October 18, 2002 MEMORANDUM FOR CHIEF FINANCIAL OFFICERS AND INSPECTORS GENERAL
Thank you for your 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. Key
Due Dates for FY 2002 Performance and Accountability Reports
ENDNOTES FOR ATTACHMENT A: 1. Required documents should be provided to the following recipients by the due dates indicated. Agencies should generally hand-carry, fax, or e-mail the information due to the difficulty experienced last year using normal mailing routes.
3. Three copies are required by OPM OIG. Notify OPM by 10/15/02 of any anticipated delays. 4. Revised AUPs are located at at http://www.opm.gov/oig/index.htm 5. CFOs may negotiate shorter review periods with their respective RMO. 6. Statement of Auditing Standard (SAS) Number 89, Audit Adjustments, which became effective for FY 2001 audits, requires a management representation regarding the materiality of uncorrected financial statement misstatements aggregated by the auditor. A list of any uncorrected misstatements should be attached to the management representation letter. 7. Cases that have not changed from the 9/30/02 interim letter do not have to be individually listed again. 8. IGs may submit the legal representation letters with management schedules electronically to USCFS@gao.gov with electronic signatures or follow up with a fax containing signatures from the agency IG. If hand delivering, three copies must be delivered by a Federal employee with government ID; call Mr. Fretwell at (202) 512-9382 prior to delivery. 9. DOJ has provided additional guidance at http://www.usdoj.gov/civil/forms/legalrepinstructions.htm. 10. Interim unaudited financial statements should be submitted electronically to Sheila_Conley_Statements@omb.eop.gov. PREPARING FY 2002 PERFORMANCE AND ACCOUNTABILITY REPORTS The following guidance is applicable for the FY 2002 reporting cycle. Guidance for future reporting periods will be included in an OMB circular that will consolidate, establish, and update government-wide policies and procedures related to agencies’ Performance and Accountability Reports. For this year, this report satisfies the reporting requirements of the:
I. OBJECTIVE A Performance and Accountability Report should provide financial and performance information that enables Congress, the President, and the public the ability to assess the performance of an organization relative to its mission and for management to be accountable for its actions and resources. II. CONTENT There will be three parts to the Performance and Accountability Reports:
Parts II and III should be included with Part I. Management’s Discussion and Analysis, available in hard and soft copy (on the internet). Agencies may, however, find it useful to publish the overview, also known as the “Management’s Discussion and Analysis” (MD&A), as a separate pamphlet in addition to including it in the Performance and Accountability Report. Content requirements for each section are described below. Part I. Management’s Discussion and Analysis A. A dated transmittal letter signed by the agency head should be located at the beginning of the report. It must include:
(2) an assessment of whether financial and performance data in the report is reliable and complete, identifying material inadequacies and actions the agency is taking to resolve them, (the letter may reference a more detailed discussion of this topic elsewhere in the report); and (3) a Federal Manager’s Financial Integrity Act (Integrity Act) statement of assurance indicating whether (a) management controls are in place and (b) financial systems conform with government-wide standards. The statement must take one of the following forms: statement of assurance; qualified statement of assurance, with exceptions explicitly noted; or statement of no assurance.
B. A concise overview of the entire Performance and Accountability Report should follow the agency head transmittal letter. The overview includes most important matters that could:
OMB has determined that the Performance and Accountability Report overview, described below, meets FASAB requirements for a MD&A. The overview is not expected to contain all items that are material to the other sections of the report. The overview should include (in no specific order):
(2) highlights of “most important” performance goals and results (positive and negative) for the applicable year, including trend data where available (this applies to goals being evaluated by quantitative and descriptive criteria); (3) actions
being taken or planned where “most important” goals are not
yet being met; (5) a brief analysis of financial statements; (6) a brief description of systems, controls, and legal compliance; (7) a summary description of Integrity Act material weaknesses and non-conformances, the year first identified, the targeted corrective action date, key milestones for corrective action, and instances where an agency failed to meet key milestones from the prior year (Agencies have the option of including this information in either the overview or the CFO letter.); and (8) other “most important” information identified by the agency head, such as the agency progress in implementing the President’s Management Agenda and/or OMB’s most recent scorecard evaluation of status and progress. The MD&A should be supported and supplemented by detailed information contained in Part II. Performance Section and Part III. Financial Section. Accrual based accounting and performance and other financial information include reasonable estimates as a part of actual information reported for quarterly and/or fiscal year data. Estimates should be supported by reasonable estimable assumptions and data. Part II. Performance Section The annual program performance information required by the Government Performance and Results Act (GPRA) should contain all of the required elements of an annual program performance report as specified in OMB Circular A-11, Preparing, Submitting, and Executing the Budget, section 231.1, “Required Elements of an Annual Program Performance Report”and section 231.9, “Other Features of the Annual Program Performance Report.” Section 231.1 applies to all performance reports. Section 231.9 contains content that is not required by statute but is encouraged by OMB or content that is required by statute which may not be applicable to all agencies. Part III. Financial Section A. A letter from the Chief Financial Officer (CFO) that briefly summarizes:
(2) major impediments to correcting audit weaknesses and noncompliance; (3) progress made in correcting previously reported problems; and (4) Integrity Act information, if the agency chooses not to include it in the Performance and Accountability Report overview. B. Agency financial statements and related auditor’s reports C. An Inspector General (IG) Summary of Serious Management Challenges must be provided to the agency head at least 30 days before the report due date. Comments by the agency head may be appended to the Inspector General’s statement. The agency head may comment on, but not modify, the IG’s statement. The IG statement must include:
(2) a brief assessment of the agency's progress in addressing those challenges. D. Other agency-specific statutorily required reports pertaining to an agency's financial or performance management may be included in the Performance and Accountability Report after consultation with OMB and Congress. The head of the agency must determine if inclusion of an agency-specific report will make the reported information more useful to decision makers. Consultation with Congress includes the Committee on Governmental Affairs of the Senate, the Committee on Government Reform of the House of Representatives, and any other committee of Congress having jurisdiction with respect to the report being proposed for consolidation. III. PRESENTATION A. Performance and Accountability Reports should be easily read and understood, and direct and concise in the information they convey. Form and style should not be elevated over content. B. Performance
and Accountability Reports should be integrated to come across as a single
document that has been subject to overall editing that assures consistency
in format, emphasis, appearance rather than as an compilation of sections
prepared by different parts of the organization.
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