Government-wide Financial Reporting - AGA

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Acknowledgements About the Authors Bert T. Edwards, CGFM, CPA, CGMA, was the lead researcher for this project. An independent consultant since his 2010 retirement as Executive Director of the Office of Historical Trust Accounting at the U.S. Department of the Interior, Edwards previously served as CFO of the U.S. Department of State. After a successful 33-year career at Arthur Andersen LLP as its worldwide industry head for government, higher education and nonprofit industries, Edwards served as a consultant for the World Bank and USAID in Vietnam, Moldova, Palestine and Germany and also lectured extensively for the AICPA and accounting firms on government accounting and auditing issues. Principal contributors to this report were: Daniel J. Murrin, CGFM, CPA, from Ernst & Young; John R. Cherbini, CGFM, CPA, CGMA, and Carlos A. Otal, CPA, from Grant Thornton LLP; Ronald Longo, CGFM, CPA, and David M. Zavada, CPA, from Kearney & Company; Andrew C. Lewis, CGFM, CPA, CIPP/G, and Jeffrey C. Steinhoff, CGFM, CPA, CFE, CGMA, from KPMG LLP; Joseph L. Kull, CGFM, CPA, CGMA, from PwC; and Ann Davis, CGFM, CPA, as Treasury Liaison. Other contributors were: Werner Lippuner, CISA, CISM, and Danila Weatherly from Ernst & Young; and Demek M. Adams, CGFM, from Grant Thornton LLP. The authors would also like to acknowledge the efforts of Lynn Hoffman and Maryann Malesardi on this project. Corporate Partner Advisory Group Chairman: Hank Steininger, CGFM, CPA Managing Partner, Global Public Sector, Grant Thornton, LLP AGA Professional Staff: Relmond Van Daniker, DBA, CPA Executive Director Susan Fritzlen Deputy Executive Director/COO Lynn Hoffman Programs Coordinator Maryann Malesardi Director of Communications AGA is proud to recognize our sponsors for supporting this effort. AGA’s Corporate Partner Advisory Group Research Program One of the roles of professional associations like AGA is to develop new thinking on issues affecting those we represent. This new thinking is developed out of research and draws on the considerable resources and experiences of our members and counterparts in the private sector – our Corporate Partners. These organizations all have long-term commitments to supporting the financial management community and choose to partner with and help AGA in its mission of advancing government accountability. AGA has been instrumental in assisting the development of accounting and auditing standards and in generating new concepts for the effective organization and administration of government financial management functions. The Association conducts independent research and analysis of all aspects of government financial management. These studies make AGA a leading advocate for improving the quality and effectiveness of government fiscal administration and program performance and accountability. Our Thought Leadership Library includes more than thirty completed studies. These in-depth studies are made possible with the support of our Corporate Partners. Download complimentary reports at www.agacgfm.org/ researchpublications. 2 AGA Corporate Partner Advisory Group Research
Table of Contents Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1. Introduction ................................................................................................... 6 Historical Perspective ......................................................................................... 6 The Research ................................................................................................. 8 Research Project Scope and Methodology ....................................................................... 8 2. Breakdowns in the Compilation Process: Bridging Budgetary and Other Critical Information ............................. 9 Issue ........................................................................................................ 9 Analysis .................................................................................................... 10 Data Flows Supporting the Compilation Process ................................................................. 11 Bridging Unaudited Budgetary Information to Audited Balances ................................................... 13 Identifying and Reporting the Differences Between the Unified Budget Deficit, Net Operating Cost and the Changes in Cash Needed to Populate the CFS Reconciliation Statements ..................................... 13 A Related Initiative ........................................................................................... 14 Short-Term Recommendations ................................................................................ 14 Long-Term Recommendation .................................................................................. 16 3. Usefulness of the Two CFS Reconciliation Statements ............................................................. 17 Issue ....................................................................................................... 17 Reconciliation of Net Cost Is a Critical Financial Statement Within the CFS ........................................... 17 Improving the Statement of Changes in Cash .................................................................... 18 Short-Term Recommendation ................................................................................. 18 4. Structure ..................................................................................................... 19 Overview of the As-Is Environment ............................................................................. 19 Interviews .................................................................................................. 20 Observations ................................................................................................ 20 Short-Term Recommendations ................................................................................ 21 Long-Term Recommendation .................................................................................. 22 Appendix A: Summary of Important Actions Leading to the Current Consolidated Financial Statements of the U.S. Government .......................................................... 24 Appendix B: Clarification on Data Format in Statement of Cash ....................................................... 27 Appendix C: Interviews with State, Private-Sector and U.S. Government Financial Officials ............................... 28 Appendix D: Abbreviations and Acronyms .......................................................................... 33 Appendix E: AGA Treasury Review Scope and Methodology Research Project — Summary of Project Meetings ............. 35 Government-wide Financial Reporting 3
Page 1: Corporate Partner Research Advisory
Page 5 and 6: Executive Summary SUMMARY OF RECOMM
Page 7 and 8: Introduction sound system of accoun
Page 9 and 10: 2. Breakdowns in the Compilation Pr
Page 11 and 12: Breakdowns in the Compilation Proce
Page 17 and 18: 3. Usefulness of the Two CFS Reconc
Page 19 and 20: 4. Structure Overview of the As-Is
Page 21 and 22: Structure to establish an organizat
Page 23 and 24: Structure and accountability. Stand
Page 25 and 26: Appendix A Act, much has been accom
Page 27 and 28: Appendix B: Clarification on Data F
Page 29 and 30: Appendix C In two instances, the st
Page 31 and 32: Appendix C Interviews with Federal
Page 33 and 34: Appendix D: Abbreviations and Acron
Page 35 and 36: Appendix E: AGA Treasury Review Sco
Page 37 and 38: Endnotes 1. Treasury’s process co
Page 39 and 40: AGA CPAG Research Reports No. 1, Ma

Government-wide Financial Reporting - AGA

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