oversight

Civil Financial Audits Issue Area: Active Assignments

Published by the Government Accountability Office on 1997-09-01.

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

  !                                                  -. .__


  j                             United   States .General      Accounting   Office

  i                             Accounting and Information
  I                             vanagement Division
                                                    .                               I
-4


      September   1997


1-                              Civil F’hancia~ Audits
                                Issue Mea
         I




                                Active Assignments




  GAO/AA-97-24(3)
                         fpMO
                                                                                        .A
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 August 29,1997, 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) 51243341; or Gloria
            Jarmon, Associate Director, on (202) 512-2600; or William Hunt, Associate
            Director, on (202) 512-2711.                                        L




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

FINANCIAL         CONDlTION-GGD                   & GOV’TWIDE
    New      .HIU     2: IRS FISCAL        YEAR     1997 CUSTODIAL          FINANCIAL           STATEMENT        AUDIT.                                               1
             , EVALUATE         FINANCIAL         MANAGEMENT             SERVICES’      @MS’)      EFFORTS     TO MANAGE           THE FEDERAL                        1
              GO-S                     CASH.
            .REVIEW       OF THE      ELIMINATION            OF INTRAGOVERNMENT                  AL TRANSACTIONS               ON THE CONSOLIDATED                1
              FlNANCIALSTATEMENTS.
    New     . HRA 2: AUDlT         OF THE INTERNAL              REVENUE       SERVICE’S         CUSTODIAL       FINANCIAL         STATEMENTS            FOR       1
              FISCAL      YEAR     1996.
    New     , ISSUES RELATED           TO TREASURY’S              COMPILATION          PROCESS       FOR THE FY 1997 GOVERNMENTWIDE                               1
              CONSOLIDATED             FINANCIAL        STATEMENTS.
    New     . UPDATE      OF THE CONSOLIDATED                   AUDIT     APPROACH         PLAN.
    New     . FINANCIAL          STATEMENT          AUDlT     OF THE PUBLIC          DEBT.
    New     ,FY 97 FXNANCIAL            STATEMENT            AUDlT      FOR CASH      LINE DEM.
    New     . RECONCI      LIATION         OF AGENCIES’         FUND    BALANCES         WITH      TREASURY       ACCOUNTS.
    New     . OTHER      MONETARY           ASSETS.
    New     , FY 97 GOVEIWMENlW                   DE CONSOLIDATED             FINANCIAL          STATEMENT        AUDIT-ADMINISTRATION                       OF
              JUSTICE.
    New     ,COMPLIANCE~THEFEDERALFINANCIALMANGE                                                                                ACT OF 1996.
FINANCIAL OPERATIONS-GGD & GOV’TWIDE
            . HRA     1 :STATUS      ON THE NEW WASHTNGTON                    CONVENTION            CENTER      DEVELOPMENT.                       ,,
            , CONSOLIDATED            FEDERAL         FINANCIAL         MANAGEMENT              SYSTEMS      SURVEY       - REPORT.
FINANCIAL CONplTION-HEHS
            ,PREPARINGFORTHEFY1997GOVERNMEMWI                                       DE AUDJT       OF MEDICARE.                                                   4
    New     , HRA 5: HCFAMEDICARE                   FINANCIAL          STATEMENT        AUDIT      FISCAL     YEAR     1997.                                      4
    New     .FY     1997 AUDIT       OF INCOME        SBCURITY         EXPENSE.                                                                                   4
    New     .FY     1997 AUDIT      OF VETERANS             BENEFlTS     AND SERVICES.                                                                            4
    New     J-IRA     6: FY 1997 AUDIT         OF EDUCATION,            TRAINING,      EMPLOYMENT             & SOCIAL       SERVICES       EXPENSES.             5       .
    New     , FY 97 AUDlT         OF HEALTH.                                                                                                                      5
    New     .FISCAL      YEAR      1997 GOB                            E AUDIT      OF ACCOUNTS           PAYABLE      AND      OTHER    LIABILITIES.             5
FINANCLiL OPERATIONS-HEHS
    New     .,SSA1997     FINANCIAL         AUDIT     AND RELATED           WORK                                                                                  5
F’INANCIAL CONDITION-RCED
            .REVlEW       OFTHE       FEDERALGOVERNME                   NTS FINANCIAL           EXPOSURE       AND SUBSIDIES            RELATED         TO        6
             ELECTRICUTILITYACTIvI?IEs.
            . THE IMPACT          OF THE SALE OR RESTRUCTURING                       OF BONNEVILLE            ON BPA’S AND         THE FEDERAL                    6
             GOVERNMENTS              RESPONSIBILITIES               FOR BPA’S WPPSS DEBT.
            .REVlEWOFGOVERNME                     NTWIDE       ENVIRONMENTAL             CLEANUP       COSTS.                                                     6
            .CFS WORK        ON USDA/NFC            GOVE RNMENT-WIDEPAYROLL.                                                                                      6
    New     .TRANSPORTATION                EXPENSE      FOR FY 1997 GO VERNMENTW’IDE                      FINANCIAL        STATE&LENT        AUDlT.               6
    New     , REVIEW      OF GOVERNME             NTWIDE      ENVIRONMENTAL              LIABILITIES         - FY 1997.                                           7
    New     , COMMITMENT            & CONTINGENCIES               FOOTNOTE          FOR GOVERNMENTWID                E FINANCIAL         STATEMENT.               7
    New     . ENERGY,      NATURAL          RESOURCES          AND     ENVIRONMENT,             NET COSTS      (BUDGET         LINE ITEMS     270 AND 300)        7
             FOR THE GOVERNMENT-WIDE                       CONSOLIDATED             FINANCIAL       STATEMENT          AUDlT     FOR FY 97.
    New     .GOVERNMENlWIDE                  ASSESSMENT           OF CREDJT       REFORM        IMPLEMENTATION.                                                   7
FINANCIAL OPERATIONS--RCED
    New     , GOVERNMENTWIDE                LOANS      RECEIVABLE          AND LIABILITY           FOR LOAN       GURANTE        ES FOR FY 1997.                  8
    New     . AUDlT     PROCEDURES           FOR ENSURING            PROPER      USE OF OMB’S        CREDlT      SUBSIDY        MODEL     (CSM).                  8
Contents




OTHER ISSUE AREA WORK - CA
           . SMALL   AGENCY     PROFILES.




                                                ‘.




                                                                ,_‘:
                          .,,   _).   ..:   :
                                                                                   “.



                                                                       il,,
                                                     ‘:   ‘t.

                                                                              ,.        ’
Civil Audits



FINANCLC              CONDITION--GGD                        & GOV’TWIDE
     ;ITIzE:           HRA2:IRSFISCALY&4R1997~STODIALFINANCIALST~TEMENTAUDIT(901755)                                 ,,
                       KBY QUBSTlONS : (1) Are the IRS Custodial financial statements fairly stated as of and for the year ending
                       September 30,1997? (2) Are the internal controls effective? (3) Is IRS in compliance with pertinent laws and
                       regulations?




                       KEY QUESTIONS : ,The Government Management Reform Act of 1994 requires GAO to audit the
                       governmentwide consolidated financial statementsfor FY97. Becausefederal cash balances are material to the
                       consolidated financial statements,and Treasury’scash accountsinvolve,high activity; GAO must focus on
                       Treasury’s ability to-safeguardcashbalancesand account for cashin a complete%nd timely manner.
     I,                        ., .,_/ ‘.I’>.1::           :     _.. ,,.      :.                  ;         .i;‘ __

     TITLE:.REVLEWilF~E~A~~~OFINTdAGO~~NTALTRANSA~O~S'ONTHECO~SOi;iDATED
              FINANCIALSTATEMEN'IS(9l9049)           -.       -:    ,,                                          .\

                         KEY QFSTIONS : 1) What are the agencies’policies ,5 proceduresto account for and report intragov’tal
                        ,:,“-_
                         transactions‘& %atare the auditors’ proceduresforensurkg that these.transactionsare properly eliminated? 2)
                         HOW doesTreasury - Financial Management Services’@MS) On-line Paykent &td Collections (OPAC) system
                        operate ~&@at are,.agencies~~processes an.d.proceduresfor using the OPAC system73) How do these processes
                      ,, h procedures.-gect the accuracyof the consolidated financial statements and our audit?




                        KEY QUESTIONS : Key Questions: 1) Are the fmancial management and interktlcontrols effective? 2) Are the
                        Custodial
                      ,.^Q        .fmancial
                          +$g@:?>$+“‘*:        statements
                                                    :,“.‘.,.L reliable,
                                   /L,.,~-~.~.‘,..‘,.““:*$”       r‘tt free of misstatements, and presented in conformity with applicable
                        aq$uning principles) 3).Is IRS in c.ompliance with laws and re&&tions?                 1
                                      >“,,,                  I.
               ‘il”     “T   ,‘:‘2.’   :   “i   .r!   ..:   -1.   :,   ;‘c;.<?‘.   ‘7   ;.   ..,   ‘-,   ,..i


    TITLE:             ISSUES-RELATED.TO..T~Y'SCOMPILATIONPROCESSMIRTHEN1997GOVERNMENTWIDE                                       i
                       ~ONSOLqDqTEDFINANCL+LSTATEMENTS(919@%,~           ,v'                                         .,

                       K6Y QUB!h’IO$JS ?In accordancewiththe Chief Financial Officer’s Act, Treasury will compile agency
          ,’          1,) ,j~._,
                       fmancrsl data’to&pare a & of annual consolidated fmancial statements (CFS) for FY97: GAO will subject the
                       CFS to audit and issue‘s report on the results. 1) What stepshas Treasury taken to ensure that it compiles
                       agencies’data timely and accurately inprepa&g’ the government&ide CFS foi FY97? 2) Has Treasury
                       identified and addressedsystemsand procedural problems from compiling the FY96‘prototype CFS using the
                       Adjusted Trial Balance System and the U.S. StandardGeneral Ledger? 3) Has Treasury developed procedures
                       to &&&hat agencies understand the reporting guidelines so that Treasury correctly compiles agencies’ audited
                       financial data?




                                                                                                   1
Civil Audits



     ?TIzE:    UPDATE OF THE _CONSOLIDATED            AUDIT APPROACH PLAN (9l9$N))

               KEY QUESTIONS : 1) What significant auditing and accounting issues wereidentified from the FY 1996
               agencyaudits thatwill affect the FY 1997,agency audits and the Consolidated Financial Statements; 2) Where
               can GAO and the agencieswork jointly to ensureadequate audit-coverage; 3) Are the Inspector General audit
               plans adequatefor FY 1997 or are there gaps that GAO must address; 4) What additional expertise is needed
                                                                                                             \
               and what GAO assistanceis needed?
                                                                                                                ..-
                                         :   ”   ‘.


                                                                                           . ..   ;.
                                                                       :,                                             :


     m:        FINANCL4LSTATEMENTAUDITOFTEEPUBLICDEBT                           (919106)               :   -’

               KEY QUESTIONS : The Bureau of Public Debt (BPD) is responsible for managing andreporting essentially all
               ,of the federal debtand related unamortized discounf, interest.payable, and interest expense. Federal debt .will
               likely be the-largest single itemon the consolidated financial statementsand has never been subject to a
               fmancial audit GAO’s auditing responsibilities-for federal debt include supporting the opinion on the .’ :
               govermnentwide consolidated statements as well asrendering an opinion on BPD’s custodial financial
               statements. GAO must determine the reasonablenessof thereported public- debt princiijal and related Erie items
                                      ” ‘..
                (unamortixed discomn,   .mterest,payable,,a$dmter$$xpense) as well asreport ou%PD’s inter& cont.@s:and
               compliance with laws and regulations relating to these line i              .^                     ,- ,.




     :           KEY ,QuESfiONS~~:rThe 1994 Government Managemeut Reform Act of 1994’(GMRA) requin%the General
                 Accounting Office (GAO) to audit the Ey 1997’goverr&ent&de consohdated fmaricial &&ments:~TreaSury’s
     :;          Financial Management Service (FMS), along with the Federal Reserve asits foal agent, functions as the
              ,. cgtiw bank‘fof tie fded;goveiriijiient. Kef~estions:,l&m$.            X1)-gi. f&de&- g&&$&gp~Yi-i g7 :.5’ ‘:
                               I_ ,I.- ;.,_ ,,.              ” -, ., .          .,I_. ~ I,       .,._~,    .....~ __Ic
                                                                                                                    .. ..,.  I..
                 ending cashbal+ces ,aren&&e in ‘a@material~respects,(2) Treasmy’s.intemal controls (includingEDP) :over
                 disbursementsand collections are working effectively, and (3) Treasury is in compliance With s@nificant~laws
                 and regulations related to the cash
                                                   .,, line item.
                                                               ,,       .i .,      ‘.                 (, ._‘.        .. . ._
                                    ;.                 :   ‘,:.   ,’                                                         :.,   , :



                                                                                                                                             1
     m:          RECONClLlATlON   OF AGENCIES’ FUND BALANCES WITE TREASURY ACCOUNTS (919119)
       -. .- l>. @,?
                  .  ..- _.,-
                     QUESfi~~~~u$~ep$@&&          +&& G+&nt      y$&g@&)t Ref&&&6F,.& $&j4,‘~A~                           will g&        I
             .
             the governmentwide consolidated financialstatements for PY 1997. The monthly-pro&ss’of reconcilirigthe
             agencies’recordswith Treasury’sfor the Fund Balances.with Treasury ticolints is ‘a key internal controXover the
     .G!     recording of overahgovermuent and mdividual agency re@p,S and disbursements. Key,Questions:( I)-@
         -1. Trea&y~~~qy+.&ry~~              effec~~~~~ e~ltfing t@; re+ptsand ~sburSements,+re,properly @ported7 (2)
             Are agenciesproperly and timely reconciling differences! and, if not, what is the effect-on agency and
             consolidated &a&      statements and budgetreports? (3) What initiatives have Treasury and agencies.taken to
             clear differencesand improvethe recor&iation. prmes? !                      ,.
                                    I..




                                                                            2
    Civil Audits




          ?T&Ez      OTHER MONETARY             ASSETS (919121)

                     KEY QUESTIONS : As part of the governmentwide tlnaticial statement audit, we will audit other monetary
                     assets,including the U.S. gold reserves;special drawmg rights (SDRs), foreign currencies, and the U.S. reserve
                     position in the hitemational Monetary Fund (IMF). Treasury’s OIG audits gold in custody of the Mint, and
                     SDRs and foreign currencies in its audit of the Exchange Stabilization Fund. We will perform a moderate level
                     of review of the OIG’s work on the gold reserves,SDRs, and foreign currencies. Gold reservesheld by the
                     Federal Reserve Bank of New York have never been audited. We plan to perform researchand interviews to
                     detetie the natitre~.purpose,.and use of other monetary assets,and to determine if other monetary ,&sets are
                     properly identified, accounted for, safeguarded,and reported
                                    -,
           ‘i             ;:

          mzE:      Fk 97.&VERNMEhWIDE                  CONSOLIDATED           FINANCIAL STAFMENT                 AUDIT-AJBMINISTRATION                OF
                                                                                              _
                    JUSTICE (919126)

                     KEY QUESTIONS : The GovernmentManagement Reform Act-of~l994,requires GAO to. audit the FY 1997
                     govemmentwide consolidated financial statements.The’Administration of Justiceline item (approx;‘$21 billion
          :.         for IY 96) is material and involves primarily the Departments of Justice (DOJ) andTreasury, and the Judicial
                     branch DOJ and Treasury will be audited by ‘me Inspector~Geneials (IG).. We need to assesstheir work to
                     render an’ophiion on the GFS. We will assessthe work of the IGs:in accordancewith FAM 650, to determine
                     whether we can iely on it asour own. Weneed to determhm whether adequate audit-proceduresare being
                     performed to: (1) audit the administration ofjustice function; (2) evaluate internal controls; and (3) test
                     compliance wlth signillcatit provisions of laws and regulations.                      ‘--       : ‘.
                           . ‘: i:  .,$ “,<,.:     .-I            ,.’      ,‘>/-.t


          -         COMPLIANCE         WITH TEE FEDERAL FINANCIAL MANGEItjENT                            IMPROVEMENT           ACT OF 1996&30)
                      KBYQUBSTIONS i- Under theFederal F&u&l Management ImprovementAct of 1996 (FFMIA), agencies%
                   ‘. are required to mahttain fmancial management systems that comply substantially with federalfinancial
                      management systems requirements, applicable federal accounting standards,and the U.S; Standard General
                  ’ Ledger@GL). FFMIArequires GAG to issue a report by 10/1/97regarding: (1) executive:agencies’
          ;,          compliance with the Act’s requiie;;hents;.i~g.~he~er     the ~federalgovermuent’s financial stitements have
          ‘+




    PINA&AL      OPERATIONS--GGD     & GOV’TWIDE
          v-4.“.
         ~~es**~&                      .<I.*. .v,*,>A:
                     i:~~~~s.~~~~~:NEw~wAs~~~~~~                           &&v&N               cE&$~~~*~&&                           &i+52)-          _ ,r ”         _, r
                                                                  (i’! .,:   *.,.i
                                                                        .Ll I..‘~ ;   ‘..B’,
                                                                                          _ij .-ii -.‘vr     ;   ^ ,‘.:~,:‘“;-;:‘~‘:;‘;.‘>‘;i,,‘: p  ;,-+,::s*!
                                                                                                                                                            .,‘I ‘? ‘, i
                    KEY QUBSTIONS : (1) What are the revised construction and prcdevelopment costsand how do they compare
                    to the budget estimates? (2):How willthe consmiction costi’be, fmanced? (3) How much &em& are generated
                    from dedicated taxes earmarked for this project? (4) How much and’what progressh& bn made on the
                    J&j&?           :‘i .’                                   ,:i; ._,                    .. .            ..*              .’
                     1’ .I                   :a’                   ‘
                                                                  ‘1   a,         :.~                ._        :                                         :
                          ”                                     .,.                                                                                                    \
                              ::                   . ...... :‘:                       ‘I                                             ..-            ,, :.,.
                                                                                                                                        <         .. .‘ “.,i^

          ,,         ‘.                                             .-z> /,,,-                       .                    ..“,.’ .>,              .‘ ‘::



                                                                                      3

I                                                                                                                                                                           _I
Civil Audits




     TITLE:      CONSOiIDATED               FEDERAL FINANCIAL                              MANAGEMENi                  SYSTEMS SURVEY -REPORT (901754)                                                          *
                  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 wereto adopt a consolidated system?


                                                                                                                                                                                        -
FINANCIAL CONDITION--HEHS
     m:          PREP-G            FOR ‘hE FY 1997 GOVERNMENTWIDE                                                 AUDIT OF MEDICARE (9l902h)

                 KEY QUESTIONS : In order to plan for the FY 1997 audit, we need to assesswhetherid&ate audit
                 procedures ambeing performed to (1) audit government-wide Medicare expenditures and the fmancial status of
                 the Med@are trust funds; (2) evaluate internal controls; and (3) testcompliance with significant provisions of
                 laws and regulations related to Medicare expenditures.



     TITLE:      ERA 5: I~CFA~~EDI$&                            FINANCIAL STh’EiiEiT .., AUDIT FIScAf: YEAR 1997 (919103)
                                                                                                   ,._,                 .,
                  KEY QU$STT&‘+$3 : The 1994 Government Mauagement Reform Act of 1994 (GMRA) requires the General
                 ,&counting Off&e (GAO) to audjt the FY f997 govemmentwide consofidated.financial statementsbeginning
                  with FY,,1997. In order to monitor the Inspector General’s completion of the Health Care Finance
                  Administration’s (HGFA) FY 1997 audit, which we plan to rely on in rendering our audit opinion on the
                  consolidated statements, we need to assesswhetherzadequateaudit procedures are being performed to (1) audit
                  governmentwide Medicare expenditures and the financial status of the medicare trust funds: (2) evahrate
                  internal controls; arid(3) test.compliance ,with significant provisions of laws and regulations related to Medicare,
                  expenditures:              L ~(               ~ I,
                        ~, ,.cj;-: ; “(                 <         .$,


     m:         ,m 199jkIjDiT          6F’IkOME                  &CU@                     EXPENSE (919111)
     :                                                                                                                         :
                   KEY QU@TIONS : The 1994 Gove,mmentManagement Reform Act of, 1994 (GMRA) requires the General
                  A=ouq!kg.,Qffice 6?4C9 to audit the FY 1997 governmentwide consolidated financial statements. Income
                   Secqjty expens.es.is a material line itern of about $228 .biion. To perform,the Fy-1997.audit, we need to
                  assess whether adequate audit procedures are being performed to (1) ,audit .governmentwideincome security
                  ‘benefit payments; (2) evaluate hrternal controls, and (3) test compliance with significant provisions of lawsand
       ‘L       ’ regulations related.to income security. ‘+2: s,..d: ._, ..?%;;;    . ,.::!:I,q.. .,. 1  ;, : ‘+!. ,
                                                                                             -:F”;       _                -,
                                    r”;,J   . ../   :<.   ,:.     :,,;.   ,_ I   ,:‘,:~        ‘?”   .   . ...,    ;                                                                        ‘,,,,;   ;;   ;,,       ‘,   ‘,‘j
                             $,?                                                                                         “I‘       ‘r’(.y        ,,   ,.:   ,,   -,   ,“ysa   -,.       -



     ?ii-IU%    FY ~~~AuDIT .,. OF VETERANS B-FITS                                         AND   SERVICES                                                                           ^
                                                                                                    ‘1 -:y.; (919114)                       ,,
     $,;        ;; ..,,:I;‘;;,) ,..)I. -.,“,. bi, .i” -f,z,:.J’:: ,                        ‘: * ,,:I           .,‘.
               i/.’ KEY QUESTfINS,:,, The GAG’requirement to audit goverqentwide fmancialstatements under the
                    Government Management Reform Act begins with the 1997 fiscal year. Veterans.Benefitsand Servicesis a
                    &erial line item of about $3i:2 billion. To perform the FY 1997 audit, we need’to determine whether the VA
                    Inspector General’s audit procedures are adequate to determine whether (1) the veteransbenefits and services
                    line item .is fairly stated in relation to the governmentwide fmancial .statementstaken as a whole<(2) internal
                    controls are effectively designed and operating, and (3) VA is in compliance with significant provisions of laws
                    and regulations related to this line item.

 L




                                                                                                         4
    Civil Audits



-
                  l’lTI.E:     HRA 6: FY 1997 AUDITOF EDUCATION, TRAINING, EMPLOYMENT                                           81 SOCIAL SERVICES EXPENSES (919115)

                               KEY QUESTIONS : The Government Management Reform Act requires GAO to audit governmentwide
                               financial statementsbeginning with fiscal year 1997. Education, Training, Employment & Social Services
                              (ETESS) expensesis a material line item with about $50 billion of expenses. Education and HHS account for
         ‘i                    about 85% of this line item and their OIGs/IPAs are performing the audits. To carry out the FY 1997 audit, we
                               need to assesswhetheradequate audit procedures are being performed to (1) audit govemmentwide ETESS
                               expenses;(2) evaluate internal controls; and (3) test compliance with significant provisions of laws and’
                               regulations related to ETESS expenses.


         i, TITLE: FY97AUDIT0FEEALTIi(9&2~                                               *
                              KEY QUESTIONS : The Government .Management Reform Act of 1994 (GMRA) requires GAO to audit the
                              1997 government wide cksoli&&d0: financial statements. The Health line item is material to those financial
                         %-’’ statements; The.Wpartment’of Heglth and Human Services (DHHS) is expected to account’for 100 percent of
                              the Health line item total in FY 1997. Consequently, DHHS will be the focusof our audit work (1) Is the
                              reported balance in the Health line item fairly stated in relation to the government wide financial statements as a
                              whole? (2) Are the interhal controlsrelated to the Health line item in place and operating effectively? (3) Is the
                              government in compliance witbsignific~ant provisions of laws and regulations related to the Health line item?
                                                  .“:‘-     :          ._    :”
                                                                            .I                                                   ,‘/’
                                                                ,;,,    .:.                   ‘L’             ,,.,                           :
         ,.. =                mFw,F+                      ~~CqVWj~N-E.#JPI~                             OFACCOUNTSPAYABLE A&) QT@R LIAIjILITIES~919123)
         ,i                       KEY’QUESTIONS : Under provisions in the Government Management Reform Act of 1994, the General
                                  Accounting Office will audit the governmentwide consolidated financial statements for fiscal year 1997.
             1           :? :i : -.Acdij;lirgpgyglk an$-c@g&L.bilities aie ded        tii’iiem   &t6w&      &A&~7$3i8 b~onat;$j,&g6*      m”
                                       . ... --. .,.... ,, ,^_”.,..I.,. ,_, . .-.
                                  $221 billion in theseaccounts at Treasury; DOD, HHS ‘at&A comprise approximately 68-‘&c&t of this line
                                  item and are the principal agenciesof our focus, To carry out the Fy 1997 audit, .weneed to assesswhether ’
                                 ~~&qte~i&t, procedures,ateb&g perfobed to (1) audit go&rn&ri~de             Accounts Payable and Other
                              Lia@iii&& (~).iAk&t&te&       .,.,‘2 ;:iX&&;   ,,x&I$ / f:y-,&
                                                                                           ,“.‘,.comp$t$F         RI;?,&~~a&                 provi&s c&k               g&l
        ”.i                                      ‘);*‘..‘,:.,y
                              regulatrons,r&t$d’~o   AccountsByable
                                                                          ;*>,;
                                                                               and Other
                                                                                                  ; ,-‘I,.:.
                                                                                            Liabilities.                 ‘.
                                                                                                                                                     .:.                   !
                                          - ; .,          ‘-; /.i..,._.-_.
                                                         ,I”                     i <““..
                                                                       -, .: . .db..L.. /       ,        );1,, ..                                          .,
        ‘i.;                                                                                                                                               ‘. 5: ~;y     ‘)

    FINiNCIAL       OPERATIONS-:HEHS
         ‘((:’ >>.,::*-.i$-:
                         ,.l.J.*~&.*p$ji!i,
                                    .~l_          .;<‘.. ::‘, .
                                       .‘:(.&;~ ._:,                                   ;: :         9; &.,:      i;.c    ,;:.   _       ‘>    .,I                       ‘,. .’ ..’
            m                ‘:.SSA~?“rANC~~~~-.~,~~.WORK,(~~i~)
                              -.f, : ._ .,.“,*:,’            .I                                                      _,..,
                                                                                                                       :‘. :,            ,-.‘1, .:    :.I. ‘.     1’_,:-             .’   ;   !
                                                                                                                                                                                              I
         ...r                 ~p~-Q~F~~(J~f.:,The,Government Management Reform~Act requires the General Accounting Office to audit
                                       .,,
             ii               the ~&c$$+r,l99? goverq?$-!&je,~~~cial         statements,.of$ich.&e Social Security Ad,ministration (SSA)                                                  ’
                              is a sk@icas,’
                                     -. ,:*  ~a%  W&s   audit wU,be  p$omed     by an accounting fii-: (/ ,i,
                                                                                                          .undercontract with >$he.
                                                                                                                                 @A$ Office
                              ofInspectorGeneral(G@).;:           ,’        .,“. ’ ,,
                                                                                                                                          :.
                                                                                         ,’
             ‘+                                                                   :-           :’
    F&XALCONDITION-RCEi
        ‘.                   .-.,:            :                        ,,’
                              , .,




                     -               ..   .
                                                                                                          5
Civil Audits




      ‘lTI’U?     REVIEW OF TEE FBDERAL GOVERNMENT’S                 FINANCLAL EXI’OSURE AND SUBSIDIES RELATED TO
                  ELECTRIC UTILITY ACTIVJTIES (913805)
                  KEiY QUESTIONS : (1)Do the unrecovered power costs, and net financing costs,still exist at the 3 Power
                  Marketing Administration (PMA)s? (2) Do similar unrecovered power costs;.andnet financing costs,exist at
                  Bonneville Power Administration (BPA), TVA and Rural Utility Service (RUS)? (3) What is the
                  short-and-long-term risk of the government incurring future financial losses due to itsinvolvement in the
                  power-relatedactivities of the 3 PMAs, BPA, TVA, and RUS?
                                                                                          . ‘.              -.-:li     ‘_’

      TITLE:      TEE iMP&T~OF      TEE St&J3 OR RESTRUCTURING OF BONNJh’ILLE 6N BPA’S AND TJ3E FED&i&
                  GOVEjUiMENT’s     REiSE’ONSiB~      FOR BPA’S WFi’SS DEBT (Pl3SO6j
                    I(Ey QUESTIONS : 1. If BPA is sold, what would bethe fed govt’s responsibility to WPPSS, under the terms
                    of+eproject agreements, for the $7 bill that BPAowes WPPSS2 Z..If BPA wererestructured.into 2 govt corps:
                    a) $ich carp, if either, would inherit BPA’s responsib@es to WPPSS under.the proj agreements, L b) would
                ,.. such restructuring expose the fed govt to financial liabihty?,       ,A         ‘I    ‘.        ,.
                 : ‘.                                                              -a.‘.    ,.. i.

      ‘ITIZE:     REVIEW OF GOVERNMENTWIDE              ENVIRONMENTAL          CLEANUP COSTS (PlPO44)

       ,. ;.  RE,Y,QURSTlONS : ,.,^C          (1),,zWhat.,,i’J
                                                           is the,; magnitude and reliabiiity of env&ronmental ,hab$ties reported in federal ’
              agency and’goveriiment co~atti~,fma~~~~rnen~.at8j0~96?..(2^).What,processes                              .dofederaI entitieshave.. ~.
              in place to-estimateand report theseliabilities?3() What i&e nature and locaitidn of,& government’s 1
              enviromnental l@$ities?~., .                        j .,.,           I_‘.\ .; ,                           ,I: ., ..,
                                                                                                                    ‘(L...
                  ‘. (i       j b ~”,, ,I ;:“:,;;c ,,‘,:I;:,: ; ‘..          ,,                                      .1:
          \%? ‘-.       . >‘, L.‘.. :, -, :, _.j_‘, ;’ L.(L,‘Lf’
                                                                                                                          : ‘”
  1   ?ITLEk     .CFS WORKdN      USDA/NFC GOV@NMENT-WIDEPAYRdI;L’(PlP@&)                       :        :
                    :
                  KJIY QUESTIONS : 1jkre internal controls at the Nation$Financk ‘Center (NFC) sufficient ‘to ensurethat
                  P&YOU’& related data submitted by ~u&ag&c&ue       p&&i   processed& recorded?,2) D USDA’s & 96
                  payroll expensefairly stated? $A& i&e&,controls’over’USDA    payroll’subrmss~ons’to NFC effectively
                  designed & opemhg as intendd? 4) Is usD.A & ;ompti&& &gw&g&t              ~~o&~on;~~2&.ale       ;gws Br




                 stated, (2) internal controls relating to these accounts are operating effectively, (3) is the government in
                 compliance with significant provisions of laws and regulations related to these accounts? ”




                                                                                                                            1..




                                                                          6
Civil Audits




          ‘ITIUz    REVIEW OF GOVERNMENTWIDE’ENVIRONMENT.AL                   LIARILlTIZS   - FY 1997 (919113)
                    KEY QUESTIONS : The Government Management Reform Act of 1994, which expandedthe CFO Act,
                    requires GAO to audit the Governmentwide consolidated financial statementsbeginning with FY-1997. ‘-Our
                    audit objectives are to determine whether: (1) FY 1997 liabilities for environmental remediation costs are fairly
                    stated in governmenhvide fmancial statements, (2) internal controlsrelating to these liabilities are effectively
                    designed and operating to prevent or detect material misstatements, and, (3) the government is in compliance
                    with significant provisions of laws and regulations related to these liabilities?. -



          TiTLE:    co MMITMENT L CONTINGENCIES            FOOTNOTE FOR GOVERNMENTWJDE               FINANCIAL STATEMENT
                                                                  ,: -.”   ,i ,..
                    (9i9”uo)    .*                                                _,                        j
                             ..
                    KEY QUESTIGNS~: ‘Die Government ManagementReform &t of?994;,wbich expandedthe CFGAct,
                 ,,,requires GAO to audit the government-wideconsolidated financial statements beginning wim.FY .J997:
                    Commitments and contingencies, a footnote item. on the financial.statements, totals $6.4triBion. The fmancial
    ;.;        .) activities of 14 agencies account for 97 percent,of.this-line:item., We wi&determine whether: (1) FY 1997
                    governmentwide commitment Bt contingencies are fairly stat&; (2) ,intemal controlsrelat&tg to commitment and
                    coutingencies,are fairly stated; and (3) the government isin compliance withsignificant provisions of laws and
                    regulations related to commitment and contingencies?                  ,.        .,
                             .:                                                         : 1                    .?‘ ~

      m:           -ENERGY, NATURXL RESOURCES AND ENViRiBNMENT, NET’6OSTS (BUDGET LiNE I’fEMS 270 AND 306) ‘FOR
                    TEEGOVERNMENTWIDE    CONSOLIDATED FINANCIAL STATEMENT AUDIT FOR FY 97 (919127)
               .., .._^
                     KEY QUESTIONS :- The Government Management Reform Act of1994, &ch expgndeedWCFG Act,
                     reqtnres GAG. to,audit the,g,overnmen:twide,consolid#ed.financial statements.beginning +h,FY >997. As part
                     of..me Fy 1997 governtnentwide consohdated f-c&l          aud&o<ur key ques6on.srelated to the Energy, Naturai.
                     Resources8zEnvironment, Net Costs ‘(budget line items 270 and 300) are to determine whether: (1) the line
                    ,items are fairly stated, (2) @ternal controlstre in place to prevent or detect misstatements in the line iteus, and-.
                     (3) the,government is complying with significant provisions of laws and regulations related to t&e hne items?’ ..



      TLTLE:        GOYEhMEFiTWIDE         ASSESSMENT OF CREDIT REFORM IbfPLEMENTATION                  (919131)
                    KEY QUESTIONS : The 1994 Government Management Reform Act of 1994 requires GAO to audit the FY97
                    consolidated fmancial statements. As part of our FY97 audit of the loans receivable and the liability for loan
                    guaranteesline items, we need to assessthe status of credit reform implementation at the five key credit
                    agencies -- VA, SBA, HUD, USDA, and ED. (1) How accurateand supportable are the agencies’ credit subsidy
                    estimation processes?(2) What barriers exist to effectively implementing credit reform? and (3) What action II-
                    plans have been developed to overcome these barriers?


FINANCIAL          OPERATIONS--RCED




                                                                          7
Civil Audits




     ‘Kl’LJ?        GOVERNMENTWIDE         LOANS RECEIVABLE         AND LIABILITY       FOR LOAN GURANTEES FOR FY 1997 (919116)         1
                    KEY QUJ3Sl’TONS : The Government Management Reform Act, which expanded the CFO Act of 1994,
                    requires GAO to audit the govemmentwide consolidated financial reports beginning with FY 1997. Both the
                    Loans Receivable and Liability for Loan Guaranteesare material line items which totaled about $127.1 billion
                    and $39.3 billion respectively at g/30/96. Our audit objectives are to determine whether (1) foal year 1997
                    governmentwide loans receivable and related allowance, interest income, aud subsidy expenseaccounts; and
                    liability for loan guaranteesare fairly stated; (2) internal controls relating to theseaccounts are operating
                    effectively; and (3) the government is in compliance with significant provisions of laws and regulations related
                    totheseaccounta.             ‘.                                                                              .I..
                                                                                                ./
                                                           I-

    TITLE:          AUDlT PROCEDms         FOR ENSURING PROPER US? OF OMB’S CREDIT SUyIDY                 MOPEL (CSM-) (919133)

                    KEY QUESTIONS : OMB’s Credit Subsidy Model (CSM) is a softwareprogram used by federal agencies to
                    calculate’subsidy rates for credit programs as required by the Federal Credit Reform Act and Statement of
   -_
                    Federal Financial Accounting Statidatds No. 2. :Werecently completed audit work on a review of the CSM to
                    determine if it(l), conforms with releveittprovisions of.applicable legislation and accounting standards, (2)
                    provides reliable results, and (3) is maintained and operated under a system of adequate controls. The report
                    also included supplemental audit steps that auditors should perform to ensure that federal credit agencies are
                    using the CSM properly. The objective of this job is to highlight those audit proceduresin a separateproduct.
                        1..._.j               .           ,.
                                                                                                           i
OTHERISSUE AREA WORK -CA                                                                .,>,        .:_’ 9‘1

    mzE:            SMALL AGENCY PROFILES (919043)                                                                        :

           ”        KEY QU@hONS : (1) What is the universe of other’entities? (2) What htformatiou~should be included in
                    profiles for the other entities? (3) What audit work, if any, should be’done for any of the other entities?
                                                               ,.         :
                                                                                                                                        \
               ,,                                                                   :




                                                                         8
 :z,
   ,.




.,a.




.%.
    ,..
          ,’           ---   ..-

.




               c




                   .