U.S. Government Standard General Ledger Board and
Issues Resolution Committee Meeting Minutes

June 6, 2002

Summary of Outstanding Issues:

Judy Yuran (FMS) opened the meeting and introductions were made. She explained that this meeting is the second part of the financial report presentation presented a few weeks ago. Currently, Gary Ward (FMS) is working on the Closing Package proposed by Bob Reid and government-wide business rules that impact the financial report. Gary and Veronica Kitchen (FMS) will be explaining how the transactions processed by agencies impact the financial report. Examples of Federal (F) and Non-governmental (N) transactions will be presented along with examples of prior period adjustments. She also indicated that all transactions have scenarios, which can be obtained from the USSGL Web site.

Handouts

• FACTS I Attribute – Federal/Non Federal
• Prior Period Adjustments

Veronica provided examples of "F" and "N" transactions. She stated that both are FACTS I attributes. She explained that the "F" attribute is used for transactions between two federal entities while the "N" attribute is used for transactions between non-federal and federal entities and is included in the financial report of the government. Veronica walked through each transaction. The document will be updated to include transaction descriptions and numbers for all transactions. The IRC may contact Veronica or Gary for additional transactions, if necessary.

Veronica provided documentation on Prior Period Adjustments (PPAs) to assist with the government-wide process. She indicated that there are three types of adjustments, which are as follows: 1) corrections of errors - material, 2) correction of errors – non-material and 3) changes in accounting principle. The Statement of Federal Financial Accounting Standard (SFFAS) No. 7 (paragraph 76), and its revision SFFAS No. 21 (issued November 2001) on PPAs provides guidance on reporting corrections of errors and changes in accounting principles. Standard No. 7 states that PPAs should be limited to corrections of errors and accounting changes with a retroactive effect and adjustments should be recognized as a change in cumulative results of operations rather than an element of net results of operations. In addition, the standard states that financial statements should not be restated for PPAs that are recognized in the current year. However, in November of 2001, Standard No. 7 was superceded and replaced by Standard 21. The amendment requires that when material errors are discovered in prior period financial statements, all statements presented must be restated to correct the error. The standard focuses on the proper reporting for material errors. Veronica provided an example of the Statement of Changes in Net Position in which she highlighted line two, Prior Period Adjustments, which is to be used to record material errors and a change in accounting principle. As a result, the beginning balance is adjusted. However, a problem occurs because the financial reporting area is unable to determine which PPAs are current or are adjustments from the prior periods. Subsequent to this IRC meeting, PPAs were discussed at the June 27th IRC meeting. In that meeting, Veronica indicated that non-material errors should be recorded as current year activities rather than a PPA. Please refer to the June 27th minutes for a further discussion on PPAs.

Holden Hogue (FMS) indicated that a method to record adjustments and determining the differences and categorizing those differences is needed. In addition, a method is needed for agencies to provide information on the differences to the financial report. Gary indicated that Bob Reid is interested in determining the change in "N" equity and its effect on the plug.

Dana James (OMB) expressed an interest in receiving background information on the proposed note. Judy indicated that she can provide some background documentation, however it will only indicate that a problem exists, it was reviewed and the result of the problem. Dana asked how the proposed note would resolve the issue. Holden explained that the note would explain the differences between the ending non-federal Adjusted Trial Balance (ATB) and the beginning non-federal ATB balance in the next year. He indicated that FMS may receive one ATB in January from an agency that confirms the balance and within the next month the agency notifies FMS that the ending balance has changed. There should be no difference between the ending and the beginning ATB’s however, if one exists then the note will explain the difference. Additionally, the note will categorize the differences, which should be supported by an explanation by the agency. He encouraged the IRC to complete the note to the best of their abilities.

Rich Fontenrose (FASAB) asked whether the note was going to be voted on by the IRC and if the note was going to be considered a standard. He suggested that the note be presented to FASAB and included as a standard in conformance with generally accepted accounting principles.

Attendees:

Cindy Scharf, Library of Congress

Joe Keady, USAID

Bob Booker, DOD/DFAS

Traci A. Carroll, HUD

Monica A. Clarke, HUD

Janet McLean, VA

Joe McAndrew, Treas

Bruce Crippin, DOS

Eugene Morroni, HUD/FHA

Christine Kent, DOT

Carol Israel, HHS

Ann Burnell, HHS

Lynn Moaney, USDA

Diane Washington, FCC

Kotora Padgett, DOJ

Richard Fontenrose, FASAB

Sed Reid, USDA

Phil Daniels, DOI

Eileen Parlow, DOD

Greg James, DOL

Carla Kohler, State

Michael Swanchara, GSA

Ed Gramp, GSA

Dana James, OMB

Holden Hogue, FMS, ASSD, Directorate

Judy Yuran, FMS, USSGL

Elois Adair, FMS, ASD

Christine Chang, FMS, USSGL

Toni Clark, FMS, USSGL

Marilyn Evans, FMS, USSGL

Karl Foltz, FMS, USSGL

Veronica Kitchen, FMS, USSGL

Mercedes Lewis, FMS, ASD

Karen Metler, FMS, USSGL

Melinda Pope, FMS, USSGL

Gary Ward, FMS, Financial Reports