Chapter 17 - Accounting and Reporting for the Federal Government

CHAPTER 17:

ACCOUNTING AND REPORTING FOR THE FEDERAL GOVERNMENT

OUTLINE

Number )ue"%io*": 17-1 17-! 17-# 17-& 17-) 17-* 17-7 17-. 17-/ 17-10 C!"e": 17-1 17-! 17-#

Topic

Type T!"#

$%!%u" &re: 1' e( Ne Ne 11-# 11-& 11-) 11-* Ne Ne 11-/ Ne Ne Ne 11-# revised 11-1 revised 11-! 11-# 11-& 11-)- revised 11-* Ne

Federal financial management responsibilities Federal GAA" hierarchy Conceptual frame or$ Accounts used in federal accounting Net position and net assets FA+A, compared to GA+, Federal funds +te ardship assets ,udgetary accounts used by federal agencies "erformance accountability report Agency "AR and audit report FA+A, 12+2 Government- ide financial statement audit

Identify Compare %escribe '(plain Compare Contrast Identify- compare %efine- compare Identify '(plain- identify Calculate- e(plain Internet Internet- evaluate 4ultiple Choice Compute 6' 6's- F+ "repare F+ 6's- F+ Analysis

E+erci"e" Prob,em": 17-1 3arious 17-! Fund balance ith 12+2 5reasury 17-# Agency financial statements- continuation of 17-!2 17-& +tatement of net cost 17-) +tatement of budgetary resources 17-* 5ransactions and statement of financing 17-7 Financial statement analysis

17-1

Chapter 17 - Accounting and Reporting for the Federal Government

CHAPTER 17:
Ans ers to 7uestions

ACCOUNTING AND REPORTING FOR THE FEDERAL GOVERNMENT

17-12 Although the three principals of the 6oint Financial 4anagement Improvement "rogram 86F4I"9 have the authority for establishing sound financial management policy and oversight- the principals have delegated the responsibility to the :ffice of 4anagement and ,udget;s :ffice of Federal Financial 4anagement- the :ffice of "ersonnel 4anagement- and the Chief Financial :fficers Council2 5he delegation occurred in !00&once the principals of the 6F4I" ere satisfied ith the operations of the FA+A,2 6F4I" no longer meets as a stand-alone organi<ation2 85he three principals of the 6F4I" are the Comptroller General- the +ecretary of the 5reasury- and the %irector of :ffice of 4anagement and ,udget29 172!2 5he GAA" hierarchies for the federal government and state and local governments are =uite similar2 :ne ma>or difference is that federal authoritative guidance comes from FA+A, hile state and local government authoritative guidance is issued by GA+,2 5here are also some differences in the type of outside guidance accepted as authoritative by the t o standard-setting bodies2 ,oth hierarchies have been codified by the respective standard-setting bodies- the FA+A, and the GA+,2 5here are four categories of principles ith the highest level 8category a9 being the statements and interpretations issued by the respective standard-setting bodies2 Category a principles can also be found in the FA+, or AIC"A pronouncements if made applicable to state and local governments by the GA+,2 5he category b principles include the 5echnical ,ulletins issued by the respective standard-setting bodies2 AIC"A Industry and Accounting Guides are also considered category b principles if made applicable to federal entities by the FA+A, or state and local governments by the GA+,2 5he GA+, can also ma$e AIC"A +tatements of "osition applicable2 Category c principles are different for the t o hierarchies2 Technical Releases of the Accounting
and Auditing Policy Committee of the FASAB are considered category c for federal entities; whereas, AICPA Practice Bulletins made applicable by GASB are considered category c for state and local governments. Category d guidance is the same, consisting of implementation guides issued by the respective standard-setting bodies, as well as widely accepted practices.

172#2

5he conceptual frame or$ for the federal government is at about the same stage as that for state and local governments- even though the GA+, as established si( years earlier2 5he FA+A, has issued si( concepts statements- and the GA+, five2 +tatement of Federal Financial Accounting Concepts 8SFFAC) No. 1 identifies the users of federal financial information and their information needs- and establishes the ob>ectives of financial reporting for the federal government- much li$e GA+, Concepts Statement No. 12 SFFAC No. 2 provides criteria for determining the reporting entity and provides

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Chapter 17 - Accounting and Reporting for the Federal Government

guidance on the nature of the financial statements to be prepared and their form and content2 5he GASBS 14 8a reporting standard rather than a concepts statement9 provides

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- Ans ers- 17- # 8Cont;d9

comparable criteria to SFFAC No. 2 for defining the reporting entity2 SFFAC No. 3 describes the 4anagement %iscussion ? Analysis as does GASBS No. 342 SFFAC No. 4 for the federal government describes five intended audiences and =ualitative characteristics for the consolidated financial report of the 12 +2 Government- as does the GA+,;s Concepts Statement No. 1 for state and local governments2 SFFAC No. 5 describes the elements of financial statements- similar to GA+,;s Concepts Statement 4 titled @'lements of Financial +tatements2A Recently issued SFFAC No. 6 is similar to the GA+,;s Concepts Statement 3 on communication methods in general purpose e(ternal financial reporting2 172&2 5he account name Estimated Reven es used by state and local governments is a budgetary account representing the government;s estimate of the amount of revenue e(pected to be reali<ed during the year2 Federal agencies use the account !t"e# App#op#iations Rea$i%ed in their budgetary trac$ to capture the amount Congress has appropriated to an agency for the upcoming year2 !t"e# App#op#iations Rea$i%ed is for basic operating appropriations- rather than appropriations earmar$ed for specific purposes2 !t"e# App#op#iations Rea$i%ed is closer in meaning to App#op#iations of state and local governments than it is to Estimated Reven es2 A federal agency uses the account F nd Ba$ance &it" '.S. (#eas #) in its proprietary trac$ as an asset that represents the balance available to the agency at the %epartment of 5reasury2 5his account ould be most similar to cash and cash e=uivalents at the state and local government level2 F nd Ba$ance &it" '.S. (#eas #) ill be reduced throughout the year by the dollar value of chec$s dra n2 +ee Illustration 17-1! for a comparison of these terms2 ,ecause they are budgetary accounts- Estimated Reven es and !t"e# App#op#iations Rea$i%ed have more in common ith each other than either one does ith F nd Ba$ance &it" t"e '.S. (#eas #)2 172)2 Agree- in part2 5he net position account on the balance sheet of a federal agency represents the difference bet een assets and liabilities- as net position does for a state or local government2 Bo ever- net position is classified into t o categoriesC une(pended appropriations and cumulative results of operations- hich are different than the classifications of net position for a state or local government2 1ne(pended appropriations is the amount of the entity;s appropriations represented by undelivered orders and unobligated balances2 Cumulative results of operations is measured since the inception of the activity as the net difference bet een e(pensesDlosses and financing sources- hich includes appropriations- revenues- and gains2

17-*2 Agree- in part2 It is true that the FA+A, sets standards for e(ternal financial reporting for federal agenciesE ho ever- its mission is considerably broader than GA+,;s mission in that it also sets standards for internal management accounting and performance measurement2 For e(ample- FA+A,;s ob>ectives for e(ternal financial reporting are designed to assist users in evaluating budgetary integrity- operating performanceste ardship- and ade=uacy of systems and controls2 5he audiences for federal financial

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- Ans ers- 17-* 8Cont;d9

reports include Congress- federal e(ecutives- program managers- as ell as citi<ens and their intermediaries2 Although the GA+, does provide guidance in presenting information on service efforts and accomplishments- its mission and activities to date have been primarily focused on e(ternal financial reporting and governmental GAA"2 17272 5he t o groups of funds used by federal government entities are federal funds and trust funds2 5here are three federal fund typesFGeneral Fund- special funds- and revolving funds2 5he General Fund is similar in intent to the General Fund of state and local governments2 It receives all revenue and other receipts not earmar$ed 8or identified9 for a specific purpose2 General appropriations are made from the General Fund2 +pecial funds are established for a specific non-business-type purpose2 5hese funds are most similar to a special revenue fund used by state and local governments2 Revolving funds are established for business-type activities ma$ing them similar to the proprietary funds of state and local governments2 5he second fund group is trust funds2 5here are t o types of trust fundsFtrust funds and deposit funds2 5rust funds are established hen a la or statute indicates that funds must be used for a specific purpose2 Fre=uently- the purpose benefits those e(ternal to the federal government- similar to trust funds of state and local governments2 Bo ever- this is not al ays the case2 In some instances the trust funds of the federal government actually benefit the government- ma$ing the funds similar to special revenue funds at the state and local government level2 5he second type of trust fund is a deposit fund2 %eposit funds hold receipts on behalf of others- ma$ing them similar to agency funds at the state and local government level2 172.2 +te ardship assets are of t o typesFheritage assets and ste ardship land2 Beritage assets have historical or natural significanceE cultural- artistic- or educational significanceE or are architecturally significant2 +te ardship land is land that is not used by the federal government for operating purposes2 General property- plant and e=uipment 8""?'9 of the federal government is used for operating purposes and as such is accounted for in the same manner as ""?' of state and local governments- not-for-profit entities- and for-profit entities2 5he costs of the assets are capitali<ed and if the asset is depreciable- depreciation e(pense is recorded periodically2 +te ardship assets- ho ever- are not recorded2 Rather they are noted on the financial statements ith disclosures in the notes to the financial statements2 5he note disclosure should provide information on ma>or categories of heritage assets- multiuse heritage assets- and ste ardship land2 Additionally- changes in ste ardship assets should be provided- including physical units added and ithdra n during the yearE methods of ac=uisition and ithdra alE and condition information

17-)

Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- Ans ers 8Cont;d9

172/2

5he budgetary accounts re=uired by the 12+2 Government +tandard General Gedger areC !t"e# App#op#iations Rea$i%edFthe account that represents the agency;s available resources for the year2 5his account normally has a debit balance2 ,udgetary accounts that e(plain here funds are in the spending cycleF 'nappo#tioned A t"o#it)* Appo#tionments* A$$otments* Commitments* 'nde$ive#ed !#de#s- and E+pended A t"o#it)2 5hese budgetary accounts normally have a credit balance and hen summed ill add to the !t"e# App#op#iations Rea$i%ed. 5he use of the Commitments account is optional- though highly recommended2

,udget authority flo s do n through the accounts in the se=uence given in Illustration 17-112 5his se=uence is the same as the order provided in the second bullet point that lists the accounts e(plaining here funds are in the spending cycle. 172102 A "AR is the consolidated performance and accountability report prepared annually by most federal agencies2 It contains several components includingC An agency head messageFanalogous to a transmittal letter2 A management;s discussion and analysis2 "erformance reportFprovides information on the agency;s success in achieving the goals in its strategic plan and performance budget2 Financial statementsFthere are seven reports- t o 8statement of social insurance and statement of net changes in social insurance amounts9 of hich are only prepared by a limited number of agencies2 5he other five statements are the balance sheetstatement of net costs- statement of changes in net position- statement of budgetary resources- and statement of custodial activity2 :ther accompanying informationFincludes summary statements and information from the Inspector General concerning any serious management and performance challenges2 +olutions to Cases 17-12 5he information provided in the solution is based on NA+A;s !010 financial statements2 Numbers presented are in millions of dollars2 a. 5he portion of NA+A;s assets that is represented by ""?' is )!2* percent 8H/-*#)DH1.-#!.92 As you can see- and ould be e(pected- a considerable portion of NA+A;s assets are ""?'2 5 o ma>or depreciable assets reported are the International +pace +tation and the +pace +huttle2 NA+A operated ith a negative change in net assets in both !010 8-H!-0.09 and !00/ 8-H#-!)192 Although the total change as not as negative in !010 as in !00/- the agency;s net position dropped from H1/-)#* in !00/ to H1&-01) in !010- a decline of !.2# percent2
17-*

Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- Case 17-1 8Cont;d9

b2 NA+A;s audit as conducted by 'rnst ? Ioung2 Given the large number of agencies and organi<ations of the federal government that re=uire audits- it is common for the government to contract ith public accounting firms for audits of federal agencies2 +ince NA+A is a federal entity- generally accepted government audit standards issued by the Comptroller General- Government Accountability :ffice are used to conduct audits of NA+A2 c. 'rnst ? Ioung identified ineffective internal controls related to the accounting for property- plant and e=uipment 8""?'9 and operating materials and supplies in !00/2 Given the large investment in ""?'- ineffective internal controls ould have a significant impact on the =uality of the financial information presented2 Although NA+A has corrected many problems- the effect has carried into !0102 %ue to the !00/ inade=uacies in internal controls the auditor as not able to obtain sufficient competent evidential support for amounts on the !010 statement of net costs and changes in net position2 In particular- several beginning balances could not be relied upon due to the problems identified in !00/2 5hus- the negative changes in net assets identified in part a may actually be larger or smaller than reported2 ,ased on the !010 audit- there should not be ongoing problems ith the NA+A audit2 'rnst ? Ioung implies that NA+A has addressed the internal control problems and the only reason the !010 audit as =ualified as due to lac$ of reliance on beginning balance amounts2 5his assumes no ne problems develop or are identified during subse=uent audits2 17-!2 5he information provided in the solution is current as of 6uly 1- !0112 a. According to the FA+A, Jeb site the mission of the FA+A, is @to develop accounting standards after considering the financial and budgetary information needs of congressional oversight groups- e(ecutive agencies- and the needs of other users of federal financial information2A b. 5here are nine members of the FA+A,2 5hree of the members represent the FA+A, sponsors 8principals9- coming from the Government Accountability :ffice 8GA:9%epartment of 5reasury- and :ffice of 4anagement and ,udget 8:4,92 'ach sponsor selects its o n representative2 5he other si( members are to be nonfederal individuals from the general financial community- accounting and auditing community- or academia2 Nonfederal members are appointed by the sponsors2 5he chair of the FA+A, is a nonfederal member appointed by the sponsors2 c. 5he FA+A, is funded by the three sponsors2 d. Given the funding source and the method of selecting members- it could be argued that the FA+A, is not independent in appearance2 5he sponsors are affected by the decisions of the FA+A, and as members of the FA+A,- the sponsors are in a position to influence the standards issued2 5o pass a standard t o-thirds of the board
17-7

Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- Case 17-! 8Cont;d9

members must approve2 5echnically- the composition of the board ma$es it possible for the nonfederal members to override the decisions of the sponsorsE ho ever- all nonfederal members ould need to be in agreement2 Finally- t o of the sponsors 8principals9- the Comptroller General and the %irector of the :ffice on 4anagement and ,udget- have veto po er over any FA+A, statement if they act ithin the /0 day revie period for final statements2 e. 5he ans er to this assignment ill change- given that the pro>ect agenda is on-going2 At the time the te(tboo$ ent to print active pro>ects includedC AIC"A :mnibusFe(amines adopting guidance for accounting and financial reporting issues that ere previously only in the professional auditing literature2 Application of the Giability %efinitionFreconsiders accounting and reporting for long-term commitments of the federal government that could potentially result in a net outflo of resources2 FA+, Reporting by Federal 'ntitiesFreconsiders reporting by federal entities that primarily apply accounting standards issued by the FA+,2 4easurement Attributes Concepts +tatementFe(amines providing guidance on the selection of measurement attributes in future federal financial reporting standards2 Financial Report Concepts +tatementFrevisits the reporting model described in SFFAC No. 2- 'ntity and %isplay Federal 'ntity Concepts +tatementFe(amines defining the boundaries of the 12+2 Government reporting entity and the component reporting entities2 %eferred 4aintenance ? Asset ImpairmentFdevelops guidance for reporting information about deferred maintenance and asset impairment2 'armar$ed FundsFevaluates e(isting standards- identifying areas here actual results from the standard on earmar$ed funds do not match the board;s e(pectations2 Natural ResourcesFdevelops reporting re=uirements to enhance accountability for and ste ardship over federal natural resources2 +te ardship InvestmentsFdetermines the appropriate categori<ation of the final ste ardship category2

,. 5he FA+A, standards are not proprietary2 Anyone can access the standards at the FA+A, Jeb site 2fasab2gov2 5his is unli$e the FA+, Codi,ication- hich is accessed through subscription- or the GA+, Codi,ication hich can be purchased in hardcopy or electronic form2 172#2 5he FI !010 report for the 12 +2 government is available at 2fms2treas2govDfrDinde(2html2 5he !011 report should be available in %ecember of !0112 5he ans ers to these =uestions are based on the FI !010 8i2e2- :ctober 1- !00/ K +eptember #0- !0109 report2

17-.

Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- Case 17-# 8Cont;d9

a. 5he Comptroller General of the GA: as not able to render an opinionE therefore- he reported a disclaimer of opinion because he as unable to determine the reliability of significant portions of the consolidated financial statements due to @certain material ea$nesses in internal control over financial reporting and other limitations on the scope of our or$LA 8pg2 !.9 b. 5hree ma>or deficiencies ere identified in the audit report2 5hey ere @819 serious financial management problems at the %epartment of %efense 8%:%9 that have prevented %:%;s financial statements from being auditable- 8!9 the federal government;s inability to ade=uately account for and reconcile intragovernmental activity and balances bet een federal agencies- and 8#9 the federal government;s ineffective process for preparing the consolidated financial statementsA 8pg2 !/92 5he audit report identifies five material ea$nesses2 5hey indicate that the federal government as unable toC

+atisfactorily determine that property- plant- and e=uipment and inventories and related property- primarily held by %:%- ere properly reported2 Reasonably estimate or ade=uately support amounts reported for certain liabilities2 +upport significant portions of the reported total net cost of operations- most notably related to %:%- and ade=uately reconcile disbursement activity at certain federal entities2 Ade=uately account for and reconcile intragovernmental activity and balances bet een federal entities2 'nsure that the federal government;s accrual-based consolidated financial statements ere 819 consistent ith the underlying audited entities; financial statements- 8!9 properly balanced- and 8#9 in conformity ith GAA"2 Identify and either resolve or e(plain material differences bet een 819 certain components of the budget deficit reported in 5reasury;s records that are used to prepare the Reconciliation of Net :perating Cost and the 1nified ,udget %eficitthe +tatement of Changes in Cash ,alance from 1nified ,udget and :ther Activities- and the Fiscal "ro>ections for the 12+2 Government- and 8!9 related amounts reported in federal entities; financial statements and underlying financial information and records2 8pg2 !!)9

c. 5 enty federal agencies out of !& re=uired to report under the CF: Act received un=ualified opinions in FI !010- as did eight of 11 additional significant reporting agencies2 5he list of agencies is included in the annual financial report of the 12+2 government2 5he management;s discussion and analysis reports on this topic in a section titled @Financial +tatement Audit Results2A d. No2 5he Comptroller General disclaimed an opinion on the statement of social insurance- unli$e !007- !00.- and !00/ hen the statement received a clean audit opinion2 5he reason the statement did not receive a clean opinion as primarily
17-/

Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- Case 17- # 8Cont;d9

due to uncertainties related to the achievement of cost reduction gro th in 4edicare2 A revie of the statement of social insurance ill sho that pro>ected e(penditures e(ceed e(pected revenue for all programs2 Bo ever- for 4edicare 8parts A and ,9 there is a large reversal in the trend of increasingly large deficits2 In !00/ the combined parts A and , deficit as estimated at H#0-/#) billion2 For !010 the statement indicates a combined deficit of H!0-&!0 billion2 5his represents a significant e(pected cost savings- the uncertainty of hich contributes to the Comptroller General;s concerns2 No%e %o I*"%ruc%orC 5he annual report of the 12+2 government is certainly provocative and li$ely to result in a spirited discussion among students2 Je suggest you focus on the tremendous accounting challenges in auditing the largest organi<ation in the orld- and stress the positive aspects of ho far federal agencies have come in the fe years since audit re=uirements ere enacted2 +olutions to '(ercises and "roblems 17-12 12 !2 #2 &2 )2 b. a. c2 d2 a. *2 72 .2 /2 102 b2 a2 d2 b. c2

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions 8Cont;d9

17-2. a. COMPUTATION OF MISSING AMOUNTS: PROPRIETARY ACCOUNTS ACCOUNTS PAYAB E ACCUMU ATED DEPRECIATION APPROPRIATIONS USED OPERATING MATERIA S AND SUPP IES CUMU ATI(E RESU TS OF OPERATIONS 1$)1)1# OPERATING)PROGRAM E*PENSES DEPRECIATION AND AMORTI+ATION P ANT AND E,UIPMENT UNE*PENDED APPROPRIATIONS 2$1& TOTA AMOUNTS GI(EN FUND BA ANCE /IT0 TREASURY 2$1& TOTA S PROPRIETARY ACCOUNTS BUDGETARY ACCOUNTS E*PENDED AUT0ORITY 2$1& APPORTIONMENTS 2$1& UNDE I(ERED ORDERS 2$1& TOTA AMOUNTS GI(EN OT0ER APPROPRIATIONS REA I+ED 2$1& TOTA S BUDGETARY ACCOUNTS ! -$%"%$$"$$$ ! %"%$$"$$$ ! &"'$$"$$$ %$$"$$$ 1"'$$"$$$ %"%$$"$$$ 11111111 1 ! %"%$$"$$$ 1%".$$"$$$ 2"#$$"$$$ !1."2$$"$$$ &"1'$"$$$ 1"1'$"$$$ -".$$"$$$ 2"1$$"$$$ 1."2$$"$$$ 1111111111 !1."2$$"$$$ ! 2"7$$"$$$ 7"7$$"$$$ ! 2"#$$"$$$ 2"%$$"$$$ &"'$$"$$$ Debits Credits

N2te: U3e45e3ded A55r25ri6ti23s 7!2"1$$"$$$8 9 E45e3ded A:t;2rit< 7!&"'$$"$$$8 = !%"%$$"$$$ 72ri>i36? 655r25ri6ti238

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Chapter 17 - Accounting and Reporting for the Federal Government

A55r25ri6ti23s Used 7!&"'$$"$$$8 9 U3e45e3ded A55r25ri6ti23s 7!2"1$$"$$$8 = !%"%$$"$$$ 72ri>i36? 655r25ri6ti238

Ch2 17- +olutions- 17-! 8Cont;d9

b. APPROPRIATIONS USED DURING FY 2$1& TOTA E*PENSES DURING FY 2$1& 7N2te A8 NET DECREASE IN CUMU ATI(E RESU TS OF OPERATIONS !&"'$$"$$$ '"#$$"$$$ ! -$$"$$$

7NET DECREASE IN CUMU ATI(E RESU TS OF OPERATIONS IS T0E SAME AS NET DECREASE IN ASSETS OT0ER T0AN FUND BA ANCE /IT0 TREASURY IF APPROPRIATIONS IS T0E ON Y FINANCING SOURCE8 7N2te A: T2t6? e45e3ses is t;e s:@ 2A O5er6ti3>)Pr2>r6@ E45e3ses 2A !&"1'$"$$$ 63d De5reBi6ti23 63d A@2rtiC6ti23 2A !1"1'$"$$$.8 17-#. a. Debits BUDGETARY E*PENDED AUT0ORITY 2$1& APPORTIONMENTS 2$1& OT0ER APPROPRIATIONS REA I+ED 2$1& PROPRIETARY CUMU ATI(E RESU TS OF OPERATIONS OPERATING)PROGRAM E*PENSES DEPRECIATION AND AMORTI+ATION APPROPRIATIONS USED CUMU ATI(E RESU TS OF OPERATIONS &"'$$"$$$ &"'$$"$$$ '"#$$"$$$ &"1'$"$$$ 1"1'$"$$$ &"'$$"$$$ %$$"$$$ '"1$$"$$$ Credits

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-# 8Cont;d9

b.

FEDERA AGENCY BA ANCE S0EET AS OF SEPTEMBER #$" 2$1& ASSETS

INTRAGO(ERNMENTA : FUND BA ANCE /IT0 TREASURY 2$1& GO(ERNMENTA : OPERATING MATERIA S AND SUPP IES P ANT AND E,UIPMENT 7NET OF ACCUMU ATED DEPRECIATION OF !2"%$$"$$$8 TOTA ASSETS LIABILITIES ACCOUNTS PAYAB E NET POSITION UNE*PENDED APPROPRIATIONS CUMU ATI(E RESU TS OF OPERATIONS TOTA NET POSITION TOTA IABI ITIES AND NET POSITION 2"1$$"$$$ %".$$"$$$ ."$$$"$$$ !11"#$$"$$$ ! 2"#$$"$$$ %"#$$"$$$ !11"#$$"$$$ 2"7$$"$$$ ! 2"#$$"$$$

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions 8Cont;d9

17-&. RURA ASSISTANCE AGENCY STATEMENT OF NET COST FOR T0E YEAR ENDED SEPTEMBER #$" 2$1& FOOD BAND COSTS ESS: EARNED RE(ENUE NET COST 0OUSING SER(ICES COSTS ESS: EARNED RE(ENUE NET COST CREDIT COUNSE ING COSTS ESS: EARNED RE(ENUE NET COST TOTA COSTS ESS: EARNED RE(ENUE NET COST OF OPERATIONS

! ."%#2"-$$ 2"%11".$$ 7"$2$".$$ 7"&#-"'$$ 1"2#7"&$$ %"2$1"1$$ 2"#.1"$$$ -7"$$$ 2"#$&"$$$ 1."&%2"#$$ #".#%"#$$ !1'"'2%"$$$

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions 8Cont;d9

17-'.

FEDERA ANTI,UITIES ADMINISTRATION STATEMENT OF BUDGETARY RESOURCES FOR T0E 11 MONT0S ENDED AUGUST #1" 2$1&

BUDGETARY RESOURCES: BUDGET AUT0ORITY 7N2te A8: APPROPRIATIONS RECEI(ED 7N2te A8 TOTA BUDGETARY RESOURCES STATUS OF BUDGETARY RESOURCES: OB IGATIONS INCURRED 7N2te B8 UNOB IGATED BA ANCES 7N2te C8 TOTA STATUS OF BUDGETARY RESOURCES C0ANGE IN OB IGATED BA ANCE: OB IGATED BA ANCE" BEGINNING OF T0E PERIOD OB IGATIONS INCURRED 7N2te B8 OUT AYS 7N2te D8 UNPAID OB IGATIONS" END OF PERIOD 7N2te E8 N2te A: N2te B: N2te C: N2te D: N2te E:

!&"-.&"-'' !&"-.&"-'' !&"1&&"-'' 7'$"$$$ !&"-.&"-''

! 1"21$"21$ &"1&&"-'' 7&"%.$".#&8 ! %%&"1#1

T2t6? b:d>et6r< res2:rBes 6re >iEe3 b< t;e b6?63Be 2A Ot;er A55r25ri6ti23s Re6?iCed 2A !&"-.&"-''. E45e3ded 6:t;2rit< 2A B:rre3t <e6r 2A !#"&-$"72& 5?:s !%%&"1#1 2b?i>6ted b:d>et6r< 6:t;2rit< A2r :3de?iEered 2rders 6t -)#1)1&. U32b?i>6ted b6?63Bes is t;e s:@ 2A 6??2t@e3ts 63d B2@@it@e3ts. O:t?6<s eF:6?s e45e3ded 6:t;2rit<" 63d is 6?s2 eF:6? t2 t;e deBre6se i3 A:3d b6?63Bes Git; t;e U.S. Tre6s:r< d:ri3> t;e 5eri2d t;e eF:iE6?e3t 2A B6s; disb:rsed. Ob?i>6ted b6?63Be 6t <e6r-e3d is eF:6? t2 :3de?iEered 2rders.

17-1)

Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions 8Cont;d9

17-%. a. F OOD CONTRO COMMISSION GENERA HOURNA Debits 1. BUDGETARY OT0ER APPROPRIATIONS REA I+ED 2$1& UNAPPORTIONED AUT0ORITY 2$1& PROPRIETARY FUND BA ANCE /IT0 TREASURY 2$1& UNE*PENDED APPROPRIATIONS 2$1& 2. BUDGETARY UNAPPORTIONED AUT0ORITY 2$1& APPORTIONMENTS 2$1& #. BUDGETARY APPORTIONMENTS 2$1& A &. A OTMENTS 2$1& 1"$$$"$$$ 1"$$$"$$$ 7"$$$"$$$ 7"$$$"$$$ 7"$$$"$$$ 7"$$$"$$$ 7"$$$"$$$ 7"$$$"$$$ Credits

BUDGETARY OTMENTS 2$1& UNDE I(ERED ORDERS 2$1& .7$"$$$ .7$"$$$

'.

BUDGETARY UNDE I(ERED ORDERS 2$1& E*PENDED AUT0ORITY 2$1& 17$"$$$ 17$"$$$

17-1*

Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-* 8Cont;d9

F OOD CONTRO COMMISSION GENERA HOURNA Debits PROPRIETARY OPERATING)PROGRAM E*PENSES DISBURSEMENTS IN TRANSIT 2$1& DISBURSEMENTS IN TRANSIT 2$1& FUND BA ANCE /IT0 TREASURY 2$1& UNE*PENDED APPROPRIATIONS 2$1& APPROPRIATIONS USED %. BUDGETARY UNDE I(ERED ORDERS 2$1& E*PENDED AUT0ORITY 2$1& PROPRIETARY FURNITURE AND E,UIPMENT OPERATING MATERIA S AND SUPP IES OPERATING)PROGRAM E*PENSES ACCOUNTS PAYAB E UNE*PENDED APPROPRIATIONS 2$1& APPROPRIATIONS USED 7. BUDGETARY UNDE I(ERED ORDERS 2$1& E*PENDED AUT0ORITY 2$1& 1-#"$$$ 1-#"$$$ #.'"$$$ #.'"$$$ 1-$"$$$ 17'"$$$ &$"$$$ #.'"$$$ #.'"$$$ #.'"$$$ 17$"$$$ 17$"$$$ 17$"$$$ 17$"$$$ 17$"$$$ 17$"$$$ Credits

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-* 8Cont;d9

F OOD CONTRO COMMISSION GENERA HOURNA Debits PROPRIETARY OPERATING)PROGRAM E*PENSES ACCRUED FUNDED PAYRO BENEFITS UNE*PENDED APPROPRIATIONS 2$1& APPROPRIATIONS USED -. PROPRIETARY ACCOUNTS PAYAB E ACCRUED FUNDED PAYRO BENEFITS DISBURSEMENTS IN TRANSIT 2$1& DISBURSEMENTS IN TRANSIT 2$1& FUND BA ANCE /IT0 TREASURY 2$1& .. BUDGETARY UNDE I(ERED ORDERS 2$1& E*PENDED AUT0ORITY 2$1& PROPRIETARY OPERATING)PROGRAM E*PENSES ACCRUED FUNDED PAYRO AND BENEFITS ACCOUNTS PAYAB E #$"$$$ 1$"$$$ &$"$$$ &$"$$$ &$"$$$ #72"$$$ #72"$$$ AND 1-#"$$$ #72"$$$ 1-."$$$ 1-#"$$$ 1-#"$$$ AND 1-#"$$$ 1-#"$$$ Credits

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-* 8Cont;d9

F OOD CONTRO COMMISSION GENERA HOURNA Debits OPERATING)PROGRAM E*PENSES OPERATING MATERIA S AND SUPP IES DEPRECIATION AND AMORTI+ATION ACC. DEPRECIATION FURN. AND E,UIP. UNE*PENDED APPROPRIATIONS 2$1& APPROPRIATIONS USED 1$. BUDGETARY E*PENDED AUT0ORITY 2$1& OT0ER APPROP. REA I+ED 2$1& PROPRIETARY CUMU ATI(E RESU TS OF OPERATIONS OPERATING)PROGRAM E*PENSES DEPRECIATION AND AMORTI+ATION APPROPRIATIONS USED CUMU ATI(E RESU TS OF OPERATIONS 7--"$$$ 7--"$$$ &.'"'$$ &.#"$$$ 2"'$$ 7--"$$$ 7--"$$$ &$"$$$ &$"$$$ 2"'$$ 2"'$$ %$"$$$ %$"$$$ Credits

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-* 8Cont;d9

b.

F OOD CONTRO COMMISSION BA ANCE S0EET OCTOBER #1" 2$1& ASSETS

INTRAGO(ERNMENTA : FUND BA ANCE /IT0 TREASURY 2$1& GO(ERNMENTA : OPERATING MATERIA S AND SUPP IES FURNITURE AND E,UIPMENT" NET OF ACCUMU ATED DEPRECIATION OF !2"'$$ TOTA ASSETS LIABILITIES ACCOUNTS PAYAB E ACCRUED FUNDED PAYRO TOTA IABI ITIES 2&%"$$$ AND BENEFITS ! 21%"$$$ #$"$$$ 177"'$$ !%"7'$"'$$ 11'"$$$ !%"&'-"$$$

CO(ERED BY BUDGETARY RESOURCES NET POSITION UNE*PENDED APPROPRIATIONS CUMU ATI(E RESU TS OF OPERATIONS TOTA NET POSITION TOTA IABI ITIES AND NET POSITION

%"212"$$$ 2.2"'$$ %"'$&"'$$ !%"7'$"'$$

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-* 8Cont;d9

c.

F OOD CONTRO COMMISSION STATEMENT OF C0ANGES IN NET POSITION FOR T0E MONT0 ENDED OCTOBER #1" 2$1& CUMU ATI(E RESU TS OF OPERATIONS UNE*PENDED APPROPRIATIONS ! $

BEGINNING BA ANCES BUDGETARY FINANCING SOURCES: APPROPRIATIONS RECEI(ED APPROPRIATIONS USED TOTA FINANCING SOURCES NET COST OF OPERATIONS 7N2te A8 ENDING BA ANCES

7--"$$$ 7--"$$$ 7&.'"'$$8 ! 2.2"'$$

7"$$$"$$$ 77--"$$$8 %"212"$$$ 111111111 !%"212"$$$

N2te A: O5er6ti3>)5r2>r6@ e45e3ses 2A !&.#"$$$ 9 de5reBi6ti23 63d 6@2rtiC6ti23 2A !2"'$$.

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-* 8Cont;d9

d.

F OOD CONTRO COMMISSION STATEMENT OF BUDGETARY RESOURCES FOR MONT0 ENDED OCTOBER #1" 2$1&

BUDGETARY RESOURCES: BUDGET AUT0ORITY 7N2te A8 STATUS OF BUDGETARY RESOURCES: OB IGATIONS INCURRED 7N2te B8 UNOB IGATED BA ANCES A(AI AB E 7N2te C8 TOTA STATUS OF BUDGETARY RESOURCES C0ANGE IN OB IGATED BA ANCE: OB IGATIONS INCURRED OUT AYS 7N2te D8 OB IGATED BA ANCE" END OF PERIOD 7N2te E8 N2te A: N2te B:

!7"$$$"$$$ ! .7$"$$$ %"$#$"$$$ !7"$$$"$$$ .7$"$$$ 7'72"$$$8 ! &2-"$$$

N2te C: N2te D: N2te E:

T2t6? b:d>et6r< res2:rBes 6re t;e t2t6? 655r25ri6ti23s A2r t;e <e6r" 2r !7"$$$"$$$. Ob?i>6ti23s i3B:rred eF:6?s e45e3ded b:d>et6r< 6:t;2rit< 2A !7--"$$$ 7see E3tr< 1$A8 5?:s t;e re@6i3i3> b6?63Be 2A U3de?iEered Orders 2$1# 2A !1-2"$$$ 7!.7$"$$$ - !7--"$$$8" 2r !.7$"$$$. I3 t;is B6se" si3Be t;e F?22d C23tr2? C2@@issi23 2b?i>6tes 5ri2r t2 6?? e45e3dit:res 2A b:d>et6r< 6:t;2rit<" t;e 6@2:3t i3B:rred 6?s2 is si@5?< t;e 6@2:3t 2b?i>6ted b< t;e Bredit t2 U3de?iEered Orders 2$1& 7see E3tr< &8. T2t6? b:d>et6r< res2:rBes 2A !7"$$$"$$$ ?ess 6@2:3t 2b?i>6ted 2A !.7$"$$$ 7see N2te B8 eF:6?s !%"$#$"$$$. O:t?6<s 6?s2 eF:6?s t;e deBre6se i3 F:3d B6?63Bes Git; t;e U.S. Tre6s:r< d:ri3> t;e 5eri2d t;e eF:iE6?e3t 2A B6s; disb:rsed. Ob?i>6ted b6?63Bes 6t <e6r-e3d i3B?:de U3de?iEered Orders 7!1-2"$$$8 63d ABB2:3ts P6<6b?e 63d 2t;er 6BBr:ed ?i6bi?ities 7!2&%"$$$8" 2r !&2-"$$$ i3 t2t6?.

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions 8Cont;d9

17-7. a. FINANCIA CAPABI ITY 718 INDI(IDUA INCOME TA*ES)TOTA RE(ENUES: 7!1"7#2..$)!2"21%.'$8 728 DEBT OAD 7!7"$'&.'$9!2$1.2$)!&"2.%.$$8: 1%-..I 7-.2I

b. FINANCIA PERFORMANCE 718 c. INTERPERIOD E,UITY 7!2"21%.'$)!&"2.%.$$8: $.'2

FINANCIA POSITION 718 728 7#8 NON-EARMARDED FUNDS)TOTA RE(ENUES: 7-!1&"11..7$)!2"21%.'$8 ,UICD RATIO 7!&2-.%)!72..8 2r 7!&2-.%)!2#7.28J: CAPITA ASSET CONDITION 7!-11.%$)!1"'#-.&$8JJ: '.-- 2r 1.-1 $.'# -%.#7

J Si3Be it is diAAiB:?t t2 ide3tiA< B:rre3t 52rti23s 2A ?23>-ter@ debt" 23?< s2@eG;6t ide3tiAi6b?e B:rre3t ?i6bi?ities Gere :sed i3 t;e B6?B:?6ti23. H:st ABB2:3ts P6<6b?e G6s :sed i3 t;e Airst B6?B:?6ti23 63d ABB2:3ts P6<6b?e 5?:s Be3eAits D:e 63d P6<6b?e Gere :sed i3 t;e seB23d B6?B:?6ti23. JJ T;e t2t6? >r2ss B65it6? 6sset E6?:e G6s 6dK:sted A2r 323-de5reBi6b?e 6ssets 7B23str:Bti23 i3 5r2>ress 63d ?63d8. d. A?? b:t tG2 @e6s:res i3diB6te t;6t t;e Aeder6? >2Eer3@e3t is i3 522r Ai363Bi6? B23diti23. T;e F:iBL r6ti2 is Ge?? 2Eer 23e :si3> eit;er B6?B:?6ti23" i3diB6ti3> s:AAiBie3t B6s; t2 56< B:rre3t ?i6bi?ities" 6ss:@i3> B:rre3t ?i6bi?ities 6re B2rreBt?< ide3tiAied. Additi236??<" t;e B65it6? 6sset B23diti23 r6ti2 2A $.'# i3diB6tes t;6t t;ere is s:AAiBie3t ?iAe re@6i3i3> i3 B65it6? 6ssets. T;e Aeder6? >2Eer3@e3t re?ies ;e6Ei?< 23 i3diEid:6? i3B2@e t64es. Debt ?26d is e4tre@e?< ;i>; b< 63< be3B;@6rL :sed. I??:str6ti23 1$-7 i3diB6tes t;6t A2r ?2B6? >2Eer3@e3ts 6 ?26d >re6ter t;6t #'I is e4tre@e?< ;i>;. I3ter5eri2d eF:it< is 522r >iEe3 t;6t 23?< '2I 2A 3et B2sts 6re B2Eered b< B:rre3t 5eri2d reEe3:es. Fi36??<" t;e 3e>6tiEe 3et 52siti23 i3diB6tes t;6t t;ere 6re 32

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Chapter 17 - Accounting and Reporting for the Federal Government

Ch2 17- +olutions- 17-7 8Cont;d9

reserEes 23 G;iB; t2 dr6G t2 ;e?5 6ddress t;e i3ter5eri2d eF:it< sit:6ti23. T;e Ai363Bi6? st6te@e3ts 2A t;e Aeder6? >2Eer3@e3t reA?eBt t;e Ai363Bi6? B23Ber3s e45ressed b< C23>ress" t;e Preside3t" 63d BitiCe3s.

17-!&