1
Q
Budget process
A
- formulation of president’s budget
- congressional action on the budget
- budget execution
2
Q
when does budget planning begin
A
18 months before fiscal year begins
3
Q
how long does president’s budget span
A
primary focus is the buget year but also covers at least 4 years following
4
Q
steps for budget formulation
A
- budget and fiscal policy guidlines provided to agencies
- agencies confer with OMB and prepare agency request
- agency request submitted to OMB
- agency proposals finalized
- president’s budget submitted to congress
5
Q
budget must consider
A
effects of economic and technical assumptions
- gdp growth, inflation, unemployment, interest rates, number of people eligible for benefit programs, shares of wages and salaries in GDP)
6
Q
budget and accounting act of 1921
A
president transmit proposed budget to congress not later than the 1st monday in february
7
Q
ability for a program to operate
A
1 - authorization
2 - appropriate funds
8
Q
authorization
A
congross establishes and sets requirements for program/activity
- still need appropriations to incur obligations and spend money
9
Q
congressional budget impoundment and control act
A
requires congress first arrive at budget resolution (senate and house both agree) to provide framework
10
Q
budget resolutin
A
specifies levels for total spend and receipts, size of defecit/surplus, and debt limit by functional category and pass by april 15
11
Q
congress votes on budget authority
A
authority provided by law to incur financial obligations that result in outlays of federal government funds - not spend (outlays) directly
12
Q
where are appropriation bills typically initiated
A
the house
13
Q
what happens if senate disagrees with appropriations bill
A
house and senate form conference committees to resolve issues
14
Q
president can approve/veto what part of appropriations bill
A
entire thing, not certain parts
15
Q
continuing resolution
A
congress must present and president approves/vetos to continue operations if appropriations not provided at beginning of year
16
Q
permanent laws
A
control remaining spend (not appropriations)
- 2/3 of spend
- mandatory spend
ex. social security, medicare
17
Q
appropriations laws
A
1/3 of spend
- discretionary spend
- 12 regular programs
18
Q
reconciliation process
A
to change mandatory spend
- bring exisiting law governing mandatory spend in conformity with most recent resolution on budget
- streamline way to improve budget by decreasing spend or increasing tax with limited debate
19
Q
how reconciliation process has limited debate
A
- cant be debated more than 20 hours
- exempt from filibuster in senate (51 votes needed instead of 60)
20
Q
steps of reconciliation process
A
1: language found in concurrent resolution on the budget
2: combination of instructed committees recommendations into omnious reconciliation bill
21
Q
treasury warrant
A
signifies an account has been established in the Treasury equal to amount of appropriation
- responsible for tracking appropriation
- can’t spend before this
22
Q
treasury account symbols (TAS)
A
individual appropriation, receipt, and other fund accounts for entities and bureaus
- assigned to each account after fund group identified
23
Q
treasury’s fiscal service
A
assigns receipts and expenditure accounts to a fund group based on characteristics and nature of transactions they support
24
Q
general fund expenditure account
A
record amounts by appropriation by congress for general support of government
25
consolidated working fund accounts
to receive and disburse advance payments from other entities or bureaus through provisions of law
26
management fund accounts
working fund accounts authorized by law to facilitate accounting for admin of intragovernmental activities other than continuous cycle of operations
27
revolving fund accounts
specified through provisions of law to finance a continuous cycle of business type operation
- public enterprise funds
- intragovernmental funds
28
public enterprise funds
receipts primarily from sources outside the government
29
intragovernmental funds
receipts primarily from other appropriations or funds
30
special fund expenditure accounts
amounts appropriated from special fund receipts
31
trust fund expenditure accounts
amounts appropriated from trust fund receipts
32
trust revolving fund/ non revolving fund
established when statute authorizes
33
antideficiency act
executive branch takes action to prevent overspending appropriations (OMB who developed apporitionment process)
- penalties for overspending
34
apportionment
distribute amounts available for obligation in an appropriation (portion of agency's budget authority)
OMB operates apportionment process
35
category A - apportionment
by time period
- most common
36
category B- apportionment
program, activity, project
37
category AB - apportionment
combo of time and program, activity, project
38
category C- apportionment
for future years (multiple years or no year)
39
allotments
agencies distribute spend authority to organizational units and locations
40
supplemental appropriations
spend more money than appropriated so need more
-congress enacts
41
deferrals and rescissions
president proposes to reduce need for spend of the appropriations
42
deferral
temporary withholdings of budget authority
- take effect immediately unless overturned by congress
- provide for contingencies, achieve savings, or specified in law
- can't use for policy reasons
43
rescissions
permanently cancel budget authority
-only if congress passes law to approve within 45 days
44
ability to spend appropriated fudns
- purpose of obligation/expenditure
- within time limit
- amount established
45
life cycle of appropriations
- current period
- expired period: 5 years to make payments agaisnt amounts that have been obligated
- closed (canceled): after 5 years
46
receipts
compared in total to net outlays in calculating surplus/defecit (taxes or fees/charges)
47
offsetting collections or receipts
deducted from gross outlays to produce net outlays
- result from business like or market oriented activities with the public (sales)
- intragovernmental transactions: payments for goods/services provided by one government to another
48
budget authority
authority provided in law to enter into legal obligations that will result in immediate or future outlays of government funds
49
forms of budget authority
appropriations
authority to borrow
contract authority
spending authority from offsetting collections
50
authority to borrow
permanent laws permits agencies to borrow funds from general fund or Treasury
51
contract authority
permanent law permits agency to incur obligation in advance of separate appropriation or in anticipation of collection of receipts to make payment
52
spending authority from offsetting collections
permanent law, permits agency to credit offsetting collections to an expenditure account
53
object class
categories in budget prep to classify obligations by item/service
54
us constitution
- no spend without appropriations and must publish the receipts
- gives congress power to borrow on the credit of the US (public debt limit)
55
budget and accoutning act 1921
created OMB and GAO
- president submits single budget to congress
- GAO investigates all matter relating to public funds
56
supplemental appropriations act 1950
defines what constitutes legal obligations against an appropriation and requires agency to report unliquidated obligation and appropriations
57
budget and accounting procedures act 1950
budgetary and financial accounting procedures:
- authorize and direct president to evaluate and develop palns for organization, coordination and management of executive branch
- full disclosure of financial results
58
congressional budget and impoundment control act 1974
establish budget committees in each house of congress and budget resolution to agree
- establish congressional budget office (CBO) to provide advice and re estimate presidnet budget
- change fiscal year to oct 1- sep30
59
budget resolution
set overall spending and receipt goals and set size of defecit/surplus
60
budget enforcement act 1990
divided spend between discretionary and mandatory (entitlement programs)
- establish caps for discretionary spending
61
federal credit and reform act 1990
special budget treatment to measure cost of direct loans and loan guarentees
- congress must provide budget authority equal to subsidy cost in appropriations before can make direct loans or loan guarentees
- direct loans = asset at pv of estimated net cash flow
- guarenteed loans= liability
62
government performance and results act 1993
strategic plans and annual performance plans containing measurable goals and annual performance reports
63
government performance and results modernization activities
every 4 years provide crosscutting long term goals
64
statutory pay as you go act 2010
all new legislation changning taxes, fees, expenditures must not increase projected defecit
65
budget control act 2011
increase debt limit, measures to reduce defecit in next 10 years
- failed
66
fiscal responsibility act 2023
suspended limit on federal debt and made changes that affect federal spending and revenues
67
central financial managemnet agencies of executive branch
OMB and Treasury
- budget guidance and budgetary reporting requirements
68
OMB role
-assist in implementation of president's vision
-oversee preparation of federal budget and performance of executive branch agencies
- uses circulars and bulletins to provide guidance (issued by director to heads of agencies)
69
when omb uses circulars
nature of subject matter is a continuing effect
70
Circular A-11
budget preparation, submission and execution
- contains guidance for SF 133 (required for every budget account)
71
when omb uses bulletins
when subject matter requires single or one time action by the departments or establishments or is of transitory nature
72
OMB memorandums
issued by any of OMB appointees to designated positions within the agencies
73
Circular A-136
financial reporting requiremnets
-updated annually
74
Treasury's Bureau of Fiscal Service
(financial manager and fiscal agent of US government)
- operates federal governments collections/deposit systems
- borrows money needed to operate federal government through Treasury bills, bonds, notes
- provides central payment service to federal program/agencies
- provides info through government wide accounting and reporting
- manages deliquent debt owed to government
75
guidance published by treasury for federal agency financial operations
- treasury financial manual
- us general ledger (USSGL) (chart of accounts)
76
federal financial management improvement act
mandates federal agencies comply wiht USSGL at transaction level
77
ussgl 2 sets of accounts
- budgetary accounting (lifecycle of appropriation)
- proprietary accounting (assets, liabilities, revenue, expenses - accrual basis)
78
basic budgetary equation
budgetary resources = status of budgetary resources
79
budgetary resource
amounts available to incur obligations in given year
80
components of budgetary resources
- appropriations
- borrowing and contract authority
- unobligated balances of multiple year and no year money from prior reporting periods
- spend authority from offsetting collections
- recoveries of prior year obligations
81
budgetary resources statuses
- obligations incurred
- unobligated balances available
- unobligated balances unavailable (time lapsed)
82
obligation
binding agreement that will result in outlays
- budgetary resources must be made available before obligations can be incurred legally
83
outlay
payment to liquidate an obligation
- measurement of government spend
84
SF 133 does what
- required every quarter
- required for each treasury account fund symbol
- fufills legal requirement that president review federal expenditure at least 4x a year
- allows monitor status of funds
- consistent presentation of info accross programs
- historical reference and patterns
- ties agencies financial statements to budget execution
85
sf 133 4 sections
- budgetary resources (available for obligation or not)
- status of budgetary resources ( amount obligated/not obligated yet)
- change in obligated blaance
- budget authority and outlays net (whether obligated amounts have been outlayed)
86
2 differences between SF 133 and statement of budgetary resources
- statement of budgetary resources is audited
- SF 133 presents amounts for single treasury account fund symbol while statement of budgetary resources combines amounts for all agency's budget accounts
87
critical budgetary events tracked
- receipt of appropriations
- apportionment and allotment of appropriations
- commitment of funds prior to issuance of orders for goods/services
- obligation of funds when goods/services ordered
- status of obligation shows whether goods received and whether payment made (appropriations expended)
88
commitment
agencies reserve budgetary authority through recognition of commitments for planned spend based on estimates
- don't legally encumber the allotment
89
entries only made against an appropriation if
the transaction was funded by that appropriation
90
journal entry to record appropriation of funds by congress
debit: other appropriations realized
credit: unapportioned authority
91
other appropriations account
tracks basic operating appropriation received by entity
-special purpose appropriations have specific accounts
92
until OMB apportions the appropriations
can't commit funds or charge expenditures
93
recognizing the apportionment of the appropriation journel entry
debit: unnaportioned authority
credit: apportionment
94
recognizing the allotment of funds to sub components
debit: apportionment
credit: allotments - realized resources
95
recognizing a commitment to reserve budget authority
debit: allotments - realized resources
credit: commitments
96
recognizing creation of obligation for supplies not delivered
debit: commitments
credit: undelivered orders, unpaid
97
in order for obligation to be valid
must be binding agreement entered into by an authorized agent of entity
98
recognizing delivery of the order
debit: undelivered orders, unpaid
credit: delivered orders, unpaid
99
recognizing the payment of the order
debit: delivered orders, unpaid
credit: delivered orders, paid
100
de-obligation entry if necessary
debit: undelivered orders, unpaid
credit: allotments - realized resources
101
what fund accounts for the greater part of the budget
general fund
102
deposit funds
account for monies that don't belong to government (government holds funds for someone else), excluded from budget totals
103
how federal government accounts
appropriations (not fund accounting)
104
proprietary accounting
focuses on financial consequences of operations during period and financial position of the entity
105
CFO Act 1990
required improvements to federal financial management by charging OMB with certain leadership responsibilities, require appointmnet of CEO at certain large agencies and establish annual financial statement audits
- implement proprietary accounting
106
government management reform act
made cfo act requirements permanent and required audited government wide consolidated financial statements
107
key annual flows- budgetary accounting
budget authority, obligations and outlays at entity level, receipts, outlays and defecit/surplus at government wide level
108
key annual flows - proprietary accounting
revenues, other financial sources and costs
- accrual model
109
federal credit reform act
required recognition of expected losses arising from defaulted loan guarentees
110
entries made for commitments
budgetary: entry made for commitment of funds in advance of preparing orders
proprietary: entries not made
111
entries made for obligation of funds
budgetary: at time goods ordered
proprietary: obligations not recorded
112
federal managers financial integrity act (FMFIA)
requires agencies to establish and maintain effective internal controls and financial management systems
- requires head of each agency to provide annual assurance statements
- corrective action plans required for material weaknesses
113
CFO Act 1990
prepare annual audited financial statements for 10 pilot agencies
- debuty director at OMB
- CFOs at largest 24 agencies
- requires omb to report to congress on audits
114
government management reform act 1994
requires head of departments and agencies to prepare and submit agency wide audited financial statements to OMB by March 1
- secretary of Treasury prepares consolidated financial statemnets for us government and comptroller general audits
115
federal financial management improvement act
consistency of accounting by agency from one FY to next and uniform accounting standards
- requires federal financial management systems to support full disclosure of federal financial data
- requires agencies in cfo act to conform to accounting standards, use ussgl, meet financial system requirements
116
reports consolidation act
authorized agencies to combine accounting reports and annual performance reports into performance and accounting reports (PAR)
117
accountability of tax dollars act
extended requirement to produce annual audited financial statemnets to all executive branch entities
- waiver authority to omb
118
improper payments elimination and recovery act
prevention, recovery, and reporting on improper payments
- study of the cfo act (examined)d
119
digital accountability and transperency act
increase availalbility, accuracy, and usefulleness of federal spend
- submit data on monthly basis
120
modernizing government tech (MGT)
allows agencies to invest in modern tech
- establish a centralized tech modern fund and board
- cfo act agencies to establish IT working capital funds
121
payment integrity info act
repealed previous laws relating to indentification, elimination and recovery and reporting of improper payments
- improper=shouldn't been made or wrong amount
122
FASAB
adivosry board - derives authority from sponsors
- 90 day review for concepts/standards
- agencies must direct agencies not fasab
- 3 federal board members, 6 non federal
123
sponsoring agencies for fasab
OMB, Treasury, GAO
- provides funding
- all concepts and standards reviewed prior to issuance
124
SFFAS 34
hierarchy for GAAP principles
125
users of federal financial reports
citizens, congress, executives, program managers
126
objectives of financial reports
budget integrity
operating performance
stewardship
systems and control (safeguard)
127
budget integrity
be publicly accountable for monies raised through taxes and for expenditures in accordance with appropriations
128
operating performance
assisst report users in evaluating service efforts, costs, and accomplishments of reporting entity
the manner in which financed
manageent of assets/liabilities
129
stewardship
assess impact on country of government operations and investments for period and how governments and nations financial condition changed and may change in future
-sufficiency of future resources
130
systems and control
financial management systems and internal accounting and admin controls are adequate to ensure:
- transactions executed in accordance with budgetary and financial laws
- assesst safeguarded to deter fraud, waste and abuse
- performance measurement info adequately supported
131
minimum life cycle of an appropriation
6 years
132
sffas 47
what orgs to include in federal reporting entity and how to distinguish consolidated vs disclosed
- orgs budgeted for, owned, or controlled by fed government included in general purpose financial reports
133
general purpose federal financial reports (GPFFR)
performance and accountability reports (PAR)
or
agency financial reports - doesn't have extensive performance info
134
GPFFR
provide info on fed reporting entity's mission and organization, plan and actual program performance, financial performance, compliance with laws and regulations, most serious challenges
135
principal financial statements
financial results of operations during year and financial position at end of year
- includes notes to financial statements
136
Generally Accepted Governmental Auditing standards (GAGAS)
independent auditor is in accordance with this
- also provides guidance on RSI and OAI
137
to recognize
give expression in books of account
- formally record or incorporate item into financial statements
138
disclosure
reporting info in notes or narrative regarded as integral part of principal financial statements
139
balance sheet
as of specific time, resources that embody economic benefits/services the federal government controls and obligations to provide assets
-separates intragovernmental assets/liab and other assets/liab (public/nongovernmental)
- disclose entity vs nonentity assets
- disclose funded liabilities and unfunded liabilities
140
principal financial statements
balance sheet
statement of net cost
statement of budgetary resources
statement of custodial activity
statement of social insurance
statement of changes in social insurance
note disclosure
141
statement of net cost
cost of operations of reporting entity, financed by taxpayers, for given period
- net cost of major programs
- only exchange revenue is deducted from gross cost
- gross cost on accrual basis, exchange revenue that offset costs and net cost remains to be financed
- reveals full cost of programs
- when full cost not billed for interentity costs - benefiting entity may recognize unblilled amounts as imputed costs
142
statement of changes in net position
net results of operations for period, other adjustments, and unexpended appropriations
- excess of financial sources over net cost
- info for unexpended appropriations and cumulative results of operations
- begin with prior year's closing balance
143
statement of budgetary resources
how budget resources were made available and status at end of period
- budgetary accounting rules
- mirrors SF-133 report on budget execution
- can see obligations incurred and outlays
- combined not consolidated
144
statemnet of custodial activities
for material amounts of nonexchange revenues on behalf of general fund, trust fund or other recipient agencies
- linked to balance sheet
- reporting entity recognize asset for collected funds not yet distributed and payable to entity receiving funds
145
statement of social insurance
5 programs - social security, medicare, railroad retirement benefits, black lung benefits, unemployment insurance
- blend exchange and nonexchange
- presents actuarial PV of future benefits and contribution and taxes
- broken out into participants who are eligible, participants not attain eligable age, future participants
146
note disclosures
basis of accounting and presentation
- brief description of reporting entity
- also has fund balance with treasury, cash and other monetary assets, investments, accounts and interest receivable, etc
147
entity assets
reporting entity has authority to use in operations
148
nonentity assets
held by entity that're not available to entity
149
funded liabilities
covered by budgetary resources
150
unfunded liabilities
congressional action needed before budgetary resources provided
151
are stewardship land and heritage assets in Balance sheet?
no - due to valuation issues
- add a reference note to the balance sheet and reveals physical units
152
sffas 59
all land expensed - use narrative in note to balance sheet to explain how it manages the land
153
recon of net cost to net outlays
sffas 53 addresses need to explain difference between budget and accrual results
3 types of differences:
- component of net cost not part of net outlays (depreciation)
- component of net outlays not part of net cost (capital asset)
- other temporary timing differences (PPAs)
154
MD and A
- entity mission and org structure
- entity performance goals and results
- status of systems, controls, and legal compliance
- analysis of financial statements
- future effects of risks, trends, conditions, demads
- limitations on GAAP based financial statements
-RSI
155
RSI
- required by FASAB
- land, MD&A, statement of budgetary resources, DM&R, fed oil and gas resources
156
DM&R
maintenance and repairs not performed when shouldve been and put off/delayed to future period
157
other info
- omb requires in Agency Financial Report and Performance Accountability Report
ex. inspector general summary of management performance challenges, revenue foregone
158
Government management reform act (gmra)
requires treasury to produce annual consolidated financial report (cfr) for government as a whole
- all federal reporting entities submit adjusted trial balance and manual adjustments to prepare
159
intragovernmental transactions
financail transactions between orgs within reporting entity
- eliminated when consolidated
160
who audits the CFR
GAO
161
revenue
inflows the government demands, earns or receives from donation
162
nonexchange revenue
demand payment from public
- taxes, duties, fines and penalties, donations
- recorded in statement of changes in net position
- report when claim arises and reasonably estimateable
163
exchange revenue
government provides goods/services for a price
- statement of net cost
- recognize when goods/services provided and is obligated to pay
164
how appropriations and transfers are reported
other financing sources
165
fund balance with treasury
represents aggregate amount of funds entity is able to use to make expenditures and pay liabilities
- at department level, fund balance is intragovernmental asset
- treasury's general fund represents committment to make resources available = intragovernmental liability
- both intragovernmental amounts eliminated in government wide statements
166
at department level, treasury fund balance increased by
- receiving appropriations, reappropriations, continuing resolutions, allocations
- receiving transfers and reimbursements from other federal entities
- borrowings from treasury
- offsetting collections authorized to spend
167
at department level, treasury fund balance decreased by
- disbursements to pay
- investments in us securities
- cancellation of expired appropriations
- transfers and reimbursements to other
- recission of appropriations
168
accounts receivable
calculated estimated allowance for estimated losses (bad debt expense)
169
estimated loss determined by
- separate accounts into groups of homogenous accounts
- stratify groups to risk characteristics
- estimate level of losses
170
advances/prepayments
-advance payments prohibited in appropriation law
- prepayments cover certain periodic expenses before incurred
- recorded as assets until satisfied
171
federal credit reform act
present value used to determine and recognize cost today of estimated cash flows
172
subsidy rate
subsidy cost/amount disbursed
estimate cost result from calcs, applied when issued, reassessed each year
173
subsidy cost usually
- different in interest rates
- defaults on payments
- fees and other costs
174
loan guarentees
liability valued at PV of cash outflows less PV inflows
- discount rate is average interest rate on marketable treasury security of similar maturity
- re estimate each year
175
upward subsidy re estimate
increases cost of loan, additional cost funded through subsidy appropriation
176
downward subsidy
excess reterned to treasury
177
nonmarketable par value treasury security
issued at face value and redeemed at face value on demand
178
market based treasury security
issued without statutorilay determined interest rates. not marketable but terms mirror terms of marketplace securities
179
marketable treasury securities
offered to marketplace and can buy/sell on securities exchange market
- publically quoted
180
contra asset account
investment premium/discount
181
effective interest rate method to amortize premium/ discount
effective interest rate x carrying amount of security at start of accounting period = interest income
- carrying amount changes by amount of amortized discount/premium
182
amount of amortize
effective interest rate - nominal interest rate
183
operating materials and supplies (OM&S)
goods acquired for use in normal operations
184
inventory and OM&S accounted for under consumption method
- recognition of historical cost as asset when inventory or OM&S received by entity
- use of flow assumptions to assign costs (FIFO or weighted/moving average)
- LIFO not permitted
185
disclosure of category of inventory, om&s required
- regular/normal inventory levels (valued at cost)
- held in reserve/future use or sale (valued at cost)
- excess (net realizable value)
- held for repair (historical cost)
186
OM&S may use purchases method if
- not significant amount
- end user controls
- not cost beneficial to use consumption method
*expense upon receipt rather upon consumption
187
188
stockpiles
strategic and critical materials held due to statutory requirements for use in national defense, conservation, or national emergencies
- asset upon receipt, expense upon use
- historical cost unless permanent decline in vlaue then net realizable value
189
seized property
accounted by central fund
- monetary instrument = asset when seized and liability established since asset not fully available until forfeiture
- other than monetary = note disclosure (market value)
190
forfeited property
once forfeiture complete - balance sheet, revenue recognized and liability removed
- not monetary = assets wehn judgement obtained and deferred revenue recognized - fair value
- forfeited property that can't be sold - no financial value recognized but is disclosed
191
PPE
estimated useful life 2 years or more
- not intended for sale
-acquired/constructed with intention of being used
192
categories of PPE
- heritage assets
- stewardship land
- general PPE (leasehold improvement, land rights, federal owned property in hadnds of others)
193
capital lease criteria
- ownership transfer at end of lease
- option to purchase at end of lease at bargain
- lease term is more than 75% estimated economic life
- PV lease payments more than 90% fair value
194
general PPE
capitalized on balance sheet and depreciated
195
when to recognize exchange transaciton liabilities
liability probable and measurable
196
when to recognize nonexchange transaciton liabilities
liability amount is due and payable at end of period
197
when to recognize government related events liabilities
liability in period event occurs and amount measurable
198
government acknowledged events
- congress appropriates/authorizes resources and
- exchange occurs or nonexchange amounts are unpaid as of reporitng date
199
contingent liability
exisiting condition involving uncertainty as to possible gain/loss
200
probable
more likely than not to occur
201
reasonably possible
more than remote but less than probable
202
remote
slight chance
203
liability recognized if
- probable and loss can be estimated (if not estimated disclose info)
- possible - record disclosure
- remote: no disclosure
204
Office of Personnel Management
- employee benefits are cost of agency employee works for but administered by OPM
- expense for accruing retirement benefits reported on employing entity financial statements without regard if they must fund full cost
- transfer of resources form employing entity to OPM but amount paid usually less than actual costs (imputed costs)
CGFM
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