FY 2003 Financial and Performance Reporting

August 13, 2003

MEMORANDUM FOR CHIEF FINANCIAL OFFICERS AND INSPECTORS GENERAL SUBJECT TO THE PROVISIONS OF THE CHIEF FINANCIAL OFFICERS ACT OF 1990 AND THE ACCOUNTABILITY OF TAX DOLLARS ACT OF 2002

FROM:	Linda M. Springer Controller
SUBJECT:	FY 2003 Financial and Performance Reporting

This spring, the CFOs and IGs of the CFO Act agencies reviewed with OMB their plans to achieve three financial reporting goals: meeting the November 15, 2004 Performance and Accountability Reporting (PAR) due date for FY 2004; getting and retaining a clean audit opinion; and eliminating material weaknesses in internal control.

Agency Reporting Requirements

Annual Audited Financial Statements

We are pleased that all but one of the CFO Act agencies have plans in place to retain or obtain a clean opinion in 2003 and that all CFO Act agencies have developed plans to eliminate outstanding material weaknesses in internal control. Also, we are encouraged to learn that most CFO Act agencies are planning to beat the January 30, 2004 deadline for 2003 PARs by issuing them in November or December. This will position agencies to reach the November 15, 2004 deadline for submitting individual agency 2004 PARs to the President, OMB and the Congress.

This is the first year that agencies covered by the Accountability of Tax Dollars (ATD) Act will be required to submit audited annual financial statements. These statements are due January 30, 2004, unless the Director of OMB has granted the agency a waiver to that specific requirement. The requirement for agencies covered by the ATD Act to prepare a PAR is optional for FY 2003. ATD Act agencies must, however, continue to submit all other statutorily-required reports as stand-alone documents by the specified due dates. The PAR will be a mandatory report for ATD Act agencies in FY 2004.

Quarterly Financial Statement

We commend agencies for producing timely quarterly statements during FY 2003. Beginning with the second quarter of FY 2004, the due date for quarterly statements will accelerate to no later than 21 days after the end of each quarter.

For agencies covered by the ATD Act, OMB has waived the requirement for unaudited quarterly financial statements for FY 2003. ATD Act agencies who can, however, are encouraged to produce unaudited quarterly financial statements during FY 2003.

Performance and Accountability Reports

OMB guidance on PARs in Attachment B of OMB’s October 18, 2002 memorandum remains in effect for the FY 2003 reporting cycle. The only change to this guidance is the addition of new reporting requirement for improper payments. Details on reporting requirements for improper payments are located in Memorandum 03-13, “Improper Payments Information Act of 2002,” dated May 21, 2003 at http://www.whitehouse.gov/omb.

Beginning in FY 2003, agencies and programs covered by Section 57 of OMB Circular A-11, see Attachment 1, are required to report progress under the requirements of Section 57 in the Management Discussion and Analysis section of their PARs. Beginning for FY 2004, all agencies required to comply with the requirements of the Improper Payments Information Act of 2002 are required to report on improper payments in the Management Discussion and Analysis section of their FY 2004 PARs.

Agency Reporting Requirements for Government-wide Financial Statements

Treasury plans to accelerate the 2003 Financial Report of the United States Government to February 27, 2004. Also, Treasury plans to issue the 2004 Financial Report of the United States Government to the President and Congress by December 15, 2004.

Management and Legal Representation Letters

Management representation letters and legal representation letters are due no later than the date an agency submits its audited financial statements or PAR. Management representation letters and legal representation letters are due this year from the agencies listed in Attachment 2.

For 2003, we are not requiring interim legal representation letters due to the compressed timetable. However, agencies may continue the practice of preparing interim letters for their own purposes if they wish. The IG should deliver three copies of agency legal representation letters to the Department of Treasury, Financial Management Service (FMS). FMS will deliver copies to GAO, and GAO will distribute to the Department of Justice.

The CFO should deliver 4 copies of the management representation letters to OMB at the same time as the financial statements or PARs; OMB will deliver copies to GAO and Treasury.

Additional Resources

Attachment 3 includes contact information and a summary schedule with the accelerated reporting due dates for the FY 2003 reporting cycle. Please note that due dates and distribution have changed for a number of the reporting requirements.

Thank you for your continued commitment to meeting the goals of the President’s Management Agenda. I look forward to continuing the progress we have made in bringing in a new era of accountability and meaningful disclosure to the Federal Government.

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