires GAO to audit the governmentwide fls. SSA's Social Security (Title II)
            expenditures are among the most significant (22% of FY95 federal expenditures). Our review of the OIG's FY95
            audit (913736) resulted in suggestions to enhance the OIG's future audit work. To utilize the OIG's work in our
            FY97 audit, we will ensure that these enhancements are made.
            KEY QUESTIONS: What enhancements did the OIG make in the FY96 audit procedures? Are there any other
            significant audit issues that may impact on GAO's FY97 audit? To what extent will the OIG address GAO
            suggestions? What additional resources does the OIG need to implement all other GAO suggestions for the
            FY97 audit? What additional resources does GAO need to provide on the FY97 audit?



    TITLE: FMS' ABILITY TO COMPILE AGENCY DATA (919034)

            BACKGROUND: Treasury's Financial Management Service (FMS) is responsible for compiling the
            governmentwide consolidated financial statements. FMS uses the Federal Agencies Centralized Trial Balance
            System (FACTS) and the U.S. Government's Standard General Ledger to collect data from the agencies in a
            uniform format.
            KEY QUESTIONS: 1) Has FMS developed systems, controls, and processes to compile governmentwide
            consolidated financial statements (CFS) that are complete and accurately reflect the government's financial
            condition and cost of operations?                                                                                   J
    TITLE: REVIEW OF THE ELIMINATION OF INTRAGOVERNMENTAL TRANSACTIONS ON THE CONSOLIDATED
            FINANCIAL STATEMENTS (919049)

            BACKGROUND: GAO is required to audit & issue an opinion on the gov'twide consolidated financial
            statements (CFS) for FY 97. The effects of intragov'tal transactionsmust be eliminated to ensure that the federal
            gov't is portrayed as a single economic unit. During FY 95, Treasury-FMS reported a net out of balance
            condition for elimination entries of approx. $230 billion.
            KEY QUESTIONS: 1) What are the agencies' policies & procedures to account for & report intragov'tal
            transactions & what are the auditors' procedures for ensuring that these transactions are properly eliminated? 2)
            How does FMS's OPAC system operate & what are agencies' processes & procedures for using OPAC? 3) How
            do these processes & procedures affect the accuracy of the CFS & our audit?




                                                                 4
Civil Audits




FINANCIAL CONDMON--GGD & GOV'TWIDE
     TITLE: 013 -FEDERAL EMPLOYEES PENSIONS AND OTHER BENEFITS LINE ITEM (919051)
            BACKGROUND: The Federal Employee Pensions and Other Benefits line item is mostly comprised of
            amounts reported by the Office of Personnel Management (OPM), Dept of Defense (DOD), Veterans'
            Administration (VA), and Dept. of Labor (DOL). These amounts are for pensions, health benefits, life
            insurance, and workmen's compensation programs. DOD is being audited under a different job code.
            KEY QUESTIONS: (1) Are the OPM, VA, and DOL OIGs/IPAs performing adequate audit procedures for FY
            1996? (2) Are the CFOs' plans adequate to ensure compliance with FASAB standards and OMB guidance? (3)
            Are there any deficiencies in the plans?


FINANCIAL OPERATIONS--GGD & GOV'TWEDE
     TITLE: BRA l:STATUS ON THE NEW WASHINGTON CONVENTION CENTER DEVELOPMENT (901752)

            BACKGROUND: GAO recently provided the subcommittee a report on the District's proposed convention
            center project WCCA has taken steps to develop revised estimates for the predevelopment and construction
            costs. However, plans for the project are still in the early stages and thus, the costs are still subject to change.
            GAO will provide a semi-annual update report on this project
            KEY QUESTIONS: (1) What are the construction and predevelopment costs and how do they compare to the
            budgets? (2) How will the constructioncosts be financed? (3) How much revenues is generated from dedicated
            taxes earmiarked for this project? (4) Are there clear lines of authority in the mnnagement structure of the staff?
            (5) How much and what progress has been made on the project?



     TITLE: CONSOLIDATED FEDERAL FINANCIAL MANAGEMENT SYSTEMS SURVEY - REPORT (901754)

            BACKGROUND: Senator Stevens requested GAO to investigate Australia's centralized financial management
            system to determine its applicability to the United States. We performed our work under job code 901714,
            which was closed 12/13/96 with a briefing to Senate staff. GAO's written product will be issued under this new
            job code.
            KEY QUESTIONS: 1) Who in Australia made the decision to move to a government-wide system? 2) Did the
            Australian agencies resist adopting the consolidated system? 3) How long did it take, how much did it cost, and
            what key lessons should be applied if the U.S. federal government were to adopt a consolidated system?




                                                                   5
Civil Audits



FINANCIAL OPERATIONS--GGD & GOV'TWIDE
     TITLE: REVIEW OF THE FY'1995 AND 1996 DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND
            MANAGEMENT ASSISTANCE AUTHORITY'S FINANCIAL STATEMENTS (901756)

            BACKGROUND: P.L 104-8 established the District of Columbia Financial Responsibility and Management
            Asssistance Authority (the "Authority") on April 17, 1995. As an entity of the District, the Authority prepared
            and issued its first audited financial statements for the period 4/17/95 through 9130195 and recently issued its
            FY 1996 statements.
            KEY QUESTIONS: Based on the Authority's role and responsibilitieswith respect to improving the financial
            operations of the District of Columbia, the Congress requested that GAO review the Authority's fiscal years 1995
            and 1996 financial statements to ensure that they are complete and adhere to generally accepted accounting
            principles.


FINANCIAL CONDMON--HEHS
    TITLE: PREPARING FOR THE FY 1997 AUDIT OF EDUCATION, TRAINING, EMPLOYMENT & SOCIAL SERVICES
           EXPENSES (919022)

            BACKGROUND: The Government Management Reform Act requires GAO to audit governmentwide financial
            statements beginning with fiscal year 1997. Education, Training, Employment and Social Services expenses is a
            material line item at about $54 billion. Education and HHS account for 81% of this line item.
            KEY QUESTIONS: In order to plan for the FY 1997 audit, we need to assess whether adequate audit
            procedures are being performed to (1) audit governmentwide Education, Training, Employment and Social
            Services expenses; (2) evaluate internal controls; and (3) test compliance with laws and regulations.



    TITLE: PREPARING FOR THE FY 1997 GOVERNMENTWIDE AUDIT OF MEDICARE (919024)

            BACKGROUND: The Gov't Management Reform Act requires GAO to audit the governmentwide financial
            statements for FY 1997. As part of our audit, GAO will have a significant audit focus on 4 agencies, including
            HHS. HCFA, an operating division of HHS, has over $190 billion in Medicare expenditures which are highly
            vunerable to fraud and continue to be included in GAO's High Risk Series.
            KEY QUESTIONS: In order to plan for the FY 1997 audit, we need to assess whether adequate audit
            procedures are being performed to (1) audit government-wide Medicare expenditures and the financial status of
            the Medicare trust funds; (2) evaluate internal controls; and (3) test compliance with significant provisions of
            laws and regulations related to Medicare expenditures.




                                                                 6
Civil Audits




FINANCLIL CONDMON--HEHS
     TITLE: HRA 1: PREPARING FOR THE FY 1997 AUDIT OF INCOME SECURITY EXPENSES (919025)

            BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 governmentwide consolidated
            financial statements. Income Security expenses, a material line item of about $220 billion will be the
            responsibility of CA/HEHS. HHS, HUD, DOL, OPM, SSA, USDA, DOD, and IRS account for 98% of this line
            item.
            KEY QUESTIONS: In order to plan for the FY 1997 audit, we need to assess whether adequate audit
            procedures are being performed to (1) audit govt. wide inc. sec. benefit payments; (2) evaluate internal controls;
            and (3) test compliance with significant provisions of laws and regulations related to inc. sec.



     TITLE: PREPARING FOR THE AUDIT OF VETERANS BENEFITS AND SERVICES (919028)
            BACKGROUND: In preparation for the audit of the FY-97 governmentwidefinancial statements, we will
            review the Dept of Veterans Affairs (VA) OIG's audit of veterans benefits and services. This $39 B line item
            primarily consists of compensation, pension, education, vocational rehabilitation, & burial benefits ($19 B), and
            medical services ($16B).
            KEY QUESTIONS: Determine whether the VA-OIG's audit procedures are adequate enough to assure that the
            1) FY-96 veterans benefits and services expenses are fairly stated; 2) internal controls relating to these expenses
            are effectively designed and operating as intended; and 3) VA iq in compliance with significant provisions of law
            and regulations related to this line item.


FINANCIAL CONDMTION-RCED
     TITLE: REVIEW OF THE FEDERAL GOVERNMENrS FINANCIAL EXPOSURE AND SUBSIDIES RELATED TO
            ELECTRIC UTILITY ACTIVITIES (90805)

            BACKGROUND: GAO previously reported on unrecovered power costs and net financing costs at 3 of DOE's
            PMAs (AIMD-96-145). Congress wants to know (1) if costs remain unrecovered at the 3 PMAs and exist at
            BPA, TVA, and RUS at 9/30/96, and (2) the Government's financial involvement/risk of future losses from
            power-related activities of these entities.
            KEY QUESTIONS: (1) Do the unrecovered power costs, and net financing costs, still exist at the 3 PMAs? (2)
            Do similar unrecovered power costs, and net financing costs, exist at BPA, TVA and RUS? (3) What is the
            short-and-long-term risk of the government incurring future financial losses due to its involvement in the
            power-related activities of the 3 PMAs, BPA, TVA, and RUS?




                                                                 7
Civil Audits




FINANCIAL CONDITION-RCED
    TITLE: THE IMPACT OF THE SALE OR RESTRUCTURING OF BONNEVILLE ON BPA'S AND THE FEDERAL
           GOVERNMENTS RESPONSIBILITIES FOR BPA'S WPPSS DEBT (913806)

           BACKGROUND: Bonneville Power Admin (BPA) owes approx $7 billion under agreements with Washington
           Public Power Supply System (WPPSS). WPPSS uses the agreements to market bonds; the marketplace views
           this as guaranteed by the fed govt. The Water & Power Resources Subcom. (House Comm. on Res) wants us to
           review the effect of a sale or restruc- ture of BPA on responsibility for WPPSS debt.
           KEY QUESTIONS: 1. If BPA is sold, what would be the fed govt's responsibility to WPPSS, under the terms of
           the project agreements, for the $7 bill that BPA owes WPPSS? 2. If BPA were restructured into 2 govt corps: a)
           which corp, if either, would inherit BPA's responsibilities to WPPSS under the proj agreements, & b) would
           such restructuring expose the fed govt to financial liability?



    TIflE: HIGHLIGHTS OF ERNST & YOUNG REORT ON OMB'S CREDIT SUBSIDY MODEL (913810)




    TITLE: LOANS RECEIVABLE LINE ITEM FOR GOVERNMENTWIDE FINANCIAL STATEMENT AUDIT (919004)

           BACKGROUND: The 1994 GMRA requires GAO to audit the FY97 governmentwide consolidated financial
           reports. Loans receivable is a material line item estimated to be about $190 billion. USDA, ED, HUD, & SBA
           account for over 75 percent of this line item. We will assess FY96 ending balances to assure that FY97 opening
           balances are fairly stated.
           KEY QUESTIONS: Determine whether (1) fiscal year 1996 governmentwideloans receivable and related
           allowance, interest income, and subsidy expense accounts are fairly stated; (2) internal controls relating to these
           accounts are operating effectively; and (3) the government is in compliance with significant provisions of laws
           and regulations related to these accounts.




                                                                8
Civil Audits




FINANCIAL CONDMON-RCED
     TITILE: LIABILITY FOR LOAN GURANTEES LINE ITEM FOR THE GOVERNMENTWIDE FINANCIAL STATEMENT
             AUDIT (919005)

              BACKGROUND: The 1994 GMRA requires GAO to audit the governmentwideconsolidated financial reports
              beginning with FY 1997. The Liability for Loan Guarantees, a material line item, totaled about $33B (related to
              $737B in guaranteed loans) at 9/30/95. We will assess the reasonableness of the FY 96 ending balances to
              assure ourselves that FY 97 opening balances are fairly stated.
              KEY QUESTIONS: Determine whether (1) fiscal year 1996 governmentwide Liability for Loan Guarantees and
              related accounts are reasonably stated; (2) internal controls relating to these accounts are operating effectively;
              and (3) the government is in compliance with significant provisions of laws and regulations related to these
              accounts.



     TITLE: ENVIRONMENTAL LIABILITIES LINE ITEM FOR GOVERNMENTWIDE FINANCIAL STATEMENT AUDIT
              (919006)

              BACKGROUND: The 1994 GMRA requires GAO to audit the FY97 governmentwide financial statements.
              Environmental liabilities, a material line item is estimated at more than $300 billion. We believe that USDA,
              DOD, DOE, and DOI will account for most of this line item. We will assess FY96 ending balances to assure
              that FY97 opening balances are fairly stated.
              KEY QUESTIONS: Determine whether (1) fiscal year 1996 governmentwide environmental liabilities are
              fairly stated; (2) internal controls relating to this line item are operating effectively; and (3) the government is in
              compliance with significant provisions of laws and regulations related to this line item.



     TITLE:   TRANSPORTATION EXPENSE FOR GOVERNMENT-WIDE EXPENSE FINANCIAL STATEMENT AUDIT (919007)

              BACKGROUND: The 1994 GMRA requires GAO to audit the FY 97 government-wide consolidated financial
              reports. Civil Audits - RCED is responsible for auditing DOTs expenses of $40 billion in the transportation line
              item. Grants and payroll expenses account for 75% of DOTs expenses. We will assess FY 96 ending balances
              to determine whether FY 97 opening balances are fairly stated.
              KEY QUESTIONS: Determine whether (1) fiscal year 1996 transportation expenses and related accruals are
              fairly stated, (2) internal controls relating to these accounts are operating effectively, and (3) the government is
              in compliance with significant provisions of laws and regulations related to these accounts.




                                                                     9
Civil Audits



FNANCIAL CONDMON-RCED
    TITLE: ENERGY, NATRUAL RESOURCES AND ENVIRONMENT, NET COSTS (919009)

           BACKGROUND: As part of the FY97 governmentwide consolidated financial audit, GAO must envision the
           Energy, Natural Resources & Environment (budget line items 270 and 300) totaling about $28 billion, net of
           exchange revenue of about $14 billion. DOE, DOD, USDA, EPA, DOC, DOL NRC, NSF, and TVA accounts
           make up these items.
           KEY QUESTIONS: Determine whether (1) fiscal year 1996 governmentwide disbursements and receipts for
           Energy, Natural Resources, and Environment accounts are fairly stated; (2) internal controls relating to these
           accounts are operating effectively; and (3) the government is in compliance with significant provisions of laws
           and regulations related to these accounts.



    TITLE: COmmTMENS & CONTINGENCIES FOOTNOTE FOR GOVERNmENTWDE FINANCIAL STATEMENT
           AUDIT (919010)

           BACKGROUND: The 1994 GMRA requires GAO to audit the governmentwide consolidated financial
           statements beginning with FY97. Commitments and contingencies, a footnote item, totals almost $6 trillion.
           The financial activities of 14 agencies account for 97% of this line item. We will assess FY96 ending balances
           to gain a basis of reliance for our audit of the FY97 balances.
           KEY OUESTIONS: Determine whether (1) fiscal year 1996 governmentwide commitments and contingencies
           are fairly stated; (2) internal controls relating to commitment and contingencies are operating effectively; and (3)
           the government is in compliance with significant provisions of laws and regulations related to commitment and
           contingencies.



    TIMBE: CONSOLIDATED AUDIT OF STEWARDSHIP LAND (919011)

           BACKGROUND: The Federal Accounting Standards Advisory Board has developed new federal accounting
           standards which require financial statement and stewardship reporting for stewardship land. Stewardship land
           includes 650 M acres of public domain land administered by Interior and Agriculture.
           KEY QUESTIONS: (1) Are land values, acreage, and condition fairly stated in governmentwide financial
           statements? (2) Have agencies established adequate processes for identifying, reporting, and safeguarding
           stewardship land? (3) Is the government in compliance provisions of laws and regulations that have a material
           impact on the financial statements?




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Civil Audits




FINANCIAL CONDITION-RCED
    TITLE: CONSOLIDATED AUDIT OF HERITAGE ASSETS (919012)

             BACKGROUND: The Federal Accounting Stanards Advisory Board has developed new federal accounting
             standards which require financial statement and stewardship reporting for heritage assets. Heritage assets
             include buildings, monuments and other structures with historical significance; cultural, educational, or esthetic
             value; and significant architectural characteristics.
             KEY QUESTIONS: (1) Are costs and stewardship information on heritage assets fairly stated in government-
             wide financial statements? (2) Have agencies estabalished adequate processes for identifying, reporting, and
             safeguarding heritage assets? (3) Is the government in compliance with significant provisions of laws and
             regualtions that have a material effect on the financial statements?



    TITLE: CONSOLIDATED AUDIT OF NON-EXCHANGE REVENUES (919033)

             BACKGROUND: GMRA requires GAO to audit the governmentwide financial statements beginning with FY
             97. Non-exchange revenues, excluding federal income tax, are material and totaled about $37B for FY
             95--Unemployment tax, $27B; spectrum sales, $7.6B; and royalties $2.4B. We will assess the reasonableness of
             FY 96 balances as a basis to assess scope and timing of the FY 1997 audit.
             KEY QUESTIONS: Low Risk: Determine whether (1) non-exchange revenues, excluding federal income tax,
             are fairly stated in the FY 1996 agency financial statements, (2) related internal controls are oneratino
             effectively, (3) the government is in compliance with significant provisions of laws and regulations related to
             non-exchange revenues.



    TITLE:   IMPROVING THE FINANCIAL INFORMATION FOREST SERVICE (919042)

             BACKGROUND: USDA's IG concluded that the Forest Service's 95 fin statements were unreliable. There has
             been much Congressional interest in resolving FS fin reporting problems. FS does not plan to prepare F/S for
             FY 96, but rather will focus its efforts on correcting problems identified in the 95 audit. To prepare for our 97
             audit, we will closely monitor and assess these efforts.
             KEY QUESTIONS: (1) What are USDA's plans to resolve the FS's financial reporting shortcomings and the
             timeframes for accomplishing the work? (2) What role will the IG, CFO, and Forest Service play in resolving
             the problems? (3) What impact will this work have on the preparation, issuance, and audit of USDA FY 96 and
             FY 97 consolidated financial statements?
Civil Audits



FINANCIAL CONDMON-RCED
     TITLE: REVIEW OF GOVERNMENTWEDE ENVIRONMENTAL CLEANUP COSTS (919044)
            BACKGROUND: The federal government faces substantialliabilities for environmental cleanup costs. The
            extent of the liability is not fully known but amounts booked to date are material to the governmentwide
            consolidated financial statements. OMB recently estimated the government's liability for environmentalcleanup
            was between $235 and $389 billion.
           KEY QUESTIONS: (1) What is the magnitude and reliability of environmental liabilities reported in federal
           agency and governmentcorporation financial statements at 9-30-96? (2) What processes do federal entities have
           in place to estimate and report these liabilities? (3) What is the nature and location of the government's
           environmental liabilities?



    TITLE: CFS WORK ON USDA/NFC GOVERNMENT-WIDE PAYROLL (91M4)

            BACKGROUND: USDA's NFC operates several major systems including payroll/personnel for USDA and over
            30 other Federal agencies. Annually, NFC processes payroll for approximately 485,000 Federal employees.
            Past USDA/OIG work has identified control weaknesses at NFC. NFC management has been slow to develop
            and implement Corrective Action Plans.
           KEY QUESTIONS: I)Are internal controls at NFC sufficient to ensure that payroll & related data submitted by
           user agencies re properly processed & recorded? 2)JTs USDA's FY 96 payroll expense fairly stated? 3)Are
           internal controls over USDA payroll submissions to NFC effectively designed & operating as intended? 4)Is

           USDA in compliance with significant provisions of applicable laws & regulations?

OTHER ISSUE AREA WORK - CA
    TITLE: ANALYSIS OF THE DISTRCT'S BUDGET AND FINANCIAL CONDMON (901748)




                                                             12
Civil Audits




OTHER ISSUE AREA WORK - CA
     TITLE: REVIEW OF SUPERFUND TRUST FUND INDIRECT AND DIRECT CEHARGES (913807)

            BACKGROUND: Most Superfund monies come from taxes paid by oil and chemical companies. Nearly half of
            the $1.5 billion a year charged to the Fund is for contractor cleanup. EPA direct and indirect charges, including
            charges by Justice, make up the balance. GAO was asked how the EPA and Justice's charges are for activities oil
            and chemical companies typically support

            KEY QUESTIONS: (1) What types and amounts of overhead and direct expenses do EPA and Justice allocate
            or charge to Superfund? (2) Do those expenses support the program's objectives? (3) Are the expenses charged
            typical of the types of cleanup costs normally incurred by large petroleum or chemical companies?




     TITLE: REVIEW OF THE STATUS OF TRIBES' RESPONSES TO THEIR RECONCILED TRIBAL ACCOUNT BALANCES
            (913809)

            BACKGROUND: Interior has completed efforts to reconcile tribal trust fund accounts and has developed a
            legislative proposal for correcting detected errors and reaching settlement on disputed account balances. Also,
            Interior's Special Trustee for American Indians has developed a legislatively- mandated strategic plan for Indian
            trust fund and asset management improvements.
            KEY QUESTIONS: (1) What issues should the Congress consider in making decisions on legislative proposals
            reearding the settlement of Indian trust fund account balances that are in dispute? (2) What issues should the
            Congress consider in evaluating the adequacy of, and making funding decisions on, the Special Trustee's
            strategic plan?




     TITLE: EDP CONTROLS AT AGENCIES UNDER GOVERNMENTWIDE AUDITS: THEIR EFFECTIVENESS AND
            RELATED IG AUDIT PROCEDURES (919003)

            BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 government-wideconsolidated
            financial statements. The adequacy of audits by agencies under Governmentwide Audits of EDP controls, and
            the effectiveness of these controls directly affect the audits of these agencies, which comprise 5 of the 24 CFO
            agencies, including Treasury.
            KEY QUESTIONS: (1) Assess the nature and extent of EDP control audits performed by the IGs in connection
            with financial audits of the subject agencies required by GMRA; and (2) Determine what this effort and other
            agency evaluations show the effectiveness of EDP controls to be.




                                                                13
Civil Audits




OTHER ISSUE AREA WORK - CA
             PREPARING FOR THE FY97 GOVERNMENTWIDE AUDIT OF ACCOUNTS PAYABLE (919021)

             BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 govemmentwide consolidated
             financial reports. Accounts payable, a material line item that totaled about $169 billion at 9/30/95 will be the
             responsibility of CA/HEHS. The $109 billion in accounts payable at DOD, HHS, and SSA comprise
             approximately 65% of this line item and are the principal agencies of our focus.
             KEY QUESTIONS: What are the procedures required to audit accounts payable in the consolidated
             governmentwide FY97 financial statements including whether related internal controls are operating effectively
             and whether the governmentis in compliance with related significant provisions of laws and regulations?



    TITLE:   PREPARING FOR THE FY97 CONSOLIDATED AUDIT OF HEALTH (919023)

             BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 governmentwide consolidated
             financial statements. Health, a material line item that totaled about $115 billion at 9130/95, will be the
             responsibility of CA/HEHS. The $114 billion in health expenditures at HHS and OPM comprise approximately
             99% of this line item and are the principal agencies of our focus.
             KEY QUESTIONS: What are the procedures required to audit health expenditures in the consolidated
             governmentwide FY 97 financial statements, including whether the related internal controls are operating
             effectively land whether tbe government is in compliance with related significant provisions of laws and
             regulations.



    TITLE: EDP CONTROLS AT HERS AGENCIES: THESE EFFECTIVENESS AND RELATED IG AUDIT PROCEDURES
             (919029)

             BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 government-wide consolidated
             financial statements. The adequacy of HEHS agencies' audit of EDP controls, and the effectiveness of these
             controls directly affect the audits of HEHS agencies, particularly SSA and HHS, which comprise a substantial
             portion of the government-wide audit.
             KEY QUESTIONS: (1) Assess the nature and extent of EDP control audits performed by the IGs in connection
             with financial audits of HEHS agencies required by GMRA; and (2) Determine what this effort and other agency
             evaluations show the effectiveness of EDP controls to be.




                                                                14
Civil Audits




OTHER ISSUE AREA WORK - CA
     TITLE:   NON CFO AGENCY PROFILES (919043)

              BACKGROUND: The consolidated financial statements of the federal government will include 24 major
              departments which account for over 95 percent of the federal budget. However, we need to profile and possibly
              perform some limited audit work in more than 100 other smaller separate entities that are included in the
              government's consolidated statements.
              KEY QUESTIONS: (1) What is the universe of other entities? (2) What information should be included in
              profiles for the other entities? (3) What audit work, if any, should be done for any of the other entities?




     TITLE:   EDP CONTROLS AT RCED AGENCIES: THEIR EFFECTIVENESS AND RELATED IG AUDIT PROCEDURES
              (919046)

              BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 government-wide consolidated
              financial statements. The adequacy of RCED agencies' audit of EDP controls, and the effectiveness of these
              controls directly affect the audits of RCED agencies, which comprise 10 of the 24 CFO agencies in the
              government-wide audit
              KEY QUESTIONS: (1) Assess the nature and extent of EDP control audits performed by the IGs in connection
              with financial audits of RCED agencies required by GMRA; and (2) Determine what this effort and other agency
              evaluations show the effectiveness of EDP controls to be.
                                 I~~~~~~~~~~~~~~~~~~~~~~~~~~~
     TITLE: EDP CONTROLS AT AGENCIES UNDER DEFENSE AUDITS: THEIR EFFECTIVENESS AND RELATED IG
              AUDIT PROCEDURES (919055)

              BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 government-wide consolidated
              financial statements. The adequacy of audits by agencies under Defense Audits of EDP controls, and the
              effectiveness of these controls directly affect the audits of these agencies, which comprise 4 of the 24 CFO
              agencies, including DOD.
              KEY QUESTIONS: (1) Assess the nature and extent of EDP control audits performed by the IGs in connection
              with financial audits of the subject agencies required by GMRA; and (2) Determine what this effort and other
              agency evaluations show the effectiveness of EDP controls to be.




                                                                 15
Civil Audits



OTHER ISSUE AREA WORK - CA
     ITMLE: EDP CONTROLS AT NON-CFO AGENCIES: TEIR EFFECTIENESS AND RELATED IG AUDIT PROCEDURES
           (919056)

           BACKGROUND: The 1994 GMRA requires GAO to audit the FY 1997 government-wide consolidated
           financial statements. In addition to the CFO agencies, GAO has audit responsibilities for other agencies, such as
           FDIC.
           KEY QUESTIONS: (1) Assess the nature and extent of EDP control audits performed by the IGs in connection
           with financial audits of the subject agencies; and (2) Determine what this effort and other agency evaluations
           show the effectiveness of EDP controls to be.




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