Department of the Interior
Departmental Manual
Effective
Date: 8/2/04
Series: Financial
Management
Part
330:
General
Chapter
2: Principal Authoritative Sources for Financial
Policies and Accounting Standards
Originating
Office: Office of Financial Management
330 DM 2
2.1 Authoritative
Sources. This chapter lists
and describes the principal federal laws, regulations, standards, policies, and
other authoritative sources that DOI bureaus and offices must comply with when recording and reporting
financial information for general purpose financial reports, i.e., those
reports which are prepared from entity general ledgers in accordance with
generally accepted federal accounting standards.
2.2 Hierarchy of Accounting Standards. The American Institute of Certified
Public Accountants (AICPA) Council designated the Federal Accounting Standards Advisory Board (FASAB) as the body that establishes accounting
principles for federal entities. The
AICPA's hierarchy of generally accepted accounting principles (GAAP) in
Statement of Auditing Standards (SAS) No. 91, The Federal GAAP Hierarchy,
governs what constitutes GAAP for
2.3 Legislation. Legislation is the foundation for most financial
accounting standards in the U.S. Government. A discussion of the major laws affecting
accounting and financial management follows:
A. Governing
Legislation.
(1) Chief Financial Officers Act of 1990 (P.L.
101-576 (31 U.S.C. Sec. 501, et seq.) http://www.gao.gov/policy/12_19_4.pdf
. This
Act established a Chief Financial Officer (CFO) of the
(2) The
Government Performance and Results Act of 1993 (P.L. 103-62 (5 U.S.C. Sec. 306)
(31 U.S.C. Secs 1115-1119) (39 U.S.C. 2801-2805). http://www.whitehouse.gov/omb/mgmt-gpra/gplaw2m.html. The purpose
of the Act is to improve the confidence of the American people in the
capability of the Federal Government, by systematically holding Federal
agencies accountable for achieving program results. The Act requires agencies to initiate program
performance reforms with a series of pilot projects in setting program goals,
and measuring program performance against those goals, and reporting publicly
on their progress. Under the Act
agencies must improve Federal program effectiveness and public accountability
by promoting a new focus on results, service quality, and customer
satisfaction. The Act requires that
Federal managers improve service delivery, by requiring that they plan to meet
program objectives and by giving them information about program results and
service quality. Under the Act, Federal
managers must provide to congressional decision makers objective information on
the relative effectiveness and efficiency of Federal programs and spending. The Act establishes requirements for strategic
plans, annual performance plans and reports, managerial accountability and
flexibility, pilot projects and training.
(3) The
Government Management Reform Act of 1994 (P.L. 103-356) (31 U.S.C. Sec 101, et
seq.) http://www.thecre.com/fedlaw/legal1/s2170.htm. The Act
requires that the head of each executive agency submit an audited financial
statement to the Director of OMB each fiscal year. The financial statement must reflect the
results of operations and cover all accounts and associated activity of each
office, bureau and activity of the agency. The Act also requires an annual
Government-wide financial statement that contains the results of operations of
the executive branch.
(4) Federal
Financial Management Improvement Act of 1996 (P.L. 104-208 (31 U.S.C. Sec. 801.
et seq.)) http://www.dfas.mil/technology/pal/regs/ffmia.doc. This Act
codifies certain financial management policies and audit procedures established
by the Executive Branch. The legislation requires that each agency implement
and maintain financial management systems that comply substantially with Federal Financial management systems requirements,
applicable Federal accounting standards, and the United States Government
Standard General Ledger at the transaction level. In addition, auditors of an agency’s financial
statements are required to report on compliance with the basic requirements of
the Act, and for agency heads and agency management to bring the
agency’s financial management systems into substantial compliance no later than
three years after the date a determination is made.
(5) Budget
and Accounting Procedures Act of 1950, as amended, (31 U.S.C. Subtitle III,
Chapter 35, Subchapter II, Secs. 3511-3515, Subtitle III, Chapter 35,
Subchapter III, Section 3521 (64 Stat. 832)) http://www.gpoaccess.gov/uscode/browse.html. This Act
directs the Comptroller General of the
(6) Accounting
and Auditing Act of 1950 http://www.gpoaccess.gov/uscode/browse.html. This legislation (31 U.S.C. Subtitle
III, Chapter 35, Subchapter II, Section 3512) established Government-wide
policies for accounting and auditing to provide full disclosure of the results
of financial operations; adequate financial information needed in the
management of operations and the formulation and execution of budget; effective
control over income, expenditures, funds, property, and other assets; full
consideration to the needs and responsibilities of the legislative and
executive branch in the establishment of accounting and reporting systems and
requirements; maintenance of accounting systems and production of financial
reports by the executive branch, auditing by the Comptroller General (CG); and
emphasis on a continuous program for the improvement of accounting and
financial reporting in the Government.
(7) Budget
and Accounting Act of 1921, as amended, (31 U.S.C.
Secs. 701 et seq., 1101 et seq.) http://uscode.house.gov/title_31.htm. This Act is
considered the major legislation governing accounting in the Federal Government.
The Act is also the enabling and
descriptive legislation dealing with GAO and its general powers and duties.
(8) Single Audit Act of 1984 http://www.ignet.gov/pande/audit/mains.html.
The purposes of this Act are to
improve the financial management of State and local governments with respect to
federal financial assistance programs; to establish uniform requirements for
audits of federal financial assistance provided to State and local governments;
to promote the efficient and effective use of audit resources; and to ensure
that federal departments and agencies, to the maximum extent practicable, rely
upon and use audit work done pursuant to chapter 75 of title 31, United States
Code (as added by the Act). See also OMB
Circular A-133, Audit of States, Local Governments, and Non-Profit
Organizations.
(9) Improper Payments Information Act of 2002,
PL No. 107-300 http://www.dfas.mil/legislative/fy03a/PL107-300.htm.
The Improper Payments Information Act of
2002 contains requirements in the areas of improper payment identification and
reporting. It requires agency heads to annually review all programs and activities, identify
those that may be susceptible to significant improper payments, estimate annual
improper payments in the susceptible programs and activities, and report the
results of their improper payment activities. The legislation also required OMB
to prescribe guidance for federal agency use in implementing the act. OMB
published memorandum M-03-13 on May 21, 2003, in response to P.L. 107-300
requirements at http://www.whitehouse.gov/omb/memoranda/2003.html.
(10) Information
Technology Management Reform Act of 1966 (ITMRA), Public Law 104-106, Division
E http://www.whitehouse.gov/omb/memoranda/m96-20.html
ITMRA repeals Section 111 of the Federal Property and Administrative
Services Act of 1949 (popularly referred to as the "Brooks Act") and
establishes a new statutory scheme for information technology management and
acquisition within the Executive branch. This act designated the chief information
officer (CIO) and includes the role of the General Services Board of Contract
Appeals (GSBCA) in information technology protests.
(11) Federal Information Security Management Act
(FISMA) of 2002, (http://www.fedcirc.gov/library/legislation/FISMA.html to be updated to 44 U.S.C. 35, Subchapter III,
Section 3541) http://www.gpoaccess.gov/uscode/browse.html). This act provides a
comprehensive framework for ensuring the effectiveness of information security
controls over information resources that support Federal operations and
assets; recognizes the highly networked
nature of the current Federal computing environment and provides effective
governmentwide management and oversight of the related information security
risks, including coordination of information security efforts throughout the
civilian, national security, and law enforcement communities; provides for
development and maintenance of minimum controls required to protect Federal
information and information systems; provides a mechanism for improved
oversight of Federal agency information security programs; acknowledges that commercially developed information
security products offer advanced, dynamic, robust, and effective information
security solutions, reflecting market solutions for the protection of critical
information infrastructures important to the national defense and economic
security of the nation that are designed, built, and operated by the private
sector; and recognizes that the selection of specific technical hardware and
software information security solutions should be left to individual agencies
from among commercially developed products.
B. Budget
Control.
(1) The Anti-Deficiency Act (31 U.S.C. Subtitle
II, Chapter 13, Subchapter III, Sec. 1341 (31 U.S.C. Secs.1341, 1342,
1349-1351, and Chapter 15, Subchapter II, Sec.1511 et seq.)) http://www.gpoaccess.gov/uscode/browse.html. The portion
of the Budget and Accounting Procedures Act of 1950, as amended by the Balanced
Budget and Emergency Deficit Control Act of 1985, prohibits obligating or
expending more than authorized ceilings, including funds to be sequestered.
(2) The
Supplemental Appropriations Act of 1955 (31 U.S.C. Subtitle II, Chapter 11,
Secs. 1108, Subtitle II, Chapter 15, Subchapter 1, Secs. 1501-1502) http://www.gpoaccess.gov/uscode/browse.html
provides that an obligation is only enforceable when
it is in writing; that the purpose is to avoid inappropriate spending based on
oral obligations; and, that the balance of an appropriation limited to a
definite period is available only for payment of expenses incurred during that
period.
(3) Closing Accounts (31 U.S.C. Subtitle II,
Chapter 15, Subchapter IV, Secs. 1551-1557)
http://www.gpoaccess.gov/uscode/browse.html
prescribes procedures to be followed in
closing appropriation accounts available for definite periods of time. It establishes the availability of
appropriation accounts to pay obligations. The law addresses the audit, control, and
reporting requirements that remain applicable to that account after the end of
the period of availability for obligation.
C. Business-like
Activities and Practices.
(1) The Economy Act of 1932 (31 U.S.C. Subtitle
II, Chapter 15, Subchapter III, Sec. 1535) http://www.gpoaccess.gov/uscode/browse.html
prescribes the rules for the purchase of
supplies, equipment, or service by one Federal Government bureau or department
from another Federal Government bureau or department.
(2) Title
V of the Independent Office Appropriations Act of 1952 (31 U.S.C. Subtitle VI,
Chapter 97, Sec. 9701) http://www.gpoaccess.gov/uscode/browse.html
authorizes Federal agencies to assess charges
or fees for Government services and for the sale or use of Government property
or resources. The Act requires that fees
charged shall be fair and equitable, taking into consideration direct and
indirect cost to the Government, value to the recipient, public policy or
interest served, and other pertinent facts. Any amount collected shall be paid into the
Treasury as miscellaneous receipts. OMB
Circular A-25, User Charges, provides guidance.
(3) Prompt
Payment Act of 1982 (31 U.S.C. Secs. 3901 et seq. (P.L. 97-177), Prompt Payment
Act Amendments of 1988 (Pub. L. 100-496), and
5 CFR Chapter III, Part 1315 http://www.gpoaccess.gov/cfr/index.html
calls for payment of bills not later than due
dates based on the receipt of proper invoices and satisfactory performance, as
well as payment of any interest penalties. The Act also encourages the taking of cash
discounts when determined to be economically beneficial.
(4) Federal
Claims Collection Act of 1966 (31 U.S.C. Subtitle III, Chapter 37, Subchapter
I, Secs. 3701, and Subchapter II, Secs. 3711, 3716-3719) http://www.gpoaccess.gov/uscode/browse.html
(Note:
also the Code of Federal Regulations, Title31, Parts 900-904) prescribe procedures for the follow-up of claims against
those who owe the Federal Government money, including amounts owed as a result
of audit follow-ups.
(5) Debt Collection Act of 1982 (P.L. 97-365
(31 U.S.C. Secs. 3302, 3701, 3711, 3716-3719)) http://thomas.loc.gov/cgi-bin/bdquery/z?d097:HR04613:@@@LITOM:bss/d097query.html#summary
mandates an increase in the efficiency of
Government-wide efforts to collect debts owed the United States and provides
additional procedures for the collection of debts owed the United States.
(6) Cash Management Improvement Act of 1990
(P.L. 101-453) as amended by the Cash Management Improvement Act of 1992, (P.L.
102-589) http://www.fms.treas.gov/cmia/index.html was passed
to improve the transfer of Federal funds between the Federal Government and the
States, territories, and the District of Columbia. The main objective is to minimize the time of
transfer of funds and the payout for program purpose. 31 CFR Subtitle B,
Chapter II, Part 205 contains rules and procedures for efficient federal-state
fund transfers.
(7) Federal
Credit Reform Act of 1990 (P.L. 101-508, as amended by 2 U.S.C. Sec. 661, et
seq.) http://www.fms.treas.gov/ussgl/creditreform/index.html
enacted for the purposes of measuring more
accurately the costs of Federal credit programs. The Act places the cost of credit programs on
a budgetary basis, requires calculation of subsidy elements of credit programs,
encourages more cost effective delivery of benefits to beneficiaries, and seeks
to improve allocation of limited financial resources among credit and other
spending programs.
(8) Debt Collection Improvement Act of 1996, Chapter 10, (P. L. 104-134
(31 U.S.C. Secs. 3701, 3322, 3716, et seq.)) http://www.fms.treas.gov/debt/dmdcia.pdf
enhances debt collection Government-wide,
mandates the use of electronic funds transfer (EFT) for Federal payments,
allows Federal Reserve Bank Treasury Check Offset, and provides funding for the
Check Forgery Insurance Fund. This law
provides that any non-tax debt or claim owed to the
D. Internal
Controls.
(1) Federal
Managers' Financial Integrity Act (FMFIA) of 1982 (P.L. 97-255 (31 U.S.C. Secs.
1105, 1106, 1108, 1113, 3512)) http://www.ustreas.gov/offices/management/dcfo/management-controls/fmfia-legislation.pdf amends
Section 113 of the Accounting and Auditing Act of 1950 as to requirements for
the performance of reviews of the systems of internal controls and the annual
issuances of a statement (report) as to the adequacy of the agency's internal
controls to the President and Congress. This
Act also amends the Budget and Accounting Act of 1921.
(2) Federal
Property and Administrative Services Act of 1949,
(40 U.S.C. Chapter 10, Subchapter II, Sec. 483) http://www.gpoaccess.gov/uscode/browse.html
requires each executive
agency to maintain adequate inventory controls and accountability systems for
the property under its control. The
Legislation Section provides reference to the particular statute, or where
appropriate, pertinent sections of the statute dealing with accounting
requirements can be found. Although the Office of Financial Management (PFM)
will attempt to keep the material on accounting-related statutes current, these
statutes are continuously amended. Bureau and office accounting and finance
officials are therefore encouraged to reference the most recent Act.
2.4
Other Federal Agency Issuances. The central agencies provide overall direction and guidance
to departments and agencies on financial management policies and practices.
Independent boards or committees provide standards and recommendations
developed jointly by representatives of the central agencies and departments. The
issuances promulgated by these organizations establish government-wide
standards that must be followed by all executive agencies. They serve as the framework for DOI's business
functions and financial information systems. The central agencies include: Office of Management and Budget (OMB), Department
of the Treasury (Treasury), General Accounting Office (GAO), Office of
Personnel Management (OPM), General Services Administration (GSA), Department
of Labor (DOL), Department of Justice (DOJ).
The independent boards and committees include the: Federal Accounting Standards Advisory Board
(FASAB) and Joint Financial Management Improvement Program (JFMIP).
A. Office of Management and Budget’s (OMB’s) Bulletins
and Circular. The following key OMB directives contribute
to the basis for the general Government-wide standards used for finance and
accounting activities. The full bulletins and circulars can be found at http://www.whitehouse.gov/omb/circulars/.
(1) OMB
Bulletin 01-09. Form and Content of Agency Financial Statements
(2) OMB
Bulletin 01-02. Audit Requirements for Federal Financial
(3) OMB Circular A-11. Preparation, Submission,
and Execution of the Budget
(4) OMB Circular A-25. User Charges
(5) OMB Circular A-50. Audit Followup
(6) OMB Circular A-76. Performance of Commercial Activities
(7) OMB Circular A-97. Specialized or Technical
Services for State and Local Governments
(8) OMB Circular A-102. Grants and Cooperative Agreements with State
and Local Governments
(9) OMB Circular A-123. Management
Accountability and Control
(10) OMB Circular A-127. Financial Management
Systems
(11) OMB Circular A-129. Managing Federal Credit
Programs
(12) OMB Circular A-130. Management of Federal Information Resources
(13) OMB Circular A-133. Audits of States, Local Governments, and
Non-Profit Organizations
(14) OMB Circular A-134. Financial Accounting
Principles & Standards
B. Department of the Treasury. Treasury prescribes the financial management
activities involving receipts, debt collection, and disbursing funds. Treasury also prescribes certain reporting
requirements by obtaining from each agency such summary-level account
information as may be necessary for carrying out it central banking,
accounting, and financial reporting responsibilities. The Treasury Financial Manual is the
principal directives manual for financial accounting and reporting of all
receipts and disbursements of the Federal government. The manual, along with the Federal Account
Symbols and Titles (FAST Book) and the Unites States Standard General Ledger
(Uniform Chart of Accounts) can be found at:
http://www.fms.treas.gov/tfm/.
C. General Accounting Office (GAO). A substantial portion of the general guidance
issued by GAO to executive agencies was first codified into the GAO Policy
and Procedures Manual for Guidance of Federal Agencies in 1957. Over the years the manual was updated to
incorporate current changes in laws, regulations, and practices. However, in
recent years changes in certain laws; the creation of the Federal Accounting
Standards Advisory Board (FASAB); the establishment of the Advisory Council on
Government Auditing Standards; and the different medium GAO has used to publish
guidance (e.g., the Yellow Book and the Green Book on internal control
standards) have superseded most of the manual titles. Guidance, previously found in the GAO Policy
and Procedures Manual for Guidance of Federal Agencies, which cannot be found
elsewhere, can be found in Accounting Principles, Standards, and Requirements:
Title 2 Standards Not Superceded by FASAB issuances. GAO-02-248G, November
2001. Refer to http://www.gao.gov for
current guidance.
D. Office of Personnel Management (OPM). This
office administers the federal personnel system. OPM supports government program managers in
their personnel management responsibilities and provides benefits to employees
and to retired employees and their survivors.
E. General Services Administration (GSA). This agency establishes policy and provides a
system for the management of government property and records including:
building construction and operation, supplies procurement and distribution, and
property utilization and disposal. GSA provides regulations controlling
transportation, travel, and communications management; and administers a
government-wide information resource management program.
F. Department of Labor (DOL). This
agency operates the unemployment compensation for Federal Employees Program
that provides
benefits for eligible unemployed former civilian Federal employees. States
administer the program as agents of the Federal government. There is no payroll deduction from a Federal
employee's wages for unemployment insurance protection. In addition, DOL pays
workmen’s compensation for federal employees injured on the job. The DOL
provides estimates of these unpaid amounts to DOI for accrual accounting and requests
reimbursement for paid amounts.
G. Department of Justice (DOJ). DOJ handles legal matters for DOI. Refer to the Financial
Statement Preparation Guidance Handbook, Appendix F at http://www.doi.gov/pfm/fs_guidance/index.html
for guidance on accruing amounts for DOJ contingent liabilities.
H. Federal Accounting Standards
Advisory Board (FASAB) Statements on Federal Financial Accounting Standards
(SFFAS). FASAB's
purpose is to consider and recommend accounting principles, standards, and
requirements to GAO, Treasury, and OMB. The Comptroller General, the Secretary of the
Treasury, and the Director of OMB will decide upon new principles, standards,
and requirements after considering FASAB's recommendations.
(1) Statements
on Federal Financial Accounting Standards and Interpretations. The Comptroller General and the Director of
OMB may each publish the principles, standards, and requirements after a 45-day
period of Congressional review. To date,
only OMB has issued the approved standards as official regulations, in the form
of “Statements of Federal Financial Accounting Standards” (SFFAS). The SFFAS's issued in final or in final
recommendation are listed in http://www.fasab.gov/standards.html
and Interpretations in http://www.fasab.gov/interprt.html.
(2) FASAB
Technical Bulletins. The Federal Accounting Standards Advisory Board
has authorized its staff to prepare FASAB Technical Bulletins to provide timely guidance on
certain financial accounting and reporting problems of federal financial
reporting entities. The Technical Bulletins are listed in http://www.fasab.gov/tchbl.html.
(3) Accounting and Auditing Policy Committee of
the Federal Financial Accounting Standards Board Technical Releases. The
FASAB will author technical releases based on issues presented for their
consideration and further discussion. Refer to http://www.fasab.gov/aapc/technicl.html
for technical releases.
(4) Statements
on Federal Financial Accounting Concepts. The Comptroller General
and the Director of OMB may each publish “Statements of Federal Financial
Accounting Concepts” (SFFAC) after a 45-day period of Congressional
review. SFFAC differs from SFFAS in that
they represent a conceptual logical framework around which the SFFAS may be
developed. Both the SFFAS and their
application in individual agencies or entities must conform to the concepts and
principles delineated in the approved SFFACs.
To date, only OMB has issued the approved SFFACs. The SFFACs issued to date are listed in http://www.fasab.gov/concepts.html.
I. Joint Financial Management Improvement Program (JFMIP). http://www.jfmip.gov/jfmip/
(1) Legislation codified at 31 U.S.C. Subtitle
III, Chapter 35, Subchapter II, Section 3511(d) requires that the Comptroller
General, the Secretary of the Treasury, and the President conduct a continuous
program to improve accounting and financial reporting in the government. This
program, known as the Joint Financial Management Improvement Program (JFMIP),
is conducted jointly by the General Accounting Office, the Department of the
Treasury, the Office of Management and Budget, and the Office of Personnel
Management with participation by the other federal agencies and private sector
companies. Government-wide financial management problems, as well as those
concerning individual agencies, are considered under the joint program.
(2) JFMIP is a cooperative working with operating
agencies to improve financial management practices throughout the Government.
Improving federal financial management involves establishing uniform
requirements for financial information, financial systems, reporting, and
financial organization. To accomplish
this objective, JFMIP has created a series of financial management system
requirement documents called the Federal Financial Management Systems
Requirements (FFMSR). The following
FFMSRs contribute to the basis for the general government-wide standards used
for finance and accounting activities.
(a) Grant Financial System Requirements
(b) Property Management Systems Requirements
(c) Core Financial System Requirements
(d) Human Resources & Payroll Systems
Requirements
(e) Travel System Requirements
(f) Direct Loans System Requirements
(g) Guaranteed Loan System Requirements
(h) Inventory System Requirements
(i) Seized Property and Forfeited Assets
System Requirements
(j) System Requirements for Managerial Cost
Accounting
(k) Revenue System Requirements Document
(l) Acquisition Financial System Requirements
(m) Benefits Systems Requirements
For a complete list of FFMSRs see: http://www.jfmip.gov/jfmip/systemrequirements.htm
2.5 Compliance with Financial Accounting Standards. Bureaus and offices must comply with the Departmental financial policies and standards listed in 330 DM 1.3.
2.6 Other DOI Authority Sources. The Departmental
Manual 328 DM 1 provides instruction for administrative control of funds. The DM policy can be found at: http://elips.doi.gov/.