oversight

Financial Audit Manual: Checklist for Reports Prepared Under the CFO Act--Revised 2003 Exposure Draft

Published by the Government Accountability Office on 2003-10-01.

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

October 2003


Dear Colleague:

In July 2001, the U.S. General Accounting Office (GAO) and the President’s Council on
Integrity and Efficiency (PCIE) issued the GAO/PCIE Financial Audit Manual (FAM). In
April 2003, we issued an update to the FAM. The FAM provides guidance for performing
financial statement audits of federal entities. The FAM is a key tool for enhancing
accountability over taxpayer-provided resources.

GAO and the PCIE are committed to keeping the FAM current. With this goal in mind, we
are now requesting comments on an exposure draft that will revise the Checklist for
Reports Prepared Under the CFO Act (CFO Checklist). This update will replace the
current CFO Checklist in the FAM Volume II, Section 1004. Once finalized, the updated
CFO Checklist will be designated in the FAM Volume II at section 1050.

The exposure draft of the CFO Checklist can be accessed at either the GAO web site
(www.gao.gov) or the PCIE web site (www.ignet.gov/pande/audit.html). Instructions for
providing comments on the draft CFO Checklist are attached and can also be found at the
GAO and PCIE web sites. Please include the rationale for any comments offered so that
we may fully understand the need for any modifications. The due date for comments is
December 5, 2003.

You may address questions to either Mary Mohiyuddin (GAO, 202-512-3087,
mohiyuddinm@gao.gov) or Curtis Crider (PCIE, 202-208-5724, Curtis_Crider@oig.doi.gov).

We appreciate your attention to this very important project.




Jeffrey C. Steinhoff                            The Honorable Gregory H. Friedman
Managing Director                               Chair, President’s Council on Integrity
U.S. General Accounting Office                   and Efficiency Audit Committee




Attachment
                                           Exposure Draft 


                    Checklist for Reports Prepared Under CFO Act – Revised 2003, 

               Section 1050, Volume II of Joint GAO/PCIE Financial Audit Manual (FAM) 



                                      Instructions for Comment 



We welcome comments from everyone. GAO and the PCIE encourage the widest possible distribution
of the exposure draft of the FAM update.

Agency inspectors general should encourage their independent public accounting firms to review and
comment.

Please e-mail comments with detailed rationale to FAM_Comments@oig.doi.gov. Also include your
name, agency name, phone number, and e-mail address.

If you have questions, you may contact:

   •   Mary A. Mohiyuddin (GAO, 202-512-3087, mohiyuddinm@gao.gov)
   •   Curtis Crider (PCIE, 202-208-5724, Curtis_Crider@oig.doi.gov)
                          United States General Accounting Office
                          President’s Council on Integrity and Efficiency


GAO/PCIE 



             FINANCIAL AUDIT MANUAL

             Checklist for Reports Prepared
             Under the CFO Act – Revised 2003
             Exposure Draft




GAO-04-44G                                            October 2003
Reporting 1050 – CFO Act Checklist

Contents



Abbreviations                                                                        2

Sections 


     I         Overview                                                              3 


     II        General Items Related to the Financial Statements                     6


     III       Balance Sheet                                                         13 


     IV        Statement of Net Cost                                                 104 


     V         Statement of Changes in Net Position                                  148 


     VI        Statement of Budgetary Resources                                      161 


     VII       Statement of Financing                                                171 


     VIII      Statement of Custodial Activity                                       181 


     IX        Notes to Financial Statements (Significant Accounting Policies)       191 


     X         Supplementary Information                                             193 





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Reporting 1050 – CFO Act Checklist

Abbreviations
AcSEC                Accounting Standards Executive Committee 

AICPA                American Institute of Certified Public Accountants 

CFO Act              Chief Financial Officers Act of 1990 

COTS                 commercial off-the-shelf      

CSRS                 Civil Service Retirement System

FASAB                Federal Accounting Standards Advisory Board 

FASB                 Financial Accounting Standards Board 

FDIC                 Federal Deposit Insurance Corporation 

FERS                 Federal Employees Retirement System 

FFMIA                Federal Financial Management Improvement Act of 1996 

FHA                  Federal Housing Administration           

FIFO                 first-in, first-out   

FY                   fiscal year       

GAAP                 Generally Accepted Accounting Principles 

GDP                  gross domestic product      

GMRA                 Government Management and Reform Act of 1994 

GPRA                 Government Performance and Results Act of 1993 

HI                   Hospital Insurance (Medicare Part A) 

IMF                  International Monetary Fund          

Imple. Guide         Implementation Guide 

IRS                  Internal Revenue Service       

LIFO                 last-in, first-out   

MD&A                 Management’s Discussion and Analysis

MRS                  Military Retirement System         

NRV                  net realizable value    

OASDI                Old Age, Survivors, and Disability Insurance (Social Security) 

OMB                  Office of Management and Budget 

OPEB                 Other Postemployment Benefits           

ORB                  Other Retirement Benefits        

PP&E                 Property, Plant, and Equipment

RRB                  Railroad Retirement Benefits          

RSI                  Required Supplementary Information         

RSSI                 Required Supplementary Stewardship Information 

SFAS                 Statement of Financial Accounting Standards 

SFFAC                Statements of Federal Financial Accounting Concepts

SFFAS                Statements of Federal Financial Accounting Standards

SGL                  U.S. Government Standard General Ledger 

SMI                  Supplementary Medical Insurance (Medicare Part B) 

SOP                  Statement of Position     

TVA                  Tennessee Valley Authority

UI                   unemployment insurance        

UTF                  Unemployment Trust Fund





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Reporting 1050 – CFO Act Checklist

Section I Overview

Introduction

The Chief Financial Officers (CFO) Act of 1990 and the Government Management and Reform Act of 1994
require, among other mandates, that agencies’ chief financial officers submit annual reports to their agency
heads and to the Office of Management and Budget (OMB). These annual reports are to contain audited
financial statements of their agencies. The financial statements are to be presented in accordance with
generally accepted accounting principles (GAAP).1

This checklist is being issued to assist agencies in preparing these statements and auditors in auditing them.
Use of this checklist is not a requirement. Rather, it is intended to help provide for a systematic, organized,
and structured approach to preparing or reviewing agency financial statements. Furthermore, it should be
noted that, while the questions contained in the checklist are taken from authoritative sources, the checklist
itself is not authoritative, nor is it a comprehensive guide. Preparers and auditors should also consult financial
management regulations for the individual agencies, as the regulations may have specific guidance when the
standards allow alternatives or management flexibility.

Checklist Organization

The checklist has 10 sections: an overview section, a section related to general items in the financial
statements, a section for each of the six financial statements, and two additional sections. The six sections
reflecting the financial statements are organized by the line items in financial statements to allow the user to
proceed through each statement from the beginning to the end. The final two sections cover (1) disclosures in
the notes to the financial statements related to significant accounting policies and (2) required supplementary
stewardship information and required supplementary information.

Since the financial statements are interrelated, some questions concerning line items in one financial
statement may also pertain to line items in another statement. For example, the questions covering loans
receivable in the balance sheet section may also deal with matters related to interest income and subsidy
expense appearing in the statements of financing and net cost sections. Because of these relationships, our
general organizational approach aggregates related information so that questions on related line items
appearing in more than one financial statement are covered only in the first financial statement section in
which the line item appears. For example, questions concerning interest income and subsidy expense would
appear only in the balance sheet section. Similarly, questions related to the notes to the financial statements
section would also appear only under the line item of the initial financial statement.




1
 The American Institute of Certified Public Accountants recognizes the federal accounting standards promulgated by the Federal Accounting
Standards Advisory Board (FASAB) as generally accepted accounting principles.


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Except for sections I, II, VI, and IX, the first page of each section contains a list showing the number of
questions in the section. This checklist has 784 questions as follows.

          General Items Related to the Financial Statements                                                              24
          Balance Sheet                                                                                                 354
          Statement of Net Cost                                                                                         178
          Statement of Changes in Net Position                                                                           40
          Statement of Budgetary Resources                                                                               27
          Statement of Financing                                                                                         27
          Statement of Custodial Activity                                                                                27
          Notes to Financial Statements (Significant
               Accounting Policies)                                                                                       5
          Supplementary Information                                                                                     102

Authoritative Guidance

Each question in this guide is referenced to a source. The sources cited are (1) the Statements of Federal
Financial Accounting Standards (SFFAS) and (2) OMB Bulletin 01-09, Form and Content of Agency
Financial Statements.

FASAB statements include Statements of Federal Financial Accounting Concepts (SFFAC) and Statements of
Federal Financial Accounting Standards (SFFAS). The three approved accounting concept statements are #1
Objectives of Federal Financial Reporting, 1993, #2 Entity and Display, 1995, and #3 Management’s
Discussion and Analysis, 1999. The 23 SFFAS standards2 covered in this checklist are:

          1.     Accounting for Selected Assets and Liabilities, 1993.
          2.     Accounting for Direct Loans and Loan Guarantees, 1993.
          3.     Accounting for Inventory and Related Property, 1993.
          4.     Managerial Cost Accounting Concepts and Standards, 1995.
          5.     Accounting for Liabilities of the Federal Government, 1995.
          6.     Accounting for Property, Plant, and Equipment, 1995.
          7.     Accounting for Revenue and Other Financing Sources, 1996.
          8.     Supplementary Stewardship Reporting, 1996.
          9.	    Deferral of the Effective Date of Managerial Cost Accounting Standards for the Federal
                 Government in SFFAS No. 4, 1997.
          10.    Accounting for Internal Use Software, 1998.
          11.    Amendments to Accounting for Property, Plant, and Equipment - Definitional Changes, 1998.3
          12.    Recognition of Contingent Liabilities Arising from Litigation, 1998.
          13.    Deferral of Paragraph 65.2 – Material Revenue-Related Transactions Disclosures, 1999.
          14.    Amendments to Deferred Maintenance Reporting, 1999.
          15.    Management’s Discussion and Analysis, 1999.
          16.	   Amendments to Accounting for Property, Plant, and Equipment – Measurement and Reporting
                 for Multi-Use Heritage Assets, 1999.
          17.    Accounting for Social Insurance, 1999.
2
  FASAB promulgates accounting standards after considering the financial and budgetary information needs of Congress, executive agencies, other
users of federal financial information, and comments from the public.
3
  SFFAS 11 was rescinded in its entirety by SFFAS 23.


October 2003                  GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 4
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              18. Amendments to Accounting Standards For Direct Loans and Loans Guarantees, 2000.
              19. Technical Amendments to Accounting Standards for Direct Loans and Loan Guarantees, 2001.
              20.	 Elimination of Certain Disclosures Related to Tax Revenue Transactions by the
                   Internal Revenue Service, Customs and Others, 2001.
              21. Reporting Corrections of Errors and Changes in Accounting Principles, 2001.
              22. Change in Certain Requirements for Reconciling Obligations and Net Cost of Operations, 2001.
              23. Eliminating the Category National Defense Property, Plant, and Equipment, 2003.

SFFAC 4, Intended Audience and Qualitative Characteristic for the Consolidated Financial Report of the
United States Government, and SFFAS 24, Selected Standards for the Consolidated Financial Report of the
United States Government, are not covered in this checklist, as this checklist is intended for use at the agency
reporting level, and is not to be used for the financial report of the U.S. government.

Subsequent to updating this checklist, FASAB issued SFFAS 25, Reclassification of Stewardship
Responsibilities and Eliminating the Current Services Assessment. The principal effect of SFFAS 25 is to
present certain social insurance information4 as a basic financial statement rather than as Required
Supplementary Stewardship Information (RSSI), effective for fiscal year 2005. This main revision is not
taken into consideration with this CFO checklist update, and will be considered in the next update of the CFO
checklist. However, the elimination of current services assessment information and reclassifying risk
assumed information from RSSI to Required Supplementary Information (RSI), effective for fiscal year 2003
are covered in this checklist.

SFFAS 7 Implementation Guide to Accounting for Revenue and Other Financing Sources, 1996, is also
covered in this checklist. OMB Bulletin 01-09 provides the detailed requirements for the form and content of
agency financial statements.

How to Use This Guide

To the right of each question are two columns. The first column provides for a “yes,” “no,” or “N/A” (not
applicable) answer to each question. The second column provides for an explanation of the answer to each
question. A “yes” answer should indicate that the financial statements contain the information asked by the
question. For each “yes” answer, the explanation column should include the page number or location in the
financial statements where the information can be found. Also, any other information pertinent to the
question and the response should be provided in the explanation column.

An “N/A” answer might indicate that the question does not apply to the federal entity. For example, most
federal agencies do not administer loan, loan guarantee, or loan insurance programs and, therefore, do not
have credit program receivables and related property. Consequently, the questions on these receivables,
property, and subsidies would not apply. A simple explanation indicating that the reporting entity does not
administer loan programs would appear in the explanation column of the first question in the series.

A “no” answer indicates that the information asked for in the question is not included in the financial
statements, notes, or supplementary information, respectively. The explanation column should describe in
sufficient detail why the information is not included. The questions in the checklist are worded such that in
virtually all instances, a no response, would indicate a particular area or certain information is not presented in
accordance with the FASAB approved statements and OMB Bulletin 01-09.

4
    The information required by paragraphs 27(3) and 32(3) of SFFAS 17 shall be presented as a basic financial statement.


October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                 Page 5
Reporting 1050 – CFO Act Checklist

Section II 

General Items Related to the Financial Statements


There are 24 questions in this section. All the questions relate to the overall financial statements and are not
further divided into categories.


                                                                    Yes,
                                                                     No,
 General Items (1 – 24)                                                            Explanation
                                                                     or
                                                                    N/A

 1.    Does the entity's annual financial statement consist of
       the following items?
       a. management’s discussion and analysis (MD&A) of
          the reporting entity
       b. basic statements and related notes
       c. required supplementary stewardship information
           (RSSI)
       d. required supplementary information (RSI)
       e. other accompanying information (OAI) that provides
          users of the financial statements with a better
          understanding of the entity’s programs and the
          extent to which program objectives are achieved
          (OMB Bulletin 01-09, p. 4, section 1.5)




October 2003               GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                    Page 6
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Section II 

General Items Related to the Financial Statements



                                                                 Yes,
                                                                 No,
 General Items (1 – 24)                                                       Explanation
                                                                 or
                                                                 N/A

 2.    Do the basic statements include?
       a. Balance Sheet
       b. Statement of Net Cost
       c. Statement of Changes in Net Position
       d. Statement of Budgetary Resources
       e. Statement of Financing
       f.   Statement of Custodial Activity
            (OMB Bulletin 01-09, pp. 4 & 5, section 1.5)




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Section II 

General Items Related to the Financial Statements



                                                                              Yes,
                                                                               No,
    General Items (1 – 24)                                                                    Explanation
                                                                               or
                                                                              N/A

    3.   Does the entity use the following hierarchy as its sources
         of guidance in preparing its financial statements?
         a.   FASAB Statements and Interpretations as well as
              American Institute of Certified Public Accountants
              (AICPA) and Financial Accounting Standards Board
              (FASB) pronouncements if made applicable to federal
              government entities by a FASAB Statement or
              Interpretation
         b.   FASAB technical bulletins and, if specifically made
              applicable to federal government entities by AICPA and
              cleared by FASAB, AICPA Industry Audit and
              Accounting Guides and AICPA Statements of Position
         c.   AICPA Accounting Standards Executive Committee
              (AcSEC) Practice Bulletins if specifically made
              applicable to federal government entities and cleared by
              FASAB, as well as Technical Releases of the Accounting
              and Auditing Policy Committee of FASAB
         d.   Implementation guides published by FASAB staff and
              practices that are widely recognized and prevalent in the
              federal government
         e. In the absence of a pronouncement covered by federal
              Generally Accepted Accounting Principles (GAAP) or
              another source of established accounting principles, other
              accounting literature, depending on its relevance in the
              circumstances.5 (OMB Bulletin 01-09, p. 2, section 1.2 &
              p. 13, section 2.1, item B)

    4.   Does the entity present comparative information and
         related footnote disclosures for the current year and prior
         year for the six basic financial statements, and MD&A?
         (OMB Bulletin 01-09, p. 5, section 1.6 & p. 13,
         section 2.1, item F)



5
 Other accounting literature includes for example, FASAB Concept Statements; Governmental Accounting Standards Board (GASB)
Statements, Interpretations, Technical Bulletins, and Concept Statements; and AICPA Issue Papers.

October 2003                   GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                              Page 8
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Section II 

General Items Related to the Financial Statements



                                                                                            Yes,
                                                                                             No,
    General Items (1 – 24)                                                                                     Explanation
                                                                                             or
                                                                                            N/A

    5.   Does the entity present comparative information in the
         RSSI and RSI when the information would be
         meaningful to the user of the financial report?
         (OMB Bulletin 01-09, p. 5, section 1.6)

    6.   Has the agency prepared quarterly interim unaudited
         financial statements,6 without footnotes for itself and for
         each of its major components within 45 days after the
         end of the quarter and submitted them to OMB’s Office
         of Federal Financial Management and the agency’s
         Resource Management Office? (OMB Bulletin 01-09,
         p. 14, section 2.1, item G)

    7.   Do the quarterly interim statements include full accruals
         and are intra-entity transactions eliminated?
         (OMB Bulletin 01-09, p. 14, section 2.1, item G)

    8.   Are these interim statements prepared on a comparative
         basis?7 (OMB Bulletin 01-09, p. 14, section 2.1,
         item G)

    9.   To the extent that information is not available on a
         quarterly basis, has the entity developed reliable,
         alternative means of estimating quarterly amounts and
         balances? (OMB Bulletin 01-09, p. 14, section 2.1,
         item G)




6
  Quarterly statements may be limited to a balance sheet, statement of net cost, and statement of budgetary resources; MD&A, RSSI, and RSI are not
required for quarterly reporting.
7
  That is, interim financial statements comparative for the year-to-date ending March 31, 2003 for fiscal year 2003 and for fiscal year 2004 comparative
for the year to date ending December 31, 2003, March 31, 2004, and June 30, 2004.

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Section II 

General Items Related to the Financial Statements



                                                                     Yes,
                                                                     No,
 General Items (1 – 24)                                                        Explanation
                                                                     or
                                                                     N/A

 10.   When an entity presents disaggregated information for
       component organizations, does the total column for the
       entity as a whole reflect consolidated totals net of intra-
       entity transactions, except for the Statement of
       Budgetary Resources, which is presented on a combined
       basis? (OMB Bulletin 01-09, p. 14, section 2.1, item H)

         When a reporting entity presents its financial statements in a single column format, the
         statements are referred to as consolidated statements. With the exception of the Statement of
         Budgetary Resources, financial statements that use a multicolumn format to present information
         on an entity’s major components or lines of business as well as the consolidated amounts are
         referred to as consolidating statements. (OMB Bulletin 01-09, p. 14, section 2.1, item H)

 11.   Are intra-entity transactions needed to arrive at the
       consolidated amounts presented in a column on the face
       of the consolidating statements? (OMB Bulletin 01-09,
       p. 14, item H)

 12.   Has the entity provided assurance of the following?
       a. information in the financial statements is presented
          in accordance with federal GAAP
       b. the underlying records fully support the information
           (OMB Bulletin 01-09, p. 14, section 2.1, item J)

 13.   Does the reporting entity include franchise funds and
       other intragovernmental support revolving funds among
       the activities covered by its financial statements?
       (OMB Bulletin 01-09, p. 15, section 2.1, item K &
       p. 113, section 11.6)




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Section II 

General Items Related to the Financial Statements



                                                                     Yes,
                                                                     No,
 General Items (1 – 24)                                                        Explanation
                                                                     or
                                                                     N/A

 14.   If information about the assets, liabilities, costs, and
       revenues of these franchise funds and intragovernmental
       support revolving funds are not separately reported on
       the entity’s basic financial statements, then is condensed
       information reported as required supplemental
       information in accordance with the applicable SFFASs
       and required segment information?
       (OMB Bulletin 01-09, p. 15, section 2.1, item K &
       p. 113, section 11.6)

 15.   Does the entity report its assets, liabilities, and net
       position by the lines displayed in the illustrative Balance
       Sheet and Statement of Changes in Net Position in OMB
       Bulletin 01-09? (OMB Bulletin 01-09, p.15, section 2.1,
       item L)

 16.   If the entity aggregates such illustrated line items in
       reporting at the departmental level, is the composition of
       the aggregated line items disclosed?
       (OMB Bulletin 01-09, p.15, section 2.1, item L)

 17.   Conversely, if the entity disaggregates such line items in
       its departmental statements, does the entity report or
       disclose the total of the disaggregated line items?
       (OMB Bulletin 01-09, p.15, section 2.1, item L)

 18.   Are line items, which are immaterial but related in
       nature, combined?
       (OMB Bulletin 01-09, p. 15, section 2.1, item M)

 19.   Are discrete balances of an immaterial amount
       designated as “other?”
       (OMB Bulletin 01-09, p. 15, section 2.1, item M)”




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Section II 

General Items Related to the Financial Statements



                                                                   Yes,
                                                                   No,
 General Items (1 – 24)                                                        Explanation
                                                                   or
                                                                   N/A

 20.   If not, are these material balances separately reported
       and designated by name? (OMB Bulletin 01-09, p. 15,
       section 2.1, items M & N)

 21.   Are the statement line items, footnotes, and lines or
       columns in footnotes that do not apply or are not
       informative for the reporting entity excluded?
       (OMB Bulletin 01-09, p. 15, section 2.1, item O)

 22.   Do schedule totals presented in the footnotes, in support
       of amounts presented in financial statements, agree with
       the amounts presented in the body of the financial
       statements? (OMB Bulletin 01-09, p. 15, section 2.1,
       item P)

 23.   When presenting dollar amounts in the statements and
       the notes, does the entity do the following?
       a. round dollar amounts to the nearest whole dollar,
          thousand, or million based upon informative value
          to the reporting entity
       b. maintain the chosen rounding level throughout the
          financial statements and footnotes
       c. ensure that individual line items add up to the totals
          by adjusting the line items for the differences
          created by the rounding process rather than adjusting
          column totals (OMB Bulletin 01-09, p. 16,
          section 2.1, item Q)

 24.   Are footnotes sequentially numbered?
       (OMB Bulletin 01-09, p. 16, section 2.1, item S)




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Section III
Balance Sheet

The questions related to the balance sheet are contained under 23 line items. The question numbers related to
each line item follow.
                                                                            Question numbers
        General items                                                               1-6

        Assets
        1. Fund Balance with Treasury 
                                            7 - 22
        2. Investments           
                                                 23 - 32
        3. Accounts Receivable (Net)          
                                    33 - 49
        4. Interest Receivable (Net)
                                              50 - 54
        5. Credit Program Receivables 
                                            55 - 96
        6. Cash and Other Monetary Assets
                                         97 - 102
        7. Inventory and Related Property 
                                        103 - 125
        8. Operating Materials and Supplies 
                                      126 - 137
        9. Stockpile Materials           
                                         138 - 150
        10. Seized Property          
                                             151 - 158
        11. Forfeited Property         
                                           159 - 172
        12.	 Goods Held Under Price Support and 

             Stabilization Programs        
                                       173 - 186
        13. General Property, Plant, and Equipment (Net) 
                         187 - 233
        14. Software          
                                                    234 - 262
        15. Other Assets           
                                               263 - 268

        Liabilities
        16. Liabilities in General
                                                269 - 272
        17. Accounts Payable and Interest Payable
                                 273 - 280
        18. Liabilities for Loan Guarantees 
                                      281 - 294
        19. Lease Liabilities        
                                             295 - 299
        20. Federal Debt and Related Interest         
                            300 - 310
        21.	 Pensions, Other Retirement Benefits, and 

             Postemployment Benefits          
                                    311 - 318
        22. Other Liabilities        
                                             319 - 352


        Net Position
        23.	 Unexpended Appropriations and Cumulative 

             Results of Operations 
                                               353 - 354




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Section III
Balance Sheet


                                                                                                 Yes,
                                                                                                 No,
    General Items (1 - 6)                                                                                                  Explanation
                                                                                                  or
                                                                                                 N/A

             The Balance Sheet presents, as of a specific time, amounts of future economic benefits
             owned or managed by the reporting entity exclusive of items subject to stewardship
             reporting (assets), amounts owed by the entity (liabilities), and amounts that comprise the
             difference (net position). (SFFAC 2, par. 57; OMB Bulletin 01-09, p. 17, section 3.1)

    1.   Are entity and nonentity assets combined on the face of
         the balance sheet?8 (OMB Bulletin 01-09, p. 17,
         section 3.1 and p. 19, section 3.3)

    2.   Are the amounts and types of nonentity assets disclosed
         in a note to the financial statements?
         (OMB Bulletin 01-09, p. 17, section 3.1; p. 19,
         section 3.3; p. 56, section 9.2)

             Liabilities covered by budgetary resources are liabilities covered by realized budgetary
             resources as of the balance sheet date. Budgetary resources encompass not only new
             budget authority but also other resources available to cover liabilities for specified
             purposes in a given year. Available budgetary resources include (1) new budget
             authority, (2) unobligated balances of budgetary resources at the beginning of the year or
             net transfers of prior year balances during the year, (3) spending authority from offsetting
             collections (credited to an appropriation or fund account), and (4) recoveries of
             unexpired budget authority through downward adjustments of prior year obligations.
             Liabilities are considered covered by budgetary resources if they are to be funded by
             permanent indefinite appropriations or borrowing authority, which have been enacted
             and signed into law as of the balance sheet date, provided that the resources may be
             apportioned by OMB without further action by the Congress and without a contingency
             having to be met first. (OMB Bulletin 01-09, p. 24, section 3.4)

    3.   Are liabilities covered by budgetary resources and
         liabilities not covered by budgetary resources combined
         on the face of the balance sheet? (OMB Bulletin 01-09,
         p. 17, section 3.1, p. 24, section 3.4)




8
 Entity assets are assets that the reporting entity has authority to use in its operations. Nonentity assets are assets that are held by an entity but are not
available to the entity, for example, income tax receivables. (OMB Bulletin 01-09, p. 19, section 3.3).

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Reporting 1050 – CFO Act Checklist

Section III
Balance Sheet

                                                                                             Yes,
                                                                                              No,
    General Items (1 - 6)                                                                                 Explanation
                                                                                              or
                                                                                             N/A

    4.     Are liabilities not covered by budgetary resources
           disclosed in a note to the financial statements?
           (OMB Bulletin 01-09, p. 17, section 3.1 & pp. 78 & 79,
           section 9.12)

    5.     Does the Balance Sheet display assets, liabilities, and
           net position? (OMB Bulletin 01-09, p. 18, section 3.2)

               Intragovernmental assets arise from transactions among federal entities.
               Intragovernmental assets represent claims of a federal entity against other federal
               entities. Intragovernmental liabilities are claims against the reporting entity by other
               federal entities. (OMB Bulletin 01-09, p. 19, section 3.3; p. 24, section 3.4)

    6.     Are intragovernmental assets and liabilities reported
           separately from transactions with non-federal entities,
           including the Federal Reserve and government
           sponsored enterprises?9 (OMB Bulletin 01-09, p. 19,
           section 3.3 & p. 24, section 3.4)




9
    Government sponsored enterprises are federally chartered but privately owned and operated entities.

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                                                                  Yes,
Assets                                                             No,              Explanation
Fund Balance with Treasury (7 – 22)                                or
                                                                  N/A

               A federal entity's fund balance with the Treasury is the aggregate amount of
               funds in the entity's accounts with Treasury for which the entity is authorized
               to make expenditures and pay liabilities. Fund balance with Treasury includes
               clearing account balances and the dollar equivalent of foreign currency
               account balances. From the reporting entity's perspective, a fund balance with
               Treasury is an asset. From the perspective of the federal government as a
               whole, the fund balance is neither an asset nor a liability; it instead represents
               a commitment to make resources available to federal departments, agencies,
               programs, and other entities. (SFFAS 1, par. 31 & 32)

7.    Is the fund balance with Treasury reported as an
      intragovernmental asset? (SFFAS 1, par. 31;
      OMB Bulletin 01-09, p. 18, section 3.2)

8.    Are amounts disclosed as fund balances in deposit,
      suspense, and clearing accounts that are not available to
      finance entity activities reported as nonentity assets?
      (OMB Bulletin 01-09, p. 19, section 3.3)

9.    Are foreign currency account balances reported on the
      balance sheet translated into U.S. dollars at exchange
      rates determined by the Treasury and effective at the
      financial reporting date? (SFFAS 1, par. 32;
      OMB Bulletin 01-09, p. 19, section 3.3)




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Balance Sheet

                                                                                             Yes,
 Assets                                                                                       No,                     Explanation
 Fund Balance with Treasury (7 – 22)                                                           or
                                                                                             N/A

 10.     Does the entity's fund balance with Treasury also
         include the following?
         a. clearing account balances
         b. balances for direct loan and loan guarantee activities
            held in the credit reform program, financing, and
            liquidating accounts
         c. funds actually borrowed from Treasury under
            statutory authority
         d. the dollar equivalent of foreign currency account
            balances (SFFAS 1, par. 32 & 35)

 11.     Does the entity’s fund balance with Treasury exclude
         contract authority10 or unused authority to borrow?
         (SFFAS 1, par. 34)

 12.     Does the entity record an increase in its fund balance
         with Treasury when it does at least one of the following?
         a. receives appropriations, reappropriations, continuing
            resolutions, appropriation restorations, and
            allocations
         b. receives transfers and reimbursements from other
            agencies
         c. borrows from the Treasury, Federal Financing Bank,
            or other entities
         d. collects and credits amounts to its appropriations or
            fund accounts that the entity is authorized to spend
            or use to offset its expenditures (SFFAS 1, par. 33)




10
  Contract authority is a statutory authority under which contracts or other obligations may be entered into prior to receiving an appropriation for the
payment of obligations.

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 17
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                                                                                          Yes,
 Assets                                                                                    No,                    Explanation
 Fund Balance with Treasury (7 – 22)                                                        or
                                                                                          N/A

 13.    Does the entity record a decrease in its fund balance
        with Treasury when each of the following occurs?
        a. disbursements are made to pay liabilities or to
           purchase assets, goods, and services
        b. investments are made in U.S. securities
        c. expired appropriations are canceled
        d. transfers and reimbursements are made to other
           entities or to the Treasury
        e. appropriations are sequestered or rescinded
           (SFFAS 1, par. 36)

 14.    Does the entity distinguish funds within fund balance
        with Treasury as the obligated balance not yet
        disbursed11 and the unobligated balance12 in a note to the
        financial statements? (SFFAS 1, par. 37;
        OMB Bulletin 01-09, p. 57, section 9.3, item B)

 15.    Are fund balances that agencies were authorized to use
        disclosed by fund type (e.g., trust funds, revolving
        funds, appropriated funds, other fund types)?
        (OMB Bulletin 01-09, pp. 56 & 57, section 9.3, item A)

 16.    Are any restrictions on unobligated balances related to
        future use disclosed? (SFFAS 1, par. 38;
        OMB Bulletin 01-09, p. 57, section 9.3, item B)

 17.    Does the entity explain any discrepancies between fund
        balance with Treasury in its general ledger accounts and
        the balance in the Treasury’s accounts and explain the
        causes of the discrepancies in footnotes to the financial
        statements?13 (SFFAS 1, par. 39; OMB Bulletin 01-09,
        p. 57, section 9.3, item C)


11
   The obligated balance not yet disbursed is the amount of funds against which budgetary obligations have been incurred, but disbursements have not
been made.
12
   The unobligated balance is the amount of funds available to the entity against which no claims have been recorded. (SFFAS 1, par. 38)
13
   Discrepancies due to time lag should be reconciled and discrepancies due to error should be corrected when financial reports are prepared.

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                         Page 18
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                                                                   Yes,
Assets                                                             No,             Explanation
Fund Balance with Treasury (7 – 22)                                or
                                                                   N/A

18.   Does the entity disclose any other information necessary
      for understanding the nature of the fund balances,
      including information on unused funds in expired
      appropriations that are returned to Treasury at the end of
      a fiscal year? (SFFAS 1, par. 39; OMB Bulletin 01-09,
      p. 57, section 9.3, item C)

19.   Are balances in deposit accounts, such as collections
      pending litigation or funds being held by the entity in
      the capacity of a banker or agent for others, disclosed
      under “other fund types?” (OMB Bulletin 01-09, p. 57,
      section 9.3, item A)

20.   If, however, any of the balances under “other fund
      types” are material, are they listed separately?
      (OMB Bulletin 01-09, p. 57, section 9.3, item A)

21.   Is other information necessary for understanding the
      nature of the fund balances with Treasury disclosed?
      (OMB Bulletin 01-09, p.57, section 9.3, item C)

22.   Are unexpended appropriations recognized as capital
      and included under funds with Treasury when they are
      made available for apportionment? (SFFAS 7, par. 71)




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                                                                         Yes,
Assets
                                                                         No,
                                                                                         Explanation
Investments (23 - 32)                                                     or
                                                                         N/A

               Investments in federal (i.e., treasury) securities include (1) nonmarketable par value
               Treasury securities, (2) market-based Treasury securities expected to be held to
               maturity, (3) marketable Treasury securities expected to be held to maturity, and (4)
               securities issued by other federal entities. Nonfederal securities include those
               issued by state and local governments, private corporations, and government-
               sponsored enterprises. (SFFAS 1, par. 62; OMB Bulletin 01-09, p. 20, section 3.3)

23.   Are investments in federal securities reported separately
      from investments in nonfederal securities?
      (SFFAS 1, par. 67; OMB Bulletin 01-09, p. 20, section 3.3)

24.   Are investments in federal securities initially recorded and
      reported at their acquisition cost or amortized acquisition
      cost (less an allowance for losses, if any)?
      (SFFAS 1, par. 68 & 69; OMB Bulletin 01-09, p. 20,
      section 3.3)

25.   Are investments in federal securities acquired in exchange
      for nonmonetary assets recognized at the fair market value
      of either the securities acquired or the assets given up,
      whichever is more definitively determinable?
      (SFFAS 1, par. 68)

26.   Subsequent to acquisition, are investments in federal
      securities reported at their carrying amount (i.e., acquisition
      cost) adjusted for amortized premium or discount?
      (SFFAS 1, par. 70-71; OMB Bulletin 01-09, pp. 59 & 60,
      section 9.5)

27.   Is the interest method (i.e., effective interest rate multiplied
      by the carrying amount) used in amortizing the premium or
      discount over the life of the treasury security?
      (SFFAS 1, par. 71)

28.   Is the market value of market-based and marketable
      securities disclosed? (SFFAS 1, par. 72;
      OMB Bulletin 01-09, pp. 59 & 60, section 9.5)




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                                                                        Yes,
Assets
                                                                        No,
                                                                                       Explanation
Investments (23 - 32)                                                   or
                                                                        N/A

29.   Are investments grouped by type of security, such as
      marketable or market-based Treasury securities?
      (SFFAS 1, par. 72)

30.   Are investment securities, which are initially expected to be
      held to maturity, reclassified as securities available for sale
      or early redemption, if significant unforeseeable
      circumstances cause a change in the entity’s intent or
      ability to hold these securities to maturity?
      (SFFAS 1, par. 72 & 73; OMB Bulletin 01-09, pp. 59 & 60,
      section 9.5)

31.   If so, is the market value of such securities disclosed?
      (SFFAS 1, par. 72 & 73; OMB Bulletin 01-09, pp. 59 & 60,
      section 9.5)

32.   Does the entity disclose any other information relative to
      understanding the nature of reported investments, such as
      permanent impairments? (OMB Bulletin 01-09, p. 60,
      section 9.5, item B)




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                                                                          Yes,
Assets
                                                                           No,
                                                                                           Explanation
Accounts Receivable (Net) (33 - 49)                                        or
                                                                          N/A

33.   Is a receivable recognized when a federal entity establishes
      a claim to cash or other assets against other entities based
      on legal provisions or when goods or services are provided?
      (SFFAS 1, par. 41)

34.   If the exact amount of a receivable is unknown, is a
      reasonable estimate made? (SFFAS 1, par. 41)

35.   Are receivables from federal entities reported as
      intragovernmental receivables, and reported separately
      from receivables from nonfederal entities?
      (SFFAS 1, par. 42; OMB Bulletin 01-09, p. 19, section 3.3)

               Entity receivables are amounts due from other federal or nonfederal entities that
               the federal entity is authorized by law to include in its obligational authority or to
               offset its expenditures and liabilities upon collection. Nonentity receivables are
               amounts that the entity is to collect on behalf of the federal government or other
               entities, and the entity is not authorized to spend. (SFFAS 1, par. 43)

36.   Are receivables not available to an entity disclosed in a note
      to the financial statements as nonentity assets, separate
      from receivables available to the entity?
      (SFFAS 1, par. 43; OMB Bulletin 01-09, p. 19, section 3.3
      & p. 56, section 9.2)

37.   Are losses on receivables recognized when it is more likely
      than not (greater than a 50 percent chance of occurrence)
      that the receivables will not be totally collected?
      (SFFAS 1, par. 44)

38.   Is an allowance for estimated uncollectible amounts
      recognized to reduce the gross amount of receivables to
      their net realizable value, and is this allowance reestimated
      on each annual financial reporting date and when
      information indicates that the latest estimate is no longer
      correct? (SFFAS 1, par. 45)




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Balance Sheet 


                                                                      Yes,
Assets
                                                                      No,
                                                                                       Explanation
Accounts Receivable (Net) (33 - 49)                                   or
                                                                      N/A

39.   Is an allowance for uncollectible amounts based on an
      analysis of both individual accounts receivable and groups
      of accounts receivable as prescribed by the standards?
      (SFFAS 1, par. 47-51; SFFAS 7, par. 56)

40.   Are accounts that represent significant amounts
      individually analyzed to determine the loss allowance?
      (SFFAS 1, par. 47)

41.   Is the loss estimation for individual accounts based on the
      following?
      a. debtor's ability to pay
      b. debtor's payment record and willingness to pay
      c. probable recovery of amounts from secondary sources
         including liens, garnishments, cross collections, and
         other applicable collection tools (SFFAS 1, par. 47)

42.   If information is not available to make a reliable assessment
      of losses on an individual account basis or if the nature of
      the receivables does not lend itself to individual account
      analysis, are the potential losses assessed on a group basis?
      (SFFAS 1, par. 48)

43.   If potential losses are assessed on a group basis, are the
      receivables separated into groups of homogeneous accounts
      with similar risk characteristics? (SFFAS 1, par. 49-51)

44.   Does the reporting entity disclose the following?
      a. major categories of accounts receivable by amount and
         type
      b. methodology used to estimate the allowance for
         uncollectible amounts
      c. dollar amount of the allowance for uncollectible
         accounts (SFFAS 1, par. 52; OMB Bulletin 01-09,
         p. 60, section 9.6)




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                                                                       Yes,
Assets
                                                                       No,
                                                                                       Explanation
Accounts Receivable (Net) (33 - 49)                                     or
                                                                       N/A

45.   Is an account receivable arising from a nonexchange
      transaction recognized when a collecting entity establishes
      a specifically identifiable, measurable, and legally
      enforceable claim to cash or other assets through its
      established assessment processes to the extent the amount is
      measurable? (SFFAS 7, par. 53, footnote 9, 61-63)

46.   Are assessments recognized as accounts receivable if an
      enforceable claim for taxes and duties exists in the
      following instances?
      a. tax returns filed by the taxpayer without sufficient
          payment
      b. customs documents filed by the importer without
         sufficient payment
      c. taxpayer agreements to assessments at the conclusion of
          an audit or to substitute for a tax return (or importer
          agreements to supplemental assessments)
      d. court actions determining an assessment
      e. taxpayer (or importer) agreements to pay an assessment
          on an installment plan
      f. receivables determined to be currently not collectible,
         but with future collection potential (SFFAS 7, par. 53,
         54, 170, & 171)

47.   Is an inter-entity receivable recognized when (1) a legally
      enforceable claim exists between a collecting entity and a
      recipient entity for the transfer or repayment of taxes or
      duties and (2) payment of such a claim is probable and
      measurable? (SFFAS 7, par. 60)

                 Compliance assessments are proposed assessments by the collecting entity in
                 definitive amounts, but with which the taxpayer (or importer) still has the right
                 to disagree or object. (SFFAS 7, par. 55.1)
                 Preassessment works-in-process are assessments not yet officially asserted by
                 the collecting entity that are subject to a taxpayer’s right to conference in
                 response to initial information notices. (SFFAS 7, par. 55.2)


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Balance Sheet 


                                                                    Yes,
Assets
                                                                     No,
                                                                                       Explanation
Accounts Receivable (Net) (33 - 49)                                  or
                                                                    N/A

48.   Do nonexchange-related accounts receivable for taxes and
      duties exclude the following?
      a. amounts received or due with tax returns received after
         the close of the reporting period
      b. compliance assessments
      c. preassessment work-in-process (SFFAS 7, par. 54)

49.   Are compliance assessments reclassified and recognized as
      account receivables in the following instances?
      a. if the taxpayer files an amended tax return
      b. when customs’ protest or retention period lapses
      c. when court action or an appeal finally determines the
         assessment
      d. if taxpayer (or importer) agrees to pay currently or
          through an installment agreement
      e. if an offer in compromise is accepted
          (SFFAS 7, par. 55.1 & 178-180)




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Balance Sheet


                                                                                 Yes,
 Assets                                                                          No,
                                                                                                  Explanation
 Interest Receivable (Net) (50 – 54)                                             or
                                                                                 N/A

 50.       Is interest receivable recognized for the amount of interest
           income earned but not received for the accounting period,
           including interest earned on investments in interest-bearing
           securities? (SFFAS 1, par. 53; OMB Bulletin 01-09,
           pp. 20 & 21, section 3.3)

 51.       Is interest receivable also recognized on outstanding
           accounts receivable and other U.S. government claims
           against persons and entities in accordance with provisions
           in 31 U.S.C. 3717, Interest and Penalty Claims?14
           (SFFAS 1, par. 53)

 52.       Does interest receivable exclude interest on accounts
           receivable or investments that are determined to be
           uncollectible unless the entity actually collects interest?
           (SFFAS 1, par. 54; OMB Bulletin 01-09, pp. 20 & 21,
           section 3.3)

 53.       Is interest accrued on uncollectible accounts receivable not
           disclosed until (1) the interest payment requirement has
           been waived by the federal government or (2) the related
           debt has been written off? (SFFAS 1, par. 55)

 54.       Is interest receivable from federal entities accounted for
           and reported separately from interest receivable from the
           public? (SFFAS 1, par. 56)




14
     See also Federal Claims Collection Standards, 4 CFR Part 103 par. 102.13)

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Balance Sheet

                                                                                             Yes,
 Assets                                                                                       No,                    Explanation
 Credit Program Receivables (55 – 96)                                                          or
                                                                                              N/A

                  The Federal Credit Reform Act of 1990, as amended, divides loans and loan
                  guarantees into two groups: pre-1992 and post-1991. Pre-1992 refers to direct
                  loan obligations or loan guarantee commitments made prior to fiscal year 1992;
                  post-1991 refers to direct loan obligations or loan guarantee commitments made
                  after fiscal year 1991.15 (OMB Bulletin 01-09, p. 68, section 9.8, item A)

 55.     Is interest receivable related to pre-1992 and post-1991
         direct loans and acquired defaulted guaranteed loans
         reported as a component of credit program receivables
         and related foreclosed property? (OMB Bulletin 01-09,
         p 21, section 3.3)

 56.     Are credit program receivables considered an entity asset
         if at least one of the following criteria is met?
         a. The entity has the authority to determine the use of
            the funds collected.
         b. The entity is legally obligated to use the funds to
            meet entity obligations (e.g., loans payable to
            Treasury). (OMB Bulletin 01-09, p. 21, section 3.3)

 57.     If a loan guarantee program, which guarantees a loan, is
         generating a negative subsidy and the lender has not
         disbursed the loan as of the balance sheet date, does the
         entity record and include this amount as part of the total
         undelivered orders?16 (OMB Bulletin 01-09, p. 21,
         section 3.3)

 58.     Are special fund receipt accounts for negative subsidies
         and downward subsidy reestimates included in the credit
         reporting entity’s financial statements?
         (OMB Bulletin 01-09, p. 21, section 3.3)




15
   Section 506 (a) of the Federal Credit Reform Act, as amended, exempts the credit activities of certain agencies, such as the Federal Deposit Insurance
Corporation (FDIC) and the Tennessee Valley Authority (TVA). These agencies can report in accordance with other requirements.
16
   Undelivered orders are the value of goods and services ordered and obligated but not yet received. The term is synonymous with unliquidated
obligations. (The Federal Budget Politics, Policy, Process; copyright 1995 by Allen Schick; p. 216)

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 27
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Balance Sheet 


                                                                   Yes,
Assets                                                             No,             Explanation
Credit Program Receivables (55 – 96)                               or
                                                                   N/A

59.   Are any assets in these special receipt fund accounts
      shown as nonentity assets that are offset by
      intragovernmental liabilities covered by budgetary
      resources? (OMB Bulletin 01-09, p. 21, section 3.3)

60.   Does the entity disclose that direct loan obligations and
      loan guarantee commitments made after fiscal year 1991,
      and the resulting direct loans or loan guarantees, are
      governed by the Federal Credit Reform Act of 1990, as
      amended? (OMB Bulletin 01-09, p. 68, section 9.8,
      instruction A)

61.   Are loan amounts broken out by group (pre-1992 and
      post-1991) and loan program and disclosed in a note to
      the financial statements? (OMB Bulletin 01-09, pp. 61 &
      70, section 9.8, items B & C)

62.   Do the notes disclose other relevant and appropriate
      information related to direct loans and loan guarantees
      including the following?
      a. description of the characteristics of the loan program
      b. commitments to guarantee
      c. management’s method for accruing interest revenue
         and recording interest receivable
      d. management's policy for accruing interest on
         nonperforming loans (OMB Bulletin 01-09, p. 69,
         section 9.8)

           For post-1991direct loans and guarantees, a subsidy expense is recognized in the year
           they are disbursed. For pre-1992 direct loans and guarantees, a loss and liability
           need not be recognized until it is more likely than not that a loan (either direct or
           guaranteed) will go into default. (SFFAS 2, par. 24 & 39)

63.   Are post-1991 direct loans disbursed and outstanding
      recognized as assets at the present value (discounted at a
      comparable Treasury rate) of their estimated net cash
      inflows? (SFFAS 2, par. 22 & app. B, part I A)



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Balance Sheet

                                                                                               Yes,
 Assets                                                                                         No,                    Explanation
 Credit Program Receivables (55 – 96)                                                            or
                                                                                               N/A

 64.     Is the difference between the outstanding principal of
         post-1991 direct loans and the present value of their net
         cash inflows recognized as a subsidy cost allowance?
         (SFFAS 2, par. 22 & app. B, part I A)

 65.     When post-1991 guaranteed loans default, is the value of
         the assets related to defaulted guaranteed loans
         receivable17 included in the reported credit program
         receivables? (OMB Bulletin 01-09, p. 64 & 72,
         section 9.8, item I)

 66.     When post-1991 direct loans are written off, is the unpaid
         principal removed from unpaid loans receivable and
         charged against the allowance for subsidy costs?
         (SFFAS 2, par. 61)

 67.     Are the following components of the assets that are
         related to post-1991 direct and defaulted guaranteed loans
         receivable disclosed by loan program?
         a. loans receivable, gross, or defaulted guaranteed loans
            receivable, gross
         b. interest receivable
         c. estimated net realizable value of foreclosed property
         d. allowance for subsidy costs (present value)
         e. value of assets related to direct loans or defaulted
            guaranteed loans receivable, net
            (OMB Bulletin 01-09, pp. 61, 64, 70, & 72,
            section 9.8, items C & I)




17
  That is, the sum of (1) defaulted guaranteed loans receivable gross, (2) interest receivable, and (3) foreclosed property, less the allowance for subsidy
cost at present value.

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Balance Sheet



                                                                                          Yes,
 Assets
                                                                                           No,                   Explanation
 Credit Program Receivables (55 - 96)                                                       or
 Pre-1992 Direct Loans                                                                    N/A


 68.    Are losses of pre-1992 direct loans obligated recognized
        (and a corresponding allowance amount set up) when it is
        more likely than not that the direct loans will not be
        totally collected? (SFFAS 2, par. 39 & app. B, part II A)

 69.    Are allowances for uncollectible pre-1992 loans
        reestimated each year? (SFFAS 2, par. 39)

 70.    Are the following components of assets related to pre-
        1992 direct loans receivable disclosed by loan program?
        a. loans receivable, gross
        b. interest receivable
        c. foreclosed property
        d. present value allowance18 (if the present value
           method is used)
        e. allowance for loan losses19 (if the allowance-for-loss
           method is used) (OMB Bulletin 01-09, pp. 61 & 70,
           section 9.8 item B)




18
   Under the present value method, the nominal amount of the direct loans is reduced by an allowance equal to the difference between the nominal
amount and the present value of the expected net cash flows from the loans. (OMB Bulletin 01-09, p. 68, section 9.8, 4th par.)
19
   Under the allowance-for-loss method, the nominal amount of the direct loans is reduced by an allowance for uncollectible amounts. (OMB Bulletin
01-09, p. 68, section 9.8, 4th par.)

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                                                                   Yes,
Assets
                                                                    No,              Explanation
Credit Program Receivables (55 - 96)                                or
Pre-1992 Direct Loans                                              N/A


71.   Are the following components of defaulted guaranteed
      loans from pre-1992 guarantees disclosed by loan
      program?
      a. defaulted guaranteed loans receivable, gross
      b. interest receivable
      c. the estimated net realizable value of related
         foreclosed property
      d. the present value allowance (if the present value
         method is used)
      e. the allowance for loan losses (if the allowance for
         loss method is used)
      f.   value of assets related to defaulted guaranteed loans
           receivable, net of the respective allowance
           (OMB Bulletin 01-09, pp. 64 & 72, section 9.8,
           item H)

                 A loan modification is a federal government action that directly or indirectly
                 alters the estimated subsidy cost and the present value of outstanding direct
                 loans or the liability of loan guarantees. A direct modification changes the
                 subsidy cost by altering the terms of existing contracts or through the sale of
                 direct loans. An indirect modification changes the subsidy costs by altering the
                 way loans and loan guarantees are administered. A modification does not
                 include subsidy cost reestimates, routine administrative workouts of troubled
                 loans, and other actions permitted within existing contract terms.
                 (SFFAS 2, par. 41-44)

72.   When post-1991 loans are modified, is their existing
      book value changed to an amount equal to the present
      value of the loans' net cash inflows that are projected
      under the modified terms from the time of the
      modification to the loans' maturity and discounted at the
      original rate? (SFFAS 2, par. 46 & app. B, part I D (4))




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Balance Sheet 



                                                                   Yes,
Assets
                                                                   No,             Explanation
Credit Program Receivables (55 - 96)                               or
Pre-1992 Direct Loans                                              N/A


73.   When pre-1992 loans are directly modified do they meet
      the following conditions?
      a. They are transferred from the liquidating account to a
         financing account.
      b. Their book value is recorded at their post-
         modification value.
         (SFFAS 2, par. 47 & app. B, part II B (4))

74.   Are subsequent (direct) modifications of pre-1992 loans
      treated as a modification of post-1991 loans?
      (SFFAS 2, par. 47)

75.   When pre-1992 loans are indirectly modified do they
      meet the following conditions?
      a. They are kept in a liquidating account.
      b. Their bad debt allowance is reassessed and adjusted
         to reflect amounts that would not be collected due to
         the modification. (SFFAS 2, par. 47)

76.   Does the entity disclose the following by program in the
      notes to the financial statements?
      a. the nature of the modification of direct loans or loan
          guarantees
      b. the discount rate used in calculating the modification
          expense
      c. the basis for recognizing a gain or loss related to the
          modification (SFFAS 2, par. 56; OMB Bulletin 01-
          09, p. 69, section 9.8, 5th par.)

77.   When post-1991 and pre-1992 loans are sold, is the sale
      treated as a direct modification if the agency did not
      assume sales proceeds in the cash flow estimates for the
      initial subsidy calculation? (SFFAS 2, par. 53 & App. B,
      Part I F, footnote 23)



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Balance Sheet 



                                                                      Yes,
Assets
                                                                      No,           Explanation
Credit Program Receivables (55 - 96)                                  or
Pre-1992 Direct Loans                                                 N/A


78.   Does the agency disclose the expectation that proceeds
      from the sale of its loans will differ from the reported
      face value of the loans or the value of their related assets?
      (OMB Bulletin 01-09, p. 69, section 9.8, 1st par.)

           Foreclosed property is any asset, which is assumed to be held for sale, that is received in
           satisfaction of a loan receivable or as a result of payment of a claim under a guaranteed or
           insured loan (excluding commodities acquired under price support programs). Pre-1992
           foreclosed property refers to property associated with direct loans obligated or loan guarantees
           committed before October 1, 1991. Post-1991 foreclosed property refers to property associated
           with direct loans obligated or loan guarantees committed after September 30, 1991.
           (SFFAS 3, par. 79 & 80)

79.   Is post-1991 foreclosed property valued at the net present
      value of the projected future cash flows associated with
      the property? (SFFAS 3, par. 81; OMB Bulletin 01-09,
      p. 70, section 9.8, item C)

80.   Is pre-1992 foreclosed property recorded at cost and
      adjusted to the lower of cost or net realizable value with
      any difference between cost and net realizable value
      carried in a valuation allowance? (SFFAS 3, par. 81)

81.   In determining net present value, does the projection of
      future cash flows include estimates of the following?
      a. sales proceeds
      b. rent, management expense, and repair costs during
         the holding period
      c. selling expense (i.e., advertising and commissions)
         (SFFAS No. 3, par. 82)

82.   In estimating sales proceeds for projecting the future cash
      flows associated with the property in determining net
      present value, has the entity considered its historical
      experience in selling property as well as the nature of the
      sale? (SFFAS 3, par. 82)



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Balance Sheet 



                                                                    Yes,
Assets
                                                                    No,            Explanation
Credit Program Receivables (55 - 96)                                or
Pre-1992 Direct Loans                                               N/A


83.   Were the estimated future cash flows of post-1991
      foreclosed property or acquired loans discounted at the
      original (or Treasury) discount rate in effect at the time
      the underlying loan or guarantee was granted?
      (SFFAS 2, par. 57& 59; SFFAS 3, par. 83; SFFAS 19,
      par. 7(e))

84.   Is the net present value of post-1991 foreclosed property
      adjusted periodically to recognize both changes in the
      expected future cash flows and accrual of interest due to
      the passage of time? (SFFAS 3, par. 84)

85.   Are any adjustments in the carrying amounts of post-
      1991 foreclosed property included in the presentation of
      "interest income" and the reestimate of "subsidy
      expense?" (SFFAS 3, par. 84)

86.   For post-1991 foreclosed property, are the following
      true?
      a. Third party claims are recorded at their net present
         value at the time of the foreclosure, using the same
         discount rate that applies to related foreclosed
         property.
      b. Any periodic changes in net present value of the
         claim are reflected in "interest income" and "subsidy
         expense." (SFFAS 3, par. 87)

87.   Are receipts or disbursements associated with acquiring
      and holding post-1991 foreclosed property charged or
      credited to foreclosed property? (SFFAS 3, par. 88)

88.   When the entity acquires foreclosed assets in full or
      partial settlement of post-1991 direct loans or guarantees,
      is the present value of the government's claim against the
      borrowers reduced by the amount settled as a result of the
      foreclosure? (SFFAS 2, par. 60)



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Balance Sheet 



                                                                   Yes,
Assets
                                                                   No,             Explanation
Credit Program Receivables (55 - 96)                               or
Pre-1992 Direct Loans                                              N/A


89.   If a lender, debtor, or other third party has a legitimate
      claim to a post-1991 foreclosed asset, is the net present
      value of the estimated claim recognized as a special
      contra-valuation allowance? (SFFAS 2, par. 58;
      SFFAS 3, par. 87)

90.   Is pre-1992 foreclosed property recorded at cost and
      adjusted, if necessary, to the lower of cost or net
      realizable value? (SFFAS 3, par. 81 & 85)

91.   Is the net realizable value based on an estimate of the
      market value of the property adjusted for any expected
      losses consistent with historical experience, abnormal
      market conditions, and time limitations as well as any
      other costs of the sale? (SFFAS 3, par. 85 & 86)

92.   Is the estimate of market value based on one of the
      following criteria?
      a. the market value of the property if an active market
         exists
      b. the market value of similar properties if no active
         market exists
      c. a reasonable forecast of expected cash flows adjusted
         for estimates of all holding costs, including any cost
         of capital (SFFAS 3, par. 85)

93.   For pre-1992 foreclosed property, are third-party claims
      recorded at the expected amount of cash required to settle
      the claims? (SFFAS 3, par. 87)

94.   If foreclosed property is not sold but placed into
      operation, is the asset removed from foreclosed property?
      (SFFAS 3, par. 90)




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Balance Sheet 



                                                                    Yes,
Assets
                                                                    No,            Explanation
Credit Program Receivables (55 - 96)                                or
Pre-1992 Direct Loans                                               N/A


95.   If reimbursement for the transfer of assets from one
      program to another is made, are the proceeds from the
      transfer treated in the same manner as a sale to a third
      party? (SFFAS 3, par. 90)

96.   When the government acquires foreclosed assets in full or
      partial settlement of a direct or guaranteed loan (pre-1992
      and post-1991), is the following information disclosed?
      a. valuation basis for foreclosed property
      b. changes from prior-year's accounting methods, if any
      c. restrictions on the use/disposal of property
      d. balances by categories (i.e., pre-1992 and post-1991
         foreclosed property)
      e. number of properties held and average holding period
         by type or category
      f.   number of properties for which foreclosure
           proceedings are in process at the end of the period
           (SFFAS 3, par. 91; OMB Bulletin 01-09, pp. 69 &
           70, section 9.8)




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Balance Sheet


                                                                                            Yes,
 Assets
                                                                                             No,                    Explanation
 Cash and Other Monetary Assets (97 – 102)                                                   or
                                                                                            N/A

            Cash (including imprest funds) consists of: coins, paper currency, readily negotiable
            instruments (such as checks, money orders, and bank drafts), demand deposits, and
            foreign currencies stated in U.S. dollars at the exchange rate on the financial statement
            date. (SFFAS 1, par. 27; OMB Bulletin 01-09, p. 20, section 3.3)
            Other monetary assets consist of other items such as gold, special drawing rights, and
            U.S. reserves in the International Monetary Fund (IMF). (OMB Bulletin 01-09, p. 20,
            section 3.3 & p.57, section 9.4, item C)

 97.     Are the components of cash and other monetary assets
         disclosed and described in a note to the financial
         statements? (OMB Bulletin 01-09, p. 20, section 3.3 &
         pp. 57 & 58, section 9.4)

            Entity cash is the amount of cash that the reporting entity holds and is authorized by law to
            spend. Nonentity cash is the cash that a federal entity collects and holds on behalf of the U.S.
            government or other entities. In some instances the entity deposits cash in its accounts in a
            fiduciary capacity for the U.S. Treasury or other entities. (SFFAS 1, par. 28 & 29)

 98.     Does cash available for agency use include petty cash
         and cash held in revolving funds that will not be
         transferred to the general fund? (OMB Bulletin 01-09,
         p.58, section 9.4, instruction E)

 99.     Is nonentity cash disclosed in the notes to the financial
         statements, separately from entity cash?
         (SFFAS 1, par. 29; OMB Bulletin 01-09, p. 17,
         section 3.1, p. 19, section 3.3, & pp. 57-58, section 9.4)

 100. If cash is restricted,20 is the nature and reason disclosed?
      (SFFAS 1, par. 30; OMB Bulletin 01-09, p. 56,
      section 9.2 & p. 58, section 9.4)




20
  Nonentity cash is always restricted. Restricted cash also includes cash held in escrow to pay property taxes and insurance related to property
associated with defaulted loans.

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 37
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Section III 

Balance Sheet 


                                                                   Yes,
Assets
                                                                   No,            Explanation
Cash and Other Monetary Assets (97 – 102)                          or
                                                                   N/A

101. Does the entity disclose any restrictions on the use or
     conversion of cash denominated in foreign currencies
     and the significant effects, if any, of changes in the
     exchange rate on the entity’s financial position that occur
     after the end of the reporting period but before the
     issuance of financial statements? (OMB Bulletin 01-09,
     p. 58, section 9.4)

102. Is other information on cash and other monetary assets
     disclosed, as appropriate, such as the valuation rate of
     gold? (OMB Bulletin 01-09, p. 58, section 9.4)




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                                                                      Yes,
Assets                                                                No,              Explanation
Inventory and Related Property (103 – 125)                             or
                                                                      N/A

               Inventory is tangible personal property that is (1) held for sale including raw
               materials and work in process, (2) in process of production for sale, or (3) to be
               consumed in the production of goods for sale or in the provision of services for a fee.
               Inventory does not include other assets held for sale such as (1) stockpile materials,
               (2) seized and forfeited property, (3) foreclosed property, and (4) goods held under
               price support and stabilization programs. (SFFAS 3, par. 1; OMB Bulletin 01-09,
               p. 21, section 3.3)

103. Is inventory valued at historical cost, latest acquisition
     cost, or net realizable value? (SFFAS 3, par. 20 & 26)

104. If inventory is valued at historical cost, does that cost
     include the purchase amount and all other costs, such as
     transportation and production costs, incurred to bring the
     inventory into its current condition and location?
     (SFFAS 3, par. 21)

105. Are abnormal costs, such as excessive handling or
     rework costs, charged to operations for the period?
     (SFFAS 3, par. 21)

106. Is donated inventory valued at its fair value at the time of
     donation? (SFFAS 3, par. 21)

107. Is inventory acquired through exchange of nonmonetary
     assets (e.g., barter) valued at the fair value of the asset
     received at the time of the exchange? (SFFAS 3, par. 21)

108. For inventory acquired through exchange of
     nonmonetary assets, is any difference between the
     recorded amount of the asset surrendered and the fair
     value of the asset received recognized as a gain or loss?
     (SFFAS 3, par 21)




October 2003                GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                   Page 39 

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Section III
Balance Sheet

                                                                                           Yes,
 Assets                                                                                     No,                    Explanation
 Inventory and Related Property (103 – 125)                                                  or
                                                                                           N/A

 109. Are one of the following historical cost flow assumptions
      used to value inventory?
          a. first-in, first out (FIFO)
          b. weighted average
          c. moving average
          d. any other valuation method (such as a standard cost
             system) whose results reasonably approximate “a,”
             “b,” or “c” above (SFFAS 3, par. 22)

 110. If the latest acquisition cost method of inventory
      valuation is used, is the latest invoice price (actual cost)
      applied to all like units held, including those acquired
      through donation or nonmonetary exchange?
      (SFFAS 3, par. 23)

 111. Under the latest acquisition cost method, is the inventory
      revalued periodically (or at least by the end of the fiscal
      year)?21 (SFFAS 3, par. 23)

 112. If unrealized holding gains/losses are recognized, is an
      allowance account established to capture these
      gains/losses? (SFFAS 3, par. 24)

 113. Is the ending balance of this [gain/loss] allowance
      account the cumulative difference between the historical
      cost, based on estimated or actual valuation, and the
      latest acquisition cost of ending inventory?
      (SFFAS 3, par. 24)

 114. Is the balance for the gain/loss account adjusted each
      time the inventory balance is adjusted?
      (SFFAS 3, par. 24)




21
  Revaluation results in recognition of unrealized holding gains/losses in the ending inventory value. Upon adjustment for unrealized holding
gains/losses, the latest acquisition cost method then results in an approximation of historical cost.

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 40
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Section III
Balance Sheet

                                                                                             Yes,
 Assets                                                                                       No,                    Explanation
 Inventory and Related Property (103 – 125)                                                    or
                                                                                             N/A

 115. Is the adjustment necessary to bring the allowance to the
      appropriate balance a component of the cost of goods
      sold as computed under the latest acquisition cost
      method?22 (SFFAS 3, par. 24 & 25)

 116. If the latest acquisition cost method is used to value
      inventory, is the reported cost of goods sold adjusted by
      the difference between the beginning and ending
      unrealized holding gains and losses?
      (SFFAS 3, par. 24 & 25)

 117. If inventory is valued at net realizable value, does it meet
      the following criteria?
         a. There is an inability to determine approximate cost.
         b. There is immediate marketability at quoted prices.
         c. There is unit interchangeability (e.g., petroleum
             reserves). (SFFAS 3, par. 26)

 118. Are inventory stocks, which are maintained because they
      are not readily available in the market or because there is
      more than a remote chance that they will eventually be
      needed, classified as inventory held in reserve for future
      sale, and reported in one of the following manners?
         a. included in the inventory line item on the face of the
             financial statements with separate disclosure in the
             footnotes
         b. shown as a separate line item on the face of the
            financial statements (SFFAS 3, par. 27)




22
  Cost of goods sold under the latest acquisition cost method equals (1) beginning inventory at beginning-of-the period latest acquisition cost, less:
beginning allowance for unrealized holding gains/losses, plus: actual purchases; and (2) resulting cost of goods available for sale, less: ending
inventory at end-of-the period latest acquisition cost, plus: ending allowance for unrealized holding gains/losses.

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 41
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Balance Sheet 


                                                                   Yes,
Assets                                                             No,            Explanation
Inventory and Related Property (103 – 125)                         or
                                                                   N/A

119. Is inventory identified as excess, obsolete, or
     unserviceable reported in one of the following manners?
      a. included in the inventory line item on the face of the
         financial statements with separate disclosures in the
         footnotes
      b. shown as a separate line item on the face of the
         financial statements (SFFAS 3, par. 29;
         OMB Bulletin 01-09, p. 74, section 9.9)

120. Is excess, obsolete, and unserviceable inventory valued
     at its expected net realizable value? (SFFAS 3 par. 30)

121. When inventory is declared excess, obsolete, or
     unserviceable is the difference between the carrying
     amount and the expected net realizable value recognized
     as a loss (or gain)? (SFFAS 3, par. 30)

122. For excess, obsolete, or unserviceable inventory, are any
     subsequent adjustments to the inventory’s net realizable
     value or any loss (or gain) upon disposal recognized as
     losses (or gains)? (SFFAS 3, par. 30)

123. When inventory is held for repair, is it valued using one
     of the following methods?
      a. the allowance method (valued at the same value as a
         serviceable item and a contra-asset repair allowance
         account is established
      b. the direct method (valued at the same value as a
         serviceable item less estimated repair costs)
         (SFFAS 3, par. 32 & 33)
124. If inventory is transferred to “inventory held for repair,”
     are estimated prior period repair costs either credited to
     the repair allowance (under the repair allowance method)
     or to the inventory account (under the direct method) and
     reported as an adjustment to equity? (SFFAS 3, par. 34)




October 2003              GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft            Page 42 

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Balance Sheet 


                                                                   Yes,
Assets                                                             No,             Explanation
Inventory and Related Property (103 – 125)                         or
                                                                   N/A

125. Does the entity disclose the following about its
     inventory?
      a. the general composition
      b. the basis for determining inventory values (including
         the valuation method and any cost flow assumptions)
      c. changes from prior years’ accounting methods, if any
      d. balances for each of the following categories of
         inventory (unless otherwise presented on the
         financial statements):
           i.     inventory held for current sale
           ii.    inventory held in reserve for future use
           iii.   excess, obsolete, and unserviceable inventory
           iv.    inventory held for repair
      e. the difference between the carrying amount of the
         inventory before identification as excess, obsolete, or
         unserviceable, and its expected net realizable value
      f.   restriction on the sale of inventory
      g. the decision criteria for categorizing inventory
      h. changes in the criteria for categorizing inventory
         (SFFAS 3, par. 18, 27-29, 31, 32 & 35;
         OMB Bulletin 01-09, pp. 74 & 75, section 9.9)




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Balance Sheet 


                                                                    Yes,
Assets                                                              No,              Explanation
Operating Materials and Supplies (126 - 137)                         or
                                                                    N/A

               Operating materials and supplies are tangible personal property to be consumed in
               normal operations. Excluded are (1) goods that have been acquired to construct real
               property and equipment for the entity’s use (2) stockpile materials, (3) goods held
               under price stabilization programs, (4) foreclosed property, (5) seized and forfeited
               property, and (6) inventory. (SFFAS 3, par. 36 & OMB Bulletin 01-09, p.21,
               section 3.3)

126. Are operating materials and supplies recognized and
     reported as assets when produced or purchased?
     (SFFAS 3, par. 38)

127. Are operating materials and supplies valued at historical
     cost, including all appropriate purchase and production
     costs incurred to bring the items to their current
     condition and location? (SFFAS 3, par. 42-43)

128. Are donated operating materials and supplies valued at
     their fair value at the time of donation?
     (SFFAS 3, par. 43)

129. Are operating materials and supplies acquired through
     exchange of nonmonetary assets (e.g., barter) valued at
     the fair value of the asset received at the time of the
     exchange? (SFFAS 3, par. 43)

130. Are operating materials and supplies acquired through
     exchange of nonmonetary assets (e.g., barter) valued at
     the fair value of the asset received at the time of
     exchange, and is any difference between the recorded
     amount of the asset surrendered and the fair value of the
     asset received recognized as a gain or loss?
     (SFFAS 3, par. 43)




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Balance Sheet 


                                                                   Yes,
Assets                                                             No,            Explanation
Operating Materials and Supplies (126 - 137)                       or
                                                                   N/A

131. Is one of the following historical cost flow assumptions
     used to value ending operating materials and supplies
     under the consumption method?
      a. first-in, first-out (FIFO)
      b. weighted average
      c. moving average
      d. any other valuation method (such as a standard cost
         system) whose results reasonably approximate “a,”
         “b,” or “c” (SFFAS 3, par. 42 & 44)

132. Are operating materials and supplies stocks, which are
     maintained because they are not readily available in the
     market or because there is more than a remote chance
     that they will eventually be needed (although not
     necessarily in the normal course of operations), classified
     as operating materials and supplies held in reserve for
     future use, and reported in one of the following manners?
      a. included in the operating materials and supplies line
          item on the face of the financial statements with
          separate disclosure in the footnotes
      b. shown as a separate line item on the face of the
         financial statements (SFFAS 3, par. 45)

133. Are operating materials and supplies identified as excess,
     obsolete, or unserviceable reported in one of the
     following manners?
      a. included in the operating materials and supplies line
          item on the face of the financial statements with
          separate disclosure in the footnotes
      b. shown as a separate line item on the face of the
         financial statements (SFFAS 3, par. 47)

134. Are excess, obsolete, and unserviceable operating
     materials and supplies valued at their estimated net
     realizable value? (SFFAS 3, par. 48)



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Balance Sheet

                                                                                              Yes,
 Assets                                                                                       No,                     Explanation
 Operating Materials and Supplies (126 - 137)                                                  or
                                                                                              N/A

 135. When operating materials and supplies are declared
      excess, obsolete, or unserviceable is the difference
      between the carrying amount before identification as
      excess, obsolete, or unserviceable and the estimated net
      realizable value recognized as a loss (or gain)?
      (SFFAS 3, par. 48)

 136. For excess, obsolete, or unserviceable operating
      materials and supplies, are any subsequent adjustments to
      the operating materials and supplies’ estimated net
      realizable value or any loss (or gain) upon disposal
      recognized as losses (or gains)? (SFFAS 3, par. 48)

 137. Does the entity disclose the following information about
      its operating materials and supplies?
         a. general composition
         b. basis for valuation (including valuation method and
            any cost flow assumptions)
         c. change from prior years’ accounting methods, if any
         d. balances in each operating material and supply
            category23
         e. the difference between the carrying amount of the
             operating materials and supplies before identification
             as excess, obsolete, or unserviceable and their
             estimated net realizable value
         f. restrictions on the use of materials and supplies, if
            any
         g. decision criteria for identifying each category to
            which material and supplies are assigned
         h. changes in the criteria for identifying the category to
            which the operating materials and supplies are
            assigned (SFFAS 3, par. 36, 37, 45-47, 49, & 50;
            OMB Bulletin 01-09, p. 75, section 9.9)


23
  Major categories of operating materials and supplies include (1) items held for use; (2) items held in reserve for future uses; and (3) excess, obsolete,
and unserviceable items.

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 46
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Balance Sheet 



                                                                     Yes,
Assets
                                                                     No,             Explanation
Stockpile Materials (138-150)                                        or
                                                                     N/A

               Stockpile materials are strategic and critical materials held due to statutory
               requirements for use in national defense, conservation, or national emergencies. Not
               included under this category are (1) items held for sale or use in normal operations,
               (2) items held for use in the event of an agency’s operating emergency or
               contingency, and (3) materials acquired to support market prices.
               (SFFAS 3, par. 51 & OMB Bulletin 01-09, p. 21, section 3.3)

138. Are stockpile materials recognized and reported as assets
     when acquired (i.e., recognized as assets using the
     consumption method)? (SFFAS 3, par. 52)

139. If the contract between the buyer and seller of the
     stockpile materials is silent regarding passage of the title,
     is title assumed to pass upon delivery of the goods?
     (SFFAS 3, par. 52)

140. Are stockpile materials valued at historical cost,
     including all appropriate purchase, transportation, and
     production costs incurred to bring the items to their
     current condition and location? (SFFAS 3, par. 53)

141. Are abnormal costs, such as excessive handling or
     rework costs, charged to operations for the period?
     (SFFAS 3, par. 53)

142. Is one of the following historical cost flow assumptions
     used to value stockpile materials under the consumption
     method?
      a. first-in, first-out (FIFO)
      b. weighted average
      c. moving average
      d. any other valuation method (such as a standard cost
         system) whose results reasonably approximate “a,”
         “b,” or “c” (SFFAS 3, par. 52 & 53)




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Balance Sheet 


                                                                  Yes,
Assets
                                                                  No,             Explanation
Stockpile Materials (138-150)                                     or
                                                                  N/A

143. If stockpile materials have either suffered a permanent
     decline in value to an amount below cost or have become
     damaged or decayed, has their value been reduced to
     expected net realizable value? (SFFAS 3, par. 54)

144. Is the resultant decline in value recognized as a loss or
     expense in the period in which it occurs?
     (SFFAS 3, par. 54)

145. When stockpile materials are authorized to be sold, are
     those materials disclosed as stockpile materials held for
     sale? (SFFAS 3, par. 55)

146. Are the stockpile materials authorized for sale valued
     using the same basis used before they were authorized
     for sale? (SFFAS 3, par. 55)

147. Is any difference between the carrying amount of the
     stockpile materials held for sale and their estimated
     selling price disclosed? (SFFAS 3, par. 55)

148. If stockpile materials are sold, is the cost removed from
     stockpile materials and reported as a cost of goods sold?
     (SFFAS 3, par. 55)

149. Is any gain (or loss) from the sale of stockpile materials
     recognized as a gain (or loss) at that time?
     (SFFAS 3, par. 55)




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Balance Sheet 


                                                                  Yes,
Assets
                                                                  No,             Explanation
Stockpile Materials (138-150)                                     or
                                                                  N/A

150. Does the entity disclose the following information about
     its stockpile materials?
      a. general composition
      b. basis for valuing stockpile materials, including
         valuation method and any cost flow assumptions
      c. changes from prior year’s accounting methods, if any
      d. restrictions on the use of the material
      e. balances in each category of stockpile material (i.e.,
         stockpile materials and stockpile materials held for
         sale)
      f. decision criteria for grouping stockpile material as
         held for sale
      g. changes in criteria for categorizing stockpile
         materials as held for sale (SFFAS 3, par. 56;
         OMB Bulletin 01-09, pp. 75 & 76, section 9.9)




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Balance Sheet 



                                                                   Yes,
Assets                                                              No,
                                                                                    Explanation
Seized Property (151 - 158)                                         or
                                                                   N/A

               Seized property includes monetary instruments, real property, and tangible personal
               property belonging to others in actual or constructive possession of the custodial
               agency. This includes illegal drugs, contraband, and counterfeit items seized by
               authorized law enforcement agencies (SFFAS 3, par. 59; OMB Bulletin 01-09, p. 22,
               section 3.3)
               There may be as many as three government entities involved with seized property: (1)
               the seizing agency, (2) the custodial agency, and (3) another agency with a “central
               fund” set up for financial recordkeeping of seizure activities. (SFFAS 3, par. 57)

151. If the central fund is other than the seizing or custodial
     entity, does the custodial entity maintain sufficient
     internal records to carry out its stewardship
     responsibility? (SFFAS 3, par. 60)

152. If monetary instruments are seized, are seized assets
     recognized at market value of the monetary instruments,
     and a corresponding liability equal to the seized asset
     value established? (SFFAS 3, par. 61 & 65;
     OMB Bulletin 01-09, p. 22, section 3.3)

153. Is the existence of seized property other than monetary
     instruments disclosed in a note to the statements and
     accounted for in the entity’s property management
     records? (SFFAS 3, par. 62)

154. Is seized property valued at its market value when seized
     (or as soon thereafter as reasonably possible if the market
     value cannot be readily determined)? (SFFAS 3, par. 63)

155. If no active market exists for the property in the general
     area in which it was seized, is a value in the principle
     market nearest the place of seizure used?
     (SFFAS 3, par. 63)

156. Is the valuation of property seized under the Internal
     Revenue Code based on the taxpayer’s equity (market
     value less any third-party liens)? (SFFAS 3, par. 64)



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Section III 

Balance Sheet 


                                                                    Yes,
Assets                                                              No,
                                                                                   Explanation
Seized Property (151 - 158)                                         or
                                                                    N/A

157. Does the entity disclose the type of seized property in its
     custody and include the following information?
      a. explanation of what constitutes a seizure and a
         general description of the composition of seized
         property
      b. valuation method(s)
      c. changes from prior years’ accounting methods, if any
      d.   analysis of change in seized property (including
           dollar value and number of seized properties) that are
           i. on hand at the beginning of the year,
           ii. seized during the year,
           iii. disposed of during the year, and
           iv. on hand at the end of the year, as well as
               known liens or other claims against the property
               (SFFAS 3, par. 66; OMB Bulletin 01-09, p. 22,
               section 3.3; p. 76, section 9.9)

158. Does the entity also disclose the method of disposal of
     seized property, if material? (SFFAS 3, par. 66;
     OMB Bulletin 01-09, p. 76, section 9.9)




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                                                                       Yes,
Assets                                                                 No,           Explanation
Forfeited property (159 - 172)                                         Or
                                                                       N/A

               Forfeited property consists of (a) property (i.e., monetary instruments, intangible
               property, real property, and tangible personal property) acquired through forfeiture
               proceedings, (b) property acquired to satisfy a tax liability, and (c) unclaimed and
               abandoned merchandise. (SFFAS 3, par. 67 & 68 & OMB Bulletin 01-09, p. 22,
               section 3.3)

159. When a forfeiture judgment is obtained for seized
     monetary instruments:
      a. Are they reclassified as forfeited monetary
         instruments at the current market value?
      b. Is revenue recognized in an amount equal to the
         value of the monetary asset?
      c. Is the liability associated with the seized monetary
         instrument classification removed?
         (SFFAS 3, par. 69)

160. When a forfeiture judgment is obtained for real, tangible,
     and intangible property:
      a.   Is the property recorded as an asset at its fair value at
           the time of forfeiture?
      b. Is an allowance account (contra-asset account)
         established for liens or claims from third party
         claimants against forfeited property?
      c.   Is offsetting deferred revenue recognized?
           (SFFAS 3, par. 70)

161. For forfeited property that cannot be sold due to legal
     restrictions, but may be either donated or destroyed, does
     the entity in lieu of recognizing financial value make the
     required disclosures concerning the composition,
     valuation, and disposition of the property?
     (SFFAS 3, par. 71 & 78)

162. Is revenue from the sale of forfeited property recognized
     when sold? (SFFAS 3, par. 72)



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Section III 

Balance Sheet 


                                                                    Yes,
Assets                                                              No,              Explanation
Forfeited property (159 - 172)                                      Or
                                                                    N/A

         Forfeited property not held for sale may be placed into official use, transferred to another federal
         agency, distributed to a state or local law enforcement agency, or distributed to a foreign
         government. (SFFAS 3, par. 73)

163. When a determination is made that forfeited property
     will not be held for sale, but distributed in one of the
     manners described above, is the property reclassified as
     forfeited property held for donation or use?
     (SFFAS 3, par. 74)

164. Is revenue associated with property not disposes of
     through sale recognized upon approval of distribution
     and the previously established deferred revenue
     reversed? (SFFAS 3, par. 74)

165. Is a distinction maintained in the entity’s accounting
     reports between revenue arising from the sale of forfeited
     property and revenue arising from forfeited property
     being transferred, donated, or placed into official use?
     (SFFAS 3, par. 72–75 & Table 1)

166. Is property acquired by the government to satisfy a
     taxpayer’s liability recorded when title to the property
     passes to the federal government, and is a credit made to
     the related account receivable? (SFFAS 3, par. 76)

167. Is the property acquired in satisfaction of a taxpayer’s
     liability valued at its market value less any third party
     liens? (SFFAS 3, par. 76)

168. Upon sale of forfeited property acquired in satisfaction of
     a taxpayer’s liability, is revenue recognized in the
     amount of the sale proceeds, and are the property and
     third party liens removed from the accounts?
     (SFFAS 3, par. 76)

169. Is unclaimed and abandoned merchandise recorded with
     an offsetting deferred revenue when statutory and/or
     regulatory requirements for forfeiture have been met?
     (SFFAS 3, par. 77)

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Section III 

Balance Sheet 


                                                                   Yes,
Assets                                                             No,             Explanation
Forfeited property (159 - 172)                                     Or
                                                                   N/A

170. Is unclaimed and abandoned merchandise valued at its
     market value? (SFFAS 3, par. 77)

171. Upon the sale of unclaimed and abandoned merchandise,
     is revenue recognized in the amount of the sale proceeds,
     and the merchandise and the deferred revenue removed
     from the accounts? (SFFAS 3, par. 77)

172. Does the entity disclose the following information about
     forfeited property?
      a.   composition of the property
      b. valuation method(s)
      c.   restrictions on the use or disposition of forfeited
            property
      d. changes from prior year’s accounting methods, if
          any
      e.   analysis of the changes in forfeited property by
            dollar amount and number of forfeitures that
            includes:
           i.     forfeitures on hand at the beginning of the
                  year
           ii.    additions
           iii.   disposals and method of disposition
           iv.    forfeitures on hand at the end of the year
      f.   if available, an estimate of the value of property or
           funds to be distributed to other federal, state, and
           local agencies in future reporting periods (SFFAS 3,
           par. 78; OMB Bulletin 01-09, p. 76, section 9.9)




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Section III
Balance Sheet


                                                                                               Yes,
 Assets
                                                                                               No,
 Goods Held Under Price Support                                                                                      Explanation
                                                                                                or
 and Stabilization Programs (173 – 186)
                                                                                               N/A

                    Goods acquired under price support and stabilization programs (i.e., commodities)
                    are items of commerce or trade (usually farm commodities) having an exchange
                    value. Producers of the goods (1) are either given nonrecourse loans under which
                    they can, at their option, repay the loan with interest or surrender their commodity
                    pledged as collateral for the loan or (2) may enter into purchase agreements that
                    allow the producer of the option to sell commodities to the government (the
                    Commodity Credit Corporation) at the price support rate. (SFFAS 3, par. 92, 93, &
                    94)

 173. Are nonrecourse loans recognized as assets when the
      loan principal is disbursed and recorded at the amount of
      the loan principal? (SFFAS 3, par. 96)

 174. Is interest accrued on nonrecourse loans?
      (SFFAS 3, par. 96)

 175. When the entity has entered into a purchase agreement
      and there is an expected loss:
            a.    Is a loss24 recognized if it is probable that a loss has
                  been incurred on purchase agreements outstanding
                  and the amount of the loss can be reasonably
                  measured?
            b.    Is a corresponding liability recognized?
                  (SFFAS 3, par. 97 & 103)

 176. If the contingent loss arising from a purchase agreement
      is not recognized because it is less than probable or is not
      reasonably measurable, is the contingent loss disclosed if
      it is at least “reasonably possible that a loss may occur?”
      (SFFAS 3, par. 98)

 177. When commodities are acquired to satisfy a nonrecourse
      loan or purchase agreement, are they recognized and
      reported as assets at the lower of cost or net realizable
      value? (SFFAS 3, par. 99 & 104)


24
     The loss amount is the difference between the contract price and the net realizable value of the commodities.

October 2003                          GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                   Page 55
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Section III 

Balance Sheet 


                                                                  Yes,
Assets
                                                                  No,
Goods Held Under Price Support                                                    Explanation
                                                                  or
and Stabilization Programs (173 – 186)
                                                                  N/A

178. When commodities acquired to satisfy the terms of a
     nonrecourse loan or purchase agreement are sold:
      a. Are revenues recognized?
      b. Is the carrying amount of the commodities removed
         from the asset account and reported as a cost of
         goods sold? (SFFAS 3, par. 100)

179. When commodities are held for purposes other than sale,
     is the carrying amount reported as an expense and
     removed from the commodity asset account upon
     transfer? (SFFAS 3, par. 101)

180. Are all nonrecourse loans recorded at their face amounts,
     and is a valuation allowance set up to recognize losses on
     such loans when it is “more likely than not” (i.e., more
     than a 50 percent chance) that loans will not be totally
     collected? (SFFAS 3, par. 102)

181. Is this allowance reestimated on each financial reporting
     date? (SFFAS 3, par. 102)

182. Does the cost for the commodities acquired through a
     nonrecourse loan settlement include the following
     amounts?
      a. loan principal (excluding interest)
      b. processing and packaging costs incurred after
         acquisition
      c. other costs (e.g., transportation) incurred in taking
         title to the commodity (SFFAS 3, par. 105)

183. Does the cost for commodities acquired though a
     purchase agreement include the following amounts?
      a. the unit price agreed upon in the purchase agreement
          multiplied by the number of units purchased
      b. other costs incurred in taking title to the commodity
         (SFFAS 3, par. 106)


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Section III 

Balance Sheet 


                                                                  Yes,
Assets
                                                                  No,
Goods Held Under Price Support                                                    Explanation
                                                                  or
and Stabilization Programs (173 – 186)
                                                                  N/A

184. Is any adjustment necessary to reduce the carrying
     amount of the acquired commodities to the lower of cost
     or net realizable value recognized as a loss on farm price
     support in the current period and recorded in a
     commodity valuation allowance? (SFFAS 3, par. 107)

185. Are recoveries of losses recognized up to the point of any
     previously recognized losses on the commodities, and is
     the commodity valuation allowance reduced accordingly
     in the current period? (SFFAS 3, par. 107)




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Section III 

Balance Sheet 


                                                                   Yes,
Assets
                                                                   No,
Goods Held Under Price Support                                                    Explanation
                                                                   or
and Stabilization Programs (173 – 186)
                                                                   N/A

186. Is the following information related to goods held under
     price support and stabilization programs disclosed?
      a. basis for valuing commodities including valuation
         method and cost flow assumptions (e.g., FIFO,
         weighted average, moving average, specific
         identification)
      b. changes from prior years’ accounting methods, if any
      c. restrictions on the use, disposal, or sale of
         commodities
      d. analysis of the changes in dollar amount and volume
         of commodities, including those
          i.     on hand at the beginning of the year
          ii.    acquired during the year
          iii.   disposed of during the year by method of
                 disposition
          iv.    on hand at the end of the year
          v.     on hand at year’s end and estimated to be
                 donated or transferred during the coming
                 period
          vi.    received as a result of surrender of collateral
                 related to nonrecourse loans outstanding
          vii.    dollar value and volume of purchase
                  agreement commitments (SFFAS 3, par. 108
                  & 109; OMB Bulletin 01-09, pp. 76 & 77,
                  section 9.9)




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Section III 

Balance Sheet 


Assets                                                            Yes,
                                                                  No,
General Property, Plant, & Equipment (Net)                                        Explanation
                                                                  or
(187 – 233)
                                                                  N/A

                 General property, plant, and equipment (PP&E) are any property, plant, and
                 equipment used in providing goods or services. (SFFAS 6, par. 23)

187. Has the entity established, disclosed, and consistently
     followed appropriate capitalization thresholds for
     property, plant, and equipment (PP&E) suitable to its
     financial and operational conditions? (SFFAS 6, par. 13)

188. Does the entity follow a policy that ensures its PP&E
     consists of tangible assets, including land, that meet the
     following criteria?
      a. have estimated useful lives of 2 years or more
      b. are not intended for sale in the ordinary course of
         operations
      c. are acquired or constructed with the intention of
         being used or being available for use by the entity
         (SFFAS 6, par. 17)

189. Does PP&E also consist of the following items?
      a. assets acquired through capital leases, including
         leasehold improvements
      b. property owned by the reporting entity in the hands
         of others (e.g., state and local governments, colleges
         and universities, federal contractors)
      c. land rights (SFFAS 6, par. 18)




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Section III 

Balance Sheet 




Assets                                                               Yes,
                                                                     No,
General Property, Plant, & Equipment (Net)                                            Explanation
                                                                     or
(187 – 233)
                                                                     N/A

                 Capital leases are leases that transfer substantially all the benefits and risks of
                 ownership to the lessee. Operating leases are leases in which the federal entity
                 does not assume the risks of ownership of PP&E. Multiyear service contracts
                 and multiyear purchase agreements for expendable commodities are not capital
                 leases. (SFFAS 6, par. 20, footnote 22; SFFAS 5, par. 43)

190. Does the entity classify a lease as a capital lease if at its
     inception the lease meets one or more of the following
     criteria?
      a. the lease transfers ownership of the property to the
         lessee by the end of the lease term
      b. the lease contains an option to purchase the leased
         property at a bargain price
      c. the lease term is equal to or greater than 75 percent
         of the estimated economic life of the lease property,
         and the beginning of the lease term does not fall
         within the last 25 percent of the total estimated
         economic life of the property
      d. the present value of rental and other minimum lease
         payments, excluding that portion of the payments
         representing executory cost, equals or exceeds 90
         percent of the fair value of the leased property, and
         the beginning of the lease terms does not fall within
         the last 25 percent of the total estimated economic
         life of the property (SFFAS 6, par. 20; SFFAS 5,
         par. 43




October 2003               GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                  Page 60 

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Section III
Balance Sheet


 Assets                                                                                    Yes,
                                                                                           No,
 General Property, Plant, & Equipment (Net)                                                                       Explanation
                                                                                            or
 (187 – 233)
                                                                                           N/A

 191. Does the general PP&E asset line item exclude the
      following items?
        a. items held in anticipation of physical consumption
            such as operating materials and supplies
        b. items the federal entity has a reversionary interest in
        c. heritage assets (except multiuse heritage assets)25
        d. stewardship land (i.e., land not included in general
           PP&E) (SFFAS 6, par. 19, 21, 57, 58, & 68;
           SFFAS 16, par. 6)

 192. In determining the level at which the entity categorizes
      its PP&E, has the entity considered the following
      factors?
        a. the cost of maintaining different accounting methods
           for property and the usefulness of the information
        b. the diversity of the PP&E (e.g., useful lives, value,
           alternative uses)
        c. the programs being served by the PP&E
        d. future disposition of the PP&E
           (SFFAS 6, par. 22)




25
  Multiuse heritage assets are heritage assets used predominately in general government operations (e.g., the main Treasury building, which is used as
an office building).

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 61
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Section III
Balance Sheet


 Assets                                                                                        Yes,
                                                                                                No,
 General Property, Plant, & Equipment (Net)                                                                             Explanation
                                                                                                 or
 (187 – 233)
                                                                                               N/A

 193. Does the entity categorize an asset under general PP&E
      if it has one or more of the following characteristics?
         a. it could be used for alternative purposes (e.g., by
             other federal programs, state or local governments,
             nongovernmental entities) but is used to produce
             goods or services or to support the mission of the
             entity
         b. it is used for business-type activities26
         c. it is used by entities in activities whose costs can be
            compared to those of other entities performing
            similar activities (e.g., federal hospital services in
            comparison to other hospitals) (SFFAS 6, par. 23;
            OMB Bulletin 01-09, p. 22, section 3.3)

 194. Is PP&E of entities operating as business-type activities
      categorized as general PP&E whether or not it meets the
      definition of other PP&E categories (e.g., heritage
      assets)? (SFFAS 6, par. 24; OMB Bulletin 01-09, p. 22,
      section 3.3)

 195. Are land and land rights specifically acquired for or in
      connection with other general PP&E included in general
      PP&E? (SFFAS 6, par. 25; OMB Bulletin 01-09,
      p. 22 & 23, section 3.3)

 196. Is all general PP&E recorded at cost?
      (SFFAS 6, par. 26)




26
  A business-type activity is defined as a significantly self-sustaining activity that finances its continuing cycle of operations through the collection of
exchange revenue.

October 2003                          GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                              Page 62
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Section III 

Balance Sheet 


Assets                                                            Yes,
                                                                  No,
General Property, Plant, & Equipment (Net)                                        Explanation
                                                                  or
(187 – 233)
                                                                  N/A

197. Does the cost of general PP&E include all costs incurred
     to bring the PP&E to a form and location suitable for its
     intended use, such as the following?
      a. amounts paid to vendors
      b. transportation charges to the point of initial use
      c. handling and storage costs
      d. labor and other direct or indirect production costs
         (for assets produced or constructed)
      e. costs of engineering, architectural, and other outside
         services for designs, plans, specifications, and
         surveys
      f.   acquisition and preparation costs of buildings and
           other facilities
      g. an appropriate share of the cost of the equipment and
         facilities used in construction work
      h. fixed equipment and related installation costs
         required for activities in a building or facility
      i.   direct costs of inspection, supervision, and
           administration of construction contracts and
           construction work
      j.   legal and recording fees and damage claims
      k. fair value of facilities and equipment donated to the
         government
      l.material amounts of interest costs paid
          (SFFAS 6, par. 26)




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Section III
Balance Sheet


 Assets                                                                                       Yes,
                                                                                               No,
 General Property, Plant, & Equipment (Net)                                                                           Explanation
                                                                                                or
 (187 – 233)
                                                                                              N/A

 198. Is the cost of general PP&E acquired under a capital
      lease equal to the amount recognized as a liability27 for
      the capital lease at its inception? (SFFAS 6, par. 29)

 199. Is the cost of general PP&E acquired through donation,
      will, or judicial process, excluding forfeiture, capitalized
      at estimated fair value at the time acquired by the
      government? (SFFAS 6, par. 30)

 200. Is general PP&E transferred from other federal entities
      capitalized at the book value recorded by the transferring
      entity? (SFFAS 6, par. 31)

 201. Is general PP&E transferred from other federal entities
      capitalized at the fair value at the time of the transfer, if
      the receiving entity cannot reasonably ascertain the book
      value of the PP&E being transferred?
      (SFFAS 6, par. 31)

 202. If general PP&E is acquired through exchange between a
      federal entity and a nonfederal entity, is it capitalized at
      the fair value of the PP&E surrendered at the time of the
      exchange? (SFFAS 6, par. 32)

 203. If general PP&E is acquired through exchange between a
      federal entity and a nonfederal entity and the fair value of
      the PP&E is more readily determinable than that of the
      PP&E surrendered, is the acquired general PP&E
      capitalized at it’s fair value? (SFFAS 6, par. 32)

 204. If general PP&E is acquired through exchange between a
      federal entity and a nonfederal entity and neither the fair
      value of the PP&E acquired or surrendered is
      determinable, is the acquired general PP&E capitalized at
      the book value of the PP&E surrendered?
      (SFFAS 6, par. 32)

27
  The liability is the net present value of lease payments unless the net present value of the lease payments exceeds the fair value of the asset, in which
case the amount recorded as the liability would be the fair value of the asset. (SFFAS 5, par. 44)

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                              Page 64
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Section III 

Balance Sheet 


Assets                                                            Yes,
                                                                  No,
General Property, Plant, & Equipment (Net)                                         Explanation
                                                                   or
(187 – 233)
                                                                  N/A

205. If cash is included in an exchange of general PP&E
     between a federal entity and a nonfederal entity, is the
     cost of PP&E acquired increased by the amount of cash
     surrendered or decreased by the amount of cash
     received? (SFFAS 6, par. 32)

206. For general PP&E acquired through exchange between a
     federal entity and a nonfederal entity, is any difference
     between the net recorded amount of the PP&E
     surrendered and the cost of the PP&E acquired
     recognized as a gain or loss? (SFFAS 6, par. 32)

207. Is PP&E recognized when title passes to the acquiring
     entity or when PP&E is delivered to the entity or to an
     agent of the entity? (SFFAS 6, par. 34)

208. If general PP&E is under construction, is it recorded as
     construction work in process until it is placed into
     service and transferred to general PP&E?
     (SFFAS 6, par. 34)

                 Depreciation expense is calculated through the systematic and rational allocation of the
                 cost of general PP&E, less its estimated salvage or residual value over its estimated
                 useful life. (SFFAS 6, par. 35, OMB Bulletin 01-09, p. 23, section 3.3)

209. Is depreciation expense recognized on all general PP&E,
     except land and land rights of unlimited duration?
     (SFFAS 6, par. 35)

210. Do estimates of useful life of general PP&E consider
     such factors as physical wear and tear and technological
     change? (SFFAS 6, par. 35)




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Section III
Balance Sheet

 Assets                                                                                   Yes,
                                                                                           No,
 General Property, Plant, & Equipment (Net)                                                                       Explanation
                                                                                            or
 (187 – 233)
                                                                                           N/A

 211. Are changes in estimated useful life or salvage and
      residual value of general PP&E accounted for in the
      period of change and future periods? (SFFAS 6, par. 35)

 212. Is the depreciation method systematic, rational, and best
      reflective of the use of the PP&E, including the use of a
      composite or a group methodology28 whereby the costs
      of PP&E are allocated using the same allocation rate?
      (SFFAS 6, par. 35; SFFAS 23, par. 9(f))

 213. Are depreciation and amortization expenses accumulated
      in contra-asset accounts? (SFFAS 6, par. 36)

 214. Are costs that either extend the useful life of existing
      general PP&E or enlarge or improve its capacity
      capitalized and depreciated/amortized over the remaining
      useful life of the asset? (SFFAS 6, par. 37)

 215. When general PP&E is disposed of, retired, or removed
      from service, is the asset removed from the asset
      accounts along with the associated accumulated
      depreciation/amortization? (SFFAS 6, par. 38)

 216. Are the differences between the book value of the PP&E
      and the amounts realized, recognized as a gain or loss in
      the period that the general PP&E is disposed of, retired
      or removed from service? (SFFAS 6, par. 38)

 217. Is general PP&E removed from general PP&E accounts
      along with associated accumulated
      depreciation/amortization if prior to disposal, retirement,
      or removal from service, it no longer provides service in
      the operations of the entity? (SFFAS 6, par. 39)




28
  The composite methodology is a method of calculating depreciation that applies a single average rate to a number of heterogeneous assets that have
dissimilar characteristics and service lives. The group methodology is a method of calculating depreciation that applies a single, average rate to a
number of homogenous assets having similar characteristics and service lives.

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 66
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Section III 

Balance Sheet 


Assets                                                           Yes,
                                                                  No,
General Property, Plant, & Equipment (Net)                                        Explanation
                                                                  or
(187 – 233)
                                                                 N/A

218. Is such PP& E that has been removed from the asset
     accounts recorded in an appropriate asset account at its
     expected net realizable value? (SFFAS 6, par. 39)

219. Is any difference in the book value and its expected net
     realizable value of the about-to-be disposed, retired, or
     removal-from-service PP&E recognized as a gain or loss
     in the period of adjustment? (SFFAS 6, par. 39)

220. Is the expected net realizable value of such PP&E assets
     adjusted at the end of each accounting period, and are
     any further adjustments in value recognized as a gain or
     loss? (SFFAS 6, par. 39)

221. If historical cost information for existing general PP&E
     has not been maintained, are cost estimates based on
     either of the following costs?
      a. the cost of similar assets at the time of acquisition
      b. the current cost of similar assets discounted for
         inflation since the time of acquisition
         (SFFAS 6, par. 40)




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Section III
Balance Sheet

 Assets                                                                                  Yes,
                                                                                          No,
 General Property, Plant, & Equipment (Net)                                                                     Explanation
                                                                                           or
 (187 – 233)
                                                                                         N/A

 222. For general PP&E previously considered national
      defense PP&E, is the initial capitalization amount for
      these assets the initial historical cost for the items
      including any major improvements or modifications?
      (SFFAS 23, par. 10)

 223. For general PP&E previously considered national
      defense PP&E where obtaining initial historical cost is
      not practical, is estimated historical cost used, based on
      one of the following alternatives?
        a. current replacement cost of similar items, deflated
           through the use of price-level indexes to the
           acquisition year or estimated acquisition year if the
           actual year is unknown
        b. other information indicating amount expended, such
           as budget, appropriation, or engineering documents
           and other reports reflecting amounts expended
        c. other reasonable approaches for estimating historical
           cost29 (SFFAS 23, par. 12 & 13)

 224. For general PP&E previously considered national
      defense PP&E that was in service upon implementation
      of SFFAS 23, are cleanup cost liabilities adjusted as
      needed?30 (SFFAS 23, par. 15)




29
  For example, the latest acquisition cost may be substituted for current replacement cost in some situations.
30
  This adjustment may be needed because the Department of Defense may have already recognized the total estimated cleanup costs as a liability and
expense for some military equipment (per paragraph 101 of SFFAS 6).

October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                         Page 68
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Section III
Balance Sheet

 Assets                                                                                          Yes,
                                                                                                 No,
 General Property, Plant, & Equipment (Net)                                                                              Explanation
                                                                                                  or
 (187 – 233)
                                                                                                 N/A

 225. Is accumulated depreciation/amortization recorded based
      on one of the following methods?
            a. the estimated cost of the PP&E and the number of
               years the PP&E has been in use relative to its
               estimated useful life
            b. the PP&E’s estimated net remaining cost31 and the
               depreciation/amortization charged over the
               remaining life based on that net remaining cost
            c. a composite or a group methodology whereby the
               costs of PP&E are allocated using the same
               allocation rate (SFFAS 6, par. 41;
               SFFAS 23, par. 9(f))

 226. If general PP&E would have been substantially
      depreciated or amortized had it been recorded upon
      acquisition, does the entity weigh materiality and cost-
      benefit in considering either of the following
      alternatives?
            a. record only improvements made during the period
               beyond the initial expected useful life of general
               PP&E
            b. make an aggregate entry for whole classes of PP&E
               (e.g., entire facilities rather than a building-by-
               building estimate). (SFFAS 6, par. 42)

 227. In recording existing general PP&E, is the difference in
      amounts added to asset and contra-accounts credited (or
      charged) to the net position of the entity, with the amount
      of the adjustment shown as a “prior period adjustment”
      in the Statement of Changes in Net Position?
      (SFFAS 6, par. 43)




31
     Net remaining cost is the original cost of the asset less any accumulated depreciation/amortization to date (i.e., book value).



October 2003                           GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                      Page 69
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Balance Sheet 


Assets                                                                Yes,
                                                                       No,
General Property, Plant, & Equipment (Net)                                              Explanation
                                                                       or
(187 – 233)
                                                                      N/A

228. In recording existing general PP&E previously identified
     as national defense PP&E, is the difference in amounts
     added to asset and contra accounts reported as a “change
     in accounting principle” and reflected as an adjustment to
     the beginning balance of cumulative results of operations
     in the statement of changes in net position, for the period
     the change is made? (SFFAS 23, par. 10 & 16)

229. Does the entity make the following minimum disclosures
     about its general PP&E?
      a. the cost, associated accumulated depreciation, and
         book value by major class (e.g., building and
         structures, fixtures, equipment)
      b. the estimated useful lives for each major class
      c. the method(s) of depreciation for each major class
      d. capitalization threshold(s) including any changes in
         thresholds(s) during the period
      e. restrictions on the use or convertibility of general
         PP&E (SFFAS 6, par. 45; OMB Bulletin 01-09,
         p. 77, section 9.10)

               Property, plant, and equipment are classified as heritage assets if they have (1)
               historical or natural significance; (2) cultural, educational, or artistic importance;
               or (3) significant architectural characteristic. (SFFAS 6, par. 57)
               Multiuse heritage assets are heritage assets that are predominately used in general
               government operations (e.g., buildings such as the main Treasury building, which is used as
               an office building). (SFFAS 16, par. 6; OMB Bulletin 01-09, p. 23, section 3.3)

230. If the predominant use of the heritage asset(s) is in
     general government operations, is the acquisition,
     betterment, or reconstruction of the asset(s) capitalized as
     general PP&E and depreciated over its useful life?
     (SFFAS 16, par. 6 & 9; OMB Bulletin 01-09, p. 23,
     section 3.3; p. 98, section 10.2A)




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Balance Sheet 


Assets                                                           Yes,
                                                                  No,
General Property, Plant, & Equipment (Net)                                        Explanation
                                                                  or
(187 – 233)
                                                                 N/A

231. Does the entity also include a footnote disclosure
     explaining that “physical quantity” information for the
     multiuse heritage assets is included in supplemental
     stewardship reporting for heritage assets? (SFFAS 16,
     par. 9; OMB Bulletin 01-09, p. 23, section 3.3; p. 98,
     section 10.2A)

232. Are multiuse heritage assets acquired through donation
     or devise recognized as general PP&E at the assets’ fair
     value? (SFFAS 16, par. 11)

233. For multiuse heritage assets acquired through donation or
     devise, are the assets fair value also recognized as
     “nonexchange revenue,” as defined in SFFAS 7?
     (SFFAS No. 16, par. 11)




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                                                                  Yes,
Assets
                                                                  No,
                                                                                    Explanation
Software (234 – 262)                                               or
                                                                  N/A

                 Software includes the application and operating system programs, procedures,
                 rules, and any associated documentation pertaining to the operation of a
                 computer system or program.
                 “Internal use software” is software that is purchased from commercial vendors
                 “off the shelf,” internally developed, or contractor-developed solely to meet the
                 entity’s internal or operational needs. (SFFAS 10, par. 8)

234. Does the entity capitalize the cost of software when
     such software meets the following criteria?
      a. specifically identifiable
      b. determinate life of 2 years or more
      c. not intended for sale in the ordinary course of
         operations
      d. acquired or developed with the intention of being
         used by the entity
      e. meets the criteria for general property, plant, and
         equipment in that it is used in providing goods and
         services (SFFAS 6, par. 17 & SFFAS 10, par. 15
         & 38)

235. Does the capitalized cost of internally developed
     software include the full cost (i.e., direct and indirect
     costs) incurred during the software development stage?
     (SFFAS 10, par. 16)




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Section III
Balance Sheet

                                                                                        Yes,
 Assets
                                                                                        No,
                                                                                                                Explanation
 Software (234 – 262)                                                                    or
                                                                                        N/A

 236. Are capitalized internally developed software
      development costs limited to costs incurred after the
      following steps have been taken?
        a. management authorizes and commits to a computer
           software project and believes that it is more likely
           than not that the project will be completed and the
           software will be used to perform the intended
           function with an estimated service life of 2 years or
           more
        b. the conceptual formulation, design, and testing of
           possible software project alternatives (i.e.,
           preliminary design stage) have been completed.
           (SFFAS 10, par. 16)

 237. Do software capitalization costs include costs for new
      software32 and documentation manuals? (SFFAS 10,
      par. 17)

 238. Do the capitalized costs for commercial off-the-shelf
      (COTS) software include the amount paid to the
      vendor? (SFFAS 10, par. 18)

 239. Do the capitalized costs for contractor-developed
      software include the amount paid to a contractor to
      design, program, install, and implement the software?
      (SFFAS 10, par. 18)

 240. Does the entity capitalize material internal costs
      incurred to implement the COTS or contractor-
      developed software and otherwise make it ready for
      use? (SFFAS 10, par. 18)




32
 Examples of costs for new software are salaries of programmers, systems analysts, project managers, and administrative personnel; associated
employee benefits; outside consultants’ fees; rent; and supplies.

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                         Page 73
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Section III
Balance Sheet

                                                                                          Yes,
 Assets
                                                                                          No,
                                                                                                                   Explanation
 Software (234 – 262)                                                                      or
                                                                                          N/A

 241. Does the entity expense as incurred all data conversion
      costs for internally developed, contractor-developed, or
      COTS software as well as the cost to develop or obtain
      software that allows for access or conversion of existing
      data to the new software? (SFFAS 10, par. 19)

 242. Does the entity expense costs incurred after the
      completion of final acceptance testing? (SFFAS 10,
      par. 20)

 243. Does the entity treat software that serves both internal
      uses and stewardship purposes33 as internal use software
      and capitalize it to the extent such software meets
      criteria for general PP&E? (SFFAS 10, par. 21)

 244. Is computer software that is integrated into and
      necessary to operate general PP&E,34 rather than
      perform an application, considered part of the PP&E of
      which it is an integral part, and is it capitalized and
      depreciated accordingly? (SFFAS 10, par. 22)

 245. If the entity purchased software as part of a package of
      products and services, does it use a reasonable estimate
      of the relative fair value of the individual elements in
      allocating the cost as capitalizable or noncapitalizable
      (i.e., expense) elements? (SFFAS 10, par. 23)

 246. If the entity purchased software as part of a package of
      products and services, does it expense software costs
      that are not susceptible to allocation between
      maintenance and relatively minor enhancements?
      (SFFAS 10, par. 23)




33
   Software that serves both internal uses and stewardship purposes is referred to as multiuse software. An example is a global positioning system used
in connection with national defense activities and general operating activities and services.
34
   For example, such software could include software necessary to operate airport radar and computer operated lathes.

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                            Page 74
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Balance Sheet 


                                                                 Yes,
Assets
                                                                 No,
                                                                                  Explanation
Software (234 – 262)                                             or
                                                                 N/A

247. Has the entity established capitalization thresholds for
     its internal-use software including bulk purchases of
     software programs and modules or components of a
     total software system? (SFFAS 10, par. 24)

248. Does the entity capitalize the acquisition cost of
     enhancements to existing internal-use software, as well
     as related modules, when it is more likely than not that
     they will result in significant additional capabilities?
     (SFFAS 10, par. 25)

249. Does the entity expense, in the period incurred, the cost
     of minor enhancements resulting from ongoing systems
     maintenance as well as the purchase of enhanced
     versions of software for a minimal charge?
     (SFFAS 10, par. 26)

250. Are costs incurred solely to repair a design flaw or to
     perform minor upgrades that may extend the useful life
     of the software without adding capabilities expensed?
     (SFFAS 10, par. 27)

251. Does the entity recognize a loss upon impairment of
     computer software if either of these
     postimplementation/operational conditions apply?
      a. the software is no longer expected to provide
         substantive service potential and will be removed
         from service
      b. a significant reduction occurs in the capabilities,
         functions, or uses of the software (or module
         thereof) (SFFAS 10, par. 28 & 29)




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Section III 

Balance Sheet 


                                                                 Yes,
Assets
                                                                 No,
                                                                                  Explanation
Software (234 – 262)                                             or
                                                                 N/A

252. If impaired software is to remain in use, is the loss due
     to impairment measured as the difference between the
     book value and either of the following amounts?
      a. the cost to acquire software that would perform
         similar remaining functions (i.e., unimpaired
         functions)
      b. the portion of book value attributable to the
         remaining functional elements of the software
         (SFFAS 10, par. 29)

253. If the loss due to impairment cannot be determined, is
     the book value of the software amortized over the
     remaining useful life of the software?
     (SFFAS 10, par. 29)

254. If impaired software is to be removed from use, is the
     loss due to impairment measured as the difference
     between the book value and any net realizable value
     (NRV)? (SFFAS 10, par. 30)

255. In situations of impaired software to be removed from
     use, does the entity transfer the NRV, if any, to an
     appropriate asset account until such time as the software
     is disposed of and the NRV realized?
     (SFFAS 10, par. 30)

256. If the entity’s managers conclude that it is no longer
     “more likely than not” that developmental software or a
     module thereof will be completed and placed in service,
     is the accumulated book value or the balance in a work
     in process account, if applicable, reduced to reflect the
     expected NRV and a loss recognized?
     (SFFAS 10, par. 31)

257. Does the entity amortize capitalized internal use
     software systematically and rationally over the
     estimated useful life of the software?
     (SFFAS 10, par. 32)



October 2003              GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft            Page 76 

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Section III 

Balance Sheet 


                                                                 Yes,
Assets
                                                                 No,
                                                                                  Explanation
Software (234 – 262)                                             or
                                                                 N/A

258. Does amortization of each module or component of a
     software project begin when that module or component
     has been successfully tested? (SFFAS 10, par. 33)

259. If the use of a module is dependent on the completion of
     another module(s), does the amortization begin only
     when both that module and the other module(s) have
     successfully completed testing? (SFFAS 10, par. 33)

260. Are additions to the book value or changes in useful life
     of capitalized software treated prospectively (i.e.,
     during the period of change and future periods only)
     when the software is amortized? (SFFAS 10, par. 34)

261. When the entity replaces existing internal-use software
     with new software, is the unamortized cost of the old
     software expensed when the new software has
     successfully completed testing? (SFFAS 10, par. 34)

262. Does the entity disclose, if material, the following
     information regarding its capitalized software?
      a. the cost, associated amortization, and book value
      b. the estimated useful life for each major class of
         software
      c. the method(s) of amortization (SFFAS 10, par. 35;
         SFFAS 6, par. 45)




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Balance Sheet 



Assets                                                               Yes,
                                                                     No,
Other Assets         (263 – 268)                                                     Explanation
                                                                     or
                                                                     N/A

263. Does the entity include under the “other” assets category
     assets that are not reported in a separate category on the
     face of the balance sheet? (OMB Bulletin 01-09, p. 23,
     section 3.3)

264. Are other assets listed and described in a note to the
     financial statements and broken out by major
     homogenous components and intragovernmental versus
     other (nonfederal) entity assets)? (OMB Bulletin 01-09,
     p. 78, section 9.11)

               Advances are cash outlays made by a federal entity to its employees, contractors,
               grantees, or others to cover the recipient’s anticipated expenses or as advance
               payments for the costs of goods and services acquired by an entity. (SFFAS 1,
               par. 57 & OMB Bulletin 01-09, p. 23, section 3.3)
               Prepayments are payments made by a federal entity to cover certain periodic
               expenses before those expenses are incurred (SFFAS 1, par. 58;
               OMB Bulletin 01-09, p. 23, section 3.3)
               Progress payments on work in progress are not included in advances and
               prepayments (OMB Bulletin 01-09, p. 23, section 3.3)

265. Are advances and prepayments recorded as assets and
     disclosed in the notes to the financial statements?
     (SFFAS 1, par. 59; OMB Bulletin 01-09, p. 23,
     section 3.3)

266. Are amounts of advances or prepayments that are subject
     to a refund transferred to accounts receivable?
     (SFFAS 1, par. 59)

267. Are advances and prepayments paid out reported
     separately as assets and not netted against the liability for
     advances and prepayments that the entity received?
     (SFFAS 1, par. 60)

268. Are advances and prepayments that are made to federal
     entities accounted for and reported separately from those
     made to nonfederal entities? (SFFAS 1, par. 61)

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Balance Sheet


                                                                                           Yes,
 Liabilities
                                                                                            No,                     Explanation
 Liabilities in General (269 – 272)                                                          or
                                                                                            N/A


                  Liabilities of the federal agencies are reported under two major categories: (1)
                  liabilities covered by budgetary resources35 and (2) liabilities not covered by
                  budgetary resources.36 Within each of these two categories, liabilities are classified
                  as (1) intragovernmental liabilities, which are amounts owed to other federal entities
                  or (2) governmental liabilities, which are amounts owed to nonfederal entities by the
                  federal government or an entity within the federal government. (SFFAS 1, par. 21;
                  SFFAS 5, footnote 1 in summary; OMB Bulletin 01-09, p. 24, section 3.4 & pp. 78 &
                  79, section 9.12)

 269. Are liabilities covered by budgetary resources and
      liabilities not covered by budgetary resources combined
      on the face of the balance sheet? (OMB Bulletin 01-09,
      p. 17, section 3.1, p. 24, section 3.4 & pp. 78 & 79,
      section 9.12)




35
   Liabilities covered by budgetary resources are liabilities covered by realized budgetary resources as of the balance sheet date. Budgetary resources
include (1) new budget authority, (2) unobligated balances of budgetary resources at the beginning of the year or net transfers of prior year balances
during the year, (3) spending authority from offsetting collections (credited to an appropriation or fund account), (4) recoveries of unexpired budget
authority through downward adjustments of prior year obligations, and (5) permanent indefinite appropriations or borrowing authority, which have
been enacted and signed into law as of the balance sheet date, provided that the resources may be apportioned by OMB without further action by the
Congress and without a contingency having to be met.
36
   Liabilities not covered by budgetary resources are liabilities for which congressional action is needed before budgetary resources can be provided.

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 79
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Section III
Balance Sheet

                                                                                         Yes,
 Liabilities
                                                                                          No,                    Explanation
 Liabilities in General (269 – 272)                                                        or
                                                                                         N/A


 270. Are the amounts and types of liabilities not covered by
      budgetary resources disclosed? (SFFAS1, par. 80 & 86;
      OMB Bulletin 01-09, p. 17, section 3.1 & p. 24,
      section 3.4)

 271. Does the federal entity recognize a liability for
      probable37 and measurable38 future outflows or other
      sacrifices of resources arising from one or more of the
      following events?
        a. past exchange transactions
        b. government-related events, such as a federal entity
           accidentally causing damage to private property
        c. government-acknowledged events, such as natural
           disasters, for which the government has taken
           formal responsibility for the related costs
        d. nonexchange transactions that, according to current
           law and applicable policy, are unpaid amounts due
           as of the reporting date (SFFAS 5, par. 19–34;
           OMB Bulletin 01-09, p. 23, section 3.4)

 272. Are liabilities recognized when incurred regardless of
      whether they are covered by available budgetary
      resources (including those liabilities related to
      appropriations canceled under “M” account legislation)?
      (OMB Bulletin 01-09, p. 24, section 3.4)




37
   Probable refers to that which can be reasonably expected or is believed to be more likely than not on the basis of available evidence or logic.
However, in the context of assessing the outcome of matters of pending or threatened litigation and unasserted claims and recognizing an associated
liability, “probable” refers to that which is likely, not to that which is “more likely than not.”
38
   Measurable refers to that which can be quantified in monetary units with sufficient reliability to be reasonably estimable.

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                                                                  Yes,
Liabilities                                                                        Explanation
                                                                  No,
Accounts Payable and                                               or
Interest Payable (273 – 280)                                      N/A

               Accounts payable are amounts owed by a federal entity for goods and services
               received from, progress in contract performance made by, and rents due to other
               entities. (SFFAS 1, par. 74; OMB Bulletin 01-09, p. 24, section 3.4)

273. Do accounts payable exclude amounts related to
     ongoing continuous expenses, such as salary and related
     benefits expense, which are classified as other current
     liabilities? (SFFAS 1, par. 75)

274. Are (intragovernmental) accounts payable owed to other
     federal agencies reported separately from those owed to
     the public? (SFFAS 1, par. 76; OMB Bulletin 01-09,
     p. 18, section 3.2 & p. 24, section 3.4)

275. When an entity accepts title to goods, whether the goods
     are delivered or in transit, does the entity recognize a
     liability for the unpaid cost of goods?
     (SFFAS 1, par. 77)

276. If invoices for goods, for which the entity has accepted
     the title, are not available, does the entity estimate the
     amount owed? (SFFAS 1, par. 77)

277. For facilities or equipment constructed or manufactured
     by contractors or grantees according to agreements or
     contract specifications, are amounts recorded as payable
     based on an estimate of work completed under the
     contract or the agreement in accordance with the federal
     entity's engineering and management evaluation of
     actual performance progress and incurred costs?
     (SFFAS 1, par. 78 & 79)

278. Does the entity disclose accounts payable not covered
     by budgetary resources? (SFFAS 1, par. 80;
     OMB Bulletin 01-09, p. 24, section 3.4; p. 78,
     section 9.12)




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                                                                   Yes,
Liabilities                                                                      Explanation
                                                                   No,
Accounts Payable and                                               or
Interest Payable (273 – 280)                                       N/A

279. Is interest incurred but unpaid on borrowed funds, late
     payments, and refunds recognized as interest payable
     and reported as a liability at the end of each period?
     (SFFAS 1, par. 81; OMB Bulletin 01-09, p. 24,
     section 3.4)

280. Is interest payable to federal entities reported separately
     from interest payable to the public? (SFFAS 1, par. 82)




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Balance Sheet


                                                                                              Yes,
                                                                                               No,                     Explanation
 Liabilities
                                                                                                or
 Liabilities for Loan Guarantees (281 – 294)
                                                                                              N/A

                    A loan guarantee is any guarantee, insurance (but not deposit insurance), or other
                    pledge with respect to the payment of all or part of the principal or interest on any
                    debt obligation of a nonfederal borrower to a nonfederal lender. (SFFAS 2, app. C)
                    The Federal Credit Reform Act of 1990 requires federal entities to estimate and
                    budget for the costs arising from default of guaranteed loans made after fiscal year
                    (FY) 1991 (i.e., post 1991). (SFFAS 2, par. 7)

 281. Is the present value of estimated net cash outflows from
      post-1991 (i.e., committed after September 30, 1991)
      loan guarantees recognized as a liability? (SFFAS 2,
      par. 7 & 23)

 282. Does the entity disclose by loan program the face value
      of guaranteed loans outstanding and the amount of
      outstanding principal guaranteed? (SFFAS 2, par. 23;
      OMB Bulletin 01-09, pp. 60, 65, & 72, section 9.8,
      item J)

 283. Does the entity disclose by loan program the estimated
      liabilities39 arising from post-1991 loan guarantees?
      (OMB Bulletin 01-09, pp. 60, 61, 65, & 72, section 9.8,
      item K)

 284. Is a liability for a pre-1992 (i.e., committed before
      October 1, 1991) loan guarantee recognized when it is
      more likely than not that the loan guarantee will require
      a future cash outflow to pay a default claim? (SFFAS 2,
      par. 39 & app. B, part IV A)

 285. Does the entity disclose by loan program the estimated
      liabilities arising from pre-1992 loan guarantees?
      (OMB Bulletin 01-09, p. 25, section 3.4; pp. 60 & 72,
      section 9.8, item K)




39
     The present value of the estimated net cash flows (outflows less inflows) to be paid by the entity arising from loan guarantees.

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Balance Sheet

                                                                                             Yes,
                                                                                              No,                      Explanation
 Liabilities
                                                                                               or
 Liabilities for Loan Guarantees (281 – 294)
                                                                                              N/A

 286. Are the liabilities for the pre-1992 loan guarantees
      reestimated each year as of the date of the financial
      statements? (SFFAS 2, par. 39)

 287. Does the entity disclose, by loan program, whether pre-
      1992 loan guarantees are reported on a present-value
      basis40 or under the allowance-for-loss method?41
      (OMB Bulletin 01-09, p. 68, section 9.8, item A,
      4th par.)

 288. When the total loan guarantee liability for all of the
      credit programs is negative, is this reported as an asset?
      (OMB Bulletin 01-09, p. 25, section 3.4)

 289. If loan guarantee liability is the result of both positive
      and negative amounts of the various components, is the
      total shown as a liability, and are the negative
      components (of the loan guarantee liability) disclosed?
      (OMB Bulletin 01-09, p. 25, section 3.4)

 290. When post-1991 loan guarantees are modified, is the
      existing book value of the related liability changed to an
      amount equal to the present value of net cash outflows
      that are projected under the modified terms from the
      time of the modification to the loan’s maturity, and
      discounted at the original discount rate?42 (SFFAS 2,
      par. 50 & app. B, part III D(4); SFFAS 19, par. 7(d))




40
   Under the present-value method, the liability for loan guarantees is the present value of the expected net cash outflows due to the loan guarantees.
41
   Under the allowance-for-loss method, the liability for loan guarantees is the amount the agency estimates will more likely than not require future
cash outflow to pay default claims.
42
   The original discount rate is the rate that was originally used to calculate the present value of the liability when the guaranteed loans were disbursed,
after adjusting for the interest rate reestimate.

October 2003                         GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                               Page 84
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Balance Sheet 


                                                                  Yes,
                                                                  No,             Explanation
Liabilities
                                                                  or
Liabilities for Loan Guarantees (281 – 294)
                                                                  N/A

291. When pre-1992 loan guarantees are directly modified,
     does the following occur?
      a. the loan guarantees are transferred from the
          liquidating account to a financing account
      b. the existing book value of the liability of the
          modified loan guarantees is changed to an amount
          equal to their postmodification liability (i.e., the
          present value of the net cash outflows under
          postmodification terms discounted at the current
          Treasury rate) (SFFAS 2, par. 51 & app. B, part IV
          B (2) & (4))

292. When pre-1992 loan guarantees are indirectly modified,
     does the following occur?
      a. The loan guarantees are kept in a liquidating
         account.
      b. The related liability is reassessed and adjusted to
         reflect any change in the liability resulting from the
         modification. (SFFAS 2, par. 51)

293. Are subsequent modifications of pre-1992 loan
     guarantees treated as modifications of post-1991 loan
     guarantees? (SFFAS 2, par. 51)

294. If a post-1991 or pre-1992 loan is sold with a recourse
     provision, is the present value (discounted at the
     Treasury rate in effect at the time of the sale) of the
     estimated losses recognized as a subsidy expense and a
     loan guarantee liability? (SFFAS 2, par. 54 & app. B,
     part I F(3))




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Balance Sheet


                                                                                         Yes,
                                                                                          No,
 Liabilities                                                                                                     Explanation
                                                                                           or
 Lease Liabilities (295 – 299)
                                                                                         N/A

                 Capital leases are leases that transfer substantially all of the benefits and risks of
                 ownership to the lessee. (SFFAS 5, par. 43)

 295. Is the amount recorded by the lessee as a liability under
      a capital lease arrangement the present value of rental
      and other minimum lease payments (excluding
      executory costs) during the lease term?
      (SFFAS 5, par. 44)

 296. If the present value of the rental and other minimum
      lease payments during the lease term exceeds the fair
      value of the leased property, is the liability recorded as
      the fair value43 of the property at the inception of the
      lease? (SFFAS 5, par. 44)

 297. Does the entity use the applicable Treasury borrowing
      rate to determine the discount rate charged on a capital
      lease unless both of the following apply?
        a. It is practicable for the lessee to learn the implicit
           rate computed by the lessor.
        b. The implicit rate is less than the Treasury borrowing
           rate. (SFFAS 5, par. 45)

 298. During the lease term, is each minimum lease payment
      allocated between a reduction of the obligation and
      interest expense so as to produce a constant periodic
      rate of interest on the remaining balance of the liability?
      (SFFAS 5, par. 46)




43
  Fair value is the price for which an asset could be bought or sold in an arm’s-length transaction between unrelated parties. Roman L. Well and
Patrick C. O’Brien, Accounting: The Language of Business, 9th ed. (Sun Lakes, Arizona: Thomas Horton and Daughters, 1994).

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 86
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Balance Sheet 


                                                                 Yes,
                                                                 No,
Liabilities                                                                      Explanation
                                                                 or
Lease Liabilities (295 – 299)
                                                                 N/A

299. Does the entity disclose, in a note to the financial
     statements, the following information about its capital
     leases?
      a. gross amounts of assets under capital lease by major
         asset category
      b. description of the lease arrangements, for example,
         future funding commitments, lease terms, renewal
         options, escalation clauses, restrictions,
         amortization periods
      c. future payments due, by major asset category, and
         deductions for imputed interest and executory costs
         for all noncancelable leases with terms longer than
         1 year
      d. a breakout of portions of the capital lease liability
         covered by budgetary resources and not covered by
         budgetary resources (OMB Bulletin 01-09,
         p. 84-85, section 9.17)




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Balance Sheet


                                                                                        Yes,
 Liabilities
                                                                                        No,
 Federal Debt and Related Interest                                                                             Explanation
                                                                                         or
 (300 – 310)
                                                                                        N/A

                 Debts are amounts borrowed from the Treasury, the Federal Financing Bank, other
                 federal agencies, or the public under general or special financing authority such as
                 Treasury bills, notes, bonds, and Federal Housing Administration (FHA) debentures.
                 (SFFAS 5, par. 47; OMB Bulletin 01-09, p. 25, section 3.4)

 300. Does the entity accounting for federal debt identify the
      amount of the outstanding debt liability at any given
      time and the related interest cost for each accounting
      period? (SFFAS 5, par. 48)

 301. Are fixed-value securities with known redemption or
      maturity amounts at time of issue valued at their
      original face (par) value net of any unamortized
      discount or premium? (SFFAS 5, par. 50)

 302. For fixed-value securities, is either the straight line or
      interest method44 of discount or premium amortization
      used in the following cases?
        a. short-term securities with a maturity of 1 year or
           less
        b. longer term securities, where the difference between
            the amount of amortization under the interest and
            straight-line methods is immaterial
            (SFFAS 5, par. 50)

 303. For fixed-value securities, is the interest method used
      for amortizing any discount or premium on all cases
      other than those described in the previous question?
      (SFFAS 5, par. 51)

 304. If the entity has issued variable value securities of
      unknown redemption or maturity values, are they
      appraised at their original value and periodically
      revalued on the basis of the regulations or offering
      language? (SFFAS 5, par. 52)


44
  The interest method for amortizing a bond premium or discount reduces the discount or premium by the difference between the effective interest and
stated interest on the bond. (SFFAS 1, app B, tables 1 & 2)

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                         Page 88
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Balance Sheet 


                                                                 Yes,
Liabilities
                                                                 No,
Federal Debt and Related Interest                                                Explanation
                                                                 or
(300 – 310)
                                                                 N/A

305. Are old currencies issued by the federal government and
     not yet redeemed or written off identified as a
     noninterest bearing federal debt liability at face value?
     (SFFAS 5, par. 55)

306. Is all debt owed to Treasury, the Federal Financing
     Bank, or other federal agencies reported under
     intragovernmental liabilities on the balance sheet and
     disclosed by category? (OMB Bulletin 01-09, p. 18 &
     pp. 79-80, section 9.13)

307. Are the beginning balances, net borrowings, and ending
     balances of debt disclosed by the following categories?
      a. total Treasury debt (reported by the Treasury
         Department only) broken out by government
         accounts and debt held by the public
      b. total agency debt issued under special financing
         authority (e.g., Federal Housing Administration
         (FHA) debentures and Tennessee Valley Authority
         (TVA) bonds) broken out by debt held by
         government accounts and debt held by the public
      c.   other debt broken out by debt owed to the Treasury,
           debt owed to the Federal Financing Bank, and debt
           owed to other federal agencies
           (OMB Bulletin 01-09, pp. 79 & 80, section 9.13)

308. Is all debt owed to the public reported and disclosed as
     such? (OMB Bulletin 01-09, p. 18 & pp. 79-80,
     section 9.13)

309. Are the names of the agencies disclosed, other than
     Treasury or the Federal Financing Bank, to which
     intragovernmental debt is owed, and are the amounts
     disclosed? (OMB Bulletin 01-09, p. 80, section 9.13)




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Section III 

Balance Sheet 


                                                                Yes,
Liabilities
                                                                No,
Federal Debt and Related Interest                                                Explanation
                                                                 or
(300 – 310)
                                                                N/A

310. Is other information relative to debt disclosed (e.g.,
     redemption or call of debt owed to the public before
     maturity dates, write-offs of debts owed to Treasury or
     the Federal Financing Bank)? (OMB Bulletin 01-09,
     p. 80, section 9.13)




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                                                                   Yes,
Liabilities
                                                                   No,
                                                                                    Explanation
Pensions, Other Retirement Benefits, and                            or
Postemployment Benefits (311 - 318)
                                                                   N/A

               Federal employee and veterans benefits include the actuarial portion of pensions,
               other retirement benefits, and other postemployment benefits. They do not include
               liabilities related to ongoing continuous expenses such as employees’ accrued salary,
               accrued annual leave, unpaid portions of employee benefits, and other benefits that
               are currently due. These items are reported under the “other liabilities” line item.
               (SFFAS 1, par. 83 & 84; SFFAS 5, par. 56; OMB Bulletin 01-09, p. 25, section 3.4)
               In the context of accounting for pensions, other retirement benefits (ORB), and other
               postemployment benefits, the “administrative entity” manages and accounts for the
               pension or other employee plan, while the “employer entity” employs federal
               workers and generates employee costs, for which it would typically receive a salary
               and expense appropriation. (SFFAS 5, par. 57, footnote 38)
               The “aggregate entry age normal” actuarial cost method is one under which the
               expenses or liabilities arising from the actuarial present value of projected pension
               benefits are allocated on a level basis over the earnings or the service of the group
               between entry age and assumed exit ages. The portion of the actuarial present value
               allocated to a valuation year is called “normal cost.” (SFFAS 5, par. 64)

311. Is the aggregate entry age normal actuarial cost method
     used to calculate, for the administrative entity financial
     statements, the liabilities arising from pension and ORB
     expenses? (SFFAS 5, par. 64 & 82)

312. If other actuarial cost methods are used because the
     results are not materially different, does the entity
     provide an explanation why aggregate entry age normal
     is not used? (SFFAS 5, par. 64 & 82)

313. Does the administrative entity disclose the assumptions
     used to calculate the liability for pensions, other
     retirement benefits, and other postemployment benefits?
     (SFFAS 5, par. 67 & 83; OMB Bulletin 01-09, p. 25,
     section 3.4; p. 80, section 9.14)




October 2003                GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                 Page 91 

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Section III 

Balance Sheet 


                                                                 Yes,
Liabilities
                                                                 No,
                                                                                 Explanation
Pensions, Other Retirement Benefits, and                         or
Postemployment Benefits (311 - 318)
                                                                 N/A

314. If the assumptions for a pension plan differ from the
     assumptions used by the three primary plans—Civil
     Service Retirement System (CSRS), Federal Employees
     Retirement System (FERS), and Military Retirement
     System (MRS)—does the administrative entity
     disclose how and why the assumptions differ from those
     of the primary plans? (SFFAS 5, par. 67;
     OMB Bulletin 01-09, p. 80, section 9.14)

315. Does the administrative entity report pension and ORB
     assets separately from liabilities as opposed to netting
     them out? (SFFAS 5, par. 68 & 85)

316. Does the administrative entity carry pension and ORB
     assets at their acquisition cost, adjusted for
     amortization, if appropriate? (SFFAS 5, par. 68 & 85)

317. Does the administrative entity disclose the market value
     of pension and ORB investments in market-based and
     marketable securities? (SFFAS 5, par. 68 & 85)

318. Does the employer entity recognize the long-term other
     postemployment benefits liability as the present value of
     future payments discounted at the Treasury borrowing
     rate for securities of similar maturity?
     (SFFAS 5, par. 95)




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Balance Sheet 



                                                                     Yes,
Liabilities
                                                                     No,
                                                                                       Explanation
Other Liabilities (319 – 352)                                         or
                                                                     N/A

               Unless they are reported separately, other liabilities cover liabilities not recognized
               in other categories. They may include, but are not limited to: capital leases,
               insurance, advances and prepayments, deposit funds held in escrow, accrued
               liabilities related to ongoing continuous expenses such as federal employee salaries
               and accrued employee annual leave, and estimated losses for claims and other
               contingencies. Claims and other contingencies include indemnity agreements,
               adjudicated claims, and commitments to international institutions.
               (SFFAS 1, par. 83-86; OMB Bulletin 01-09, p. 26, section 3.4)

319. Does the entity separately report items within other
     liabilities if the amounts are material?
     (OMB Bulletin 01-09, p. 26, section 3.4)

320. Do all federal insurance and guarantee programs (except
     social insurance and loan guarantee programs)
     recognize a liability for unpaid claims incurred resulting
     from insured events that have occurred as of the
     reporting date? (SFFAS 5, par. 104;
     OMB Bulletin 01-09, p. 26, section 3.4)

321. Do federal insurance programs accrue a contingent
     liability when an existing condition, situation, or set of
     circumstances involving uncertainty as to possible loss
     exists, and when the following conditions apply?
      a. the uncertainty will be resolved when one or more
         probable future events occur or fail to occur.
      b. future outflow or other sacrifice of resources is
         probable and measurable. (SFFAS 5, par. 104 &
         108; OMB Bulletin 01-09, pp. 26 & 27, section 3.4)

322. Does the entity also recognize a liability for future life
     insurance policy benefits (such as death or disability)?
     (SFFAS 5, par. 104; OMB Bulletin 01-09, p. 27,
     section 3.4)




October 2003                GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                   Page 93 

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Section III 

Balance Sheet 


                                                                     Yes,
Liabilities
                                                                      No,
                                                                                       Explanation
Other Liabilities (319 – 352)                                          or
                                                                      N/A

323. When insurance payments and losses extend beyond the
     current year, does the liability at the end of the year
     represent net losses calculated on a present-value basis
     to reflect the time value of money? (SFFAS 5, par. 109)

324. Does the entity report under “required supplementary
     information” (RSI) the major assumptions and “risks
     assumed” (i.e., the present value of unpaid expected
     losses net of associated premiums based on risk inherent
     in the insurance or guarantee coverage) for all
     sponsored insurance programs (except for social
     insurance, life insurance, and loan guarantee programs)?
     (SFFAS 5, par. 105 & 106; SFFAS 25, par. 4)

325. Does the entity also report under RSI the indicators of
     the range of uncertainty around insurance-related
     estimates and sensitivity of the estimates to changes in
     major assumptions? (SFFAS 5, par. 114; SFFAS 25,
     par.4)

               The liability for future policy benefits is the present value of future outflows to be
               paid to (or on behalf of) policyholders, less the present value of future related
               premiums. In general, for whole life policies, the liability for future policy benefits
               should be no less than the cash surrender value that accrues to the benefit of the
               policyholder. (SFFAS 5, par. 116)




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Section III
Balance Sheet

                                                                                            Yes,
 Liabilities
                                                                                             No,
                                                                                                                    Explanation
 Other Liabilities (319 – 352)                                                                or
                                                                                            N/A

 326. Are liabilities for future benefits of whole life insurance
      policies reported and disclosed in accordance with
      private sector standards (i.e., Financial Accounting
      Standards Board (FASB) Statement of Accounting
      Standards (SFAS) 60, 97, & 120; American Institute of
      Certified Public Accountants (AICPA) Statement of
      Position (SOP) 95-1)? (SFFAS 5, par. 117;
      OMB Bulletin 01-09, p. 85, section 9.18)

 327. Does the liability for future benefits relating to
      participating life insurance contracts equal the sum of
      the following amounts?
         a. the net level premium reserve for death and
            endowment policy benefits
         b. liability for terminal dividends and
         c. any premium deficiency45 (SFFAS 5, par. 118 &
            120)

 328. Has the entity made an assessment to compare the
      liability for future policy benefits using actuarial
      assumptions applicable at the time the contract was
      made (contract assumptions) with the liability for future
      policy benefits using assumptions that consider the
      following factors?
         a. current economic conditions (i.e., current and
            expected investments and expected long-term
            yields)
         b. experience (i.e., mortality, morbidity, and
            termination rates) (SFFAS 5, par. 119)




45
  A premium deficiency occurs if the liability for future policy benefits using current conditions exceeds the liability for future policy benefits using
contract conditions.

October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                               Page 95
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Section III
Balance Sheet

                                                                                           Yes,
    Liabilities
                                                                                            No,
                                                                                                                   Explanation
    Other Liabilities (319 – 352)                                                            or
                                                                                            N/A

    329. Does the entity separately disclose the components46 of
         the liability for future policy benefits of whole life
         insurance contracts along with a description of each
         amount and explanation of its projected use and any
         other potential uses? (SFFAS 5, par. 121;
         OMB Bulletin 01-09, p. 85, section 9.18)

    330. Does the reporting entity disclose and break out the
         following items?
           a. the portion of other liabilities covered by budgetary
              resources and the portion not covered by budgetary
              resources
           b. the portion of other liabilities payable to federal
              entities (i.e., intragovernmental liabilities) and the
              portion payable to nonfederal entities
           c. the portion of other liabilities that are noncurrent
              and the portion that are current (SFFAS 1, par. 85
              & 86; OMB Bulletin 01-09, pp. 78 & 79,
              section 9.l2 & pp. 81 & 82, section 9.16)

    331. Does the agency record “unearned revenue” as a
         liability if it requests advances or progress payments
         prior to receipt of cash, and it records the amounts?
         (SFFAS 7, par. 37)

    332. Are amounts payable for refunds, refund offsets,47 and
         drawbacks48 recognized as liabilities when measurable
         and legally payable under established processes of the
         collecting entity? (SFFAS 7, par. 57)




46
     The net-level premium reserve for a death and endowment policy and the liability for terminal dividends.
47
     Refund offsets are amounts withheld from refunds on behalf of other agencies. (OMB Circular No. A-129 (revised), app. A, Part V, section 2.c.i. (1)
)
48
  Drawbacks are refunds payable on all or part of duties paid on imported goods that are subsequently exported or destroyed. (SFFAS 7, app. C,
glossary)

October 2003                          GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 96
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Section III 

Balance Sheet 


                                                                Yes,
Liabilities
                                                                No,
                                                                                 Explanation
Other Liabilities (319 – 352)                                    or
                                                                N/A

333. Do amounts payable for refunds include refund claims
     filed by the taxpayer when the government has
     determined the amount refundable and identified the
     payee? (SFFAS 7, par. 57)

334. Are amounts payable for refunds with respect to returns
     or claims filed as of the end of the reporting period
     included in accounts payable for refunds if they do not
     require specific approval before payment? (SFFAS 7,
     par. 57)

335. For claims filed for refunds where specific
     administrative actions are required before payments can
     be made, are the amounts excluded from being
     recognized as a liability if the required administrative
     actions are not yet complete as of the close of the
     reporting period, even if reasonably estimable?
     (SFFAS 7, par. 58.1)

336. Are unasserted claims for refunds by taxpayers or
     importers, such as unfiled claims for refunds or
     drawbacks for which no claim has been filed, excluded
     from being recognized as a liability, even if reasonably
     estimable? (SFFAS 7, par. 58.2)

337. Are amounts voluntarily made as deposits, such as those
     made to stop the accrual of interest or those made
     pending settlements and judgments, separately
     recognized as deposit liabilities? (SFFAS 7, par. 59)




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Section III
Balance Sheet

                                                                                           Yes,
 Liabilities
                                                                                           No,
                                                                                                                   Explanation
 Other Liabilities (319 – 352)                                                              or
                                                                                           N/A

                  A loss contingency is an existing condition, situation, or set of circumstances
                  involving uncertainty as to possible loss to an entity. The uncertainty should
                  ultimately be resolved when one or more future events occur or fail to occur.
                  (SFFAS 5, par. 35; OMB Bulletin 01-09, pp. 85 & 86, section 9.19)

 338. Does the entity recognize estimated losses for claims or
      other contingencies if all of the following conditions
      apply?
         a. a past event or exchange transaction has occurred
         b. a future outflow or other sacrifice of resources is
            probable49
         c. the future outflow or sacrifice of resources is
            measurable (e.g., the federal entity’s management
            determines an estimated settlement amount).
            (SFFAS 5, par. 38; SFFAS 6, par. 91; SFFAS 12,
            par. 10 & 11; OMB Bulletin 01-09, p. 26,
            section 3.4)

 339. When determining an estimated contingent liability, if
      some amount within a range of amounts is a better
      estimate than any other amount within the range, is that
      amount recognized? (SFFAS 5, par. 39)




49
 In the context of pending or threatened litigation, “probable” is taken to mean “likely;” otherwise, “probable” refers to that which is believed to be
more “likely than not” or can be reasonably expected.

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Balance Sheet

                                                                                             Yes,
 Liabilities
                                                                                              No,
                                                                                                                      Explanation
 Other Liabilities (319 – 352)                                                                or
                                                                                             N/A

 340. When determining an estimated contingent liability, if
      no amount within a range of amounts is a better estimate
      than any other amount, does the entity recognize a
      minimum amount in the range and disclose a description
      of the nature of the contingency? (SFFAS 5, par. 39)

 341. If any one of the conditions for recognizing a contingent
      liability is not met and there is at least a “reasonable
      possibility” 50 that a loss or additional loss may be
      incurred, does the entity disclose the nature of the
      contingency51 and one of the following?
         a.    an estimate of the possible liability
         b. an estimate of the range of the possible liability
         c.    a statement that such an estimate cannot be made
               (SFFAS 5, par. 36, 38, 40, & 41)

 342. If information about remote contingencies, or related to
      remote contingencies, is included in general purpose
      federal financial reports,52 is the information labeled to
      avoid the misleading implication that there is more than
      a remote chance of a loss of that amount?
      (SFFAS 5, par. 42)




50
   The chance of a future event occurring is less than “probable” but more than “remote.”
51
   Examples of claims or other contingencies include (1) indemnity agreements-reimbursements due to licenses or contractors for losses incurred in
support of federal activities; (2) adjudicated claims (i.e., claims against the federal government that are in the process of judicial proceedings); and (3)
commitments to international institutions-payment due to international institutions.
52
   An example of information related to a remote contingency would be the total face amount of insurance and guarantees in force.

October 2003                         GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                               Page 99
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Section III
Balance Sheet

                                                                                          Yes,
 Liabilities
                                                                                          No,
                                                                                                                 Explanation
 Other Liabilities (319 – 352)                                                             or
                                                                                          N/A

 343. Does the entity disclose the following related to
      commitments and contingencies?
         a. an estimate of obligations related to canceled
            appropriations for which the reporting entity has a
            contractual commitment for payment
         b. amounts for contractual arrangements that may
            require future financial obligations
            (OMB Bulletin 01-09, p. 27, section 3.4 &
            pp. 85 & 86, section 9.19)

 344. If material, does the entity separately recognize a
      contingent liability for environmental clean-up costs53
      for PP&E if the following criteria apply?
         a. they are related to a past transaction or event
         b. the related costs are probable and measurable
            (SFFAS 5, par. 38 & SFFAS 6, par. 91-93;
            OMB Bulletin 01-09, pp. 25 & 26, section 3.4)

 345. When clean-up costs are paid, are the payments
      recognized as a reduction in the liability for clean-up
      costs? (SFFAS 6, par. 100)

 346. If clean-up costs have not been previously recognized,
      is a liability recognized for the portion of the estimated
      total clean-up cost that is attributable to either the
      portion of the physical capacity used or the portion of
      the estimated useful life that has passed since the PP&E
      was placed into service? (SFFAS 6, par. 104-106)

 347. Are any subsequent changes (made in periods following
      implementation) in estimated total clean-up cost
      immediately expensed (if costs are to be recovered
      though user charges) and reflected in the related liability
      balance? (SFFAS 6, par. 104)



53
  Clean-up costs are the costs of removing, containing, and/ or disposing of (1) hazardous waste from property, or (2) material and/or property that
consists of hazardous waste at permanent or temporary closure or shutdown of associated PP&E. (SFFAS 6, par. 85)

October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                            Page 100
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Section III 

Balance Sheet 


                                                                  Yes,
Liabilities
                                                                  No,
                                                                                  Explanation
Other Liabilities (319 – 352)                                      or
                                                                  N/A

348. When clean-up costs are recognized for the first time, is
     the offsetting charge for any liability for clean-up costs
     shown as a “prior-period adjustment?”
     (SFFAS 6, par. 105; SFFAS 21, par. 13)

349. Are the amounts of prior-period adjustments arising
     from belated recognition of clean-up costs and liabilities
     disclosed and, if possible, are amounts associated with
     current and prior periods noted? (SFFAS 6, par. 105;
     SFFAS 21, par. 13)

350. Does the entity also disclose the following information
     related to clean-up costs?
      a. the sources (i.e., applicable laws and regulations) of
          clean-up requirements
      b. the method for assigning estimated total clean-up
          costs to current operating periods (e.g., physical
          capacity versus passage of time)
      c. the unrecognized portion of estimated total clean-up
          costs associated with PP&E
      d. the material changes in total estimated clean-up
          costs due to changes in laws, technology, or plans
      e. the portion of change in an estimate that relates to
          prior-period operations
      f. the nature of estimates and the disclosure of
          information regarding possible changes due to
          inflation, deflation, technology, or applicable laws
          and regulations (SFFAS 6, par. 107-111;
          OMB Bulletin 01-09, p. 81, section 9.15)

               Social insurance programs provide for the maintenance and distribution of incomes
               and medical benefits during periods of unemployment, disability, and retirement.
               These programs are Social Security, Medicare, Railroad Retirement Benefits, Black
               Lung Benefits, and Unemployment Insurance. Expense and liability recognition for
               these programs is the same for both the consolidated governmentwide entity and for
               the component entities. (SFFAS 17, par. 2,4, 14, 15, 19, 30, & app. D, glossary)



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Section III 

Balance Sheet 


                                                                  Yes,
Liabilities
                                                                  No,
                                                                                 Explanation
Other Liabilities (319 – 352)                                     or
                                                                  N/A

351. Does the entity recognize a liability for social insurance
     benefits due and payable including claims incurred but
     not reported? (SFFAS 17, par. 22)

352. Does the liability for unemployment insurance include
     the following amounts?
      a. amounts due to states and territories for benefits
         they have paid to beneficiaries but for which they
         have not withdrawn funds from the federal
         unemployment trust fund (UTF) as of the fiscal year
         end
      b. estimated amounts to be withdrawn from UTF and
         benefits paid by states and territories after fiscal
         year end for compensatory days occurring prior to
         fiscal year end (SFFAS 17, par. 23)




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Section III 

Balance Sheet 



                                                                Yes,
Net Position
                                                                No,
                                                                                 Explanation
Unexpended Appropriations & Cumulative Results of                or
Operations (353 – 354)
                                                                N/A

353. Does the line item “unexpended appropriations” include
     both the portion of the entity’s appropriation
     represented by undelivered orders and unobligated
     balances? (OMB Bulletin 01-09, p. 27, section 3.5)

354. Does the line item “cumulative results of operations”
     include the following items?
      a. the net results of operations since inception
      b. the cumulative amount of prior-period adjustments
      c. the cumulative amount of donations and transfers of
          assets in and out without reimbursement
          (OMB Bulletin 01-09, p. 27, section 3.5)




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Section IV Statement of Net Cost


The questions related to the Statement of Net Cost are presented under three general captions and 12 sections.
The question numbers related to each caption and section identified below.

                                                                                 Question Numbers
        Cost Accounting in General
        1. Overall Requirements                                                           1-13          

        2. Responsibility Segments                                                        14-18             

        3. Full Cost                                                                      19-26             

        4. Interentity Costs                                                              27-32             

        5. Costing Methodology                                                            33-39             


        Revenues                                                                          40-61


        Costs
        6.	 Pensions and Other Retirement and 

            Postemployement Benefits                                                      62-89             

        7. Inventory, Materials, Supplies, and Commodities                                90-98 

        8. Property, Plant, and Equipment                                                 99-115 

        9. Clean-up Costs                                                                 116-124               

        10. Interest                                                                      125-126               

        11. Insurance and Subsidies                                                       127-130               

        12. Credit Programs                                                               131-178               





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Section IV Statement of Net Cost



                                                                                             Yes,
 Cost Accounting in General
                                                                                             No,
                                                                                                    Explanation
 Overall Requirements (1 – 13)                                                               or
                                                                                             N/A

                     The Statement of Net Cost is designed to show separately the components of the net
                     cost of the reporting entity's operations for the period. The statement and any related
                     supporting schedules classify revenue and cost information by suborganization or
                     responsibility segment. (OMB Bulletin 01-09, p. 28, section 4.1)
                     Managerial cost accounting is the process of accumulating, measuring, analyzing,
                     interpreting, and reporting cost information useful to both internal and external
                     groups concerned with the way in which the organization uses, accounts for,
                     safeguards, and controls its resources to meet its objectives. (SFFAS 4, par. 42)
                     A cost accounting "system" is a continuous and systematic cost accounting process
                     that may be designed to accumulate and assign costs to a variety of objects routinely
                     or as desired by management. (SFFAS 4, par. 74)
                     Cost finding is a method for determining the cost of producing goods or services
                     using appropriate procedures, for example, special cost studies or analyses.
                     (SFFAS 4, par. 76)

 1.        Are net costs reported for the entity as a whole and for
           its suborganizations54 and major programs?
           (OMB Bulletin 01-09, p. 28, section 4.1)

 2.        Does the entity present responsibility segments that
           align directly with the major goals and outputs described
           in the entity’s strategic and performance plans, required
           by the Government Performance and Results Act of
           1993 (GPRA)? (SFFAS 4, par. 69;
           OMB Bulletin 01-09, p. 28, section 4.1)




54
     Suborganizations are considered to be generally equivalent to responsibility segments



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Section IV Statement of Net Cost

                                                                  Yes,
Cost Accounting in General
                                                                  No,
                                                                                 Explanation
Overall Requirements (1 – 13)                                     or
                                                                  N/A

3.    In its Statement of Net Cost, does the entity show the
      following?
      a. the gross cost of goods and services provided to
         federal government agencies (intragovernmental)
      b. the gross cost of goods, services, transfers, and
         grants provided to the public
      c. related exchange revenues
      d. excess of costs over exchange revenues (net
         program costs)
      e. costs that cannot be assigned to specific programs or
         outputs
      f.   the exchange revenues that cannot be attrinuted to
           specific programs and outputs (SFFAS 7, par. 43 &
           44; OMB Bulletin 01-09, pp. 28 & 29, section 4.1 &
           p. 30, section 4.2)

4.    Are the costs related to the production of goods and
      services provided to other programs (intragovernmental)
      reported separately from the costs of goods, services,
      transfers, and grants provided to the public?
      (OMB Bulletin 01-09, p. 31, section 4.3)

5.    Are costs related to the production of outputs reported
      separately from costs that are not related to the
      production outputs (i.e., nonproduction costs)?
      (OMB Bulletin 01-09, p. 31, section 4.3)

6.    Are costs that cannot be directly traced or assigned on a
      cause-and-effect basis, or reasonably allocated to
      segments and their outputs and programs reported on the
      Statement of Net Cost as “Costs not assigned to
      programs?” (SFFAS 4, par. 92; OMB Bulletin 01-09,
      p. 32, section 4.6)




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Section IV Statement of Net Cost

                                                                   Yes,
Cost Accounting in General
                                                                   No,
                                                                                 Explanation
Overall Requirements (1 – 13)                                      or
                                                                   N/A

7.    Has the entity established appropriate procedures and
      practices to enable the consistent and regular collection,
      measurement, accumulation, analysis, interpretation, and
      communication of cost information?
      (SFFAS 4, par. 68-70)

8.    As a means of providing cost information in an efficient
      and reliable manner on a continuing basis, does the
      reporting entity regularly accumulate and report the
      costs of its activities either by means of cost accounting
      systems or cost finding techniques?
      (SFFAS 4, par. 68-70)




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Section IV Statement of Net Cost

                                                                    Yes,
Cost Accounting in General
                                                                    No,
                                                                                 Explanation
Overall Requirements (1 – 13)                                       or
                                                                    N/A

9.    Does the reporting entity's cost accounting system or
      cost finding technique, at a minimum, do the following?
      a. collect cost information by responsibility segments
         identified by management
      b. define outputs for each responsibility segment
      c. measure the full cost (including the cost of goods or
         services provided by other entities) of outputs so
         that total operational costs and total unit costs of
         outputs can be determined
      d. use a costing methodology (e.g., activity-based, job
         order, standard costing) that is appropriate for
         management’s needs and the operating environment
      e. provide information needed to determine and report
         service efforts and accomplishments and
         information necessary to meet the requirements of
         GPRA (or interface with a system that provides such
         information)
      f.   report cost information in a timely manner and on a
           regular basis consistent with the needs of
           management and budgetary and financial reporting
           requirements
      g. rely on the United States Standard General Ledger
         as a basis for integrating its cost information with its
         general financial accounting capability
      h. supply cost data precise enough to provide reliable
         and useful information to internal and external users
         in making evaluations or decisions but also avoid
         unnecessary precision and refinement of data
      i.   accommodate management’s special cost
           information needs (SFFAS 4, par. 71)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 108

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Section IV Statement of Net Cost

                                                                   Yes,
Cost Accounting in General
                                                                   No,
                                                                                 Explanation
Overall Requirements (1 – 13)                                      or
                                                                   N/A

10. Are all managerial cost accounting activities, processes,
    and procedures documented? (SFFAS 4, par. 71)

11.   In determining the appropriate detail for its cost
      accounting processes and procedures, has the reporting
      entity considered the following?
      a. nature of its operations
      b. the precision desired and needed in cost
         information
      c. the practicality of data collection and processing
      d. the availability of electronic data-handling facilities
      e. the cost of installing, operating, and maintaining the
         cost accounting processes
      f.   any specific information needs of management
           (SFFAS 4, par. 72)

12.   Has the entity used similar or compatible cost
      accounting processes throughout its component units?
      (SFFAS 4, par. 73)

13.   Does the line item “net cost of operations,” as reported
      on the Statement of Net Cost, agree with the line items
      of the same name that are reported on the Statement of
      Changes in Net Position and Statement of Financing?
      (OMB Bulletin 01-09, p. 38, section 5.6 & p. 51,
      section 7.7)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 109

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Section IV Statement of Net Cost


                                                                    Yes,
Cost Accounting in General
                                                                     No,
                                                                                      Explanation
Responsibility Segments (14 – 18)                                    or
                                                                     N/A

               A responsibility segment is a component of a reporting entity that is responsible for
               carrying out a mission, conducting a major line of activity, or producing one or a
               group of related products or services. (SFFAS 4, par. 78)

14.   Has the management of the reporting entity defined and
      established responsibility segments? (SFFAS 4, par. 77)

15.   Does management designate or establish responsibility
      segments based on the following?
      a. the entity’s organizational structure
      b. its lines of responsibility and missions
      c. its output (goods or services it delivers)
      d. budget accounts and funding authorities (SFFAS 4,
          par. 86)

16.   For each responsibility segment, does the entity do the
      following?
      a. define and accumulate outputs and, if feasible,
         quantify each type of output in units
      b. accumulate costs and quantitative units of resources
          consumed in producing the outputs
      c. assign costs to outputs and calculate the cost per unit
          of each type of output
      d. establish cost centers within responsibility segments,
          as needed (SFFAS 4, par. 79 & 88)




October 2003              GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft               Page 110

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Section IV Statement of Net Cost

                                                                                                Yes,
 Cost Accounting in General
                                                                                                No,
                                                                                                       Explanation
 Responsibility Segments (14 – 18)                                                              or
                                                                                                N/A

 17.        Does the reporting entity include supporting schedules
            in the notes to the financial statements if the
            suborganization’s summary information provided in the
            Statement of Net Cost does not fully display the
            suborganization’s major programs and activities?
            (OMB Bulletin 01-09, pp. 88-90, section 9.21)

 18.        Does the reporting entity disclose gross cost and earned
            revenue,55 by budget functional classification?
            (OMB Bulletin 01-09, p. 91, section 9.25)




55
     Gross cost and earned revenue should be net of intra-entity transactions (consolidated).



October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                   Page 111

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Section IV Statement of Net Cost


                                                                                               Yes,
 Cost Accounting in General
                                                                                               No,
                                                                                                                      Explanation
 Full Cost (19 – 26)                                                                            or
                                                                                               N/A

                   Full cost is the sum of all costs that contribute to an output and includes direct and
                   indirect costs regardless of funding sources. It also includes the costs of supporting
                   services provided by other responsibility segments or entities. (SFFAS 4, par. 89)
                   Output is any product or service generated from the consumption of resources.
                   (SFFAS 4, par. 89)
                   Direct costs are costs that can be specifically identified with an output. (SFFAS 4,
                   par. 90)
                   Indirect costs are costs of resources that are jointly or commonly used to produce two
                   or more types of outputs, but are not specifically identifiable with any of the outputs.
                   (SFFAS 4, par. 91)

 19.       Does the reporting entity include all direct costs in the
           full cost of outputs? (SFFAS 4, par. 90)

 20.       Does the reporting entity also include the following in the
           full cost of outputs?
           a. indirect costs incurred within a responsibility
              segment
           b. the costs of support services that a responsibility
              segment receives from other segments or entities
              (SFFAS 4, par. 91, 122, & 123)

 21.       Are the costs of employee benefits56 included as part of
           the cost of outputs? (SFFAS 4, par. 93-97)

 22.       Are the costs of other postemployment benefits reported
           as expenses for the period during which a future outflow
           or other sacrifice of resources is probable and measurable
           on the basis of an event occurring on or before the
           accounting date? (SFFAS 4, par. 96-97)

 23.       Are the full costs of transfer payments for welfare,
           insurance, grants, and other public assistance programs
           separately identified from the costs of operating such
           programs? (SFFAS 4, par. 98-101; OMB Bulletin 01-09,
           pp. 30-32, section 4.3)


56
     These include health and life insurance, pension, and other retirement benefits, but not other postemployment benefits.



October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                  Page 112

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Section IV Statement of Net Cost

                                                                                    Yes,
 Cost Accounting in General
                                                                                     No,
                                                                                                         Explanation
 Full Cost (19 – 26)                                                                  or
                                                                                    N/A

 24.       Is depreciation expense incurred by responsibility
           segments on general PP&E included in the full costs of
           the goods and services that the segments produce?
           (SFFAS 4, par. 102)

 25.       Are the costs of acquiring or constructing heritage assets
           excluded from the full cost of goods and services and
           treated as a program cost57 or period expense? (SFFAS 4,
           par. 103)

 26.       Are nonproduction costs incurred by responsibility
           segments, such as reorganization costs and nonrecurring
           clean-up costs resulting from facility abandonment,
           excluded from the full cost of outputs and treated as
           current-period expenses? (SFFAS 4, par. 104)




57
     Acquisition costs of heritage assets are part of the costs of the entity or the program that makes the property acquisitions.



October 2003                    GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                              Page 113

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Section IV Statement of Net Cost


                                                                    Yes,
Cost Accounting in General
                                                                    No,
                                                                                      Explanation
Interentity Costs (27 – 32)                                          or
                                                                    NA

               Within the federal government, some reporting entities rely on other federal entities
               to help them achieve their missions.Often, this involves support services, but may
               include the provision of goods. The reporting entity generally must account for the
               full cost of goods or services provided to or received from other federal entities.
               (SFFAS 4, par. 105-108)

27.   Does the reporting entity include in its Statement of Net
      Cost the full costs of goods and services received from
      other federal entities? (SFFAS 4, par. 105)

28.   Does the entity providing goods or services to another
      reporting entity recognize in its accounting records, as
      well as disclose to the receiving entity, the full cost of
      goods and services provided? (SFFAS 4, par. 108)

29.   Is recognition of interentity costs that are not fully
      reimbursed limited to material items based on an
      assessment of the importance of the individual
      interentity transaction in light of the following factors?
      a. significance to the entity
      b. directness of relationship to the entity’s operations
      c. identifiability (SFFAS 4, par. 112)

30.   Are the costs of broad, general support services provided
      by a federal entity to other federal entities excluded from
      the costs of the recipient entity unless such services are
      integral to the receiving entity (e.g., Treasury check-
      writing services provided for the Social Security
      Administration)? (SFFAS 4, par. 112)

31.   If the receiving entity cannot get complete information
      on the full cost of goods or services provided by another
      reporting entity, does the receiving entity use a
      reasonable estimate of the cost of the goods or services
      received or the market value of the goods or services
      received if an estimate of the cost cannot be made?
      (SFFAS 4, par. 109)




October 2003              GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft               Page 114

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Section IV Statement of Net Cost

                                                                Yes,
Cost Accounting in General
                                                                No,
                                                                                 Explanation
Interentity Costs (27 – 32)                                      or
                                                                NA

32.   Are interentity expenses and financing sources
      eliminated for any consolidated financial statements
      covering both entities? (SFFAS 4, par. 109)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft         Page 115

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Section IV Statement of Net Cost


                                                                                            Yes,
 Cost Accounting in General
                                                                                            No,
                                                                                                                    Explanation
 Costing Methodology (33 – 39)                                                               or
                                                                                            N/A

                     Cost accumulation is the process of collecting cost data in an organized way by
                     responsibility segment. (SFFAS 4, par. 117)
                     Cost assignment is a process that identifies accumulated costs with reporting periods
                     and cost objects. Three methods of cost assignment are direct tracing, cause and
                     effect, and allocating costs on a reasonable and consistent basis.
                     (SFFAS 4, par. 120)
                     Cost object or cost objective is an activity, output, or item the cost of which is to be
                     measured. (SFFAS 4, par. 121)
                     Entities are not required to use a particular costing system or costing methodology,
                     but the costing system or methodology used should be appropriate to the entity's
                     operating environment and used consistently. Four examples of acceptable (but not
                     necessarily mutually exclusive) costing methodologies are activity-based costing, job
                     order costing, process costing, and standard costing. (SFFAS 4, par. 144-147)

 33.       Is the entity's accounting system capable of identifying
           costs with responsibility segments? (SFFAS 4, par. 118)

 34.       Are the costs of resources consumed by responsibility
           segments classified by type of resource, such as costs of
           employees, materials, capital, utilities, and rent?
           (SFFAS 4, par. 119)

 35.       Are data on the quantity of units (e.g., staff days, gallons
           of gasoline consumed) related to the various cost
           categories maintained, when appropriate and feasible?
           (SFFAS 4, par. 119)

 36.       Are costs assigned to outputs using the methods in the
           following order of preference?
           a. directly tracing costs used in the production of an
              output, wherever economically feasible58
           b. assigning costs on a cause-and-effect basis
           c. allocating costs on a reasonable and consistent basis
              (SFFAS 4, par. 124)




58
     A method is economically feasible if the benefits resulting from implementing the method outweigh its costs.



October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                Page 116

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Section IV Statement of Net Cost

                                                                                            Yes,
 Cost Accounting in General
                                                                                             No,
                                                                                                                     Explanation
 Costing Methodology (33 – 39)                                                                or
                                                                                            N/A

 37.     For cost allocation purposes, do indirect costs assigned
         to a given cost pool have similar characteristics?
         (SFFAS 4, par. 136)

 38.     Are common costs59 assigned to activities either on a
         cause-and-effect basis, if feasible, or through reasonable
         allocations? (SFFAS 4, par. 140)

 39.     Are the full costing methodologies that are most
         appropriate to a segment's operating environment used
         and consistently followed, and any changes made
         documented and explained? (SFFAS 4, par. 145 & 146)




59
  Common costs refers to the costs of maintaining and operating facilities and other resources that cannot be directly traced to any of the activities or
outputs that share resources.



October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 117
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Section IV Statement of Net Cost


                                                                    Yes,
                                                                                      Explanation
Revenues (40-61)                                                     No,
                                                                     or
                                                                    N/A

               Revenues are inflows of resources that the government demands, earns, or receives
               by donation. Revenue comes from two sources: exchange transactions and
               nonexchange transactions. (SFFAS 7, par. 30)
               Exchange (or earned) revenues arise when a government entity provides goods or
               services to the public or to another government entity for a price. (SFFAS 7, par. 30;
               OMB Bulletin 01-09, p. 32, section 4.4)
               Nonexchange revenues arise primarily from the government’s power to demand
               payments from the public (e.g., taxes, duties, fines), and also include donations.
               (SFFAS 7, par. 30)
               The net cost of a program is the difference between its gross costs and related
               exchange revenues. (OMB Bulletin 01-09, p. 32, section 4.5)
               The net cost of operations by a reporting entity consists of gross cost incurred by the
               reporting entity less any exchange revenue earned from its activities.
               (OMB Bulletin 01-09, p. 28, section 4.1 & p. 33, section 4.8)

40.   Are earned revenues deducted from the full cost of
      outputs or outcomes, if practical, to determine their net
      costs? (SFFAS 7, par. 43; OMB Bulletin 01-09, p. 32,
      section 4.4)

41.   Is the net amount of gains (or losses) subtracted from (or
      added to) the gross cost to determine net cost of
      operations and programs? (SFFAS 7, par. 44;
      OMB Bulletin 01-09, p. 28, section 4.1)

42.   Is earned revenue that is insignificant or cannot be
      attributed to particular outputs or programs reported
      separately as a deduction in arriving at the net cost of
      operations of the suborganization or reporting entity as a
      whole? (SFFAS 7, par. 44; OMB Bulletin 01-09, p. 30,
      section 4.2 & p. 33, section 4.7)

43.   Are nonexchange revenues and other financing sources
      excluded from calculating net cost of operations for the
      reporting entity? (SFFAS 7, par. 44)




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Section IV Statement of Net Cost

                                                                  Yes,
                                                                                 Explanation
Revenues (40-61)                                                  No,
                                                                  or
                                                                  N/A

44.   If the entity incurs virtually no cost in connection with
      earning exchange revenue, is such revenue not
      recognized in the Statement of Net Cost, but shown as a
      financing source on the Statement of Changes in Net
      Position or (if appropriate) Statement of Custodial
      Activity? (SFFAS 7, par. 45)

45.   Is any portion of exchange revenue that cannot be
      retained by the entity reported as a transfer-out on the
      Statement of Changes in Net Position?
      (OMB Bulletin 01-09, p. 32, section 4.4)

46.    Does a reporting entity that provides goods or services
      to the public or other government entity disclose the
      following in a note or narrative?
      a. a pricing policy that differs from the full cost or
         market pricing guidance set forth in OMB Circular
         No. A-25 and the possible effect on demand and
         revenue if prices were raised to reflect the market or
         full cost
      b. exchange transactions with the public in which
         prices are set by law or executive order and are not
         based on full cost or market price, or the possible
         effect on demand and revenue if prices were raised
         to reflect the market or full cost
      c. the nature of intragovernmental exchange
         transactions in which goods or services are provided
         free or at less than full cost and the reasons for
         disparities between billing (if any) and full cost
      d. the full amount of any expected loss when specific
         goods or services are provided or made to order
         under a contract and a loss is both probable and
         measurable (SFFAS 7, par. 46 & 47)

47.   Is collected custodial nonexchange revenue that is
      legally retained by the collecting entity as
      reimbursement for the cost of collection, recognized as
      exchange revenue in determining the collecting entity's
      net cost of operations? (SFFAS 7, par. 60.3;
      OMB Bulletin 01-09, p. 52, section 8.1)



October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 119

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Section IV Statement of Net Cost

                                                                   Yes,
                                                                                 Explanation
Revenues (40-61)                                                   No,
                                                                   or
                                                                   N/A

48.   Is revenue received from the public or other government
      entity in return for providing goods or services
      recognized and reported in the Statement of Net Cost as
      exchange revenue? (SFFAS 7, par. 34;
      OMB Bulletin 01-09, p. 32, section 4.4)

49.   If an exchange transaction is likely to be unusual or
      nonrecurring for a particular entity, is a gain or loss
      recognized rather than a revenue or expense? (SFFAS 7,
      par. 35)

50.   Is exchange revenue recognized when services are
      performed for transactions in which services are
      provided to the public or another government entity?
      (SFFAS 7, par. 34 & 36(a))

51.   If specific goods or services are made to order under
      terms of a contract, is exchange revenue (and any
      probable loss) recognized in proportion to estimated
      total cost when goods and services are acquired to fulfill
      the contract? (SFFAS 7, par. 36(b))

52.   When goods are kept in inventory so that they are
      available to customers when ordered, is exchange
      revenue recognized when the goods are delivered to the
      customer? (SFFAS 7, par. 36(c))

53.   If services are rendered continuously or the right to use
      an asset extends continually over time, is exchange
      revenue recognized in proportion to the passage of time
      or the use of the asset? (SFFAS 7, par. 36(d))

54.   Is interest received on intragovernmental loans
      recognized as exchange revenue if the source of
      borrowed funds is predominately exchange revenue?
      (SFFAS 7, par. 36(d))

55.   When an asset other than inventory is sold, is any gain
      (or loss) recognized when the asset is delivered to the
      purchaser? (SFFAS 7, par. 36(e))




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 120

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                    Yes,
                                                                                 Explanation
Revenues (40-61)                                                    No,
                                                                    or
                                                                    N/A

56. When advance fees or payments are received, such as for
    large-scale, long-term projects, is revenue recognized
    only as the cost of providing the corresponding goods
    and services is incurred? (SFFAS 7, par. 37)

57.   Is the measurement of revenue from exchange
      transactions based on the actual price received or
      receivable under established pricing arrangements?
      (SFFAS 7, par. 38)

58.   To the extent that realization of the full amount of
      exchange revenue is not probable due to credit losses
      (caused by the failure of the debtor to pay the
      established or negotiated price), is an expense
      recognized and the allowance for bad debts increased, if
      the bad debts can be reasonably estimated? (SFFAS 7,
      par. 40)

59.   If the realization of the full amount of exchange revenue
      is not probable for reasons apart from credit losses (e.g.,
      returns and allowances), is a provision made to reduce
      the recognized revenue (if amounts can be reasonably
      estimated), with the provision recognized as a revenue
      adjustment? (SFFAS 7, par. 41)

60.   Is exchange revenue recognized regardless of whether
      the entity retains the revenue for its own use or transfers
      it to other entities? (SFFAS 7, par. 43)

61.   Is exchange revenue broken out by major category and
      linked, where possible, to the net costs of related
      outputs, programs, organizations, or suborganizations in
      the Statement of Net Cost? (SFFAS 7, par. 43;
      OMB Bulletin 01-09, p. 32, section 4.4)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 121

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost


                                                                    Yes,
Costs
                                                                    No,
Pensions and Other Retirement and                                                    Explanation
                                                                     or
Postemployment Benefits (62 – 89)
                                                                    N/A

               Pension benefits include all retirement, disability, and survivor benefits financed
               through a pension plan, including unfunded pension plans. Required federal
               payments to social insurance plans (i.e., Social Security and Medicare) and matching
               federal payments to defined contribution pension plans are also considered to be
               plan expenses. (SFFAS 5, par. 61)
               Costs of pensions and other retirement benefits (ORB), whether they are paid for in
               part or in total by other governmental entities, are included in the costs of program
               outputs. (SFFAS 4, par. 95))
               Recognition of other postemployment benefits (OPEB) is linked to the occurrence of
               an OPEB event rather than the production of an output. OPEB costs are generally
               treated as period expenses. Special-purpose cost studies may distribute OPEB costs
               over a number of prior years to determine the cost of outputs OPEB recipients helped
               produce. (SFFAS 4, par. 96 & 97)
               In accounting for pensions, ORB, and OPEB, the “administrative entity,” typically
               manages and accounts for the related assets and liabilities. The “employer entity”
               accounts for the related costs of pensions, ORB, and OPEB. For these costs the
               employer entity receives a salary and expense appropriation, imputes a financing
               source, or both. (SFFAS 5, par. 57, footnote 38)
               The “aggregate entry age normal” actuarial cost method is one under which the
               expenses or liabilities arising from the actuarial present value of projected pension
               benefits are allocated on a level basis over the earnings or the service of the group
               between entry age and assumed exit ages. The portion of the actuarial present value
               of pension plan and benefits and expenses that is allocated to a valuation year is
               called “normal cost.” (SFFAS 5, par. 64)

62.   Are pensions and ORB recognized as expenses at the
      time the employee’s services are rendered?
      (SFFAS 5, par. 59)

63.   Are postemployment benefits recognized as expenses at
      the time the accountable event occurs?
      (SFFAS 5, par. 59)




October 2003              GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft               Page 122

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                             Yes,
 Costs
                                                                                              No,
 Pensions and Other Retirement and                                                                                    Explanation
                                                                                               or
 Postemployment Benefits (62 – 89)
                                                                                              N/A

 64.      Is the "aggregate entry age normal" actuarial cost
         method (or other actuarial cost method, if the results are
         not materially different and an explanation is provided)
         used to calculate pension expense, the liability for the
         administrative entity financial statements, and the
         expense for the employer entity financial statements?
         (SFFAS 5, par. 64)

 65.     When using the "aggregate entry age normal" actuarial
         cost method, does the entity allocate pension expenses
         on the basis of a level percentage of earnings?
         (SFFAS 5, par. 64)

 66.     Does the administrative entity base its actuarial
         assumptions for pension plans on the experience of the
         covered groups, long-term trends, and guidance of the
         Actuarial Standards Board? (SFFAS 5, par. 65)

 67.      Does the administrative entity base its interest rate
         assumptions on the estimated long-term investment
         yield for the pension plan or, if the plan is not being
         funded, on some other appropriate long-term assumption
         (e.g., the federal long-term borrowing rate)?
         (SFFAS 5, par. 66)

 68.     Does the administrative entity disclose the assumptions
         used to calculate pension benefit expenses?
         (SFFAS 5, par. 67)

 69.      When a new pension plan is initiated or current one
         amended, does the administrative entity recognize all
         past and prior service costs60 or gains immediately,
         without amortization? (SFFAS 5, par. 69 & 70)

 70.      Does the administrative entity recognize actuarial gains
         and losses61 immediately, without amortization?
         (SFFAS 5, par. 69 &70)


60
   Past service costs result from retroactive benefits granted when a new plan is initiated. Prior service costs result from retroactive benefits granted in
a plan amendment.
61
   Actuarial gains and losses are changes in the balance of the pension liability that result from (1) deviations between actual experience and the
actuarial assumptions used or (2) changes in actuarial assumptions.



October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 123
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                          Yes,
 Costs
                                                                                           No,
 Pensions and Other Retirement and                                                                                Explanation
                                                                                            or
 Postemployment Benefits (62 – 89)
                                                                                          N/A

 71.      Does the administrative entity report a pension expense
         for the net of the following components, with disclosure
         of the individual components?
         a. normal cost
         b. interest on pension liability during the period

         c. prior (and past) service cost from plan amendments
            (or the initiation of a new plan) during the period, if
            any
         d. actuarial gains or losses (including any gains or
            losses due to a change in the medical inflation rate
            assumption) during the period, if any (SFFAS 5,
            par. 72; OMB Bulletin 01-09, p. 80, section 9.14)

 72.      Does the administrative entity report pension plan
         revenue for the sum of contributions from the following
         entities?
         a. the employer
         b. its employees62
         c. interest on the plan's investments
             (SFFAS 5, par. 73 & 78)

 73.      In the financial report, does the employer entity
         recognize a pension expense that equals the service cost
         (normal cost) for its employees for the accounting
         period, less the amount contributed by the employees, if
         any? (SFFAS 5, par. 74)

 74.      Is the employer entity's pension expense balanced by
         (1) a decrease to its “fund balance with Treasury” for the
         amount of its contribution to the pension plan, if any;
         and if this does not equal the full pension expense, by
         (2) an increase to an account representing an
         intragovernmental financing source (e.g., “imputed
         financing- expenses paid by other agencies.”
         (SFFAS 5, par. 75)


62
  The administrative entity may also receive financing from the general fund to cover prior service or other costs for which contributions were not
provided by the employer or employee.



October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                         Page 124
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                               Yes,
 Costs
                                                                                                No,
 Pensions and Other Retirement and                                                                                      Explanation
                                                                                                 or
 Postemployment Benefits (62 – 89)
                                                                                               N/A

 75.     If the employer entity is also the administrative entity,
         does it also report the liability63 and recognize the
         expense for all components of the pension plan's cost?
         (SFFAS 5, par. 71 & 76)

                   ORB includes all retirement benefits other than pension benefits. The predominant
                   ORB expense in the federal government is retirement health benefits.
                   (SFFAS 5, par. 58 & 79)

 76.     Is the "aggregate entry age normal" actuarial cost
         method (or other actuarial cost method, if the results are
         not materially different and an explanation is provided)
         used to calculate the ORB expense and liability for the
         administrative entity financial statements and the
         expense for the employer entity financial statements?
         (SFFAS 5, par. 82)

 77.     Are expenses and other liabilities attributable to ORB
         expenses allocated based on the service rendered by
         each employee? (SFFAS 5, par. 82)

 78.     Do the amounts calculated for financial reports prepared
         for ORB plans reflect the following?
         a. general actuarial and economic assumptions that are
            consistent with those used for pensions
         b. a health care cost trend assumption that is consistent
            with Medicare projections or other authoritative
            sources appropriate for the population covered by
            the plan (SFFAS 5, par. 83)

 79.     Does the administrative entity discount the projected
         ORB costs at the rate of expected return of plan assets, if
         the plan is being funded, or on some other long-term
         assumptions (e.g., the long-term federal government
         borrowing rate) for unfunded plans? (SFFAS 5, par. 83)




63
  The liability is the actuarial present value of all future benefits, based on projected salaries and total projected service, less the actuarial present value
of future normal cost contributions that would be made for and by the employees under the plan.



October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                               Page 125
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                   Yes,
Costs
                                                                   No,
Pensions and Other Retirement and                                                Explanation
                                                                   or
Postemployment Benefits (62 – 89)
                                                                   N/A

80.   Does the administrative entity disclose the assumptions
      used to calculate projected ORB costs?
      (SFFAS 5, par. 83)

81.   Is the accrual period for ORB based on the expected
      retirement age rather than the age when the employee
      first becomes eligible for retirement benefits?
      (SFFAS 5, par. 84)

82.   When a new ORB plan is initiated or current one
      amended, does the administrative entity recognize all
      past and prior service costs or gains immediately,
      without amortization? (SFFAS 5, par. 86 & 87)

83.   Does the administrative entity recognize all actuarial
      gains and losses from changes in the ORB liability
      immediately, without amortization?
      (SFFAS 5, par. 86 & 87)

84.   Does the administrative entity report an ORB expense
      (e.g., health insurance) for the net of the following
      components with disclosure of the individual
      components?
      a. normal cost
      b. interest on the ORB liability during the period
      c. prior (and past) service cost from plan amendments
         (or the initiation of a new plan) during the period, if
         any
      d. any gains/losses due to a change in the medical
         inflation rate assumption
      e. other actuarial gains or losses during the period, if
         any (SFFAS 5, par. 88; OMB Bulletin 01-09, p. 80,
         section 9.14)

85.   Does the administrative entity report ORB revenue for
      the sum of contributions from the employer entity and
      its employees? (SFFAS 5, par. 89)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 126

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                             Yes,
 Costs
                                                                                              No,
 Pensions and Other Retirement and                                                                                    Explanation
                                                                                               or
 Postemployment Benefits (62 – 89)
                                                                                             N/A

 86.     In the financial report, does the employer entity
         recognize ORB expenses equal to the service cost
         (normal cost) for its employees for the accounting
         period, less the amount contributed by the employees, if
         any? (SFFAS 5, par. 90)

 87.      Is the employer entity's ORB expense balanced by
         either of the following?
         a. a decrease to its “fund balance with Treasury” for
            the amount of its contribution to the ORB plan, if
            any
         b. an increase to an account representing an
            intragovernmental imputed financing source (e.g.,
            “imputed financing-expenses paid by other entities”)
            (SFFAS 5, par. 91)

 88.     If the employer entity is also the administrative entity,
         does it also report the liability64 and recognize the
         expense for all components of the ORB's cost?
         (SFFAS 5, par. 88 & 92)

                  OPEB are provided to former or inactive employees, beneficiaries, and covered
                  dependents outside pension or ORB plans. Postemployment benefits can include
                  salary continuation, severance benefits, counseling and training, continuation of
                  health care or other benefits, unemployment workers' compensation, and veterans’
                  disability compensation benefits paid by the employer. (SFFAS 4, par. 96; SFFAS 5,
                  par. 57 & 94)

 89.     Does the employer recognize an expense and a liability
         for OPEB when a future outflow or other sacrifice of
         resources is probable (i.e., more likely than not) and
         measurable? (SFFAS 5, par. 95)




64
  The liability is the actuarial present value of all future benefits less the actuarial present value of future normal cost contributions that would be made
for and by the employees under the plan. (SFFAS 5, par. 88)



October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 127
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost


                                                                   Yes,
Costs
                                                                   No,
Inventory, Materials, Supplies,                                                     Explanation
                                                                    or
and Commodities (90 – 98)
                                                                   N/A

90.   Upon sale or use of inventory, is the related expense
      recognized and the cost of those goods removed from
      the inventory asset account? (SFFAS 3, par. 19)

91.   To arrive at the historical cost of ending inventory and
      cost of goods sold, is one of the following cost flow
      assumptions used?
      a. first-in, first-out
      b. weighted average
      c. moving average
      d. any other valuation method (such as a standard cost
         system) whose results reasonably approximate one
         of the above historical cost methods
         (SFFAS 3, par. 22)

92.   Are operating materials and supplies expensed using the
      consumption method (i.e., reported as an operating
      expense as they are issued to the end user for
      consumption in normal operations)?
      (SFFAS 3, par. 38 & 39)

93.   Are operating materials and supplies expensed upon
      purchase (purchase method) if they meet one of the
      following attributes?
      a. they are of insignificant amounts
      b. they are in the hands of the end user for use in
          normal operations
      c. it is not cost beneficial to apply the consumption
         method (SFFAS 3, par. 40 & 41)

94.   Are inventory and operating materials and supplies
      acquired through a nonmonetary exchange valued at the
      fair value of the items received at the time of the
      exchange, and is the difference between the fair value of
      the acquired items and the recorded amount surrendered
      reported as a gain or loss? (SFFAS 3, par. 21 & 43)




October 2003               GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft         Page 128

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                Yes,
Costs
                                                                No,
Inventory, Materials, Supplies,                                                  Explanation
                                                                 or
and Commodities (90 – 98)
                                                                N/A

95.   Are abnormal costs associated with inventory and
      operating materials and supplies, such as excessive
      handling or rework costs, charged to operations of the
      period? (SFFAS 3, par. 21 & 43)

96.   Are any unrealized gains or losses resulting from
      periodic revaluations of inventory captured in a
      designated allowance account? (SFFAS 3, par. 23 & 24)

97.   Is the cost of stockpile materials removed from the
      corresponding asset account and reported as an
      operating expense when issued for use or sale?
      (SFFAS 3, par. 52)

98.   Are abnormal costs of stockpile materials, such as
      excessive handling and rework costs, expensed in
      current operations? (SFFAS 3, par. 53)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft         Page 129

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost


                                                                                         Yes,
 Costs
                                                                                          No,
                                                                                                                 Explanation
 Property, Plant, and Equipment (99 – 115)                                                 or
                                                                                          N/A

                  A common expense related to PP&E that is included in the Statement of Net Cost is
                  depreciation. Other PP&E-related expenses that are reported in the Statement of
                  Net Cost include all current cost of acquiring and maintaining stewardship land and
                  heritage assets (other than multiuse heritage assets.) (SFFAS 6, par. 35, & 69;
                  SFFAS 16, par. 8)
                  Depreciation expense is calculated through systematic and rational allocation of the
                  cost of PP&E, less its estimated salvage or residual value, over its estimated useful
                  life. A composite or group methodology,65 whereby the costs of PP&E are allocated
                  using the same allocation rate, is permissible. (SFFAS 6, par. 35; SFFAS 23, par. 9,
                  item f)

 99.     Is depreciation expense recognized on all general
         PP&E? (SFFAS 6, par. 35)

 100. If historical cost information has not been maintained for
      existing PP&E, does the entity depreciate or amortize
      the estimated net remaining cost over its remaining
      useful life in a systematic and rational manner?
      (SFFAS 6, par. 35, 40, & 41)

 101. In an exchange transaction with a nonfederal entity, is
      the difference between the book value (i.e., cost less
      accumulated depreciation) of PP&E surrendered and the
      cost of PP&E acquired66 recognized as either a gain or a
      loss? (SFFAS 6, par. 32)

 102. In the event that cash consideration is included in the
      exchange transaction with a non federal entity, is the
      cost of PP&E acquired either increased by the amount of
      cash consideration surrendered or decreased by the
      amount of cash consideration received?
      (SFFAS 6, par. 32)




65
   The composite methodology is a method of calculating depreciation that applies a single average rate to a number of heterogeneous assets that have
dissimilar characteristics and service lives. The group methodology is a method of calculating depreciation that applies a single, average rate to a
number of homogeneous assets having similar characteristics and service lives.
66
   The cost of the PP&E acquired is recorded at the cost of the PP&E surrendered net of any accumulated depreciation or amortization when the fair
value of the PP&E surrendered or acquired is not determinable.



October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                        Page 130
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                    Yes,
Costs
                                                                    No,
                                                                                 Explanation
Property, Plant, and Equipment (99 – 115)                           or
                                                                    N/A

103. When assets have been removed from PP&E in
     anticipation of disposal, retirement, or removal from
     service, has the entity stopped recording depreciation
     and amortization expenses for such assets?
     (SFFAS 6, par. 38 & 39)

104. For general PP&E that is disposed of, retired or removed
     from service, is any difference between the book value
     of the PP&E and amounts realized recognized as a gain
     or a loss in the period of disposal, retirement, or removal
     from service? (SFFAS 6, par. 38)

105. For PP&E assets removed from general PP&E accounts
     prior to disposal, retirement or removal from service, is
     the expected net realizable value of these assets adjusted
     at the end of each accounting period, and is any
     adjustment made recognized as either a gain or loss?
     (SFFAS 6, par. 39)

106. Are costs to acquire, improve, reconstruct, or renovate
     heritage assets, other than multiuse heritage assets,
     recognized and reported separately on the Statement of
     Net Cost for the period in which the costs are incurred?
     (SFFAS 16, par. 8; OMB Bulletin 01-09, pp. 31 & 32,
     section 4.3 & p. 91, section 9.22)

107. Do the recognized costs of heritage assets also include
     all costs incurred during the period to bring the items to
     their current condition at its initial location?
     (SFFAS 16, par. 8)

108. Are amounts for heritage assets or stewardship land
     acquired through donation or devise excluded from the
     calculation of net cost? (SFFAS 8, par.79;
     SFFAS 16, par. 10; OMB Bulletin 01-09, p. 91,
     section 9.23)

109. Is the fair value, if known and material, of heritage assets
     acquired through donation or devise disclosed in notes to
     the financial statements in the year received? (SFFAS 16,
     par. 10; OMB Bulletin 01-09, p. 91, section 9.23)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 131

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                     Yes,
Costs
                                                                     No,
                                                                                 Explanation
Property, Plant, and Equipment (99 – 115)                            or
                                                                     N/A

110. If the fair value of donated or bequeathed heritage assets is
     not known or reasonably estimable, is information as to
     the type and quantity of assets received disclosed in the
     notes to the financial statements in the year received?
     (SFFAS 16, par. 10; OMB Bulletin 01-09, p. 91,
     section 9.23)

111. Are costs to acquire, as well as costs incurred to bring the
     stewardship land to its current condition or prepare it for
     its intended use, recognized as a cost of the period
     incurred and disclosed as “Cost of Stewardship Land?”
     (SFFAS 6, par. 69 & 73; SFFAS 8, par. 77 & 119;
     OMB Bulletin 01-09, p. 91, section 9.22)

112. Is the fair value, if known and material, of stewardship
     land acquired through donation or devise disclosed in
     notes to the Statement of Net Cost in the year received?
     (SFFAS 6, par. 71; OMB Bulletin 01-09, p. 91,
     section 9.23)

113. If the fair value of donated or willed stewardship land is
     not estimable, is information as to the type and quantity of
     assets received disclosed in notes to the Statement of Net
     Cost in the year received, if material? (SFFAS 6, par. 71;
     OMB Bulletin 01-09, p. 91, section 9.23)

114. If land included in PP&E is transferred to another
     federal entity to be used as stewardship land, is the cost
     to the receiving entity of the transferred land recognized
     at the book value on the transferring entity’s books?
     (SFFAS 6, par. 72)

115. If the receiving entity does not know the book value of
     the transferred land, is the transfer disclosed in the notes
     to the Statement of Net Cost, if material?
     (SFFAS 6, par. 72)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 132

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost


                                                                   Yes,
Costs
                                                                    No,
                                                                                     Explanation
Clean-up Costs (116 – 124)                                          or
                                                                    N/A

               Clean-up costs are the costs of removing, containing, and/or disposing of (1)
               hazardous waste from property or (2) material and/or property that consists of
               hazardous waste upon permanent or temporary closure or shutdown of associated
               PP&E. Clean-up costs may include, but are not limited to, decontamination,
               decommissioning, site restoration, site monitoring, closure, and postclosure costs.
               (SFFAS 6, par. 85 & 87)

116. When PP&E is placed into service, does the entity
     estimate the associated clean-up costs?
     (SFFAS 6, par. 94)

117. In estimating clean-up costs and liability, has the entity
     considered the following?
      a. the level of restoration to be performed
      b. current legal and regulatory requirements
      c. current technology
      d. current costs (i.e., amount that would be paid if all
         goods and services included in the clean-up estimate
         were acquired in the current period)
         (SFFAS 6, par. 95)

118. Are estimated clean-up costs periodically revised to
     account for material changes due to inflation or deflation
     and changes in regulations, plans, and/or technology?
     (SFFAS 6, par. 96)

119. When PP&E is placed into service, does the entity
     recognize cleanup costs during each period that general
     PP&E is in operation, in a systematic and rational
     manner based on one of the following methods?
      a. based on the physical capacity of the PP&E, (e.g.,
         expected usable landfill area)
      b. if physical capacity is not applicable or estimable,
         based on the estimated useful life of the associated
         PP&E (SFFAS 6, par. 97)




October 2003              GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                 Page 133

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                    Yes,
Costs
                                                                    No,
                                                                                 Explanation
Clean-up Costs (116 – 124)                                          or
                                                                    N/A

120. Does recognition of the cleanup costs and the
     accumulation of the related liability begin on the date
     that the associated PP&E is placed into service, continue
     in each period that operation continues, and end when
     the PP&E ceases operation? (SFFAS 6, par. 98)

121. If clean-up costs are reestimated, are the cumulative
     effects of changes in total estimated cleanup costs
     related to current and past operations of PP&E
     immediately recognized as an expense and is the
     corresponding liability adjusted? (SFFAS 6, par. 99)

122. When stewardship PP&E is placed into service, does the
     entity expense the total estimated clean-up costs and
     establish a liability in the period the asset is placed into
     service? (SFFAS 6, par. 101)

123. If clean-up costs for stewardship PP&E are reestimated,
     are any adjustments to the liability associated with
     clean-up costs expensed in the period of the change in
     estimate? (SFFAS 6, par. 102)

124. Does the entity disclose the following related to cleanup
     costs?
      a. the applicable laws and regulations covering clean-
          up requirements
      b. the method for assigning estimated total clean-up
         costs to current operating periods (e.g., physical
         capacity versus passage of time)
      c. the unrecognized portion of estimated total clean-up
         costs for clean-up costs associated with PP&E
      d. material changes in total estimated clean-up costs
         due to changes in laws, technology, or plans, as well
         as the portion of the change in clean-up cost
         estimates that relates to prior-period operations
      e. the nature of estimates and information regarding
         possible changes due to inflation, deflation,
         technology, or applicable laws and regulations
         (SFFAS 6, par. 107-111)



October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 134

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost


                                                                     Yes,
 Costs
                                                                     No,
                                                                                      Explanation
 Interest (125 –126)                                                  or
                                                                     N/A

               Interest incurred results from borrowing funds from Treasury, Federal Financing
               Bank, other federal entities, or the public. Interest also should be recorded on late
               payment of bills by the federal entity and on refunds. (SFFAS 1, par. 81)
               Interest costs are generally related to securities and other debt instruments issued by
               the U.S. Treasury or other federal agencies. (SFFAS 5, par. 47-48)

 125. Does the related interest cost of federal debt include the
      following?
       a. the accrued (prorated) share of the nominal interest
          incurred during the accounting period
       b. the amortized discounts or premiums for each
           accounting period for fixed value securities
       c. the amount of change in the current value for the
          accounting period for variable value securities
          (SFFAS 5, par. 53)

 126. If securities are retired before maturity, is the difference
      between the reacquisition price and net carrying value
      of the extinguished debt recognized in the period of
      extinguishment as a gain or loss? (SFFAS 5, par. 54)




October 2003              GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                   Page 135

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost


                                                                                          Yes,
 Costs
                                                                                           No,
                                                                                                                  Explanation
 Insurance and Subsidies (127 –130)                                                         or
                                                                                          N/A

                    Federal insurance and guarantee programs are established to assume risks that
                    private sector entities are unwilling or unable to assume or to subsidize the provision
                    of insurance to achieve social objectives. For life insurance, a premium deficiency
                    occurs if the liability for future policy benefits using current conditions exceeds the
                    liability for future policy benefits using contract conditions. (SFFAS 5, par. 97 &
                    120)

 127. If an insured event has occurred as of the financial
      statement reporting date, has the federal entity
      recognized an expense for all claims incurred during the
      period, including, when appropriate, those incurred but
      not reported and contingencies that meet the criteria for
      recognition? (SFFAS 5, par. 104 & 109)

 128. Are changes in estimates of claim cost resulting from (1)
      the present value calculations, (2) the continuous review
      process, and (3) differences between the estimates and
      actual payments for claims, recognized as charges
      against operations of the period in which the estimates
      are changed or payments are made?
      (SFFAS 5, par. 109)

 129. If the liability for future [life insurance] policy benefits
      using current conditions exceeds the liability for future
      policy benefits under contract conditions (resulting in a
      premium deficiency), is the difference recognized as a
      charge to operations in the current period?
      (SFFAS 5, par. 120)

 130. Does the entity recognize an expense for social
      insurance67 benefits paid during the reporting period plus
      any increase (or less any decrease) in the liability for
      social insurance benefits due and payable to or on behalf
      of beneficiaries, from the end of the prior period to the
      end of the current period? (SFFAS 17, par. 22)




67
     Social insurance programs include Social Security, Medicare, Railroad Retirement, and Black Lung Benefits.



October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                   Page 136

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost


                                                                                             Yes,
                                                                                                                      Explanation
 Costs                                                                                        No,

 Credit Programs (131 – 178)                                                                   or
                                                                                              N/A

                  In accordance with the Federal Credit Reform Act of 1990, as amended, a subsidy
                  expense is recognized for direct or guaranteed loans disbursed during the fiscal year.
                  The amount of the subsidy expense equals the present value of estimated cash
                  outflows over the life of the loans minus the present value of the estimated cash
                  inflows. The discount rate used to calculate the present value is the average interest
                  rate on marketable Treasury securities of similar maturity to the cash flows of the
                  direct loan or loan guarantee for which the estimate is being made.
                  (SFFAS 2, par. 6, 7, 24, 30, & 31; SFFAS 19, par. 6 & 7)

 131. For post-1991 direct or loan guarantee programs, is the
      present value of estimated cash outflows over the life of
      the loans minus the present value of estimated cash
      inflows discounted at the interest rate of marketable
      Treasury securities with similar maturity to the cash
      flows? (SFFAS 2, par. 24; SFFAS 19, par. 6)

 132. For post-1991 direct or loan guarantee programs, are the
      net present values recognized as expense in the year the
      loan is disbursed? (SFFAS 2, par. 24; SFFAS 19, par. 6)

 133. Are the following components of estimated subsidy
      costs (and offsetting receipts) of post-1991 loans and
      guarantees separately recognized?
         a. interest subsidy costs68
         b. default costs69
         c. present value of fees and other collections
         d. other subsidy costs (SFFAS 2, par. 25-29)




68
   The interest subsidy cost of direct loans is the excess of the amount of the loans disbursed over the present value of the interest and principal
payments required by loan contracts discounted at the applicable Treasury rate; for loan guarantees it is the present value of estimated interest
supplement payments.
69
   The default cost of direct loans or loan guarantees is measured at the present value of projected payment delinquencies and omissions minus
projected net recoveries.




October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 137
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                              Yes,
                                                                                                                       Explanation
 Costs                                                                                         No,

 Credit Programs (131 – 178)                                                                    or
                                                                                              N/A

 134. Is the subsidy cost allowance for post-1991 direct loans
      amortized using the interest method? 70
      (SFFAS 2, par. 30, 31, and app. B, part I B (2);
      SFFAS 19, par. 7(a))

 135. If the effective interest for post-1991 direct loans is less
      than the nominal interest, is the subsidy cost allowance
      increased by the difference and recognized as a
      reduction in interest income? (SFFAS 2, par. 30 &
      app. B, part I B (2); SFFAS 19, par. 7(a))

 136. If the effective interest for post-1991 direct loans is
      greater than the nominal interest, is the subsidy cost
      allowance decreased by the difference and recognized as
      an increase in interest income?
      (SFFAS 2, par. 30 & app. B, part I B (2); SFFAS 19,
      par. 7(a))

 137. Is interest accrued and compounded on the liabilities of
      post-1991 loan guarantees at the interest rate that was
      originally used to calculate the present value of the loan
      guarantee liabilities when the guaranteed loans were
      disbursed, after adjusting for the interest reestimate?
      (SFFAS 2, par. 31 & app. B, part III B (2); SFFAS 19,
      par. 7(b))

 138. Is the interest accrued and compounded on the liabilities
      of post-1991 loan guarantees recognized as an interest
      expense? (SFFAS 2, par. 31 & app. B, part III B (2))




70
  Under the interest method, the amortized amount is the difference between the nominal interest (face amount of loan times stated interest) and
effective interest (present value of loan times discount rate). The effective interest rate is the average interest rate of marketable Treasury securities
with similar maturity that was used to calculate the present value of the direct loans when the direct loans were disbursed, after adjusting for the
interest rate reestimate.



October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 138
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                             Yes,
                                                                                                                     Explanation
 Costs                                                                                       No,

 Credit Programs (131 – 178)                                                                  or
                                                                                             N/A

                  Two kinds of reestimates for the subsidy cost allowance for outstanding direct loans
                  and the liability for outstanding loan guarantees are           (1) interest rate
                  reestimates and (2) technical/default reestimates. An interest rate reestimate is due
                  to a change in the interest rates from those that were assumed in budget preparation
                  and used in calculating the subsidy expense to the interest rates that are prevailing
                  during the periods in which the direct or guaranteed loans are disbursed. A
                  technical/default reestimate is due to changes in projected cash flows of outstanding
                  direct loans and loan guarantees after reevaluating the underlying assumptions and
                  other factors (except for interest rate reestimates) that affect cash flow projections as
                  of the financial statement date. (SFFAS 18, par. 9)

 139. Does the entity measure and disclose reestimates of
      allowances for subsidy costs of post-1991 loans and
      liabilities for guarantees in two components separately,
      specifically: the interest rate reestimate and the
      technical/default reestimate? (SFFAS 18, par. 9)

 140. Is any increase (or decrease) in the subsidy cost
      allowance of post-1991 direct loans or loan guarantee
      liabilities resulting from the interest rate and technical
      /default reestimates recognized as a subsidy expense (or
      a reduction in subsidy expense) and disclosed
      separatetly by component? (SFFAS 2, par. 32;
      SFFAS 18, par. 9; OMB Bulletin 01-09, pp. 62 & 71,
      section 9.8, item E2 & pp. 66 & 73, section 9.8, item L2)

 141. If the assumed interest rates used in calculating the
      subsidy expenses for cohorts71 from which direct or
      guaranteed loans are disbursed differ from the rates
      prevailing at the time of the loan disbursement, is an
      interest rate reestimate for those cohorts made as of the
      date of the financial statements? (SFFAS 18, par. 9 (A))

 142. Do technical/default reestimates take into consideration
      all factors that may have affected various components of
      projected cash flows, including defaults, delinquencies,
      recoveries, and prepayments? (SFFAS 18, par. 9 (B))




71
  Cohort, as it is used here, is a budget term that refers to all direct loans or loan guarantees of a program for which a subsidy appropriation is provided
for a given fiscal year, even if disbursements occur in subsequent years.



October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                            Page 139
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                  Yes,
                                                                                 Explanation
Costs                                                             No,

Credit Programs (131 – 178)                                       or
                                                                  N/A

143. Are technical/default reestimates made each year as of
     the date of the financial statements?
     (SFFAS 18, par. 9 (B))

144. In a note to the financial statement, does the entity
     display a reconciliation between the beginning and
     ending balances of the following?
      a. the subsidy cost allowances for outstanding direct
         loans
      b. the liability for outstanding loan guarantees reported
         in the entity’s balance sheet (SFFAS 18, par. 10)

145. Does the reconciliation of beginning and ending subsidy
     cost allowances and loan guarantee liability balances
     include changes in the following?
      a. interest subsidy costs, default costs, fees and other
         collections, and other subsidy costs
      b. interest rate and technical/default reestimates
      c. other adjustments (SFFAS 2, par. 25-29; SFFAS 18,
         par. 10)

146. For direct loans, do other adjustments include loan
     modifications, fees received, loans written off,
     foreclosed property or other recoveries acquired, and
     subsidy allowance amortization? (SFFAS 18, par. 10)

147. For loan guarantees, do other adjustments include loan
     guarantee modifications, fees received, interest
     supplements paid, claim payments made to lenders,
     foreclosed property or other recoveries acquired, and
     interest accumulated on the loan guarantee liability?
     (SFFAS 18, par. 10)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 140

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                             Yes,
                                                                                                                      Explanation
 Costs                                                                                        No,

 Credit Programs (131 – 178)                                                                   or
                                                                                             N/A

 148. In its notes to the financial statements, does the entity
      include a description of the characteristics of the
      program it administers, including the following?
         a. the total amount of direct or guaranteed loans
            disbursed for the current and preceding reporting
            years
         b. interest subsidy costs, default costs, fees and other
            collections, and other subsidy costs
         c. interest rate and technical/default reestimates
            (SFFAS 18, par. 11 (A))

 149. Does the reporting entity disclose, at the program level,
      the subsidy rates72 for direct loans and loan guarantees in
      the current year’s budget for the current year’s cohorts,
      the following items?
         a. total subsidy cost
         b. interest subsidy costs
         c. default costs (net of recoveries)
         d. fees and other collections
         e. other costs (SFFAS 18, par. 11 (B))

 150. If the entity uses trend data to display significant
      fluctuations in subsidy rates, are these data accompanied
      by an analysis that explains the underlying causes for the
      fluctuations? (SFFAS 18, par. 11 (B))

 151. Does the reporting entity disclose, discuss, and explain
      events and changes in economic conditions, other risk
      factors, legislation, credit policies,73 and subsidy
      estimation methodologies and assumptions that have had
      a significant and measurable effect on subsidy rates,
      subsidy expenses, and subsidy reestimates?
      (SFFAS 18, par. 11 (C))



72
  The subsidy rate is the dollar amount of the subsidy component as a percentage of the direct loans or loan guarantees obligated in the cohort.
73
  Changes in legislation or credit policies include, for example, changes in borrowers’ eligibility, the levels of fees or interest rates charged to
borrowers, the maturity terms of loans, and the percentage of private loans that are guaranteed.



October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                             Page 141
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                  Yes,
                                                                                 Explanation
Costs                                                             No,

Credit Programs (131 – 178)                                       or
                                                                  N/A

152. Does the disclosure and discussion also include events
     and changes that have occurred and are more likely than
     not to have a significant impact, but whose effects are
     not measurable at the reporting date?
     (SFFAS 18, par. 11 (C))

153. Are default costs estimated and periodically reestimated
     for each post-1991 loan and loan guarantee program on
     the basis of separate cohorts and risk categories?
     (SFFAS 2, par. 33)

154. In estimating default costs, has the entity considered the
     following factors?
        a. loan performance experience
        b. the current and forecasted international, national,
            or regional economic conditions that may affect
            the performance of the loans
        c. financial and other relevant characteristics of
           borrowers
        d. the value of collateral to loan balance
        e. changes in recoverable value of collateral
        f. newly developed events that could affect the loans'
           performance
        g. improvements in methods to reestimate defaults
            (SFFAS 2, par. 34)

155. In estimating and reestimating future default costs for
     each group, cohort, and risk category of loan and
     guarantee, has the agency used a systematic
     methodology based on actual historical experience?
     (SFFAS 2, par. 35 & 36)

156. Is interest (at the discount rate in effect when the loans
     were first disbursed) accrued on post-1991 direct loans,
     including amortized interest, recognized as interest
     income? (SFFAS 2, par. 37 & app. B, part I B (2) & C)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 142

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                   Yes,
                                                                                 Explanation
Costs                                                              No,

Credit Programs (131 – 178)                                        or
                                                                   N/A

157. Is interest (at the original discount rate) accrued on debt
     to the Treasury arising from post-1991 direct loans
     recognized as interest expense? (SFFAS 2, par. 37 &
     app. B, part I B (2) & C)

158. Is interest (at the discount rate in effect when the loans
     were first disbursed) accrued on liability of post-1991
     loan guarantees recognized as interest expense?
     (SFFAS 2, par. 37 & app. B, part III B (2) & C)

159. Is interest (at the original discount rate) due from the
     Treasury on uninvested funds associated with post-1991
     loan guarantee liabilities recognized as interest income?
     (SFFAS 2, par. 37 & app. B, part III B (2) & C)

160. Are costs for administering credit activities (such as
     salaries, legal fees, and servicing) incurred in support of
     direct loan and guaranteed loan programs recognized as
     administrative expenses and not included in direct loan
     and loan guarantee subsidy costs? (SFFAS 2, par. 38)

161. Are administrative expenses for loans and guarantees
     broken out and disclosed by program, if material?
     (OMB Bulletin 01-09, p. 67 & 74, section 9.8, item O)

162. Are losses (as well as valuation allowances and
     corresponding liabilities) of direct loans obligated and
     loan guarantees committed before October 1, 1991,
     recognized when it is more likely than not that the direct
     loans will not be totally collected or that the loan
     guarantees will require a future cash outflow to pay
     default claims? (SFFAS 2, par. 39)

                 Foreclosed properties are assets received in satisfaction of a loan receivable or as a
                 result of payment of a claim under a guaranteed or insured loan (excluding commodities
                 acquired under price support programs.) All properties included in foreclosed property
                 are assumed to be held for sale. Pre-1992 foreclosed property refers to property
                 associated with direct loans obligated or loan guarantees committed before October 1,
                 1991. Post-1991 foreclosed property refers to property associated with direct loans
                 obligated or loan guarantees committed after September 30, 1991.
                 (SFFAS 3, par. 79 & 80)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 143

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                    Yes,
                                                                                 Explanation
Costs                                                               No,

Credit Programs (131 – 178)                                         or
                                                                    N/A

163. If, at the time of the foreclosure, the expected net
     realizable value of pre-1992 foreclosed property is less
     than the cost (i.e., the carrying amount of the loan, or for
     a loan guarantee, the amount of the claim paid), is the
     loss charged to operations and tracked in a valuation
     allowance account? (SFFAS 3, par. 86)

164. If the pre-1992 foreclosed asset's net realizable value
     subsequently increases or decreases, does the entity
     credit or charge this amount to results of operations and
     adjust the valuation allowance? (SFFAS 3, par. 86)

165. Upon sale of foreclosed property, is any difference
     between the net carrying amount of foreclosed property
     and the net proceeds of the sale recognized as a
     component of operating results? (SFFAS 3, par. 89)

166. For post-1991 foreclosed property, is interest income
     accrued from the previous periodic adjustment in the
     carrying amount up to the sale date? (SFFAS 3, par. 89)

167. For post-1991 foreclosed property, is the resulting
     difference between the adjusted carrying amount and the
     net sales proceeds recognized as a reestimate of “subsidy
     expense?” (SFFAS 3, par. 89)

168. For pre-1992 foreclosed property, is the difference
     between the adjusted carrying amount and net sales
     proceeds recognized as a gain or a loss on the sale of
     foreclosed property? (SFFAS 3, par. 89)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 144

Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                            Yes,
                                                                                                                    Explanation
 Costs                                                                                      No,

 Credit Programs (131 – 178)                                                                 or
                                                                                            N/A

                  The term modification, as it applies to direct loans and loan guarantees, means a
                  federal government action, including new legislation or administrative action, that
                  directly or indirectly alters the estimated subsidy cost and the present value of
                  outstanding direct loans, or the liability of loan guarantees. The cost of the
                  modification is the excess of the premodification value of a direct loan (or
                  postmodification liability of loan guarantees) over the postmodification value of a
                  direct loan (or premodification liability of loan guarantees), both of which have been
                  discounted at the Treasury rate in effect when the modification occurred. (SFFAS 2,
                  par. 41; SFFAS 2, par. 45, notes 3 & 4 & par. 49, notes 6 & 7; SFFAS 19, par. 6)
                  The book value of the loan or guarantee is discounted at the Treasury rate originally
                  used to calculate the present value of the direct loan or loan guarantee liability when
                  the loan was originally disbursed. (SFFAS 2, par. 48 & 50, app. B parts I D (4 & 5),
                  II B (4), III B (4), & IV B (4))
                  The sale of post-1991 and pre-1992 direct loans is treated as a direct modification of
                  the loans sold if the sale proceeds were not included in the cash flows estimates for
                  the initial subsidy calculation. The cost of modification is determined on the basis of
                  the premodification value of the loans sold. However, if sale proceeds were included
                  in the cash flow estimates for the initial subsidy calculation, the effect of the loan sale
                  on the cost of the program is recognized in the reestimates. (SFFAS 2, par. 53,
                  Appendix B. par 1F)

 169. If pre-1992 or post-1991 direct loans are modified, is the
      excess of the premodification value74 over the
      postmodification value75 recognized as a modification
      expense? (SFFAS 2, par. 45 & app. B, parts I D (1-3) &
      II B (1-3))

 170. If the cost of modifying pre-1992 or post-1991 loans is
      greater than the decrease in the loans' book value, is the
      difference recognized as a gain?76 (SFFAS 2, par. 48 &
      app. B, parts I D (4 & 5) & II B (4 & 5))




74
   This is the present value of the net cash inflows estimated under premodification terms discounted at the current Treasury rate.
75
   This is the present value of the net cash inflows estimated under postmodification terms discounted at the current Treasury rate.
76
   A gain from a modification occurs when the cost of a modification is greater than the decrease in book value of a direct loan (or increase in the
liability of a loan guarantee). (SFFAS 2, par. 46, 48 note 5, 50, & 52 note 8; SFFAS 19, par. 7)



October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 145
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                                             Yes,
                                                                                                                      Explanation
 Costs                                                                                        No,

 Credit Programs (131 – 178)                                                                   or
                                                                                             N/A

 171. If the cost of modifying pre-1992 or post-1991 loans is
      less than the decrease in the loans' book value, is the
      difference recognized as a loss?77 (SFFAS 2, par. 48 &
      app. B, parts I D (4 & 5), & part II B (4 & 5))

 172. If pre-1992 or post-1991 loan guarantees are modified,
      is the excess of the postmodification liability78 over the
      premodification liability79 recognized as a modification
      expense? (SFFAS 2, par. 49 & app. B, parts III D (1-3),
      & IV B (1-3))

 173. If the cost of modifying pre-1992 or post-1991 loan
      guarantees is greater than the increase in the book value
      of the related loan guarantee liabilities, is the difference
      recognized as a gain? (SFFAS 2, par. 52 & app. B,
      parts III D (4 & 5), & IV B (5))

 174. If the cost of modifying pre-1992 or post-1991 loan
      guarantees is less than the increase of the related loan
      guarantee liabilities, is the difference recognized as a
      loss? (SFFAS 2, par. 52 & app. B, parts III D (4 & 5) &
      IV B (5))

 175. If the premodification value of post-1991 and pre-1992
      loans sold80 exceeds the net proceeds from the sale, is
      the excess treated as the cost of modification and
      recognized as a modification expense?
      (SFFAS 2, par. 45 & 53 & app. B, part I F (1))

 176. If a loan is sold with recourse, is the present value of
      estimated losses under the recourse or guarantee
      obligations recognized as a subsidy expense and as a
      loan guarantee liability? (SFFAS 2, par. 54)




77
   A loss from a modification occurs when the cost of a modification is less than the decrease in book value of a direct loan (or increase in the liability
of a loan guarantee) that was discounted at the Treasury rate in effect when the loan was made. (SFFAS 2, par. 46, 48 note 5, 50, & 52 note 8; SFFAS
19, par. 17)
78
   This is the present value of the net cash flows under postmodification terms discounted at the current Treasury rate.
79
   This is the present value of the net cash flows under premodification terms discounted at the current Treasury rate.
80
   This is the present value of the loans’ net cash inflows discounted at the current discount rate.



October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                            Page 146
Reporting 1050 – CFO Act Checklist

Section IV Statement of Net Cost

                                                                Yes,
                                                                                 Explanation
Costs                                                           No,

Credit Programs (131 – 178)                                      or
                                                                N/A

177. If the modification expense arising from a loan sale is
     greater than the book value loss, is the difference
     recognized as a gain? (SFFAS 2, par. 55 & app. B,
     part I F (2))

178. If the modification expense arising from a loan sale is
     less than the book value loss, is the difference
     recognized as a loss? (SFFAS 2, par. 55 & app. B,
     part I F (2))




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 147

Reporting 1050 – CFO Act Checklist

Section V       Statement of Changes in Net Position

The 40 questions in this section are related to the Statement of Changes in Net Position

                                                                          Question Numbers

        1.     General                                                              1-6
        2.     Budgetary Financing Sources                                          7 - 23 

        3.     Other Financing Sources                                             24 - 40





October 2003             GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft            Page 148

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Section V       Statement of Changes in Net Position

                                                                  Yes,
                                                                  No,
General (1 – 6)                                                                       Explanation
                                                                   or
                                                                  N/A

               The Statement of Changes in Net Position reports the change in net position during
               the reporting period. Net position is affected by changes to its two components:
               Cumulative Results of Operations and Unexpended Appropriations. They are broken
               out into two separate columns in the Statement of Changes in Net Position.
               (OMB Bulletin 01-09, pp. 34 & 35, sections 5.1 & 5.2)

1.    Do the ending balances of the two main components of
      this statement, Cumulative Results of Operations and
      Unexpended Appropriations, agree with to line items of
      the same names in the “net position” section of the
      balance sheet? (OMB Bulletin 01-09, p. 18, section 3.2,
      pp. 34 & 35, sections 5.1 & 5.2, p. 38, section 5.7)

2.    Do beginning balances of Cumulative Results of
      Operations and Unexpended Appropriations agree with
      the amounts reported as net position on the prior year’s
      balance sheet? (OMB Bulletin 01-09, p. 35, section 5.3)




October 2003             GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 149

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Section V           Statement of Changes in Net Position

                                                                                             Yes,
                                                                                             No,
 General (1 – 6)                                                                                                     Explanation
                                                                                              or
                                                                                             N/A

 3.      Are “beginning balances, as adjusted,” equal to the sum
         of the beginning balances of net position as reported on
         the prior year’s balance sheet, and prior period
         adjustments? (OMB Bulletin 01-09, p. 36, section 5.3)

 4.     When errors81 are discovered after the issuance of
        financial statements, and if the financial statements would
        be materially misstated absent correction of the errors,
        are the corrections made as follows in the statement of
        changes in net position?
         a. If only the current period statement is presented, the
            cumulative effect of correcting the error is reported
            as a prior period adjustment to the beginning balance
            of the cumulative results of operations.
         b. If comparative financial statements are presented,
            individual amounts on the financial statements are
            corrected in the earliest affected period presented.
         c. If the earliest period presented in the comparative
            financial statements is not the period in which the
            error occurred and the cumulative effect is
            attributable to prior periods, the cumulative effect is
            reported as a prior period adjustment to the beginning
            balance of cumulative results of operations in the
            statement of net position for the earliest period
            presented. (SFFAS 21, par. 10 & 11)




81
  Errors in financial statements result from mathematical mistakes, mistakes in the application of accounting principles, or oversight or misuse of facts
that existed at the time the financial statements were prepared.


October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 150
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                                                                                             Yes,
                                                                                             No,
 General (1 – 6)                                                                                                     Explanation
                                                                                              or
                                                                                             N/A

 5.      Is the nature of an error in previously issued financial
         statements and the effect of its correction on relevant
         balances disclosed? (SFFAS 21, par. 10 (c))

 6.      If changes in accounting principles82 would have resulted
         in a change to prior period financial statements, are they
         handled in the following manner?
         a. the cumulative effect of the change on prior periods
            is reported as a “change in accounting principle” and
            reported as an adjustment to the beginning balance of
            the cumulative results of operations in the Statement
            of Changes in Net Position for the period that the
            change is made
         b. prior period financial statements presented for
            comparative purposes are presented as previously
            reported
         c. the nature of the changes in accounting principle and
            its effect on relevant balances are disclosed in the
            current period83 (SFFAS 21, par. 12 & 13;
            SFFAS 23, par. 17 & 18)




82
   A change in accounting principle is a change from one generally accepted accounting principle to another one that can be justified as preferable; this
would also include changes occasioned by the adoption of new federal accounting standards.
83
   Financial statements of subsequent periods need not repeat the disclosure.


October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 151
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                                                                                          Yes,
 Budgetary Financing Sources (7 – 23)                                                      No,
                                                                                                                  Explanation
                                                                                            or
                                                                                           N/A

                  The section, “Budgetary Financing Sources,” displays financing sources and
                  nonexchange revenue that are also budgetary resources, or adjustments to these
                  resources, as reported on the Statement of Budgetary Resources and defined as such
                  by OMB Circular No. A-11, Part 484 “Instructions on Budget Execution,” as
                  amended. (OMB Bulletin 01-09, p. 36, section 5.4)

 7.     Do budgetary “appropriations received”85 reported under
        “Budgetary Financing Sources” agree with the amount
        reported on the line item “appropriations received” in the
        Statement of Budgetary Resources?
        (OMB Bulletin 01-09, p. 36, section 5.4)

 8.     Are unexpended appropriations reduced as appropriations
        are used? (SFFAS 7, par. 71)

 9.     Are unexpended appropriations adjusted for other
        changes in budgetary resources, such as rescissions and
        transfers? (SFFAS 7, par. 71)

 10.    Do “appropriations transferred in/out (+/-)” equal the
        amount of appropriations received in the current or prior
        year(s) that have been transferred in or out during the
        current reporting year? (OMB Bulletin 01-09, p. 36,
        section 5.4)

 11.    Do “other adjustments86 (rescissions, etc.) (+/-)” include
        adjustments to either cumulative results of operations or
        unexpended appropriations? (OMB Bulletin 01-09, p. 36,
        section 5.4)




84
   OMB Circular A-11 superceded OMB Circular A-34 in June 2002 and was revised on July 25, 2003.
85
   Appropriations received do not include appropriated dedicated and earmarked receipts. Dedicated and earmarked receipts are accounted for as either
exchange or nonexchange revenue in accordance with SFFAS No. 7)
86
   Some examples of adjustments include rescissions of appropriations and cancellations of expired appropriation expenditure accounts, which would
also be included in line 6, “Permanently not Available” on the Statement of Budgetary Resources.


October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                        Page 152
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                                                                                              Yes,
 Budgetary Financing Sources (7 – 23)                                                         No,
                                                                                                                      Explanation
                                                                                               or
                                                                                              N/A

 12.     Are appropriations used by collecting entities to provide
         refunds of monies deposited to Treasury and trust funds
         reported under “other adjustments (rescissions, etc.)
         (+/-)” rather than as an “appropriations used?”
         (OMB Bulletin 01-09, p. 36, section 5.4)

 13.     Are "appropriations used" recognized as a financing
         source when goods and services are received or when
         benefits and grants are provided?87 (SFFAS 7, par. 72;
         OMB Bulletin 01-09, p. 36, section 5.4)

 14.     Is the amount of appropriations used subtracted from
         unexpended appropriations and added to cumulative
         results of operations for a net zero effect on net position
         as a whole? (OMB Bulletin 01-09, p. 36, section 5.4)

 15.     Do “appropriations88 used” exclude the following?
         a. undelivered orders
         b. unobligated appropriations
         c. dedicated tax receipts, earmarked receipts, and
            donations89 (OMB Bulletin 01-09, p. 36, section 5.4)

 16.     Is nonexchange revenue recognized as a financing source
         (and not as a deduction in determining the net cost of
         operations)? (SFFAS 7, par. 60)




87
   This is true whether the goods, services, and benefits are payable or paid as of the reporting date and whether the appropriations are used for items
that are expensed or capitalized.
88
   Appropriations used does not increase net position. It is subtracted from “unexpended appropriations” and added to “cumulative results of
operations,” which are line items on the balance sheet.
89
   Those financing sources are reported as either exchange or nonexchange revenue.


October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 153
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                                                                    Yes,
Budgetary Financing Sources (7 – 23)                                No,
                                                                                     Explanation
                                                                    or
                                                                    N/A

17.   Does the entity recognize nonexchange revenues, such as
      taxes, if it is legally entitled to the revenue? (SFFAS 7,
      par. 48 & 49)

18.   Is nonexchange revenue recognized when the
      government's claim to resources can be characterized as
      follows?
      a. specifically identifiable
      b. legally enforceable
      c. reasonably estimable
      d. more likely than not collectable (SFFAS 7, par. 48)

19.   Is revenue recognized by the recipient entities the sum of
      the following?
      a. cash or cash equivalents transferred to them by the
         collecting entities
      b. the net change in any related interentity balances
         between the collecting and the receiving entities (i.e.,
         the amount to be transferred to the recipient entities
         from the collecting entity or vice versa)
         (SFFAS 7, par. 60)

20. Do “donations and forfeitures of cash and cash
    equivalents” include voluntary gifts and involuntary
    forfeitures of resources to the federal government by
    nonfederal entities? (OMB Bulletin 01-09, p. 37,
    section 5.4)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 154

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                                                                                           Yes,
 Budgetary Financing Sources (7 – 23)                                                       No,
                                                                                                                 Explanation
                                                                                             or
                                                                                            N/A

 21.        Do “transfers-in/out without reimbursement (+/-)” under
            “budgetary financing sources” include intragovernmental
            nonappropriated90 balance transfers in or out during the
            current reporting year? (OMB Bulletin 01-09, p. 37,
            section 5.4)

 22.        Is exchange revenue (included in calculating an entity’s
            net cost of operations) required to be transferred to the
            Treasury or another federal entity recognized as a transfer
            out? (OMB Bulletin 01-09, p. 37, section 5.4)

 23.        Do “other budgetary financing sources” include other
            financing sources that affect budgetary resources that
            have not been covered by the preceding questions?
            (OMB Bulletin 01-09, p. 37, section 5.4)




90
     Nonappropriated balances include financing sources and revenue not reported as unexpended appropriations.


October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                              Page 155

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                                                                                          Yes,
 Other Financing Sources (24 – 40)                                                         No,
                                                                                            or                    Explanation

                                                                                         N/A

         “Other financing sources,” displays financing sources and nonexchange revenue that do not
         represent budgetary resources as reported on the Statement of Budgetary Resources and defined as
         such by OMB Circular No. A-11, Part 4 (OMB Bulletin 01-09, p. 37, section 5.5)

 24.    Do the items reported in the “other financing sources”
        section equal the amounts reported as similar line items
        in the “other resources”91 section on the Statement of
        Financing? (OMB Bulletin 01-09, p. 35, section 5.2,
        pp. 37 & 38, section 5.5, p. 46, section 7.2 & p. 48,
        section 7.3)

 25.    Is revenue arising from donations of property measured at
        the estimated fair value of the contribution at the time of
        the donation? (SFFAS 6, par. 30; SFFAS 7, par. 62,
        OMB Bulletin 01-09, p. 37, section 5.5)




91
 Other resources increase net position but are not budgetary resources as reported on the “Statement of Budgetary Resources or defined as such in
OMB Circular No. A-11, Part 4. OMB Circular A-11 superceded OMB Circular A-34 in June 2002 and was revised on July 25, 2003.


October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                       Page 156
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Section V              Statement of Changes in Net Position


                                                                                                Yes,
 Other Financing Sources (24 – 40)                                                               No,
                                                                                                 or                     Explanation

                                                                                               N/A

 26.       Are transferred assets recorded at the book value of the
           transferring entity, or, if the receiving entity does not
           know the book value, is the asset recorded at its estimated
           fair value as of the date of the transfer? (SFFAS 7,
           par. 74; OMB Bulletin 01-09, p. 37, section 5.5)

 27.       When assets92 are transferred in or out by entities without
           reimbursement:
            a. Does the receiving entity recognize the transfer-in as
               an increase in financing sources in its statement of
               net position?
            b. Does the transferring entity recognize the transfer out
               as a decrease in financing sources in its statement of
               changes in net position? (SFFAS 7, par. 74,
               OMB Bulletin 01-09, p. 37, section 5.5)




92
     This amount includes intragovernmental transfers in to or out of capitalized assets during the current reporting year.


October 2003                         GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                   Page 157

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Section V             Statement of Changes in Net Position


                                                                                               Yes,
 Other Financing Sources (24 – 40)                                                              No,
                                                                                                                        Explanation
                                                                                                 or
                                                                                               N/A

 28. Does the reporting entity recognize an imputed financing
     source for costs funded through other federal entities as
     well as nonreimbursed costs of goods and services
     provided by other federal entities? (SFFAS 4, par. 109;
     SFFAS 7, par. 73; OMB Bulletin 01-09, p. 37,
     section 5.5)

 29. Do imputed financing costs reported on the Statement of
     Changes in Net Position equal the amount of imputed
     financing costs as reported on the statement of net cost?
     (OMB Bulletin 01-09, p. 37, section 5.5)

 30.       Do “other financing sources” include other financing
           sources that do not represent budgetary resources and that
           have not been covered by the preceding questions (i.e.,
           nos. 23-28)? (OMB Bulletin 01-09, p. 38, section 5.5)

 31.       Is exchange revenue transferred to another government
           entity or to the Treasury recognized as a "transfer out" in
           determining the net results of operations?
           (SFFAS 7, par. 75)

 32.       Is a gain93 from the modification94 of post-1991 loans
           reported as a reduction in financing source and paid to the
           Treasury as a "modification adjustment transfer?"
           (SFFAS 2, par. 48, & app. B, part I D (5))




93
     The excess of the cost of the modification over the decrease in loan book value discounted at the Treasury rate.
94
  A modification means a federal government action, including new legislation or administration action, which directly or indirectly alters
the estimated subsidy cost and present value of outstanding loans or the liability of loan guarantees. (SFFAS 2, par. 41)


October 2003                        GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                      Page 158
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                                                                                             Yes,
 Other Financing Sources (24 – 40)                                                            No,
                                                                                                                        Explanation
                                                                                               or
                                                                                              N/A

 33.     Is a loss95 from the modification of post-1991 loans
         reported as a financing source when the reporting entity
         receives from the Treasury a "modification adjustment
         transfer?" (SFFAS 2, par. 48 & app. B, part I D (5))

 34.     Is a gain96 resulting from a modification of post-1991
         loan guarantees reported as a reduction in financing
         source and paid to the Treasury as a "modification
         adjustment transfer?" (SFFAS 2, par. 52 & app. B,
         part III D (5))

 35.     Is a loss97 resulting from a modification of post-1991 loan
         guarantees reported as a financing source when the
         reporting entity receives from the Treasury a
         "modification adjustment transfer" to offset the
         difference? (SFFAS 2, par. 52 & app. B, part III D (5))

 36.     Is a gain on the sale of a post-1991 loan reported as a
         reduction in financing source and paid to the Treasury as
         a "modification adjustment transfer?" (SFFAS 2, par. 55
         & app. B, part I F (2))

 37.     Is a loss on the sale of a post-1991 loan reported as a
         financing source when the reporting entity receives from
         the Treasury a “modification adjustment transfer?”
         (SFFAS 2, par. 55 & app. B, part I F (2))




95
   The excess of the decrease in loan book value, discounted at the Treasury rate, over the cost of the modification.
96
   The excess of the cost of the modification over the increase in liability discounted at the Treasury rate.
97
   The excess of the increase in liability, discounted at the Treasury rate, over the cost of the modification.


October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                      Page 159
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                                                                 Yes,
Other Financing Sources (24 – 40)                                No,
                                                                                     Explanation
                                                                  or
                                                                 N/A

38.   Does the amount “net cost of operations” reported under
      cumulative results of operations agree with “net cost of
      operations” as reported on the Statement of Net Cost and
      Statement of Financing? (OMB Bulletin 01-09, p. 38,
      section 5.6 & p. 51, section 7.7)

39.   Is the difference between the net cost of operations and
      the sum of the financing sources (i.e., budgetary and
      other) equal to the ending balance of net position as it
      relates to the cumulative results of operations?
      (OMB Bulletin 01-09, p. 38, section 5.6)

40.   Do the ending balances of the cumulative results of
      operations and unexpended appropriations agree with the
      amounts reported as net position on the current year’s
      balance sheet? (OMB Bulletin 01-09, p. 38, section 5.7)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft             Page 160

 Reporting 1050 – CFO Act Checklist

 Section VI Statement of Budgetary Resources

 The 27 questions in this section concern the Statement of Budgetary Resources.




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft   Page 161

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 Section VI Statement of Budgetary Resources


                                                                                        Yes,
  Statement of Budgetary Resources
                                                                                         No,
                                                                                                      Explanation
  (1–27)                                                                                  or
                                                                                        N/A

                    The budget is the primary financial planning and control tool of the government. The
                    Statement of Budgetary Resources and the related disclosures provide information
                    about how budgetary resources were made available as well as their status at the end
                    of the period. It is the only financial statement exclusively derived from an entity’s
                    budgetary general ledger, prepared in accordance with budgetary accounting rules,
                    which are incorporated into Generally Accepted Accounting Principles (GAAP) for
                    the federal government. (SFFAS 7, par. 77; OMB Bulletin 01-09,
                    p. 39, section 6.1)

  1.        Is the recognition and measurement of budgetary
            information reported on the Statement of Budgetary
            Resources (SBR) based on budget terminology,
            definitions, and guidance in OMB Circular A-11,98
            Preparation, Submission and Execution of the Budget,
            (July 2003)? (SFFAS 7, par. 78; OMB Bulletin 01-09,
            p. 39, section 6.1)

  2.        Is information on the SBR consistent with budget
            execution information reported on the Report on Budget
            Execution and Budgetary Resources (SF 133) and with
            information reported in the Budget of the United States
            Government? (OMB Bulletin 01-09, p. 39, section 6.1)

  3.        Does the entity disclose and explain any material
            differences between comparable information contained in
            the three reports (i.e., SBR, SF 133 and the Budget of the
            United States Government)? (OMB Bulletin 01-09, p. 6,
            section 1.7 & p. 39, section 6.1)

  4.        Is budgetary information aggregated for purposes of the
            Statement of Budgetary Resources disaggregated99 for
            each of the reporting entity’s major budget accounts and
            presented as required supplementary information?
            (SFFAS 7, par. 78; OMB Bulletin 01-09, p. 112,
            section 11.4)




 98
      OMB Circular A-11 superceded OMB Circular A-34 in June 2002 and was revised on July 25, 2003.
 99
      Small budgetary accounts may be aggregated.

October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                   Page 162
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                                                                    Yes,
 Statement of Budgetary Resources
                                                                    No,
                                                                                     Explanation
 (1–27)                                                             or
                                                                    N/A

 5.    Do the major accounts and the aggregate of small budget
       accounts agree, in total, with the amounts reported on the
       face of the Statement of Budgetary Resources?
       (OMB Bulletin 01-09, p. 112, section 11.4)

 6.    Is the budgetary information in the SBR presented on a
       combined basis that is consistent with the aggregate of
       the account-level information presented on the SF 133s?
       (OMB Bulletin 01-09, p. 39, section 6.2)

 7.    Are nonbudgetary credit financing accounts reported
       separately from the budgetary accounts?
       (OMB Bulletin 01-09, p. 40, section 6.3)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft            Page 163

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                                                                     Yes,
 Statement of Budgetary Resources
                                                                     No,
                                                                                      Explanation
 (1–27)                                                              or
                                                                     N/A

 8.    Does the entity include in its SBR the following under
       “Budgetary Resources”?
       a. budget authority, including if applicable
          i.      appropriations received
          ii.     borrowing authority
          iii.    contract authority
          iv.     net transfers (+/-)
          v.      other
       b. unobligated balances, including if applicable
          i.      beginning of period balances
          ii.     net transfers, actual (+/-)
          iii.    anticipated transfer balances
       c. spending authority from offsetting collections,
          including, if applicable
          i.      earned authority that is collected and/or
                  receivable from federal services
          ii.     changes in unfilled customer orders that are
                  advance(s) received, and/or without
                  advance(s) from federal sources
          iii.    anticipated collections for the rest of the year
                  without advances
          iv.     transfers from trust funds
       d. recoveries of prior year obligations
       e. budgetary resources temporarily not available
          pursuant to public law
       f. budgetary resources permanently not available
          (OMB Bulletin 01-09, p. 41, section, 6.4; SFFAS 7,
          par. 77)




October 2003             GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft            Page 164

 Reporting 1050 – CFO Act Checklist

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                                                                                          Yes,
  Statement of Budgetary Resources
                                                                                           No,
                                                                                                                 Explanation
  (1–27)                                                                                    or
                                                                                          N/A

  9.     Do the budgetary resources reported in this section agree
         with the total budgetary resources reported for all of the
         budget accounts on the year-end SF 133?
         (OMB Bulletin 01-09, p. 42, section 6.5)

  10.    Does the line item “appropriations received”100 reported
         on the SBR equal the amount reported as “appropriations
         received” on the Statement of Changes in Net Position?
         (OMB Bulletin 01-09, p. 36, section 5.4 & p. 43,
         section 6.5)

  11.    Does the line item entitled “permanently not available”
         on the SBR include items reported under “other
         adjustments (rescissions, etc.)” on the Statement of
         Changes in Net Position? (OMB Bulletin 01-09, p. 36,
         section 5.4 & p. 43, section 6.5)

  12.    Does the entity include the following under “Status of
         Budgetary Resources” on the SBR?
         a. obligations incurred that are
            i.      direct and/or
            ii.     reimbursable
         b. unobligated balance(s) that are
            i.      apportioned
            ii.     exempt from apportionment
            iii.    otherwise available
         c. unobligated balance(s) not available
            (OMB Bulletin 01-09, p. 42, section 6.4; SFFAS 7,
            par. 77)

  13.    Does the total amount displayed for the “status of
         budgetary resources” section of the SBR equal “total
         budgetary resources” available to the reporting entity as
         of the reporting date? (OMB Bulletin 01-09, p. 43,
         section 6.6)



 100
   Appropriations received do not include appropriated, dedicated and earmarked receipts. Dedicated and earmarked receipts, typically in special and
 nonrevolving trust funds, are accounted for as either exchange or nonexchange revenue in accordance with SFFAS No. 7.

October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                      Page 165
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                                                                                             Yes,
  Statement of Budgetary Resources
                                                                                             No,
                                                                                                                    Explanation
  (1–27)                                                                                      or
                                                                                             N/A

  14.     Does the status of budgetary resources reported on the
          SBR agree with the total status reported for each budget
          account on the year-end SF 133? (OMB Bulletin 01-09,
          p. 43, section 6.6)

  15.     Does the entity’s SBR include the following under
          “Relationship of Obligations to Outlays?”
          a. obligated balance, net, beginning of period
          b. obligated balance transferred, net (+/-)
          c. obigated balance, net, end of period that are
               i.        accounts receivable
               ii.       unfilled customer orders from federal sources
               iii.      undelivered orders
               iv.       accounts payable
          d. outlays that are
               i.        disbursements
               ii.       collections
          e. less, if applicable, offsetting receipts101
             (OMB Bulletin 01-09, p. 40, section 6.3 & p. 42,
             section 6.4)

  16.     Do the outlays102 reported in “Relationship of Obligations
          to Outlays” section agree with the agency outlay totals
          reported in the Budget of the United States
          Government?103 (OMB Bulletin 01-09, p. 43, section 6.7)




 101
     Offsetting receipts offset budget authority and outlays at the agency level in the Budget of the United States Government, but are not reflected in
 budget execution reports (SF 133s), which provide account-level information only. Since the SBR is an agencywide report, offsetting receipts must be
 included to reconcile to information in the Budget of the United States Government.
 102
     Outlays consist of disbursements net of offsetting collections.
 103
     That is, do the outlays agree with the aggregate of the outlays for accounts within the Budget of the United States Government?

October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 166
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                                                                                           Yes,
  Statement of Budgetary Resources
                                                                                            No,
                                                                                                                  Explanation
  (1–27)                                                                                    or
                                                                                           N/A

  17.    Do the outlays also agree with the aggregate of outlays
         reported on the year-end SF 133 for all budget accounts,
         including nonbudgetary financing accounts and the
         disbursements and collections reported to Treasury on a
         monthly basis104 as per OMB Circular A-11?105
         (OMB Bulletin 01-09, p. 43, section 6.7)

                        Offsetting receipts are collections that are credited to general fund, special fund, or trust
                        fund receipt accounts and that offset gross outlays. Unlike offsetting collections, which
                        are credited to expenditure accounts and offset outlays at the account level, offsetting
                        receipts are credited to receipt accounts and offset outlays at the agency or
                        governmentwide level.
                        Offsetting receipts may be distributed or undistributed to agencies. Distributed offsetting
                        receipts offset the outlays of the agency, while undistributed offsetting receipts offset
                        governmentwide outlays. Distributed offsetting receipts typically offset the outlays of the
                        agency that conducts the activity, generating the receipts and the subfunction to which the
                        activity is assigned. Offsetting receipts are composed of proprietary receipts from the
                        public, receipts from intragovernmental transactions, and offsetting governmental
                        receipts. (OMB Bulletin 01-09, pp. 43 & 44, section 6.7)

  18.    Does the line item “offsetting receipts” on the SBR
         include all distributed offsetting receipts for the
         agency?106 (OMB Bulletin 01-09, p. 44, section 6.7)

  19.    Does the agency include the following receipt accounts
         from the Treasury Annual Report Appendix, Part 4, Other
         Information/Receipts by Department, in the SBR?
         a. Proprietary Receipts from the Public
         b. Intrabudgetary Receipts Deducted by Agencies
         c. Offsetting Governmental Receipts
            (OMB Bulletin 01-09, p. 44, section 6.7)




 104
     Agencies report their disbursements and collections using the SF 224, Statement of Transactions; SF 1219, Statement of Accountability; and SF
 1220, Statement of Transactions.
 105
     OMB Circular A-11 superceded OMB Circular A-34 in June 2002 and was revised on July 25, 2003.
 106
     A list of distributed offsetting receipt accounts can be found in the Treasury Annual Report Appendix, Part 4, Other Information.

October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                       Page 167
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                                                                                         Yes,
  Statement of Budgetary Resources
                                                                                          No,
                                                                                                                Explanation
  (1–27)                                                                                   or
                                                                                          N/A

  20.    Is the amount of distributed offsetting receipts reported in
         SBR the aggregate of cash collected in these receipt
         accounts and reported to Treasury on a monthly basis?107
         (OMB Bulletin 01-09, p. 44, section 6.7)

  21.    Does the amount of offsetting receipts that are distributed
         to agencies and reported on the SBR agree with the
         deductions for offsetting receipts as reported in the
         Budget of the United States Government, if available by
         the time the financial statements must be finalized and
         submitted? (OMB Bulletin 01-09, p. 44, section 6.7)

  22.    Are undistributed offsetting receipts, which are credited
         to governmentwide outlay totals, excluded from the
         SBR? (OMB Bulletin 01-09, p. 44, section 6.7)

  23.    Do the net outlays in the SBR agree with the net
         outlays108 as reported in the Budget of the United States
         Government, if available by the time the financial
         statements must be finalized and submitted?
         (OMB Bulletin 01-09, p. 44, section 6.7)

  24.    Does the entity disclose the amount of direct and
         reimbursable obligations incurred against amounts
         apportioned under category109 “A,” “B,” and “exempt
         from apportionment”? (OMB Bulletin 01-09, p. 93,
         section 9.27)




 107
     Agencies use the SF 224, Statement of Transactions; SF 1219, Statement of Accountability; and SF 1220, Statement of Transactions.
 108
     Net outlays are equal to gross outlays less offsetting collections and receipts.
 109
     Apportionment categories are to be determined in accordance with guidance provided in OMB Circular A-11, Part 4, Instructions on Budget
 Execution, which superceded Circular A-34.

October 2003                    GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                      Page 168
 Reporting 1050 – CFO Act Checklist

 Section VI Statement of Budgetary Resources


                                                                                        Yes,
  Statement of Budgetary Resources
                                                                                        No,
                                                                                                              Explanation
  (1–27)                                                                                 or
                                                                                        N/A

  25.    Does the disclosure of the amount of direct and
         reimbursable obligations incurred against amounts
         apportioned under category110 “A,” “B,” and “exempt
         from apportionment” agree with the aggregate of the
         related information as reported on the agency’s year-end
         SF 133, and the amounts reported under direct and
         reimbursable obligations incurred, reported on the SBR?
         (OMB Bulletin 01-09, p. 93, section 9.27)
  26.    Does the entity disclose the following information related
         to the status of budgetary resources?
         a. the amount of budgetary resources obligated for
              undelivered orders at the end of the period
         b. available borrowing and contract authority at the end
              of the period
         c. repayment requirements, financing sources for
              repayment, and other terms of borrowing authority
              used
         d. amounts adjusted to “budgetary resources available at
              the beginning of the year,” during the reporting
              period, as well as an explanation of the adjustments
         e. existence, purpose, and availability of permanent,
              indefinite appropriations
         f. information about legal arrangements affecting the
              use of unobligated balances of budget authority, such
              as time limits, purpose, and obligation limitations
         g. explanations of any material differences between the
              budgetary resources reported in the SBR and "actual"
              amounts in the Budget of the United States
              Government
         h. the amount of unfunded liabilities, and an explanation
              that includes identification of balance sheet
              components, when unfunded liabilities do not equal
              the total financing sources yet to be provided
         i. the amount of any capital infusion received during the
              reporting period (SFFAS 7, par. 79 & 209-212;
              OMB Bulletin 01-09, p. 93 & 94, sections 9.27-9.34)

 110
   Apportionment categories are to be determined in accordance with guidance provided in OMB Circular A-11, Part 4 Instructions on Budget
 Execution, which superceded Circular A-34.

October 2003                    GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                    Page 169
 Reporting 1050 – CFO Act Checklist

 Section VI Statement of Budgetary Resources


                                                                   Yes,
 Statement of Budgetary Resources
                                                                   No,
                                                                                     Explanation
 (1–27)                                                            or
                                                                   N/A

 27.    In order to ensure consistency between the information
        presented in the SBR and the Budget of the United States
        Government, does the entity do the following?
       a. post all known audit adjustments to the Federal
          Agencies Centralized Trial-balance System II (FACTS
          II) during the window of time specified for posting
          corrections to the budget information
       b. post all known audit adjustments to OMB’s MAX A-
          11 budget preparation system during the time frames
          provided by OMB (OMB Bulletin 01-09, pp. 5 & 6,
          section 1.7)




October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft            Page 170

 Reporting 1050 – CFO Act Checklist


Section VII         Statement of Financing

The 27 questions in this section are related to the Statement of Financing.


                                                                                 Question Numbers

        1.     Resources Used to Finance Activities                                      1-8 


        2. 	 Resources Used to Finance Items Not Part of                                 9-14 

             the Net Cost of Operations 


        3.     Components of the Net Cost of Operations that                             15-24

               Will Not Require or Generate Resources in the
                Current Period Resources

        4.     Disclosure Items                                                          25-27





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Section VII                Statement of Financing



                                                                                      Yes,
                                                                                      No,                     Explanation
 Resources Used to Finance Activities (1 – 8)
                                                                                       or
                                                                                      N/A

                    The Statement of Financing is the bridge between an entity’s budgetary and
                    financial (i.e., proprietary) accounting. The Statement of Financing articulates the
                    relationship between net obligations derived from an entity’s budgetary accounts
                    and net cost of operations derived from the entity’s proprietary accounts by
                    identifying and explaining key differences between the two numbers.
                    Most entity transactions are recorded in both budgetary and proprietary accounts.
                    However, because different accounting bases are used for budgetary and
                    proprietary accounting, some transactions may appear in only one set of accounts
                    (e.g., accrual of environmental and disposal liabilities, which is recorded only in the
                    proprietary records). Furthermore, not all obligations or offsetting collections may
                    result in expenses or exchange revenue (e.g., purchase of a building is capitalized
                    on the balance sheet in the proprietary accounts but obligated and outlayed in the
                    budgetary accounts).
                    The statement is structured to first identify total resources used by an entity during
                    the period (budgetary and other) and then make adjustments to the resources based
                    upon how they were used to finance net obligations or net cost. Budgetary
                    resources reported in this statement are those resources as defined in OMB Circular
                    No. A-11111and are also reported on the Statement of Budgetary Resources. Other
                    resources reported in this statement are also reflected in the Statement of Changes
                    in Net Position. (OMB Bulletin 01-09, p. 45, section 7.1; SFFAS 7, par. 80 & 95)
                    The section “Resources Used to Finance Activities” reflects the budgetary resources
                    obligated and other resources that are used to finance the activities of the agency. The
                    obligations of budgetary resources are net of offsetting collections, recoveries, and offsetting
                    receipts. The other resources are financing sources that increase net position but are not
                    budgetary resources. Every line item in this section is mirrored on either the Statement of
                    Budgetary Resources or the Statement of Changes in Financial Position.
                    (OMB Bulletin 01-09, p. 47, section 7.3)




111
      OMB Circular No. A-11, Part 4, Instructions on Budget Execution, has superceded OMB Circular No A-34.


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Section VII               Statement of Financing


                                                                                           Yes,
                                                                                            No,                     Explanation
 Resources Used to Finance Activities (1 – 8)
                                                                                            or
                                                                                           N/A

 1.       Is the budgetary information used to calculate net
          obligations112 in the “Resources Used to Finance
          Activities” section of the Consolidated Statement of
          Financing, presented on a combined basis113 to enable
          agreement with similar amounts reported on the
          Statement of Budgetary Resources?
          (OMB Bulletin 01-09, p. 6, section 1.8 & p. 46,
          section 7.1)

 2.       Does the amount reported as “obligations incurred”
          equal the obligations incurred114 line item as reported
          on the Statement of Budgetary Resources, and does
          this include all budget accounts, including
          nonbudgetary financing accounts?
          (OMB Bulletin 01-09,p. 47, section 7.3)

 3.       Does the line item “less: spending authority from
          offsetting115 collections and recoveries”116 agree with
          the spending authority from offsetting collections and
          recoveries as reported on the Statement of Budgetary
          Resources, and does this include all budget accounts,
          including nonbudgetary financing accounts?
          (OMB Bulletin 01-09, p. 47, section 7.3)

 4.       Is “Obligations net of offsetting collections and
          recoveries” equal to the difference between
          “obligations incurred” and “spending authority from
          offsetting collections and recoveries?”
          (OMB Bulletin 01-09, p. 48, section 7.3)


112
    The budgetary information includes the line items (1) “ obligations incurred,” (2) “Less: spending authority from offsetting collections and
recoveries,” (3) “obligations net of offsetting collections and recoveries,” and 4) “less: offsetting receipts.”
113
    A combined basis means the aggregation of account-level information as opposed to a consolidation that implies the elimination of inter-account
transactions.
114
    This is not to be confused with total budgetary resources; e.g., with total appropriations received and available, as the statement of financing is not
concerned with total resources or restrictions on OMB’s ability to apportion or the agency’s ability to allot total resources. (SFFAS 7 Implementation
Guide (April 2002), par. 14)
115
    “Offsetting” in the term “offsetting collections” means that the resources generated by the collecting activity are added to the expenditure accounts
and hence “offset” gross obligations. (SFFAS 7 Implementation Guide (April 2002), par. 22)
116
    Recoveries are budgetary resources that offset obligations on the Statement of Budgetary Resources, but are not a proprietary financing source used
to offset costs on the Statement of Net Cost. (OMB Bulletin 01-09, p. 49, section 7.4)


October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 173
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Section VII               Statement of Financing


                                                                                            Yes,
                                                                                             No,                      Explanation
 Resources Used to Finance Activities (1 – 8)
                                                                                              or
                                                                                            N/A

 5.       Does the amount reported as “less: offsetting receipts”
          equal the offsetting receipts117 line item as reported on
          the Statement of Budgetary Resources?
          (OMB Bulletin 01-09, p. 48, section 7.3)

 6.       Do “net obligations”118 equal the difference between
          “obligations net of offsetting collections and
          recoveries” and “offsetting receipts?”
          (OMB Bulletin 01-09, p. 48, section 7.3)

 7.       Does the entity’s Statement of Financing include other
          nonbudgetary resources used to finance activities, and
          do the line item amounts as reported on the Statement
          of Financing equal the following corresponding line
          item amounts reported as “other financing sources” on
          the Statement of Changes in Net Position?
          a. donations and forfeitures of property
          b. transfers in/out without reimbursement
          c. imputed financing from costs absorbed by others
          d. other (OMB Bulletin 01-09, p. 48, section 7.3)

 8.       Is “total resources used to finance activities” equal to
          the sum of net obligations119 and net other
          (nonbudgetary) resources used to finance activities?
          (OMB Bulletin 01-09, p. 46, section 7.2)




117
    Offsetting receipts differ from “offsetting collections.” Offsetting collections are included in the entity’s expenditure account and thus are usually
available for spending for the purposes of the account without further action by Congress. (SFFAS 7 Implementation Guide (April 2002), par. 23)
118
    Net obligations reflect obligations incurred net of offsetting collections, recoveries, and offsetting receipts.
119
    One of the reasons that net obligations does not equal the amount of the net cost of operations is that there are resources that are not reported in the
Budget of the United States Government that may finance the net cost of operations or other activities of the agency.


October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                            Page 174
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Section VII               Statement of Financing



                                                                                          Yes,
                                                                                          No,                      Explanation
 Resources Used to Finance Items Not Part of the Net Cost
 of Operations (9 – 14)                                                                    or
                                                                                          N/A

                    The section, “Resources Used to Finance Items Not Part of the Net Cost of Operations,” in
                    the Statement of Financing adjusts total resources used to finance the activities of the
                    entity to account for items that were included in net obligations and other resources, but
                    which were not part of the net cost of operations. This section would include items in which
                    the expense was recognized in a prior period but the budgetary resource and obligation
                    are recognized in the current period (e.g., upward/downward reestimates of subsidy
                    expense accrued in the prior period but obligated in the current period). It would also
                    include budgetary resources and obligations recognized in the current period that do not
                    affect the net cost of operations (e.g., the acquisition of assets reflected in net obligations
                    but not in net cost of operations for the period). (OMB Bulletin 01-09, p. 48, section 7.4)

 9.      Does the line item, “change in budgetary resources
         obligated for goods, services, and benefits ordered but
         not yet provided (+/-),”120 reflect undelivered orders,
         or adjustments thereof, that are included in net
         obligations, but which are not part of the net cost of
         operations? (OMB Bulletin 01-09, p. 48, section 7.4)

 10.     Does the line item, “resources that fund expenses
         recognized in prior periods,”121 reflect the obligation
         of resources that were part of the net cost of
         operations in a prior period? (OMB Bulletin 01-09,
         p. 48, section 7.4)




120
    This line item is used to explain the difference between the total resources used to finance activities and the net cost of operations because of the
change in “budgetary resources obligated for goods, services, and benefits ordered but not yet provided,” i.e., “undelivered orders.” Undelivered
orders are part of “obligations incurred,” but they do not affect the net cost of operations. Thus, for a transaction involving the placing a $100
undelivered order, obligations incurred would increase by $100 but would be shown as a negative or a reduction to total resources used to finance
activities. (SFFAS 7 Implementation Guide (April 2002), par. 53-55)
121
    This line item is used to explain differences in resources and net cost of operations caused by expenses, which were accrued in previous periods but
paid in the current period. If, for example, the amount of annual leave taken or obligated was worth $250 but the amount of annual leave earned (i.e.,
expensed) for the period was $200, the difference of $50 between obligation and expense would be shown as a negative. (SFFAS 7 Implementation
Guide (April 2002), par. 56-58)


October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                         Page 175
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Section VII               Statement of Financing


                                                                                           Yes,
                                                                                            No,                     Explanation
 Resources Used to Finance Items Not Part of the Net Cost
 of Operations (9 – 14)                                                                      or
                                                                                           N/A

 11.      Do the line items included under “budgetary offsetting
          collections and receipts that do not affect net cost of
          operations” reflect offsetting collections and
          receipts122 that are not reported as exchange revenue in
          the Statement of Net Cost? (OMB Bulletin 01-09,
          pp. 48 & 49, section 7.4)

 12.      Does the line item, “resources that finance the
          acquisition of assets,” reflect budgetary resources
          obligated123 that are not expenses as reported on the
          Statement of Net Cost? (OMB Bulletin 01-09, p. 49,
          section 7.4)

 13.      Does the agency include under the line item, “Other
          resources or adjustments to net obligated resources
          that do not affect net cost of operations,” activities124
          not otherwise classified under the line items in this
          section of the Statement of Financing?
          (OMB Bulletin 01-09, p. 49, section 7.4)

 14.      Does the line item, “total resources used to finance the
          net cost of operations,” consist of the difference
          between the line items “total resources used to finance
          activities” and “total resources used to finance items
          not part of the net cost of operations?”
          (OMB Bulletin 01-09, p. 46, section 7.2 & p. 48,
          section 7.4)




122
    Examples of offsetting collections and receipts that are not exchange revenue are (1) collections of subsidy expenses for post –1991 credit
programs, (2) collections of exchange revenue receivable from the public, and (3) advances (i.e., unfilled customer orders) for work not performed,
with the caveat that in most cases, orders from the public without advances cannot be accepted. This line item is usually shown as a positive, the
opposite (i.e., negative) of what is included under the line item, “less: spending authority from offsetting collections and recoveries,” unless there is a
net decrease in unfilled customer orders.                (SFFAS 7 Implementation Guide (April 2002), par. 59-61)
123
    An example of this activity is the purchase of capital assets. (SFFAS 7 Implementation Guide (April 2002), par. 62)
124
    This activity may include noncash recoveries of prior year obligations. Recoveries are budgetary resources that offset obligations on the Statement
of Budgetary Resources, but which are not a proprietary financing source used to offset costs on the Statement of Net Cost.


October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 176
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Section VII               Statement of Financing



                                                                                            Yes,

 Components of the Net Cost of Operations that Will Not                                     No,
                                                                                                                     Explanation
 Require or Generate Resources in the Current Period                                         or
 Resources (15 – 24)
                                                                                            N/A

                    The section, “Components of the Net Cost of Operations that will not Require or Generate
                    Resources in the Current Period,” identifies (1) items that are recognized as a component
                    of the net cost of operations (i.e., current period expenses and exchange revenues) for
                    which budgetary resources (and related obligations) will not be provided (or incurred)
                    until a subsequent period and (2) items (i.e., current period expenses) that are recognized
                    as a part of the net cost of operations for the period but will not generate or require the use
                    of resources in the current period. (OMB Bulletin 01-09, p. 49, section 7.5 & p. 50,
                    section 7.6)

 15.      Does the line item, “increase in annual leave liability,”
          include the expense related to the increase125 in annual
          leave liability for which the budgetary resources will
          be provided in a subsequent period?
          (OMB Bulletin 01-09, p. 50, section 7.5)

 16.      Does the line item, “increase in environmental and
          disposal liability,” include the expense related to the
          increase in environmental and disposal liability for
          which the budgetary resources will be provided in a
          subsequent period?
          (OMB Bulletin 01-09, p. 50, section 7.5)

 17.      Does the line item “upward/downward reestimates of
          credit subsidy expense (+/-),” include the expense
          recognized as a result of an upward(+) or downward(-)
          reestimate of credit program subsidy cost for which
          budgetary resources (or obligations) will be provided
          (or incurred) in a subsequent period?126
          (OMB Bulletin 01-09, p. 50, section 7.5)




125
    An increase in annual leave liability has no effect on budgetary accounts, because it is not funded on an accrual basis. It is financed when it is taken
and the amounts are paid to employees who took the leave. Thus, budgetary resources are zero, but the net cost of operations includes the amount of
accrued leave. (SFFAS 7 Implementation Guide (April 2002), par. 40)
126
    The Credit Reform Act of 1990, as amended, provides that agencies will receive subsidies to cover defaults and other situations for direct loans and
loan guarantees obligated after September 30, 1991. (SFFAS 7 Implementation Guide (April 2002), par. 66)


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Section VII              Statement of Financing


                                                                                        Yes,

 Components of the Net Cost of Operations that Will Not                                  No,
                                                                                                                 Explanation
 Require or Generate Resources in the Current Period                                      or
 Resources (15 – 24)
                                                                                         N/A

 18.     Are these credit subsidy reestimates reflected as
         liabilities covered by budgetary resources?127
         (OMB Bulletin 01-09, p. 50, section 7.5)

 19.     Does the line item, “increase in exchange revenue
         receivable from the public,” include exchange revenue
         recognized as a component128 of the net cost of
         operations for the period? (OMB Bulletin 01-09,
         p. 50, section 7.5)

 20.     Does the entity report as “other” under the section
         “Components Requiring or Generating Resources in
         Future Periods,” all other expenses and exchange
         revenue not specifically mentioned in the preceding
         questions that do not require or generate resources in
         the current period but will do so in a subsequent
         period? (OMB Bulletin 01-09, p. 50, section 7.5)

 21.     Does the line item, “depreciation and amortization,”
         reflect the current period usage of assets129 or
         amortization of liabilities130 for which budgetary
         resources were obligated in a prior period?
         (OMB Bulletin 01-09, p. 50, section 7.6)

 22.     Does the line item, “revaluation of assets and
         liabilities,” include gains and losses recognized131
         during the revaluation of assets or liabilities?
         (OMB Bulletin 01-09, p. 50, section 7.6;)



127
    Budget authority to fund reestimates is permanent and indefinite and no further congressional action is needed to provide the resources.
128
    Absent specific legislation to the contrary, public receivables do not count as budgetary resources until they are collected. Hence, the revenue
related to accruals of those resources is not reflected in offsetting collection activity at the time they are accrued. (SFFAS 7 Implementation Guide
(April 2002) par. 70)
129
    Budgetary resources are obligated when the asset is acquired, not when it is depreciated or used up. No budgetary resources are used when an asset
is depreciated. (SFFAS Implementation Guide, par. 44)
130
    Budgetary resources are obligated when an allowance (i.e., liability or contra-asset) for a subsidy is set up, and as the estimated expenses are
realized the allowance account is amortized. The budgetary accounts, which have already recognized the obligation and offsetting collection for
subsidy expense, are not affected by the transaction. (SFFAS 7 Implementation Guide (April 2002), par. 92)
131
    Gains are shown as a negative; losses are shown as a positive.


October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                       Page 178
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Section VII                 Statement of Financing


                                                                                          Yes,

 Components of the Net Cost of Operations that Will Not                                    No,
                                                                                                    Explanation
 Require or Generate Resources in the Current Period                                           or
 Resources (15 – 24)
                                                                                           N/A

 23.        Does the entity report as “other” under the section
            “components not requiring or generating resources,”
            all other expenses132 and exchange revenue not
            specifically mentioned in the preceding questions that
            will not require or generate resources in the current or
            future periods?
            (OMB Bulletin 01-09, p. 50, section 7.5)

 24.        Does the sum of the line items “total resources used to
            finance net cost of operations” and “total components
            of net cost of operations that will not require or
            generate resources in the current period” agree with
            the net cost of operations as reported in the Statement
            of Net Cost as well as the Statement of Changes in Net
            Position? (OMB Bulletin 01-09, p. 51, section 7.7)




132
      An example of this would be default expenses of pre-credit reform (or pre 1992) loans.


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Section VII                Statement of Financing



                                                                          Yes,
                                                                           No,               Explanation
 Disclosure Items (25 – 27)
                                                                           or
                                                                          N/A

 25.        Has the entity identified and explained in a note to the
            financial statements the relationship between amounts
            reported as “liabilities not covered by budgetary
            resources” reported on the Balance Sheet and amounts
            reported as “components requiring or generating
            resources in future periods” on the Statement of
            Financing? (OMB Bulletin 01-09, p. 94, section 9.35)
                      When budget authority and other resources are allocated to another agency or bureau,133
                      the parent (transferor of the appropriation) should report the activity in its financial
                      statements unless the allocation transfer is material to the child’s (recipient of the transfer)
                      financial statements. If the allocation transfer is material to the child’s financial
                      statements, the child entity should report the activity relating to the allocation in all of its
                      financial statements, except the Statement of Budgetary Resources (SBR). In this case, the
                      parent entity should continue to report the appropriation and the related budgetary activity
                      in its SBR. It is the responsibility of the parent to ensure that the reporting to Treasury,
                      through FACTS I, is consistent with the presentation in the financial statements.
                      (OMB Bulletin 01-09, p. 94, section 9.36)
 26.        When the child entity reports material allocation
            transfers in its Statement of Net Cost, do both the
            parent and the child report a reconciling item on their
            respective Statements of Financing?
            (OMB Bulletin 01-09, p. 95, section 9.36)
 27.        Do both parent and child entities provide a general
            description of the funds transferred or received,
            including the nature and purpose of the transfer and
            any additional details deemed necessary?
            (OMB Bulletin 01-09, p. 95, section 9.36)




133
      See OMB Circular A-11, sections 20.4 (l) and 71.6


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Reporting 1050 – CFO Act Checklist

Section VIII         Statement of Custodial Activity

The 28 questions in this section are related to the Statement of Custodial Activity.


                                                                             Question Numbers

        1.     General                                                                  1-2      

        2.     Sources of Collections                                                   3-10         

        3.     Disposition of Collections                                              11-15         

        4.     Disclosures                                                             16-19         

        5.	    Dedicated Collections and                                               20-27         

               Other Accompanying Information 





October 2003            GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft              Page 181

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Section VIII Statement of Custodial Activity

                                                                      Yes,
                                                                       No,
General Items (1 – 2)                                                                    Explanation
                                                                       or
                                                                      N/A

               Entities that collect nonexchange revenue for the General Fund of the Treasury, a
               trust fund, or other recipient entities account for the sources and disposition of these
               collections in a Statement of Custodial Activity. (OMB Bulletin 01-09, p. 52,
               section 8.1)

1.    If some of the nonexchange revenue is transferred to
      others and some of the nonexchange revenue is retained
      as a reimbursement for the costs of collection, are the
      transferred amounts reported on the Statement of
      Custodial Activity, and are the retained amounts reported
      on the Statement of Net Cost?
      (OMB Bulletin 01-09, p. 52, section 8.1)

2.    If the entity collects exchange revenue (e.g., rents and
      royalties) on behalf of other entities and recognizes
      virtually no costs in connection with earning that
      revenue, does the entity account for it as a custodial
      activity? (SFFAS 7, par. 45)




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Section VIII Statement of Custodial Activity


                                                                                          Yes,
                                                                                          No,
 Sources of Collections (3 – 10)                                                                                  Explanation
                                                                                           or
                                                                                          N/A

 3.     Are the following transactions recognized as taxes and
        other nonexchange revenues from the public?
        a. individual and corporate income taxes, social
           insurance taxes and contributions, excise taxes,
           estate and gift taxes, and customs duties
        b. social insurance taxes and contributions paid by
           federal employees
        c. deposits by states for unemployment trust funds
        d. user fees and harbor maintenance trust fund
           payments
        e. customs service fees
        f.    deposits of earnings from the Federal Reserve
              System
        g. donations, except types of PP&E that are expensed
        h. fines and penalties
        i.    penalties due to delinquent taxes in connection with
              custodial activity
        j.    forfeitures (SFFAS 7, par. 49; SFFAS 7,
              Appendix B, par. 242 - 264)

 4.     Does the collecting entity measure taxes and duties on a
        cash basis and then modify that with an accrual
        adjustment to determine the amount of revenue to be
        recognized? (SFFAS 7, par. 49 & 52;
        OMB Bulletin 01-09, p. 54, section 8.3)

 5.     Except for deposits, are cash collections134 based on
        amounts actually received during the fiscal period
        including withholdings, estimated payments, final
        payments, and collections of receivables? (SFFAS 7,
        par. 50 & 59)

134
   Cash collections include any amounts paid in advance of due dates unless they are deposits. Deposits are amounts voluntarily paid to reporting
entities, such as those made to stop the accrual of interest or those made pending settlements and judgments. Such Deposits are separately recognized
as deposit liabilities.


October 2003                      GAO-04-44G – CFO Checklist –Revised 2003 – Exposure Draft                                        Page 183
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Section VIII Statement of Custodial Activity

                                                                                          Yes,
                                                                                          No,
 Sources of Collections (3 – 10)                                                                                  Explanation
                                                                                           or
                                                                                          N/A

 6.     Are the components of cash collections classified by
        source and nature of collection, such as by type of tax or
        duty? (OMB Bulletin 01-09, pp. 53 & 54, section 8.3)

 7.     Are cash refunds of nonexchange revenue based on
        refunds of taxes and duties during the period?
        (SFFAS 7, par. 51)

 8.     Do cash refunds of nonexchange revenue for taxes and
        duties include refund offsets135 and drawbacks?136
        (SFFAS 7, par. 51)

 9.     Are cash refunds, if material in relation to gross
        collections, disclosed separately by component in the
        notes to the financial statement?
        (OMB Bulletin 01-09, p.54, section 8.3)

 10.    Are accrual adjustments,137 if material in relation to
        gross collections, disclosed separately in the notes to the
        financial statement? (SFFAS 7, par. 52;
        OMB Bulletin 01-09, p. 54, section 8.3)




135
    Refund offsets are amounts withheld from refunds on behalf of other agencies and paid to such agencies.
136
    Drawbacks are refunds of duties paid on imported goods that are subsequently exported or destroyed.
137
    Accrual adjustments, which modify the net of cash collections and refunds to determine the amount of revenue recognized, are the net increases or
decreases during the reporting period in accounts receivable, allowance for uncollectable accounts, and accounts payable for refunds.


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Section VIII Statement of Custodial Activity


                                                                    Yes,
                                                                    No,
Disposition of Collections (11 – 15)                                             Explanation
                                                                    or
                                                                    N/A

11.   Do the amounts transferred to others, reported in the
      “disposition of collections” section, identify the specific
      agencies to which collections were transferred and the
      amounts transferred? (OMB Bulletin 01-09, p. 53,
      section 8.2 & p. 54, section 8.4)

12.   Does the collecting entity report the change in liability
      for accrued and collected revenue yet to be transferred?
      (OMB Bulletin 01-09, p. 53, section 8.2 & p. 54,
      section 8.4)

13.   Are the amounts of refunds and other payments made
      reported separately in the “disposition of collections”
      section of the Statement of Custodial Activity?
      (OMB Bulletin 01-09, p. 53, section 8.2 & p. 54,
      section 8.4)

14.   Are collections retained by the entity separately reported
      as exchange revenue in the Statement of Net Cost and
      treated as a disposition of collections revenue in the
      statement of custodial activity? (OMB Bulletin 01-09,
      p. 52, section 8.1, p. 53, section 8.2. & p. 54,
      section 8.4)

15.   In the Statement of Custodial Activity, do total sources
      of collections equal total disposition of collections
      (revenue) so that the net custodial activity is zero?
      (OMB Bulletin 01-09, p. 54, section 8.5)




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Section VIII Statement of Custodial Activity


                                                                   Yes,
                                                                   No,
Disclosures (16 – 19)                                                            Explanation
                                                                   or
                                                                   N/A

16.   If custodial revenues are immaterial and incidental to the
      entity’s primary mission and are not reported separately
      on the Statement of Custodial Activity, are the sources
      and amounts of the collections and amounts to be
      distributed to others disclosed? (OMB Bulletin 01-09,
      p. 52, section 8.1 & p. 95, section 9.37)

17.   Does the collecting entity disclose and explain the
      following information?
      a. the basis of accounting when application of the
         general rule for recognizing nonexchange revenue
         (i.e., specifically identifiable, legally enforceable,
         and reasonably estimable) results in a modified cash
         basis of accounting
      b. the specific potential accruals that are not made as a
         result of using the modified cash basis accounting
      c. the practical and inherent limitations affecting the
         accrual of taxes and duties
      d. the use of accrual-based accounting, if applicable
         (SFFAS 7, par.48 & 64)

18.   Do entities that collect taxes and duties disclose the
      following information in a note or narrative?
      a. basis of accounting
      b. factors affecting the collectibility and timing of
         taxes and other nonexchange revenues
      c. cash collections and refunds by tax year and type of
         tax for the reporting period (SFFAS 7, par. 65.1 &
         65.3; OMB Bulletin 01-09, p. 95, section 9.38)

19.   If trust fund revenues are not recorded in accordance
      with applicable law, do the collecting and recipient
      entities disclose the reasons? (SFFAS 7, par. 66)




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Section VIII Statement of Custodial Activity



                                                                     Yes,
Dedicated Collections and Other Accompanying                         No,
                                                                                       Explanation
Information (20 – 27)                                                 or
                                                                     N/A

               Dedicated collections are funds held with the expectation that they will be held for
               and applied to the purposes for which the funds were dedicated. Such funds include
               all funds within the budget classified as trust funds, those funds within the budget that
               are classified as “special funds” but that are similar in nature to trust funds, and
               those funds within the federal universe (inside or outside the budget) that are
               fiduciary in nature. (SFFAS 7, par. 83; OMB Bulletin 01-09, p. 95, section 9.39)

20.   Does the management of a reporting entity identify,
      track, and disclose the receipts and expenditures of
      dedicated trust funds, "special funds," and fiduciary or
      deposit funds (both inside and outside the budget) for
      which it is responsible? (SFFAS 7, par. 83;
      OMB Bulletin 01-09, pp. 95 & 96, section 9.39)

21.   Does management provide separate financial
      information about these dedicated funds if they are
      material to the reporting entity, the beneficiary, or the
      contributors? (SFFAS 7, par. 84; OMB Bulletin 01-09,
      pp. 95 & 96, section 9.39)




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Section VIII Statement of Custodial Activity


                                                                   Yes,
Dedicated Collections and Other Accompanying                       No,
                                                                                 Explanation
Information (20 – 27)                                              or
                                                                   N/A

22.   Is the following information reported for individual
      funds that account for dedicated collections?
      a. a description of each fund’s purpose, how the
         administrative entity accounts for and reports the
         fund, and its authority to use those collections
      b. the sources of revenue or other financing for the
         period and an explanation of the extent to which
         they are inflows of resources to the government or
         the result of intragovernmental flows
      c. condensed information about assets and liabilities
         showing investments in Treasury securities, other
         assets, liabilities due and payable to beneficiaries,
         other liabilities, and fund balance
      d. condensed information on net cost and changes to
         fund balance showing revenues by type (exchange
         or nonexchange), program expenses, other expenses,
         other financing sources, and other changes in fund
         balance
      e. the amounts of any revenues—other financing
         sources or costs attributable to the fund under
         accounting standards—that are not legally allowable
         as credits or charges to the fund (SFFAS 7, par. 85;
         OMB Bulletin 01-09, pp. 95 & 96, section 9.39)

23.   If revenues, other financing sources, or costs (such as
      item "e" of the previous question) are associated with
      but not legally allowable to a fund, does the larger
      reporting entity of which the fund is a component
      recognize them? (SFFAS 7, par. 86;
      OMB Bulletin 01-09, p. 96, section 9.39)

24.   If more than one reporting entity is responsible for
      carrying out a program financed with dedicated
      collections, does the entity with the largest share of the
      activity take responsibility for reporting all revenues,
      other financing sources, assets, liabilities, and costs of
      the fund? (SFFAS 7, par. 87)


October 2003             GAO-04-44G – CFO Checklist –Revised 2003 – Exposure Draft         Page 188

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Section VIII Statement of Custodial Activity


                                                                    Yes,
Dedicated Collections and Other Accompanying                        No,
                                                                                 Explanation
Information (20 – 27)                                               or
                                                                    N/A

25.   If information on actual collections is not currently
      available from the collecting entity, do the trust funds
      that are legally entitled to receive only excise taxes that
      are actually collected by the collecting entity recognize
      revenue from excise taxes on the basis of assessments in
      lieu of excise taxes actually collected? (SFFAS 7,
      par. 60.1)

26.   Is the amount of revenue accrued and recognized by the
      social security trust fund based on the best available
      information (i.e., on the basis of the higher of the
      amount of Internal Revenue Service (IRS) assessments
      or the amounts actually reported by employers to Social
      Security)? (SFFAS 7, par. 60.2)




October 2003             GAO-04-44G – CFO Checklist –Revised 2003 – Exposure Draft         Page 189

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Section VIII Statement of Custodial Activity


                                                                   Yes,
Dedicated Collections and Other Accompanying                       No,
                                                                                 Explanation
Information (20 – 27)                                              or
                                                                   N/A

27.   Does the collecting entity report the following as other
      accompanying information?
      a. income tax burden borne by different classes of
          taxpayers and the effects of tax rates, deductions,
          credits, etc. (required of IRS)
      b. available information on the size of the tax gap,
         including
          i.      explicit definitions of the estimated amounts
                  reported (e.g., whether the tax gap includes
                  estimates on illegally earned income)
          ii.    appropriate explanations of the limited
                  reliability of the estimates
          iii.   cross references to portions of the tax gap due
                  from identified noncompliant taxpayers and
                  importers
      c. appropriate explanations and qualifications, if
         information about tax expenditures related to entity
         programs is present
      d. a description of the basis for the estimates and
         appropriate cautionary language about reliability, if
         information about estimated directed flows of
         resources related to an entity’s programs is
         presented (SFFAS 7, par. 69.1 - 69.4;
         OMB Bulletin 01-09, p. 114 section 12.3 & p. 115,
         section 12.4)




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Section IX Notes to Financial Statements



The five questions in this section concern the disclosure of significant accounting policies.




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Section IX Notes to Financial Statements




                                                                    Yes,
                                                                    No,              Explanation
 Note to Financial Statements
                                                                    Or
 (1 - 5)
                                                                    N/A

 1.    Is a description of the reporting entity presented in the
       disclosure of significant accounting policies, along with
       identification of the entity’s major components?
       (OMB Bulletin 01-09, p. 55, section 9.1)

 2.    Does the entity identify and describe accounting
       principles it follows, and methods of applying those
       principles in a note to the financial statements?
       (OMB Bulletin 01-09, p. 55, section 9.1)

 3.    Does the entity's disclosure of its accounting policies
       include its rationale for the valuation, recognition, and
       allocation of assets, liabilities, expenses, revenues, and
       other financing sources? (OMB Bulletin 01-09, p. 55,
       section 9.1)

 4.   Does the entity disclose any significant changes in its
      composition or manner in which it aggregates
      information for financial reporting purposes?
      (OMB Bulletin 01-09, p. 55, section 9.1)

 5.    If changes in the composition of the reporting entity or
       manner in which the reporting entity aggregates
       information for financial reporting purposes, in effect,
       result in a new reporting entity, has the entity restated
       financial statements for all prior periods presented to
       correspond to the changes? (OMB Bulletin 01-09,
       pp. 55 & 56, section 9.1)




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Section X Supplementary Information
The questions related to the Supplementary Information are organized in the following nine categories.

                                                                                                                     Question Numbers

           1. 	 Required Supplementary Stewardship Information:
                Property, Plant, & Equipment                                                                                    1–14

           2. 	 Required Supplementary Stewardship Information:
                Stewardship Investments                                                                                        15–42

           3. 	 Required Supplementary Information:
                Risk-Assumed Information                                                                                       43

           4. 	 Required Supplementary Information:
                Custodial Activity                                                                                             44–45

           5. 	 Required Supplementary Information:
                Segment Information                                                                                            46–47

           6. 	 Required Supplementary Information
                Management’s Discussion and Analysis                                                                           48-61

           7. 	 Required Supplementary Information:
                Deferred Maintenance                                                                                           62-65

           8. 	 Required Supplementary Information:
                Intragovernmental Amounts                                                                                      66–78

           9. 	 Required Supplementary Stewardship Information:
                Social Insurance138                                                                                           79–102




138
   For periods beginning after September 30, 2004, the information required by paragraphs 27(3) and 32(3) of SFFAS 17 shall be presented as a basic
financial statement rather than as RSSI. Other information required by SFFAS 17 shall be presented as RSI, except to the extent that the preparer
elects to include some or all of that information in notes that are presented as an integral part of the basic financial statements (SFFAS 25, par. 6 & 7)


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Section X Supplementary Information


                                                                      Yes,
Required Supplementary Stewardship Information:                       No,
                                                                                         Explanation
Property, Plant, and Equipment (1 – 14)                                or
                                                                      N/A

               Stewardship reporting requires the federal government to report on its stewardship
               over certain resources entrusted to it and certain responsibilities assumed by it that
               cannot be measured in traditional financial reports. These resources and
               responsibilities do not meet the criteria for assets and liabilities that are required to
               be reported in the financial statements, but are important to understanding the
               operations and financial condition of the federal government at the date of the
               financial statements and in subsequent periods.
               Stewardship PP&E consists of items whose physical properties resemble those of
               general PP&E traditionally capitalized in financial statements. However, because of
               the nature of these assets, valuation may be difficult, and matching costs with specific
               periods would not be meaningful.
               Stewardship PP&E includes:
               - heritage assets, such as federal monuments and memorials, that are of historical,
                 natural, cultural, educational, architectural, or artistic significance and
               - stewardship land, such as national forests and parks that have not been acquired
                 for or in connection with general PP&E. (SFFAS 8, par.7-11 & 17;
                 OMB Bulletin 01-09, p. 97 section 10.1 and p. 98, section, 10.2)

1.    Except for multi-use heritage assets in which the
      predominant use of the asset is in general government
      operations, are heritage assets reported as Required
      Supplementary Stewardship Information (RSSI)
      accompanying the financial statements rather than as
      asset amounts on the balance sheet? (SFFAS 8, par.43;
      OMB Bulletin 01-09, p. 23, section 3.3 & p. 98,
      section 10.2A)

2.    Are heritage assets (including multiuse heritage assets)
      reported in RSSI in terms of physical units rather than in
      terms of cost, fair value, or other monetary values?
      (SFFAS 8, par. 46; SFFAS 16, par.9;
      OMB Bulletin 01-09, p. 23, section 3.3 & p. 98,
      section 10.2A)




October 2003               GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                 Page 194

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Section X Supplementary Information

                                                                                             Yes,
 Required Supplementary Stewardship Information:                                             No,
                                                                                                                      Explanation
 Property, Plant, and Equipment (1 – 14)                                                      or
                                                                                             N/A

 3.      Does the reporting entity provide relevant RSSI in the
         financial statements, such as the following information
         about its heritage assets?
         a. a description of each major category of heritage asset
             and whether it is collectible or noncollectible
         b. a description of the methods of acquisition and
             withdrawal of heritage assets
         c. an accounting for the physical units by major
            category including:
               i.       beginning balances
               ii.      additions
               iii.     withdrawals
               iv.      ending balances
         d. a description of the condition of the assets unless it is
             already reported in deferred maintenance
             information included elsewhere in the report, in
             which case a reference to the information will
             suffice
         e. a reference to deferred maintenance information, if
             deferred maintenance is reported for the assets
             (SFFAS 8, par. 50, SFFAS 14, par. 10-11;
             OMB Bulletin 01-09, pp. 99-100, section 10.2D)

 4.      Are federal land139 and land rights owned by the federal
         government and not acquired for or in connection with
         other general PP&E reported as stewardship land in the
         RSSI of the financial statements? (SFFAS 6, par. 66-68,
         SFFAS 8, par. 74)

 5.      Is stewardship land quantified and reported in terms of
         physical units (e.g., acres) in the RSSI rather than in
         monetary values? (SFFAS 8, par. 75;
         OMB Bulletin 01-09, p. 99, section 10.2C)



139
   Land is defined as the solid part of the surface of the earth. Excluded from the definition of land are materials beneath the surface (i.e., depletable
resources such as mineral deposits and petroleum), the space above the surface (i.e., renewable resources such as timber), and the outer-continental
shelf resources.


October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 195
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Section X Supplementary Information

                                                                    Yes,
Required Supplementary Stewardship Information:                     No,
                                                                                  Explanation
Property, Plant, and Equipment (1 – 14)                             or
                                                                    N/A

6.    Is the cost of a structure acquired with stewardship land
      that is to be used in operations included in the
      acquisition cost of the land if one of the following
      conditions applies?
      a. the structure’s value is insignificant compared to the
         value of the land
      b. the structure has little or no inherent value
      c. the structure is merely a byproduct of the acquisition
         of the land (SFFAS 6, par. 70)

7.    If a significant structure acquired with stewardship land
      has an operating use (e.g., a recently constructed hotel or
      employee-housing block), is its cost segregated from the
      cost of the stewardship land acquired and capitalized as
      general PP&E? (SFFAS 6, par. 70; SFFAS 8, par. 78)

8.    If the fair value of stewardship land acquired through
      donation or devise is known and material, is it disclosed
      in the notes to the financial statements? (SFFAS 6,
      par. 71; SFFAS 8, par. 79)

9.    If the fair value of the stewardship land acquired through
      donation or devise is not estimable, is information as to
      the type and quantity of the assets disclosed? (SFFAS 6,
      par. 71; SFFAS 8, par. 79)

10.   Is the cost of stewardship land transferred from another
      federal entity recorded at the book value of the land on
      the transferring entity’s books? (SFFAS 6, par. 72)

11.   If stewardship land is transferred from another federal
      entity, and the receiving entity does not know its book
      value, is the transfer disclosed in the notes if material?
      (SFFAS 6, par. 72)

12.   Are all transfers of stewardship land disclosed in the
      notes if material? (SFFAS 6, par. 72)




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Section X Supplementary Information

                                                                                            Yes,
 Required Supplementary Stewardship Information:                                             No,
                                                                                                                     Explanation
 Property, Plant, and Equipment (1 – 14)                                                      or
                                                                                             N/A

 13.     Is acquisition cost of stewardship land recorded in the
         following manner?
         a. recognized as a cost in the period incurred
         b. include all costs incurred to bring the stewardship
            land to its intended use, current condition, and
            location (including razing a building)
         c. disclosed140 as “cost of stewardship land” (SFFAS 6,
            par. 69 & 73, SFFAS 8, par. 80)

 14.     With regard to stewardship land, does the reporting
         entity include in its RSSI the following information?
         a. a description, by principal organization, significant
            holdings of stewardship land by category of major
            use141
         b. a description of the methods of acquisition and
             withdrawal of stewardship land
         c. an accounting for physical units by major category
            including:
               i. beginning balance
               ii. additions
               iii. withdrawals
               iv. ending balance
         d. the condition of the stewardship land, unless it is
             already reported elsewhere in the report (in which
             case a reference to the information will suffice)
         e. a reference to the applicable information if deferred
             maintenance is reported for the assets. (SFFAS 6,
             par. 69 & 73; SFFAS 8, par. 80 & 81; SFFAS 14,
             par. 10 & 11; OMB Bulletin 01-09, pp. 99 & 100,
             section 10.2D)




140
    Disclosure shall be either on the face of the statement of net cost or in footnotes, depending on the materiality of the amounts and the need to
distinguish such amounts from other costs relating to measures of outputs or outcomes of the reporting entity.
141
    Where parcels of stewardship land have more than one use, the predominant use of the land shall be considered the major use.


October 2003                       GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                           Page 197
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Section X Supplementary Information

                                                                                            Yes,
 Required Supplementary Stewardship Information:                                             No,
                                                                                                              Explanation
 Stewardship Investments (15 – 42)                                                           or
                                                                                           N/A

                    Stewardship investments are substantial investments made by the federal government
                    for the benefit of the nation. When incurred, they are treated as expenses in
                    calculating net cost, but they are also separately reported as RSSI to highlight the
                    extent of investments that are made for long-term benefit. (SFFAS 8, par. 12)
                    Stewardship investments include:
                     -    nonfederal physical property: federally financed (but not federally owned)
                          purchases, construction, or major renovation of physical property owned by
                          state and local governments, including major additions, alterations, and
                          replacements, the purchase of major equipment; and the purchase or
                          improvement of other physical assets.142
                     -    human capital: expenses incurred for programs for education and training of the
                          public143 that are intended to increase or maintain national productive capacity
                          and that produce outputs and outcomes that provide evidence of maintaining or
                          increasing national productive capacity.
                     -    research & development: expenses incurred to support the search for new or
                          refined knowledge and ideas and for the application or use of such knowledge
                          and ideas for the development of new or improved products and processes with
                          the expectation of maintaining or increasing national productive capacity or
                          yielding other future benefits. (SFFAS 8, par. 12, 83, 89, 90, & 96;
                          OMB Bulletin 01-09, p. 100, section 10.3)

 15.        Are nonfederal physical property investments reported
            in nominal dollars on the basis of "expenses incurred"
            and measured on the same basis of accounting used for
            financial statement purposes, including appropriate
            accrual adjustments, general and administrative
            overhead, and costs of facilities? (SFFAS 8, par. 84)

 16.        Are investments in nonfederal physical property and
            related cash grants recognized and reported as expenses
            in arriving at the net cost of operations? (SFFAS 8,
            par. 85; OMB Bulletin 01-09, p. 100, section 10.3A)




142
      Grants for maintenance and operations are not considered investments in nonfederal physical property.
143
      The definition excludes education and training expensed for federal civilian and military personnel.




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Section X Supplementary Information

                                                                                         Yes,
 Required Supplementary Stewardship Information:                                          No,
                                                                                                                 Explanation
 Stewardship Investments (15 – 42)                                                         or
                                                                                         N/A

 17.     Are expenses incurred for nonfederal physical property
         program costs, contracts, or grants with split
         purposes144 reported in RSSI on the basis of a logical
         allocation? (SFFAS 8, par. 86)

 18.     If an allocation of such program costs, etc. is not
         feasible, is the investment reported on the basis of the
         predominant application of the expenses incurred?
         (SFFAS 8, par. 86)

 19.     Does the reporting entity provide in its RSSI a dollar
         amount and a narrative description of its investment in
         nonfederal physical property for the year being reported
         on as well as at least the preceding 4 years? (SFFAS 8,
         par. 87; OMB Bulletin 01-09, p. 100, section 10.3A &
         p. 102, section 10.3D)

 20.     Is expense or outlay data for investments in nonfederal
         physical property reported at a meaningful category or
         level (e.g., by major program or department)?
         (SFFAS 8, par. 87; OMB Bulletin 01-09, p. 102,
         section 10.3D)

 21.     Does the reporting entity also include in its RSSI a
         description of federally owned physical property
         transferred to state and local governments for the year
         being reported on as well as at least the preceding 4
         years? (SFFAS 8, par. 87; OMB Bulletin 01-09, p. 102,
         section 10.3D)

 22.     If expense data for the purchase of PP&E for state and
         local governments for the year being reported on and
         for the preceding 4 years are not available, does the
         entity report outlay data, if available? (SFFAS 8,
         par. 87; OMB Bulletin 01-09, p. 102, section 10.3D)




144
   An example of an investment with a split purpose is a grant issued to a state to construct segments of the National Highway System and to conduct
highway research.


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Section X Supplementary Information

                                                                                              Yes,
 Required Supplementary Stewardship Information:                                              No,
                                                                                                                      Explanation
 Stewardship Investments (15 – 42)                                                             or
                                                                                             N/A

 23.        If neither historical expense nor outlay data are
            available ion stewardship investments for the year
            being reported on and the preceding 4 years, does the
            entity report expense data for the current reporting year
            and such other years, as available? (SFFAS 8, par. 87;
            OMB Bulletin 01-09, p. 102, section 10.3D)

 24.        Are investments in human capital reported in nominal
            dollars on the basis of "expenses incurred" and
            measured on the same basis of accounting used for
            financial statement purposes, including appropriate
            accrual adjustments, general and administrative
            overhead, and costs of facilities? (SFFAS 8, par. 91)

 25.        Are expenses incurred for human capital program costs,
            contracts, or grants with split purposes145 reported in
            RSSI on the basis of a logical allocation? (SFFAS 8,
            par. 92)

 26.        If an allocation of such program costs, etc. is not
            feasible, is the investment reported on the basis of the
            predominant application of the expenses incurred?
            (SFFAS 8, par. 92)

 27.        Does the entity link its investments in human capital to
            outcomes that can be described in financial, economic,
            or quantitative terms? (SFFAS 8, par. 93)

 28.        If outcome data are not available, does the reporting
            entity report output data that best provide indications of
            the intended program outcomes? (SFFAS 8, par. 93)

 29.        Does the reporting entity include in its RSSI the dollar
            amount and a narrative description of its investment in
            human capital for the year being reported on as well as
            the preceding 4 years? (SFFAS 8, par. 94;
            OMB Bulletin 01-09, p. 101, section 10.3B)




145
      An example of an investment with a split purpose is a grant issued to a teaching hospital for both medical education and medical research.


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Section X Supplementary Information

                                                                                  Yes,
 Required Supplementary Stewardship Information:                                  No,
                                                                                                        Explanation
 Stewardship Investments (15 – 42)                                                 or
                                                                                 N/A

 30.    If expense data for the investments in human capital for
        the year being reported and for the preceding 4 years
        are not available, does the entity report outlay data, if
        available? (SFFAS 8, par. 94; OMB Bulletin 01-09,
        p. 102, section 10.3D)

 31.    If neither historical expense nor outlay data for the
        investments in human capital are available for the year
        being reported on and the preceding 4 years, does the
        entity report expense data for the current reporting year
        and such other years, as available? (SFFAS 8, par. 94;
        OMB Bulletin 01-09, p. 102, section 10.3D)

 32.    Is expense or outlay data for investments in human
        capital reported at a meaningful category or level (e.g.,
        by major program or department)? (SFFAS 8, par. 94)

 33.    Is the investment in research and development reported
        in nominal dollars on the basis of "expenses incurred"
        and measured on the same basis of accounting used for
        financial statement purposes, including appropriate
        accrual adjustments, general and administrative
        overhead, and costs of facilities? (SFFAS 8, par. 97)

 34.    Are expenses incurred for research and development
        program costs, contracts, or grants with split
        purposes146 reported in RSSI on the basis of a logical
        allocation? (SFFAS 8, par. 98)

 35.    If an allocation of such program costs, etc. is not
        feasible, is the investment reported on the basis of the
        predominant application of the expenses incurred?
        (SFFAS 8, par. 98)




146
  An example of an investment with a split purpose is a grant issued to a teaching hospital to perform both medical education and
medical research.


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Section X Supplementary Information

                                                                                             Yes,
 Required Supplementary Stewardship Information:                                             No,
                                                                                                                     Explanation
 Stewardship Investments (15 – 42)                                                            or
                                                                                            N/A

 36.     Does the entity link its investments in research and
         development to program outcome data via a narrative
         discussion of the major results achieved by the program
         during the year, along the following lines?
         a.     basic research, which refers to an identification of
                any major new discoveries that were made during
                the year

         b.     applied research, which refers to an identification
                of any major new applications that were developed
                during the year

         c. development, which refers to the progress of major
             developmental projects including the results with
             respect to projects completed or otherwise
             terminated during the year and the status of
             projects that will continue (SFFAS 8, par. 99)
 37.     If outcome data are not available, does the reporting
         entity use output data147 that best provide indications of
         the intended program outcomes? (SFFAS 8, par. 99)

 38.     Does the reporting entity include in its RSSI the dollar
         amount and a narrative description of its investment in
         major research and development programs for the year
         being reported on as well as the preceding 4 years?
         (SFFAS 8, par. 100; OMB Bulletin 01-09, p. 101,
         section 10.3C & p. 102, section 10.3D)

 39.     If expense data for the investments in research and
         development for the year being reported and for the
         preceding 4 years are not available, does the entity
         report outlay data, if available? (SFFAS 8, par. 100;
         OMB Bulletin 01-09, p. 102, section 10.3D)




147
   In research and development programs, output data might consist of a number of new projects initiated, or the number of projects continued,
completed, or terminated. It also might consist of quantitative measures such as publication counts, citation counts, patent counts, or scientific and
engineering personnel funded.


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Section X Supplementary Information

                                                                              Yes,
 Required Supplementary Stewardship Information:                              No,
                                                                                               Explanation
 Stewardship Investments (15 – 42)                                             or
                                                                             N/A

 40.        If neither historical expense nor outlay data are
            available for the year being reported on and the
            preceding 4 years, does the entity report expense data
            for the current year and such other years as available?
            (SFFAS 8, par. 100; OMB Bulletin 01-09, p. 102,
            section 10.3D)

 41.        Is expense or outlay data for investments in research
            and development reported at a meaningful category or
            level (e.g., by major program or department)?
            (SFFAS 8, par. 100; OMB Bulletin 01-09, p. 102,
            section 10.3D)

 42.        Does the entity report in its RSSI the amounts of
            significant contributions from state, local, private, and
            other sources to its investments in nonfederal physical
            property, human capital, and research and
            development?148 (SFFAS 8, par. 88, 95, & 101)




148
      This reporting is encouraged, but is not required.


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Section X Supplementary Information


                                                                   Yes,
Required Supplementary Information:                                No,
                                                                                       Explanation
Risk-Assumed Information (43)                                       or
                                                                   N/A

               Risk-assumed information is generally measured by the present value of unpaid
               expected losses net of associated premiums based on the risk inherent in the
               insurance or guarantee coverage in force. (SFFAS 5, par. 105 & 106;
               OMB Bulletin 01-09, p.103, section 10.4A)

43.   Does the entity include as Required Supplementary
      Information (RSI) the current amount and periodic
      changes of "risk assumed" arising from insurance and
      guarantee programs? (SFFAS 5, par. 105, 106, 110;
      SFFAS 25, par. 2; OMB Bulletin 01-09, p. 103,
      section 10.4A)




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Section X Supplementary Information


                                                                    Yes,

Required Supplementary Information:                                 No,
                                                                                  Explanation
                                                                     or
Custodial Activity (44 – 45)
                                                                    N/A

44.   Do entities that collect taxes and duties provide the
      following supplementary information relating to their
      potential revenue and custodial responsibilities?
      a. the estimated realizable value, as of the end of the
          reporting period, of compliance assessments and, if
          reasonably estimable, pre-assessment work in
          process, based on management’s best estimate that is
          appropriately identified as to their reliability
      b. if reasonably estimable, other claims for refunds not
          yet accrued but likely to be paid when administrative
          action is complete, based on management’s best
          estimates
      c. amount of assessments defined as written-off (i.e., no
          further collection potential) that continues to be
          statutorily collectable
      d. amounts by which trust funds may be overfunded or
          underfunded in comparison with the requirements of
          the law, if reasonably estimable (SFFAS 7,
          par. 67.1-67.4; OMB Bulletin 01-09, pp.112-113,
          section 11.5)

45.   If the entity receiving funds from the collecting entity is
      itself a trust fund, does it provide as supplementary
      information amounts by which related trust funds may be
      overfunded or underfunded in comparison with the
      requirements of the law, if reasonably estimable?
      (SFFAS 7, par. 67.4, 68; OMB Bulletin 01-09, p. 113,
      section 11.5)




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Section X Supplementary Information



                                                                  Yes,
Required Supplementary Information:
                                                                  No,
                                                                                      Explanation
Segment Information (46 – 47)                                      or
                                                                  N/A

46.   Do all franchise and other intragovernmental support
      revolving funds report the following supplementary
      information?
      a. a brief description of the services provided by the
         fund and the identity of the fund's major customers
         (i.e., organizations that account for more than 15
         percent of the fund's revenues)
      b. a summary for the reporting period, by product or line
         of business, including the following items
          i.      the full cost of goods and services provided
          ii.     the related exchange revenues
          iii.    the excess of full costs over exchange
                  revenues (OMB Bulletin 01-09, p. 113,
                  section 11.6)

47.   If a franchise fund or other intragovernmental support
      revolving fund is not separately reported on the entity's
      principal statements, does the entity report as
      supplementary information a summary of the fund's
      assets, liabilities, and net position that includes the
      following items as of the reporting date?
      a. fund balance
      b. accounts receivable
      c. property, plant, and equipment
      d. other assets
      e. liabilities due and payable for goods and services
          received
      f. deferred revenues
      g. other liabilities
      h. cumulative results of operations
         (OMB Bulletin 01-09, p. 113, section 11.6)




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Section X Supplementary Information


                                                                    Yes,
Required Supplementary Information:
                                                                    No,
                                                                                      Explanation
Management’s Discussion and Analysis (48 – 61)                      or
                                                                    N/A

 48.   Does the entity include as RSI a section devoted to
       management discussion and analysis (MD&A) of the
       financial statements and related information?
       (SFFAS 15, par. 1; SFFAC 3, par. 1 & 2;
       OMB Bulletin 01-09, p. 105, section 11.1)

 49.   In general, does the MD&A provide a clear, concise, and
       balanced description of the reporting entity and its
       mission, activities, program and financial performance,
       systems, controls, legal compliance, financial position,
       and financial condition? (SFFAS 15, par. 1; SFFAC 3,
       par. 1; OMB Bulletin 01-09, p. 105, section 11.1)

 50.    Does the MD&A, at a minimum, contain sections that
       address the following items concerning the entity?
       a. mission and organizational structure
       b. performance goals, objectives, and results
       c. financial statements
       d. systems, controls, and legal compliance
       e. forward-looking information, either as a separate
          section of MD&A or incorporated with the sections
          listed above
       f.   important problems that need to be addressed and
            action taken or planned, either as a separate section
            of the MD&A or incorporated with the sections
            listed above (SFFAS 15, par. 2-4;
            OMB Bulletin 01-09, pp. 105 & 106, section 11.1A)




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Section X Supplementary Information

                                                                     Yes,
Required Supplementary Information:
                                                                     No,
                                                                                      Explanation
Management’s Discussion and Analysis (48 – 61)                       or
                                                                     N/A

 51.   Does the MD&A limit itself to the most important
       matters that could, for example, have the following
       impact?
       a. lead to significant actions or proposals by top
          management of the reporting unit
       b. be significant to the managing, budgeting, and
          oversight functions of Congress and the
          administration
       c. significantly affect the judgment of citizens about
          the efficiency and effectiveness of their federal
          government (SFFAS 15, par. 5 & 6)

 52.   Does the MD&A section on the entity’s mission and
       organizational structure contain a brief description of the
       mission(s) of the entity and its related organizational
       structure, that is consistent with the entity’s strategic
       plan? (OMB Bulletin 01-09, p. 106, section 11.1B)

 53.   Are the entity’s programs and financial results expressed
       in terms of objective and relevant measures that disclose
       the extent to which its programs are achieving their
       intended objectives? (OMB Bulletin 01-09, p. 106,
       section 11.1C)

 54.   Has the entity attempted to develop and report objective
       measures that provide information about the cost
       effectiveness of programs? (OMB Bulletin 01-09,
       pp. 106 & 107, section 11.1C)

 55.   Are the performance measures presented in the MD&A
       consistent with the measures previously included in the
       budget and planning documents? (OMB Bulletin 01-09,
       p. 107, section 11.1C)

 56.   Does the entity explain what needs to be done and what
       is planned to improve financial or program
       performance? (OMB Bulletin 01-09, p. 107,
       section 11.1C)




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Section X Supplementary Information

                                                                     Yes,
Required Supplementary Information:
                                                                     No,
                                                                                      Explanation
Management’s Discussion and Analysis (48 – 61)                       or
                                                                     N/A

 57.   Does the entity’s discussion of performance goals,
       objectives, and results indicate the extent to which its
       programs are achieving their intended goals and
       objectives, and are these clearly linked to cost categories
       (responsibility segments) featured in the Statement of
       Net Cost? (OMB Bulletin 01-09, p. 106, section 11.1C)

 58.   Does the MD&A section on the entity’s performance
       goals, objectives, and results also provide the following
       information?
         a. a discussion of the strategies and resources the
            agency uses to achieve its performance goals
         b. a clear picture of planned and actual performance
         c. an explanation of the procedures that management
            has designed and followed to provide reasonable
            assurance that reported performance information
            is relevant and reliable
         d. an explanation of performance trends
         e. an evaluation of the significance of underlying
            factors that may have affected the reported
            performance (OMB Bulletin 01-09, p. 106,
            section 11.1C)

 59.   In reporting on the status of systems and internal
       controls that support preparation of the financial
       statements, performance information, and compliance
       with applicable laws, does the entity describe material
       problems revealed by audits or otherwise known to
       management as well as corrective actions taken or
       planned? (OMB Bulletin 01-09, p. 107, section 11.1E)




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Section X Supplementary Information

                                                                     Yes,
Required Supplementary Information:
                                                                     No,
                                                                                      Explanation
Management’s Discussion and Analysis (48 – 61)                       or
                                                                     N/A

 60.   Does the entity’s discussion of the possible future effects
       of existing events and conditions include at least the
       following information?
       a. demographic characteristics
       b. claims
       c. deferred maintenance
       d. commitments
       e. major unfunded liabilities (OMB Bulletin 01-09,
          p. 108, section 11.1F)

 61.   Does the entity note the following in the section on
       limitations of the Financial Statements?
       a. the principal financial statements have been
          prepared to report the financial position and results
          of operations of the entity, pursuant to the
          requirements of 31 U.S.C. 3515(b)
       b. while the statements have been prepared from the
          books and records of the entity in accordance GAAP
          for federal entities and the formats prescribed by
          OMB, the statements are in addition to the financial
          reports used to monitor and control budgetary
          resources which are prepared from the same books
          and records
       c. the statements should be read with the realization
          that they are for a component of the U.S.
          government (OMB Bulletin 01-09, p. 108,
          section 11.1G)




October 2003             GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft            Page 210

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Section X Supplementary Information

                                                                      Yes,
Required Supplementary Information
                                                                      No,
                                                                                       Explanation
Deferred Maintenance (62 –65)                                          or
                                                                      N/A

               Maintenance is the act of keeping fixed assets in acceptable condition. Maintenance
               includes preventive maintenance, normal repairs, replacement of parts and structural
               components, and other activities needed to preserve the asset so that it continues to
               provide acceptable services and achieves its expected life.
               Maintenance excludes activities aimed at expanding the capacity of an asset or
               otherwise upgrading it to serve needs different from, or significantly greater than,
               originally intended.
               Deferred maintenance is maintenance that was not performed when it should have been, or
               was scheduled to be, and that, therefore, is put off or delayed for a future period. (SFFAS 6,
               par. 77 & 78)

62.   Does the entity report under required supplementary
      information the following information for each major
      category of its PP&E (i.e., general PP&E, heritage assets,
      and stewardship land)?
      a. the identity (e.g., building, equipment, land) of each
          major class of asset for which maintenance was
          deferred
      b. the method of measuring deferred maintenance
          (SFFAS 6, par. 83; SFFAS 14, par. 1;
          OMB Bulletin 01-09, pp. 108-109, section 11.2)




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Section X Supplementary Information

                                                                   Yes,
Required Supplementary Information
                                                                   No,
                                                                                      Explanation
Deferred Maintenance (62 –65)                                       or
                                                                  N/A

                 Amounts reported for deferred maintenance may be measured using condition assessment
                 surveys or life-cycle cost forecasts.
                 Condition assessment surveys are periodic inspections of PP&E, based on generally
                 accepted and consistently applied methods, to determine PP&E’s current condition and
                 the estimated cost to correct any deficiencies. (SFFAS 6, par. 81)
                 Life-cycle costing is an acquisition or procurement technique that considers operating,
                 maintenance, and other costs in addition to the acquisition cost of assets.
                 (SFFAS 6, par. 82)

63.   If the condition assessment survey method is used to
      measure deferred maintenance, is the following
      information presented for each major class of PP&E in
      supplementary information?
      a. a description of requirements or standards for
         acceptable operating condition
      b. any changes in the condition requirements or
         standards
      c. asset condition and a range estimate of the dollar
         amount of maintenance needed to return it to its
         acceptable operating condition (SFFAS 6, par. 83)




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Section X Supplementary Information

                                                                      Yes,
                                                                      No,
Required Supplementary Information                                                    Explanation
                                                                      or
Deferred Maintenance (62 –65)                                         N/A

64.   If the total life cycle cost method is used to measure
      deferred maintenance, is the following information
      presented for each major class of PP&E?
      a. the original date of the maintenance forecast and an
         explanation for any changes to the forecast
      b. prior-year balance of the cumulative deferred
         maintenance amount
      c. the dollar amount of maintenance that was defined by
         the professionals who designed, built, or managed the
         PP&E as required maintenance for the reporting
         period
      d. the dollar amount of maintenance actually performed
         during the period
      e. the difference between the forecast and actual
         maintenance
      f.   any adjustments to the scheduled amounts deemed
           necessary by the managers of the PP&E
      g. the ending cumulative balance for the reporting
         period for each major class of asset experiencing
         deferred maintenance (SFFAS 6, par. 83)

65.   If management elects to break out deferred maintenance
      by critical and noncritical amounts needed to bring each
      class of asset to its acceptable operating condition, does it
      also include its definition of these categories? (SFFAS 6,
      par. 84)




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Section X Supplementary Information

                                                                    Yes,
Required Supplementary Information:
                                                                    No,
                                                                                   Explanation
Intragovernmental Amounts (66 – 78)                                 or
                                                                    N/A

               Intragovernmental amounts represent transactions between federal entities included
               in the Financial Report of the United States Government. These transactions include
               activities with federal CFO Act and non-CFO Act entities as identified in the
               Treasury Financial Manual. (OMB Bulletin 01-09, p.109, section 11.3)

 66.   Does the entity report, as required supplementary
       information and intragovernmental amounts, the
       following items?
       a. assets
       b. liabilities
       c. nonexchange revenue
       d. for certain reporting entities, earned revenue from
          trade (buy/sell) transactions along with the gross
          cost to generate such revenue (OMB Bulletin 01-09,
          p. 109, section 11.3)

 67.   Does the entity report intragovernmental assets,
       liabilities, and earned revenue from trade transactions
       and nonexchange revenue by trading partner (i.e.,
       reciprocal federal entity)? (OMB Bulletin 01-09, p. 109,
       section 11.3)

 68.   Does the entity report intragovernmental gross cost to
       generate earned revenue from trade transactions by
       budget functional classification? (OMB Bulletin 01-09,
       p. 109, section 11.3)

 69.   Do intragovernmental asset and liability categories
       reported as required supplementary information agree
       with the intragovernmental asset and line items reported
       on the balance sheet? (OMB Bulletin 01-09, p. 109,
       section 11.3)

 70.   Are transactions with components of federal departments
       and agencies (e.g., Forest Service of the USDA) not
       reported separately, but included in the activity reported
       for the federal department or agency?
       (OMB Bulletin 01-09, p. 109, section 11.3)




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Section X Supplementary Information

                                                                                             Yes,
 Required Supplementary Information:
                                                                                             No,
                                                                                                                     Explanation
 Intragovernmental Amounts (66 – 78)                                                          or
                                                                                             N/A

 71.     Are all intragovernmental amounts net of intra-entity
         transactions? (OMB Bulletin 01-09, p. 109,
         section 11.3)

 72.     Does the entity reconcile intragovernmental asset,
         liability, and revenue amounts with its trading partners at
         least quarterly? (OMB Bulletin 01-09, pp. 109 & 110,
         section 11.3)

 73.     Do intragovernmental assets and liabilities reported as
         required supplementary information (RSI) agree with the
         intragovernmental asset and liability line items and totals
         on the reporting entity’s consolidated agencywide
         balance sheet? (OMB Bulletin 01-09, pp. 110 & 111,
         section 11.3)

 74.     For each intragovernmental asset and liability line item
         on the consolidated agencywide balance sheet, does the
         entity identify in the supplementary information the
         trading partner balances that make up the line item?149
         (OMB Bulletin 01-09, pp. 110 & 111, section 11.3)

 75.     If intragovernmental transactions with a trading partner
         are material in one asset or liability category but
         immaterial in another category, does the entity report
         transactions with the trading partner for each category?
         (OMB Bulletin 01-09, pp. 110 & 111, section 11.3)

 76.     If the entity has total intragovernmental earned revenues
         from trade transactions (net of intra-entity activity) of
         greater than $500 million, does it report such
         intragovernmental revenues by trading partner?
         (OMB Bulletin 01-09, p. 111, section 11.3)




149
   Reporting entities may aggregate trading partners whose individual totals for a particular asset category collectively comprise less than 20 percent of
the total asset line item category.




October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 215
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Section X Supplementary Information

                                                                                         Yes,
 Required Supplementary Information:
                                                                                          No,
                                                                                                                Explanation
 Intragovernmental Amounts (66 – 78)                                                       or
                                                                                         N/A

 77.     If the entity reports intragovernmental earned revenues,
         does it also report, by budget functional classification,
         the gross cost of goods, services, and other transactions
         that generated the intragovernmental earned revenues?150
         (OMB Bulletin 01-09, p. 111, section 11.3)

 78.     Does the entity report, by trading partner,
         intragovernmental nonexchange revenues transferred in
         and out? (OMB Bulletin 01-09, p. 112, section 11.3)




150
   The costs that generate intragovernmental earned revenues may not be intragovernmental in and of themselves. For example, if the General Services
Administration (GSA) sells pencils to Agency A, GSA would report the revenue earned by selling the pencils to Agency A (intragovernmental) and
report the cost of purchasing those pencils from Vendor B (public) by budget functional classification.


October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                      Page 216
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Section X Supplementary Information

                                                                                           Yes,
 Required Supplementary Stewardship
                                                                                            No,
 Information                                                                                                       Explanation
                                                                                             or
 Social Insurance Programs (79 – 102)
                                                                                           N/A

                  Social insurance programs covered by SFFAS 17, Accounting for Social Insurance,
                  have the following five common characteristics.
                  a. financing from participants or their employers
                  b. eligibility from taxes or fees paid and time worked in covered employment
                  c. benefits not directly related to taxes or fees paid
                  d. benefits prescribed in law
                  e. programs intended for the general public
                  The following social insurance programs are specifically covered by SFFAS 17.
                  a. Old-Age, Survivors, and Disability Insurance (OASDI, i.e., Social Security)
                  b. Hospital Insurance (HI or Medicare Part A) and Supplementary Medical
                     Insurance (SMI or Medicare Part B)
                  c. Railroad Retirement Benefits (RRB)
                  d. Black Lung Benefits
                  e. Unemployment Insurance (UI. (SFFAS 17, par. 14 &, 15; OMB Bulletin 01-09,
                     pp.103 & 104, section 10.4B)

 79.    In general, does the entity responsible for a given social
        insurance program provide a clear and concise
        description of the program including its financing,
        calculation of benefits, and actuarial status151 as required
        supplementary stewardship information? (SFFAS 17,
        par. 24; OMB Bulletin 01-09, p.104, section 10.B)

 80.     Does this description include the following information?
         a. discussion of the long-term sustainability and
            financial condition of the program
         b. an illustration and explanation of the long-term trends
            revealed in the data (SFFAS 17, par. 24;
            OMB Bulletin 01-09, p.104, section 10.B)




151
   This is the status of a program based on statistical calculations and actuarial assumptions about future economic, demographic, and other conditions
and events.


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Section X Supplementary Information

                                                                    Yes,
Required Supplementary Stewardship
                                                                    No,
Information                                                                       Explanation
                                                                    or
Social Insurance Programs (79 – 102)
                                                                    N/A

81.   Does the reporting entity describe statutory or other
      material changes, and implications thereof, affecting the
      program after the current fiscal year? (SFFAS 17,
      par. 24)

82.   Are projections and estimates based on the entity’s best
      estimates of demographic and economic assumptions?
      (SFFAS 17, par. 25)

83.   Does the entity disclose significant assumptions used in
      making estimates and projections? (SFFAS 17, par. 25)

84.   Are all projections and estimates made as of a date (i.e.,
      the valuation date) as close to the end of the fiscal year
      (i.e., current year) being reported on as possible and no
      more than 1 year prior to the end of the current year?
      (SFFAS 17, par. 26)

85.   Does the entity consistently follow this valuation date
      from year to year? (SFFAS 17, par. 26)

86.   Does information on the financial and actuarial status of
      the social insurance programs include actuarial
      projections that are indicative of long-term sustainability
      and show the annual cash flows in nominal dollars for
      current and future participants? (SFFAS 17, par. 27 (1))

87.   Are the actuarial projections of cash flow amounts
      reported for at least every fifth year in the projection
      period? (SFFAS 17, par. 27 (1) (a))

88.   Does the cash flow information show the following
      amounts?
      a. total cash inflow from all sources (i.e., by and on
         behalf of participants) less net interest on
         intragovernmental borrowing and lending
      b. total cash outflow (SFFAS 17, par. 27 (1) (a))




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Section X Supplementary Information

                                                                    Yes,
Required Supplementary Stewardship
                                                                    No,
Information                                                                       Explanation
                                                                    or
Social Insurance Programs (79 – 102)
                                                                    N/A

89.   Does the narrative accompanying the cash flow data
      include identification of any year or years during the
      projection period when cash outflow exceeds cash inflow,
      with and without interest on intragovernmental borrowing
      or lending (the “cross-over points”)? (SFFAS 17,
      par. 27 (1) (a))

90.   Does the narrative provide an explanation of the
      significance of the cash flow “cross-over points” where
      cash outflows begin exceeding cash inflows?
      (SFFAS 17, par. 27 (1) (a) & 32 (1) (a))

91.   Do the cash flow projections (net of interest on
      intragovernmental borrowing/lending) for Social Security
      and Medicare Part A include an estimate of cash flows as
      a percentage of taxable payroll? (SFFAS 17,
      par. 27 (1) (b))

92.   Do the cash flow projections (net of interest on
      intragovernmental borrowing/lending) for Social Security
      and Medicare (Parts A & B) include an estimate of cash
      flows as a percentage of gross domestic product?
      (SFFAS 17, par. 27 (1) (b))

93.   For Social Security and Medicare, Part A programs, does
      the entity’s cash flow information show its estimate of
      the ratio of the number of contributors to the number of
      beneficiaries during the same projection period as for
      cash flow projections? (SFFAS 17, par. 27 (2))


94.   At a minimum, is the ratio of contributors to beneficiaries
      for Social Security and Medicare, Part A reported for the
      beginning and end of the projection period? (SFFAS 17,
      par. 27 (2))




October 2003             GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft         Page 219

Reporting 1050 – CFO Act Checklist


Section X Supplementary Information

                                                                                            Yes,
 Required Supplementary Stewardship
                                                                                             No,
 Information                                                                                                        Explanation
                                                                                              or
 Social Insurance Programs (79 – 102)
                                                                                            N/A

 95.     For all enumerated social insurance programs except
         Unemployment Insurance (UI), does the responsible
         entity present a statement of actuarial present values of
         the following items?152
         a. all future expenditures during the projection period
            related to benefit payments
              i.         to or on behalf of current participants who
                         have not yet attained retirement age
              ii.        to or on behalf of current participants who
                         have attained retirement age
              iii.       to or on behalf of those who are expected to
                         become plan participants
         b. all future contributions and tax income (from taxation
            of benefits) during the projection period
              i.         from or on behalf of current participants who
                         have not yet attained retirement age
              ii.        from or on behalf of current participants who
                         have attained retirement age
              iii.       from or on behalf of those who are expected
                         to become plan participants
         c. cash flow during the projection period153 (SFFAS 17,
            par. 27 (3) (a)–(g); OMB Bulletin 01-09, p. 104,
            section 10.4B)

 96.     With the exception of Unemployment Insurance (UI),
         does the entity disclose the accumulated excess of all past
         cash receipts, including interest on investments, over all
         cash disbursements within the social insurance program
         represented by the fund balance at the valuation date?154
         (SFFAS 17, par. 27 (3) (h))




152
    For periods beginning after September 30, 2004 this information shall be presented as a basic financial statement rather than as a component of
RSSI (SFFAS 25, par. 6 & 7)
153
    Cash flow during the projection period is derived from subtracting the actuarial present value of future contributions and tax income during the
projection period (95b above) from the actuarial present value of future expenditures for the projection period (95a above).
154
    ibid.


October 2003                      GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft                                          Page 220
Reporting 1050 – CFO Act Checklist


Section X Supplementary Information

                                                                            Yes,
 Required Supplementary Stewardship
                                                                            No,
 Information                                                                              Explanation
                                                                            or
 Social Insurance Programs (79 – 102)
                                                                            N/A

 97.          Does the entity also disclose how it calculated the
              actuarial net present value of future benefits and
              contributions from or on behalf of current participants of
              all social insurance programs except UI?155 (SFFAS 17,
              par. 27 (3) (i))

 98.          If available, does the entity provide estimates of the
              actuarial present values and fund balances of the social
              insurance programs (except UI) under its purview for
              each of the 4 preceding years?156
              (SFFAS 17, par. 27 (3) (j))

 99.          For all social insurance programs except UI, does the
              responsible entity illustrate the sensitivity of the
              projections of cash flows and actuarial present values to
              changes in the most significant individual assumptions?
              (SFFAS 17, par. 27 (4) (a))



 100. At a minimum, do the Social Security and Medicare
      programs analyze assumptions regarding the following
      factors?
              a. birth and death rates
              b. net immigration
              c. real wage differential
              d. real interest rate (SFFAS 17, par. 27 (4) (a))


 101. Does the sensitivity analysis for UI programs show the
      effects of increasing the unemployment rate as follows?
              a. by approximately one percentage point
              b. to a level sufficient to put stress on the system (e.g.,
                 to simulate the largest recession occurring within the
                 last 25 years) (SFFAS 17, par. 27 (4) (b);
                 OMB Bulletin 01-09, p. 104, section 10.4B)


155
      ibid.
156
      ibid.


October 2003                     GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft         Page 221
Reporting 1050 – CFO Act Checklist


Section X Supplementary Information

                                                                 Yes,
Required Supplementary Stewardship
                                                                  No,
Information                                                                       Explanation
                                                                  or
Social Insurance Programs (79 – 102)
                                                                 N/A

102. Does information on the UI program provide a state-by-
     state analysis illustrating the relative solvency of
     individual state programs, including the ratio of each
     state’s current accumulated fund balance to a year’s
     projected benefit payments based on the highest level of
     annual benefit payments experienced by that state over
     the last 20 years? (SFFAS 17, par. 27 (5);
     OMB Bulletin 01-09, p.104, section 10.4B)




October 2003             GAO-04-44G – CFO Checklist – Revised 2003 – Exposure Draft         Page 222