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entitled 'GAO/PCIE: Financial Audit Manual: Checklist for Federal 
Accounting Reporting, and Disclosures' which was released on July 01, 
2004.

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July 2004:

Dear Colleague:

The U.S. Government Accountability Office (GAO) and the President's 
Council on Integrity and Efficiency (PCIE) maintain the GAO/PCIE 
Financial Audit Manual (FAM). The FAM provides guidance for performing 
financial statement audits of federal entities. It is a key tool for 
enhancing accountability over taxpayer-provided resources.

GAO and PCIE are committed to keeping the FAM current. With this goal 
in mind, in October of 2003, we revised the Checklist for Reports 
Prepared Under the CFO Act (CFO Checklist), and requested comments on 
an exposure draft of the checklist. One of the key changes in the final 
checklist is its title, which has been changed to Checklist for Federal 
Accounting, Reporting, and Disclosures. This change was made to reflect 
the checklist's potential application to any federal entity preparing 
annual audited financial statements in accordance with the Office of 
Management and Budget's (OMB) form and content guidance.

This checklist is located in section 1050 of the GAO/PCIE FAM. It can 
be accessed at either the GAO Web site [Hyperlink, http://www.gao.gov] 
or the PCIE Web site 
[Hyperlink, http://www.ignet.gov/pande/audit1.html#guide]. We extend 
our thanks to the individuals and organizations that provided comments 
to make this checklist more effective.

Signed by:

Jeffrey C. Steinhoff:

Managing Director:
Financial Management and Assurance:
U.S. Government Accountability Office:

Signed by:

The Honorable Everett L. Mosley:
Chair:
President's Council on Integrity and Efficiency Audit Committee:

Attachment:

GAO/PCIE:

FINANCIAL AUDIT MANUAL:

Checklist for Federal Accounting, Reporting, and Disclosures:

Reporting 1050--Checklist for Federal Accounting, Reporting, and 
Disclosures:

Contents:

Abbreviations:

Sections:

I. Overview:

II. General Items related to the Financial Statements:

III. Balance Sheet:

IV. Statement of Net Cost:

V. Statement of Changes in Net Position:

VI. Statement of Budgetary Resources:

VII. Statement of Financing:

VIII. Statement of Custodial Activity:

IX. Notes to Financial Statements:

X. Supplementary Information:

XI. Social Insurance:

Abbreviations:

AcSEC: Accounting Standards Executive Committee:

AICPA: American Institute of Certified Public Accountants:

CFO Act: Chief Financial Officers Act of 1990:

COTS: commercial off-the-shelf:

CSRS: Civil Service Retirement System:

FASAB: Federal Accounting Standards Advisory Board:

FASB: Financial Accounting Standards Board:

FDIC: Federal Deposit Insurance Corporation:

FERS: Federal Employees Retirement System:

FFMIA: Federal Financial Management Improvement Act of 1996:

FHA: Federal Housing Administration:

FIFO: first-in, first-out:

FY: fiscal year:

GAAP: Generally Accepted Accounting Principles:

GDP: gross domestic product:

GMRA: Government Management Reform Act of 1994:

GPRA: Government Performance and Results Act of 1993:

HI: Hospital Insurance (Medicare Part A):

IMF: International Monetary Fund:

Imple. Guide: Implementation Guide:

IRS: Internal Revenue Service:

LIFO: last-in, first-out:

MD&A: Management's Discussion and Analysis:

MRS: Military Retirement System:

NRV: net realizable value:

OASDI: Old Age, Survivors, and Disability Insurance (Social Security):

OMB: Office of Management and Budget:

OPEB: Other Postemployment Benefits:

ORB: Other Retirement Benefits:

PP&E: Property, Plant, and Equipment:

RRB: Railroad Retirement Benefits:

RSI: Required Supplementary Information:

RSSI: Required Supplementary Stewardship Information:

SFAS: Statement of Financial Accounting Standards:

SFFAC Statements of Federal Financial Accounting Concepts:

SFFAS Statements of Federal Financial Accounting Standards:

SGL: U.S. Government Standard General Ledger:

SMI: Supplementary Medical Insurance (Medicare Part B):

SOP: Statement of Position:

TVA: Tennessee Valley Authority:

UI: unemployment insurance:

UTF: Unemployment Trust Fund:

Section I: Overview:

Introduction:

The Chief Financial Officers (CFO) Act of 1990 and the Government 
Management Reform Act of 1994 require, among other mandates, that 
agencies' chief financial officers submit annual reports to their 
agency heads and to the Office of Management and Budget (OMB). These 
annual reports are to contain audited financial statements of their 
agencies. The financial statements are to be presented in conformity 
with generally accepted accounting principles (GAAP). [Footnote 1] The 
title of this checklist has been changed to Checklist for Federal 
Accounting, Reporting, and Disclosures. Previously referred to as the 
CFO Act Checklist, the change was made to reflect its potential 
application to any federal entity preparing annual audited financial 
statements in accordance with OMB's proposed form and content 
guidelines.

This checklist is being issued to assist agencies in preparing these 
statements and auditors in auditing them. Use of this checklist is not 
a requirement. Rather, it is intended to help provide for a systematic, 
organized, and structured approach to preparing or reviewing agency 
financial statements. Furthermore, it should be noted that, while the 
questions contained in the checklist are taken from authoritative 
sources, the checklist itself is not authoritative, nor is it a 
comprehensive guide. Preparers and auditors should also consult 
financial management regulations for the individual agencies, as the 
regulations may have specific guidance when the standards allow 
alternatives or management flexibility.

Checklist Organization:

The checklist has 11 sections: an overview section, a section related 
to general items in the financial statements, a section for each of the 
six financial statements, and three additional sections. The six 
sections reflecting the financial statements are organized by the line 
items in financial statements to allow the user to proceed through each 
statement from the beginning to the end. The final three sections cover 
(1) disclosures in the notes to the financial statements related to 
significant accounting policies, (2) required supplementary 
stewardship information and required supplementary information, and (3) 
social insurance.

Since the financial statements are interrelated, some questions 
concerning line items in one financial statement may also pertain to 
line items in another statement. For example, the questions covering 
loans receivable in the balance sheet section may also deal with 
matters related to interest income and subsidy expense appearing in the 
statements of financing and net cost sections. Because of these 
relationships, our general organizational approach aggregates related 
information so that questions on related line items appearing in more 
than one financial statement are covered only in the first financial 
statement section in which the line item appears. For example, 
questions concerning interest income and subsidy expense would appear 
only in the balance sheet section. Similarly, questions related to the 
notes to the financial statements section would also appear only under 
the line item of the initial financial statement.

Except for sections I, II, VI, IX, and XI, the first page of each 
section contains a list showing the number of questions in the section. 
This checklist has 785 questions as follows.

General Items Related to the Financial Statements: 23;

Balance Sheet: 355;

Statement of Net Cost: 180;

Statement of Changes in Net Position: 39;

Statement of Budgetary Resources: 27;

Statement of Financing: 27;

Statement of Custodial Activity: 27;

Notes to Financial Statements (Significant Accounting Policies): 5;

Supplementary Information: 78;

Social Insurance: 24;

Authoritative Guidance:

Each question in this guide is referenced to a source. The sources 
cited are (1) the Statements of Federal Financial Accounting Standards 
(SFFAS) and (2) OMB Bulletin 01-09, Form and Content of Agency 
Financial Statements.

FASAB statements include Statements of Federal Financial Accounting 
Concepts (SFFAC) and Statements of Federal Financial Accounting 
Standards (SFFAS). The three approved accounting concept statements are 
#1 Objectives of Federal Financial Reporting, 1993, #2 Entity and 
Display, 1995, and #3 Management's Discussion and Analysis, 1999. The 
24 SFFAS standards [Footnote 2] covered in this checklist are:

1. Accounting for Selected Assets and Liabilities, 1993.

2. Accounting for Direct Loans and Loan Guarantees, 1993.

3. Accounting for Inventory and Related Property, 1993.

4. Managerial Cost Accounting Concepts and Standards, 1995.

5. Accounting for Liabilities of the Federal Government, 1995.

6. Accounting for Property, Plant, and Equipment, 1995.

7. Accounting for Revenue and Other Financing Sources, 1996.

8. Supplementary Stewardship Reporting, 1996.

9. Deferral of the Effective Date of Managerial Cost Accounting 
Standards for the Federal Government in SFFAS No. 4, 1997.

10. Accounting for Internal Use Software, 1998.

11. Amendments to Accounting for Property, Plant, and Equipment - 
Definitional Changes, 1998. [Footnote 3]

12. Recognition of Contingent Liabilities Arising from Litigation, 
1998.

13. Deferral of Paragraph 65.2 - Material Revenue-Related Transactions 
Disclosures, 1999.

14. Amendments to Deferred Maintenance Reporting, 1999.

15. Management's Discussion and Analysis, 1999.

16. Amendments to Accounting for Property, Plant, and Equipment - 
Measurement and Reporting for Multi-Use Heritage Assets, 1999.

17. Accounting for Social Insurance, 1999.

18. Amendments to Accounting Standards For Direct Loans and Loans 
Guarantees, 2000.

19. Technical Amendments to Accounting Standards for Direct Loans and 
Loan Guarantees, 2001.

20. Elimination of Certain Disclosures Related to Tax Revenue 
Transactions by the Internal Revenue Service, Customs and Others, 2001.

21. Reporting Corrections of Errors and Changes in Accounting 
Principles, 2001.

22. Change in Certain Requirements for Reconciling Obligations and Net 
Cost of Operations, 2001.

23. Eliminating the Category National Defense Property, Plant, and 
Equipment, 2003.

25. Reclassification of Stewardship Responsibilities and Eliminating 
the Current Services Assessment, 2003. [Footnote 4]

SFFAC 4, Intended Audience and Qualitative Characteristic for the 
Consolidated Financial Report of the United States Government, and 
SFFAS 24, Selected Standards for the Consolidated Financial Report of 
the United States Government, are not covered in this checklist, as 
this checklist is intended for use at the agency reporting level, and 
is not to be used for the financial report of the U.S. government.

SFFAS 7 Implementation Guide to Accounting for Revenue and Other 
Financing Sources, 1996, is also covered in this checklist. OMB 
Bulletin 01-09 provides the detailed requirements for the form and 
content of agency financial statements.

How to Use This Guide:

To the right of each question are two columns. The first column 
provides for a "yes," "no," or "N/A" (not applicable) answer to each 
question. The second column provides for an explanation of the answer 
to each question. A "yes" answer should indicate that the financial 
statements contain the information asked by the question. For each 
"yes" answer, the explanation column should include the page number or 
location in the financial statements where the information can be 
found. Also, any other information pertinent to the question and the 
response should be provided in the explanation column.

An "N/A" answer might indicate that the question does not apply to the 
federal entity. For example, most federal agencies do not administer 
loan, loan guarantee, or loan insurance programs and, therefore, do not 
have credit program receivables and related property. Consequently, the 
questions on these receivables, property, and subsidies would not 
apply. A simple explanation indicating that the reporting entity does 
not administer loan programs would appear in the explanation column of 
the first question in the series.

A "no" answer indicates that the information asked for in the question 
is not included in the financial statements, notes, or supplementary 
information, respectively. The explanation column should describe in 
sufficient detail why the information is not included.

[End of section]

Section II: General Items Related to the Financial Statements:

There are 23 questions in this section. All the questions relate to the 
overall financial statements and are not further divided into 
categories.

General Items (1 - 23):

1. Does the entity's annual financial statement consist of the 
following items?

a. management's discussion and analysis (MD&A) of the reporting entity;

b. basic statements and related notes;

c. required supplementary stewardship information (RSSI)?

d. required supplementary information (RSI)?

e. other accompanying information (OAI) that provides users of the 
financial statements with a better understanding of the entity's 
programs and the extent to which program objectives are achieved (OMB 
Bulletin 01-09, p. 4, section 1.5);

2. Do the basic statements include?

a. Balance Sheet;

b. Statement of Net Cost;

c. Statement of Changes in Net Position; d. Statement of Budgetary 
Resources;

e. Statement of Financing;

f. Statement of Custodial Activity (OMB Bulletin 01-09, pp. 4 & 5, 
section 1.5);

3. Does the entity use the following hierarchy as its sources of 
guidance in preparing its financial statements?

a. FASAB Statements and Interpretations as well as American Institute 
of Certified Public Accountants (AICPA) and Financial Accounting 
Standards Board (FASB) pronouncements if made applicable to federal 
government entities by a FASAB Statement or Interpretation;

b. FASAB technical bulletins and, if specifically made applicable to 
federal government entities by AICPS and cleared by FASAB, AICPA 
Industry Audit and Accounting Guides and AICPA Statements of Position;

c. AICPA Accounting Standards Executive Committee (AcSEC) Practice 
Bulletins if specifically made applicable to federal government 
entities and cleared by FASAB, as well as Technical Releases of the 
Accounting and Auditing Policy Committee of FASAB;

d. Implementation guides published by FASAB staff and practices that 
are widely recognized and prevalent in the federal government;

e. In the absence of a pronouncement covered by federal Generally 
Accepted Accounting Principles (GAAP) or another source of established 
principles, other accounting literature, depending on its relevance in 
the circumstances.[Footnote 1] (OMB Bulletin 01-09, p. 2, section 1.2 & 
p. 13, section 2.1, item B);

4. Does the entity present comparative information and related footnote 
disclosures for the current year and prior year for the six basic 
financial statements, and MD&A? (OMB Bulletin 01-09, p. 5, section 1.6 
& p. 13, section 2.1, item F);

5. Does the entity present comparative information in the RSSI and RSI 
when the information would be meaningful to the user of the financial 
report? (OMB Bulletin 01-09, p. 5, section 1.6);

6. Do the quarterly interim statements include full accruals and are 
intra-entity transactions eliminated? (OMB Bulletin 01-09, p. 14, 
section 2.1, item G);

7. Are these interim statements prepared on a comparative 
basis?[Footnote 2] (OMB Bulletin 01-09, p. 14, section 2.1, item G);

8. To the extent that information is not available on a quarterly 
basis, has the entity developed reliable, alternative means of 
estimating quarterly amounts and balances? (OMB Bulletin 01-09, p. 14, 
section 2.1, item G);

9. When an entity presents disaggregated information for component 
organizations, does the total column for the entity as a whole reflect 
consolidated totals net of intra-entity transactions, except for the 
Statement of Budgetary Resources, which is presented on a combined 
basis? (OMB Bulletin 01-09, p. 14, section 2.1, item H):

When a reporting entity presents its financial statements in a single 
column format, the statements are referred to as consolidated 
statements. With the exception of the Statement of Budgetary Resources, 
financial statements that use a multicolumn format to present 
information on an entity's major components or lines of business as 
well as the consolidated amounts are referred to as consolidating 
statements. (OMB Bulletin 01-09, p. 14, section 2.1, item H);

10. Are intra-entity transactions needed to arrive at the consolidated 
amounts presented in a column on the face of the consolidating 
statements? (OMB Bulletin 01-09, p. 14, item H);

11. Has the entity provided assurance of the following?

a. information in the financial statements is presented in accordance 
with federal GAAP;

b. the underlying records fully support the information (OMB Bulletin 
01-09, p. 14, section 2.1, item J);

12. Does the reporting entity include franchise funds and other 
intragovernmental support revolving funds among the activities covered 
by its financial statements? (OMB Bulletin 01-09, p. 15, section 2.1, 
item K & p. 113, section 11.6);

13. If information about the assets, liabilities, costs, and revenues 
of these franchise funds and intragovernmental support revolving funds 
are not separately reported on the entity's basic financial statements, 
then is condensed information reported as required supplemental 
information in accordance with the applicable SFFAS and required 
segment information? (OMB Bulletin 01-09, p. 15, section 2.1, item K & 
p. 113, section 11.6);

14. Does the entity report its assets, liabilities, and net position by 
the lines displayed in the illustrative Balance Sheet and Statement of 
Changes in Net Position in OMB Bulletin 01-09? (OMB Bulletin 01-09, 
p.15, section 2.1, item L);

15. If the entity aggregates such illustrated line items in reporting 
at the departmental level, is the composition of the aggregated line 
items disclosed? (OMB Bulletin 01-09, p.15, section 2.1, item L);

16. Conversely, if the entity disaggregates such line items in its 
departmental statements, does the entity report or disclose the total 
of the disaggregated line items? (OMB Bulletin 01-09, p.15, section 
2.1, item L);

17. Are line items, which are immaterial but related in nature, 
combined? (OMB Bulletin 01-09, p. 15, section 2.1, item M);

18. Are discrete balances of an immaterial amount designated as 
"other?" (OMB Bulletin 01-09, p. 15, section 2.1, item M);

19. If not, are these material balances separately reported and 
designated by name? (OMB Bulletin 01-09, p. 15, section 2.1, items M & 
N);

20. Are the statement line items, footnotes, and lines or columns in 
footnotes that do not apply or are not informative for the reporting 
entity excluded? (OMB Bulletin 01-09, p. 15, section 2.1, item O);

21. Do schedule totals presented in the footnotes, in support of 
amounts presented in financial statements, agree with the amounts 
presented in the body of the financial statements? (OMB Bulletin 01-09, 
p. 15, section 2.1, item P);

22. When presenting dollar amounts in the statements and the notes, 
does the entity do the following?

a. round dollar amounts to the nearest whole dollar, thousand, or 
million based upon informative value to the reporting entity;

b. maintain the chosen rounding level throughout the financial 
statements and footnotes;

c. ensure that individual line items add up to the totals by adjusting 
the line items for the differences created by the rounding process 
rather than adjusting column totals (OMB Bulletin 01-09, p. 16, section 
2.1, item Q);

23. Are footnotes sequentially numbered? (OMB Bulletin 01-09, p. 16, 
section 2.1, item S);

The Balance Sheet presents, as of a specific time, amounts of future 
economic benefits owned or managed by the reporting entity exclusive of 
items subject to stewardship reporting (assets), amounts owed by the 
entity (liabilities), and amounts that comprise the difference (net 
position). (SFFAC 2, par. 57; OMB Bulletin 01-09, p. 17, section 3.1);

[End of section]

Section III: Balance Sheet:

The questions related to the balance sheet are contained under 23 line 
items. The question numbers related to each line item follow.

Assets:

General items:

1. Fund Balance with Treasury; Question numbers: 7 - 22;

2. Investments; Question numbers: 23 - 32;

3. Accounts Receivable (Net); Question numbers: 33 - 49;

4. Interest Receivable (Net); Question numbers: 50 - 54;

5. Credit Program Receivables; Question numbers: 55 - 96;

6. Cash and Other Monetary Assets; Question numbers: 97 - 102;

7. Inventory and Related Property; Question numbers: 103 - 125;

8. Operating Materials and Supplies; Question numbers: 126 - 137;

9. Stockpile Materials; Question numbers: 138 - 150;

10. Seized Property; Question numbers: 151 - 158;

11. Forfeited Property; Question numbers: 159 - 172;

12. Goods Held Under Price Support and Stabilization Programs; Question 
numbers: 173 - 186;

13. General Property, Plant, and Equipment (Net); Question numbers: 187 
- 233;

14. Software; Question numbers: 234 - 262;

15. Other Assets; Question numbers: 263 - 268;

Liabilities:

16. Liabilities in General; Question numbers: 269 - 272;

17. Accounts Payable and Interest Payable; Question numbers: 273 - 280;

18. Liabilities for Loan Guarantees; Question numbers: 281 - 294;

19. Lease Liabilities; Question numbers: 295 - 300;

20. Federal Debt and Related Interest; Question numbers: 301 - 311;

21. Pensions, Other Retirement Benefits, and Postemployment Benefits; 
Question numbers: 312 - 319;

22. Other Liabilities; Question numbers: 320 - 353;

Net Position:

23. Unexpended Appropriations and Cumulative Results of Operations; 
Question numbers: 354 - 355;

General Items (1-6):

1. Are entity and nonentity assets combined on the face of the balance 
sheet?[Footnote 3] (OMB Bulletin 01-09, p. 17, section 3.1 and p. 19, 
section 3.3);

2. Are the amounts and types of nonentity assets disclosed in a note to 
the financial statements? OMB Bulletin 01-09, p. 17, section 3.1; p. 
19, section 3.3; p. 56, section 9.2)?

Liabilities covered by budgetary resources are liabilities covered by 
realized budgetary resources as of the balance sheet date. Budgetary 
resources encompass not only new budget authority but also other 
resources available to cover liabilities for specified purposes in a 
given year. Available budgetary resources include (1) new budget 
authority, (2) unobligated balances of budgetary resources at the 
beginning of the year or net transfers of prior year balances during 
the year, (3) spending authority from offsetting collections (credited 
to an appropriation or fund account), and (4) recoveries of unexpired 
budget authority through downward adjustments of prior year 
obligations. Liabilities are considered covered by budgetary resources 
if they are to be funded by permanent indefinite appropriations or 
borrowing authority, which have been enacted and signed into law as of 
the balance sheet date, provided that the resources may be apportioned 
by OMB without further action by the Congress and without a contingency 
having to be met first. (OMB Bulletin 01-09, p. 24, section 3.4);

3. Are liabilities covered by budgetary resources and liabilities not 
covered by budgetary resources combined on the face of the balance 
sheet? (OMB Bulletin 01-09, p. 17, section 3.1, p. 24, section 3.4);

4. Are liabilities not covered by budgetary resources disclosed in a 
note to the financial statements? (OMB Bulletin 01-09, p. 17, section 
3.1 & pp. 78 & 79, section 9.12);

5. Does the Balance Sheet display assets, liabilities, and net 
position? (OMB Bulletin 01-09, p. 18, section 3.2)?

Intragovernmental assets arise from transactions among federal 
entities. Intragovernmental assets represent claims of a federal entity 
against other federal entities. Intragovernmental liabilities are 
claims against the reporting entity by other federal entities. (OMB 
Bulletin 01-09, p. 19, section 3.3; p. 24, section 3.4);

6. Are intragovernmental assets and liabilities reported separately 
from transactions with non-federal entities, including the Federal 
Reserve and government sponsored enterprises?[Footnote 4] (OMB Bulletin 
01-09, p. 19, section 3.3 & p. 24, section 3.4);

Assets; Fund Balance with Treasury (7 - 22):

A federal entity's fund balance with the Treasury is the aggregate 
amount of funds in the entity's accounts with Treasury for which the 
entity is authorized to make expenditures and pay liabilities. Fund 
balance with Treasury includes clearing account balances and the dollar 
equivalent of foreign currency account balances. From the reporting 
entity's perspective, a fund balance with Treasury is an asset. From 
the perspective of the federal government as a whole, the fund balance 
is neither an asset nor a liability; it instead represents a commitment 
to make resources available to federal departments, agencies, programs, 
and other entities. (SFFAS 1, par. 31 & 32);

7. Is the fund balance with Treasury reported as an intragovernmental 
asset? (SFFAS 1, par. 31; OMB Bulletin 01-09, p. 18, section 3.2);

8. Are amounts disclosed as fund balances in deposit, suspense, and 
clearing accounts that are not available to finance entity activities 
reported as nonentity assets? (OMB Bulletin 01-09, p. 19, section 3.3);

9. Are foreign currency account balances reported on the balance sheet 
translated into U.S. dollars at exchange rates determined by the 
Treasury and effective at the financial reporting date? (SFFAS 1, par. 
32; OMB Bulletin 01-09, p. 19, section 3.3);

10. Does the entity's fund balance with Treasury also include the 
following?

a. clearing account balances;

b. balances for direct loan and loan guarantee activities held in the 
credit reform program, financing, and liquidating accounts;

c. funds actually borrowed from Treasury under statutory authority;

d. the dollar equivalent of foreign currency account balances (SFFAS 1, 
par. 32 & 35);

11. Does the entity's fund balance with Treasury exclude contract 
authority[Footnote 5] or unused authority to borrow? (SFFAS 1, par. 
34);

12. Does the entity record an increase in its fund balance with 
Treasury when it does at least one of the following?

a. receives appropriations, reappropriations, continuing resolutions, 
appropriation restorations, and allocations;

b. receives transfers and reimbursements from other agencies;

c. borrows from the Treasury, Federal Financing Bank, or other 
entities;

d. collects and credits amounts to its appropriations or fund accounts 
that the entity is authorized to spend or use to offset its 
expenditures (SFFAS 1, par. 33);

13. Does the entity record a decrease in its fund balance with Treasury 
when each of the following occurs?

a. disbursements are made to pay liabilities or to purchase assets, 
goods, and services;

b. investments are made in U.S. securities;

c. expired appropriations are canceled;

d. transfers and reimbursements are made to other entities or to the 
Treasury;

e. appropriations are sequestered or rescinded (SFFAS 1, par. 36);

14. Does the entity distinguish funds within fund balance with Treasury 
as the obligated balance not yet disbursed[Footnote 6] and the 
unobligated balance[Footnote 7] in a note to the financial statements? 
(SFFAS 1, par. 37; OMB Bulletin 01-09, p. 57, section 9.3, item B);

15. Are fund balances that agencies were authorized to use disclosed by 
fund type (e.g., trust funds, revolving funds, appropriated funds, 
other fund types)? (OMB Bulletin 01-09, pp. 56 & 57, section 9.3, item 
A);

16. Are any restrictions on unobligated balances related to future use 
disclosed? (SFFAS 1, par. 38; OMB Bulletin 01-09, p. 57, section 9.3, 
item B);

17. Does the entity explain any discrepancies between fund balance with 
Treasury in its general ledger accounts and the balance in the 
Treasury's accounts and explain the causes of the discrepancies in 
footnotes to the financial statements?[Footnote 8] (SFFAS 1, par. 39; 
OMB Bulletin 01-09, p. 57, section 9.3, item C);

18. Does the entity disclose any other information necessary for 
understanding the nature of the fund balances, including information on 
unused funds in expired appropriations that are returned to Treasury at 
the end of a fiscal year? (SFFAS 1, par. 39; OMB Bulletin 01-09, p. 57, 
section 9.3, item C);

19. Are balances in deposit accounts, such as collections pending 
litigation or funds being held by the entity in the capacity of a 
banker or agent for others, disclosed under "other fund types?" (OMB 
Bulletin 01-09, p. 57, section 9.3, item A);

20. If, however, any of the balances under "other fund types" are 
material, are they listed separately? (OMB Bulletin 01-09, p. 57, 
section 9.3, item A);

21. Is other information necessary for understanding the nature of the 
fund balances with Treasury disclosed? (OMB Bulletin 01-09, p.57, 
section 9.3, item C);

22. Are unexpended appropriations recognized as capital and included 
under funds with Treasury when they are made available for 
apportionment? (SFFAS 7, par. 71);

Assets; Investments (23 - 32):

Investments in federal (i.e., treasury) securities include (1) 
nonmarketable par value Treasury securities, (2) market-based Treasury 
securities expected to be held to maturity, (3) marketable Treasury 
securities expected to be held to maturity, and (4) securities issued 
by other federal entities. Nonfederal securities include those issued 
by state and local governments, private corporations, and government-
sponsored enterprises. (SFFAS 1, par. 62; OMB Bulletin 01-09, p. 20, 
section 3.3);

23. Are investments in federal securities reported separately from 
investments in nonfederal securities? (SFFAS 1, par. 67; OMB Bulletin 
01-09, p. 20, section 3.3);

24. Are investments in federal securities initially recorded and 
reported at their acquisition cost or amortized acquisition cost (less 
an allowance for losses, if any)? (SFFAS 1, par. 68 & 69; OMB Bulletin 
01-09, p. 20, section 3.3);

25. Are investments in federal securities acquired in exchange for 
nonmonetary assets recognized at the fair market value of either the 
securities acquired or the assets given up, whichever is more 
definitively determinable? (SFFAS 1, par. 68);

26. Subsequent to acquisition, are investments in federal securities 
reported at their carrying amount (i.e., acquisition cost) adjusted for 
amortized premium or discount? (SFFAS 1, par. 70-71; OMB Bulletin 01-
09, pp. 59 & 60, section 9.5);

27. Is the interest method (i.e., effective interest rate multiplied by 
the carrying amount) used in amortizing the premium or discount over 
the life of the treasury security? (SFFAS 1, par. 71);

28. Is the market value of market-based and marketable securities 
disclosed? (SFFAS 1, par. 72; OMB Bulletin 01-09, pp. 59 & 60, section 
9.5);

29. Are investments grouped by type of security, such as marketable or 
market-based Treasury securities? (SFFAS 1, par. 72);

30. Are investment securities, which are initially expected to be held 
to maturity, reclassified as securities available for sale or early 
redemption, if significant unforeseeable circumstances cause a change 
in the entity's intent or ability to hold these securities to maturity? 
(SFFAS 1, par. 72 & 73; OMB Bulletin 01-09, pp. 59 & 60, section 9.5);

31. If so, is the market value of such securities disclosed? (SFFAS 1, 
par. 72 & 73; OMB Bulletin 01-09, pp. 59 & 60, section 9.5);

32. Does the entity disclose any other information relative to 
understanding the nature of reported investments, such as permanent 
impairments? (OMB Bulletin 01-09, p. 60, section 9.5, item B);

Assets; Accounts Receivable (33 - 49):

33. Is a receivable recognized when a federal entity establishes a 
claim to cash or other assets against other entities based on legal 
provisions or when goods or services are provided? (SFFAS 1, par. 41);

34. If the exact amount of a receivable is unknown, is a reasonable 
estimate made? (SFFAS 1, par. 41);

35. Are receivables from federal entities reported as intragovernmental 
receivables, and reported separately from receivables from nonfederal 
entities? (SFFAS 1, par. 42; OMB Bulletin 01-09, p. 19, section 3.3)?

Entity receivables are amounts due from other federal or nonfederal 
entities that the federal entity is authorized by law to include in its 
obligational authority or to offset its expenditures and liabilities 
upon collection. Nonentity receivables are amounts that the entity is 
to collect on behalf of the federal government or other entities, and 
the entity is not authorized to spend. (SFFAS 1, par. 43);

36. Are receivables not available to an entity disclosed in a note to 
the financial statements as nonentity assets, separate from receivables 
available to the entity? (SFFAS 1, par. 43; OMB Bulletin 01-09, p. 19, 
section 3.3 & p. 56, section 9.2);

37. Are losses on receivables recognized when it is more likely than 
not (greater than a 50 percent chance of occurrence) that the 
receivables will not be totally collected? (SFFAS 1, par. 44);

38. Is an allowance for estimated uncollectible amounts recognized to 
reduce the gross amount of receivables to their net realizable value, 
and is this allowance reestimated on each annual financial reporting 
date and when information indicates that the latest estimate is no 
longer correct? (SFFAS 1, par. 45);

39. Is an allowance for uncollectible amounts based on an analysis of 
both individual accounts receivable and groups of accounts receivable 
as prescribed by the standards? (SFFAS 1, par. 47-51; SFFAS 7, par. 
56);

40. Are accounts that represent significant amounts individually 
analyzed to determine the loss allowance? (SFFAS 1, par. 47);

41. Is the loss estimation for individual accounts based on the 
following?

a. debtor's ability to pay;

b. debtor's payment record and willingness to pay;

c. probable recovery of amounts from secondary sources including liens, 
garnishments, cross collections, and other applicable collection tools 
(SFFAS 1, par. 47);

42. If information is not available to make a reliable assessment of 
losses on an individual account basis or if the nature of the 
receivables does not lend itself to individual account analysis, are 
the potential losses assessed on a group basis? (SFFAS 1, par. 48);

43. If potential losses are assessed on a group basis, are the 
receivables separated into groups of homogeneous accounts with similar 
risk characteristics? (SFFAS 1, par. 49-51);

44. Does the reporting entity disclose the following?

a. major categories of accounts receivable by amount and type;

b. methodology used to estimate the allowance for uncollectible 
amounts;

c. dollar amount of the allowance for uncollectible accounts (SFFAS 1, 
par. 52; OMB Bulletin 01-09, p. 60, section 9.6);

45. Is an account receivable arising from a nonexchange transaction 
recognized when a collecting entity establishes a specifically 
identifiable, measurable, and legally enforceable claim to cash or 
other assets through its established assessment processes to the extent 
the amount is measurable? (SFFAS 7, par. 53, footnote 9, 61-63);

46. Are assessments recognized as accounts receivable if an enforceable 
claim for taxes and duties exists in the following instances?

a. tax returns filed by the taxpayer without sufficient payment;

b. customs documents filed by the importer without sufficient payment;

c. taxpayer agreements to assessments at the conclusion of an audit or 
to substitute for a tax return (or importer agreements to supplemental 
assessments)?

d. court actions determining an assessment;

e. taxpayer (or importer) agreements to pay an assessment on an 
installment plan;

f. receivables determined to be currently not collectible, but with 
future collection potential (SFFAS 7, par. 53, 54, 170, & 171);

47. Is an interentity receivable recognized when (1) a legally 
enforceable claim exists between a collecting entity and a recipient 
entity for the transfer or repayment of taxes or duties and (2) payment 
of such a claim is probable and measurable? (SFFAS 7, par. 60);

Assets; Accounts Receivable (33 - 49);

Compliance assessments are proposed assessments by the collecting 
entity in definitive amounts, but with which the taxpayer (or importer) 
still has the right to disagree or object. (SFFAS 7, par. 55.1)?

Preassessment works-in-process are assessments not yet officially 
asserted by the collecting entity that are subject to a taxpayer's 
right to conference in response to initial information notices. (SFFAS 
7, par. 55.2);

48. Do nonexchange-related accounts receivable for taxes and duties 
exclude the following?

a. amounts received or due with tax returns received after the close of 
the reporting period;

b. compliance assessments;

c. preassessment work-in-process (SFFAS 7, par. 54);

49. Are compliance assessments reclassified and recognized as account 
receivables in the following instances?

a. if the taxpayer files an amended tax return;

b. when customs' protest or retention period lapses;

c. when court action or an appeal finally determines the assessment;

d. if taxpayer (or importer) agrees to pay currently or through an 
installment agreement;

e. if an offer in compromise is accepted (SFFAS 7, par. 55.1 & 178-
180);

Assets; Interest Receivable (50 - 54):

50. Is interest receivable recognized for the amount of interest income 
earned but not received for the accounting period, including interest 
earned on investments in interest-bearing securities? (SFFAS 1, par. 
53; OMB Bulletin 01-09, pp. 20 & 21, section 3.3);

51. Is interest receivable also recognized on outstanding accounts 
receivable and other U.S. government claims against persons and 
entities in accordance with provisions in 31 U.S.C. 3717, Interest and 
Penalty Claims?[Footnote 9] (SFFAS 1, par. 53);

52. Does interest receivable exclude interest on accounts receivable or 
investments that are determined to be uncollectible unless the entity 
actually collects interest? (SFFAS 1, par. 54; OMB Bulletin 01-09, pp. 
20 & 21, section 3.3);

53. Is interest accrued on uncollectible accounts receivable not 
disclosed until (1) the interest payment requirement has been waived by 
the federal government or (2) the related debt has been written off? 
(SFFAS 1, par. 55);

54. Is interest receivable from federal entities accounted for and 
reported separately from interest receivable from the public? (SFFAS 1, 
par. 56);

Assets; Credit Program Receivables (55 - 96):

The Federal Credit Reform Act of 1990, as amended, divides loans and 
loan guarantees into two groups: pre-1992 and post-1991. Pre-1992 
refers to direct loan obligations or loan guarantee commitments made 
prior to fiscal year 1992; post-1991 refers to direct loan obligations 
or loan guarantee commitments made after fiscal year 1991.[Footnote 10] 
(OMB Bulletin 01-09, p. 68, section 9.8, item A);

55. Is interest receivable related to pre-1992 and post-1991 direct 
loans and acquired defaulted guaranteed loans reported as a component 
of credit program receivables and related foreclosed property? (OMB 
Bulletin 01-09, p 21, section 3.3);

56. Are credit program receivables considered an entity asset if at 
least one of the following criteria is met?

a. The entity has the authority to determine the use of the funds 
collected?

b. The entity is legally obligated to use the funds to meet entity 
obligations (e.g., loans payable to Treasury). (OMB Bulletin 01-09, p. 
21, section 3.3);

57. If a loan guarantee program, which guarantees a loan, is generating 
a negative subsidy and the lender has not disbursed the loan as of the 
balance sheet date, does the entity record and include this amount as 
part of the total undelivered orders?[Footnote 11] (OMB Bulletin 01-09, 
p. 21, section 3.3);

58. Are special fund receipt accounts for negative subsidies and 
downward subsidy reestimates included in the credit reporting entity's 
financial statements? (OMB Bulletin 01-09, p. 21, section 3.3);

59. Are any assets in these special receipt fund accounts shown as 
nonentity assets that are offset by intragovernmental liabilities 
covered by budgetary resources? (OMB Bulletin 01-09, p. 21, section 
3.3);

60. Does the entity disclose that direct loan obligations and loan 
guarantee commitments made after fiscal year 1991, and the resulting 
direct loans or loan guarantees, are governed by the Federal Credit 
Reform Act of 1990, as amended? (OMB Bulletin 01-09, p. 68, section 
9.8, instruction A);

61. Are loan amounts broken out by group (pre-1992 and post-1991) and 
loan program and disclosed in a note to the financial statements? (OMB 
Bulletin 01-09, pp. 61 & 70, section 9.8, items B & C);

62. Do the notes disclose other relevant and appropriate information 
related to direct loans and loan guarantees including the following?

a. description of the characteristics of the loan program;

b. commitments to guarantee;

c. management's method for accruing interest revenue and recording 
interest receivable;

d. management's policy for accruing interest on nonperforming loans 
(OMB Bulletin 01-09, p. 69, section 9.8)?

For post-1991 direct loans and guarantees, a subsidy expense is 
recognized in the year they are disbursed. For pre-1992 direct loans 
and guarantees, a loss and liability need not be recognized until it is 
more likely than not that a loan (either direct or guaranteed) will go 
into default. (SFFAS 2, par. 24 & 39);

63. Are post-1991 direct loans disbursed and outstanding recognized as 
assets at the present value (discounted at a comparable Treasury rate) 
of their estimated net cash inflows? (SFFAS 2, par. 22 & app. B, part I 
A);

64. Is the difference between the outstanding principal of post-1991 
direct loans and the present value of their net cash inflows recognized 
as a subsidy cost allowance? (SFFAS 2, par. 22 & app. B, part I A);

65. When post-1991 guaranteed loans default, is the value of the assets 
related to defaulted guaranteed loans receivable[Footnote 12] included 
in the reported credit program receivables? (OMB Bulletin 01-09, p. 64 
& 72, section 9.8, item I);

66. When post-1991 direct loans are written off, is the unpaid 
principal removed from unpaid loans receivable and charged against the 
allowance for subsidy costs? (SFFAS 2, par. 61);

67. Are the following components of the assets that are related to 
post-1991 direct and defaulted guaranteed loans receivable disclosed by 
loan program?

a. loans receivable, gross, or defaulted guaranteed loans receivable, 
gross;

b. interest receivable;

c. estimated net realizable value of foreclosed property;

d. allowance for subsidy costs (present value)?

e. value of assets related to direct loans or defaulted guaranteed 
loans receivable, net (OMB Bulletin 01-09, pp. 61, 64, 70, & 72, 
section 9.8, items C & I);

Assets; Credit Program Receivables (55 - 96)?

Pre-1992 Direct Loans;

68. Are losses of pre-1992 direct loans obligated recognized (and a 
corresponding allowance amount set up) when it is more likely than not 
that the direct loans will not be totally collected? (SFFAS 2, par. 39 
& app. B, part II A);

69. Are allowances for uncollectible pre-1992 loans reestimated each 
year? (SFFAS 2, par. 39);

70. Are the following components of assets related to pre-1992 direct 
loans receivable disclosed by loan program?

a. loans receivable, gross;

b. interest receivable;

c. foreclosed property;

d. present value allowance[Footnote 13] (if the present value method is 
used)?

e. allowance for loan losses[Footnote 14] (if the allowance-for-loss 
method is used) (OMB Bulletin 01-09, pp. 61 & 70, section 9.8 item B);

71. Are the following components of defaulted guaranteed loans from 
pre-1992 guarantees disclosed by loan program?

a. defaulted guaranteed loans receivable, gross;

b. interest receivable;

c. the estimated net realizable value of related foreclosed property;

d. the present value allowance (if the present value method is used)?

e. the allowance for loan losses (if the allowance for loss method is 
used)?

f. value of assets related to defaulted guaranteed loans receivable, 
net of the respective allowance (OMB Bulletin 01-09, pp. 64 & 72, 
section 9.8, item H)?

A loan modification is a federal government action that directly or 
indirectly alters the estimated subsidy cost and the present value of 
outstanding direct loans or the liability of loan guarantees. A direct 
modification changes the subsidy cost by altering the terms of existing 
contracts or through the sale of direct loans. An indirect modification 
changes the subsidy costs by altering the way loans and loan guarantees 
are administered. A modification does not include subsidy cost 
reestimates, routine administrative workouts of troubled loans, and 
other actions permitted within existing contract terms. (SFFAS 2, par. 
41-44);

72. When post-1991 loans are modified, is their existing book value 
changed to an amount equal to the present value of the loans' net cash 
inflows that are projected under the modified terms from the time of 
the modification to the loans' maturity and discounted at the original 
rate? (SFFAS 2, par. 46 & app. B, part I D (4));

73. When pre-1992 loans are directly modified do they meet the 
following conditions?

a. They are transferred from the liquidating account to a financing 
account.;

b. Their book value is recorded at their post-modification value. 
(SFFAS 2, par. 47 & app. B, part II B (4));

74. Are subsequent (direct) modifications of pre-1992 loans treated as 
a modification of post-1991 loans? (SFFAS 2, par. 47);

75. When pre-1992 loans are indirectly modified do they meet the 
following conditions?

a. They are kept in a liquidating account?

b. Their bad debt allowance is reassessed and adjusted to reflect 
amounts that would not be collected due to the modification. (SFFAS 2, 
par. 47);

76. Does the entity disclose the following by program in the notes to 
the financial statements?

a. the nature of the modification of direct loans or loan guarantees;

b. the discount rate used in calculating the modification expense;

c. the basis for recognizing a gain or loss related to the modification 
(SFFAS 2, par. 56; OMB Bulletin 01-09, p. 69, section 9.8, 5th par.);

77. When post-1991 and pre-1992 loans are sold, is the sale treated as 
a direct modification if the agency did not assume sales proceeds in 
the cash flow estimates for the initial subsidy calculation? (SFFAS 2, 
par. 53 & App. B, Part I F, footnote 23);

78. Does the agency disclose the expectation that proceeds from the 
sale of its loans will differ from the reported face value of the loans 
or the value of their related assets? (OMB Bulletin 01-09, p. 69, 
section 9.8, 1st par.)?

Foreclosed property is any asset, which is assumed to be held for sale, 
that is either received in satisfaction of a loan receivable or as a 
result of payment of a claim under a guaranteed or insured loan 
(excluding commodities acquired under price support programs). Pre-1992 
foreclosed property refers to property associated with direct loans 
obligated or loan guarantees committed before October 1, 1991. Post-
1991 foreclosed property refers to property associated with direct 
loans obligated or loan guarantees committed after September 30, 1991. 
(SFFAS 3, par. 79 & 80);

79. Is post-1991 foreclosed property valued at the net present value of 
the projected future cash flows associated with the property? (SFFAS 3, 
par. 81; OMB Bulletin 01-09, p. 70, section 9.8, item C);

80. Is pre-1992 foreclosed property recorded at cost and adjusted to 
the lower of cost or net realizable value with any difference between 
cost and net realizable value carried in a valuation allowance? (SFFAS 
3, par. 81);

81. In determining net present value, does the projection of future 
cash flows include estimates of the following?

a. sales proceeds;

b. rent, management expense, and repair costs during the holding 
period;

c. selling expense (i.e., advertising and commissions) (SFFAS No. 3, 
par. 82);

82. In estimating sales proceeds for projecting the future cash flows 
associated with the property in determining net present value, has the 
entity considered its historical experience in selling property as well 
as the nature of the sale? (SFFAS 3, par. 82);

83. Were the estimated future cash flows of post-1991 foreclosed 
property or acquired loans discounted at the original (or Treasury) 
discount rate in effect at the time the underlying loan or guarantee 
was granted? (SFFAS 2, par. 57& 59; SFFAS 3, par. 83; SFFAS 19, par. 
7(e));

84. Is the net present value of post-1991 foreclosed property adjusted 
periodically to recognize both changes in the expected future cash 
flows and accrual of interest due to the passage of time? (SFFAS 3, 
par. 84);

85. Are any adjustments in the carrying amounts of post-1991 foreclosed 
property included in the presentation of "interest income" and the 
reestimate of "subsidy expense?" (SFFAS 3, par. 84);

86. For post-1991 foreclosed property, are the following true?

a. Third party claims are recorded at their net present value at the 
time of the foreclosure, using the same discount rate that applies to 
related foreclosed property?

b. Any periodic changes in net present value of the claim are reflected 
in "interest income" and "subsidy expense." (SFFAS 3, par. 87);

87. Are receipts or disbursements associated with acquiring and holding 
post-1991 foreclosed property charged or credited to foreclosed 
property? (SFFAS 3, par. 88);

88. When the entity acquires foreclosed assets in full or partial 
settlement of post-1991 direct loans or guarantees, is the present 
value of the government's claim against the borrowers reduced by the 
amount settled as a result of the foreclosure? (SFFAS 2, par. 60);

89. If a lender, debtor, or other third party has a legitimate claim to 
a post-1991 foreclosed asset, is the net present value of the estimated 
claim recognized as a special contra-valuation allowance? (SFFAS 2, 
par. 58; SFFAS 3, par. 87);

90. Is pre-1992 foreclosed property recorded at cost and adjusted, if 
necessary, to the lower of cost or net realizable value? (SFFAS 3, par. 
81 & 85);

91. Is the net realizable value based on an estimate of the market 
value of the property adjusted for any expected losses consistent with 
historical experience, abnormal market conditions, and time limitations 
as well as any other costs of the sale? (SFFAS 3, par. 85 & 86);

92. Is the estimate of market value based on one of the following 
criteria?

a. the market value of the property if an active market exists;

b. the market value of similar properties if no active market exists;

c. a reasonable forecast of expected cash flows adjusted for estimates 
of all holding costs, including any cost of capital (SFFAS 3, par. 85);

93. For pre-1992 foreclosed property, are third-party claims recorded 
at the expected amount of cash required to settle the claims? (SFFAS 3, 
par. 87);

94. If foreclosed property is not sold but placed into operation, is 
the asset removed from foreclosed property? (SFFAS 3, par. 90);

95. If reimbursement for the transfer of assets from one program to 
another is made, are the proceeds from the transfer treated in the same 
manner as a sale to a third party? (SFFAS 3, par. 90);

96. When the government acquires foreclosed assets in full or partial 
settlement of a direct or guaranteed loan (pre-1992 and post-1991), is 
the following information disclosed?

a. valuation basis for foreclosed property;

b. changes from prior-year's accounting methods, if any;

c. restrictions on the use/disposal of property;

d. balances by categories (i.e., pre-1992 and post-1991 foreclosed 
property)?

e. number of properties held and average holding period by type or 
category;

f. number of properties for which foreclosure proceedings are in 
process at the end of the period (SFFAS 3, par. 91; OMB Bulletin 01-09, 
pp. 69 & 70, section 9.8);

Assets; Cash and Other Monetary Assets (97 - 102):

Cash (including imprest funds) consists of: coins, paper currency, 
readily negotiable instruments (such as checks, money orders, and bank 
drafts), demand deposits, and foreign currencies stated in U.S. dollars 
at the exchange rate on the financial statement date. (SFFAS 1, par. 
27; OMB Bulletin 01-09, p. 20, section 3.3)?

Other monetary assets consist of other items such as gold, special 
drawing rights, and U.S. reserves in the International Monetary Fund 
(IMF). (OMB Bulletin 01-09, p. 20, section 3.3 & p.57, section 9.4, 
item C);

97. Are the components of cash and other monetary assets disclosed and 
described in a note to the financial statements? (OMB Bulletin 01-09, 
p. 20, section 3.3 & pp. 57 & 58, section 9.4)?

Entity cash is the amount of cash that the reporting entity holds and 
is authorized by law to spend. Nonentity cash is the cash that a 
federal entity collects and holds on behalf of the U.S. government or 
other entities. In some instances the entity deposits cash in its 
accounts in a fiduciary capacity for the U.S. Treasury or other 
entities. (SFFAS 1, par. 28 & 29);

98. Does cash available for agency use include petty cash and cash held 
in revolving funds that will not be transferred to the general fund? 
(OMB Bulletin 01-09, p.58, section 9.4, instruction E);

99. Is nonentity cash disclosed in the notes to the financial 
statements, separately from entity cash? (SFFAS 1, par. 29; OMB 
Bulletin 01-09, p. 17, section 3.1, p. 19, section 3.3, & pp. 57-58, 
section 9.4);

100. If cash is restricted,[Footnote 15] is the nature and reason 
disclosed? (SFFAS 1, par. 30; OMB Bulletin 01-09, p. 56, section 9.2 & 
p. 58, section 9.4);

101. Does the entity disclose any restrictions on the use or conversion 
of cash denominated in foreign currencies and the significant effects, 
if any, of changes in the exchange rate on the entity's financial 
position that occur after the end of the reporting period but before 
the issuance of financial statements? (OMB Bulletin 01-09, p. 58, 
section 9.4);

102. Is other information on cash and other monetary assets disclosed, 
as appropriate, such as the valuation rate of gold? (OMB Bulletin 01-
09, p. 58, section 9.4);

Assets; Inventory and Related Property (103 - 125):

Inventory is tangible personal property that is (1) held for sale 
including raw materials and work in process, (2) in process of 
production for sale, or (3) to be consumed in the production of goods 
for sale or in the provision of services for a fee. Inventory does not 
include other assets held for sale such as (1) stockpile materials, (2) 
seized and forfeited property, (3) foreclosed property, and (4) goods 
held under price support and stabilization programs. (SFFAS 3, par. 1; 
OMB Bulletin 01-09, p. 21, section 3.3);

103. Is inventory valued at historical cost, latest acquisition cost, 
or net realizable value? (SFFAS 3, par. 20 & 26);

104. If inventory is valued at historical cost, does that cost include 
the purchase amount and all other costs, such as transportation and 
production costs, incurred to bring the inventory into its current 
condition and location? (SFFAS 3, par. 21);

105. Are abnormal costs, such as excessive handling or rework costs, 
charged to operations for the period? (SFFAS 3, par. 21);

106. Is donated inventory valued at its fair value at the time of 
donation? (SFFAS 3, par. 21);

107. Is inventory acquired through exchange of nonmonetary assets 
(e.g., barter) valued at the fair value of the asset received at the 
time of the exchange? (SFFAS 3, par. 21);

108. For inventory acquired through exchange of nonmonetary assets, is 
any difference between the recorded amount of the asset surrendered and 
the fair value of the asset received recognized as a gain or loss? 
(SFFAS 3, par 21);

109. Are one of the following historical cost flow assumptions used to 
value inventory?

a. first-in, first out (FIFO);

b. weighted average;

c. moving average;

d. any other valuation method (such as a standard cost system) whose 
results reasonably approximate "a," "b," or "c" above (SFFAS 3, par. 
22);

110. If the latest acquisition cost method of inventory valuation is 
used, is the latest invoice price (actual cost) applied to all like 
units held, including those acquired through donation or nonmonetary 
exchange? SFFAS 3, par. 23);

111. Under the latest acquisition cost method, is the inventory 
revalued periodically (or at least by the end of the fiscal 
year)?[Footnote 16] (SFFAS 3, par. 23);

112. If unrealized holding gains/losses are recognized, is an allowance 
account established to capture these gains/losses? (SFFAS 3, par. 24);

113. Is the ending balance of this [Footnote gain/loss] allowance 
account the cumulative difference between the historical cost, based on 
estimated or actual valuation, and the latest acquisition cost of 
ending inventory? (SFFAS 3, par. 24);

114. Is the balance for the gain/loss account adjusted each time the 
inventory balance is adjusted? (SFFAS 3, par. 24);

115. Is the adjustment necessary to bring the allowance to the 
appropriate balance a component of the cost of goods sold as computed 
under the latest acquisition cost method?[Footnote 17] (SFFAS 3, par. 
24 & 25);

116. If the latest acquisition cost method is used to value inventory, 
is the reported cost of goods sold adjusted by the difference between 
the beginning and ending unrealized holding gains and losses? (SFFAS 3, 
par. 24 & 25);

117. If inventory is valued at net realizable value, does it meet the 
following criteria?

a. There is an inability to determine approximate cost?

b. There is immediate marketability at quoted prices?

c. There is unit interchangeability (e.g., petroleum reserves). (SFFAS 
3, par. 26);

118. Are inventory stocks, which are maintained because they are not 
readily available in the market or because there is more than a remote 
chance that they will eventually be needed, classified as inventory 
held in reserve for future sale, and reported in one of the following 
manners?

a. included in the inventory line item on the face of the financial 
statements with separate disclosure in the footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 27);

119. Is inventory identified as excess, obsolete, or unserviceable 
reported in one of the following manners?

a. included in the inventory line item on the face of the financial 
statements with separate disclosures in the footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 29; OMB Bulletin 01-09, p. 74, section 9.9);

120. Is excess, obsolete, and unserviceable inventory valued at its 
expected net realizable value? (SFFAS 3 par. 30);

121. When inventory is declared excess, obsolete, or unserviceable is 
the difference between the carrying amount and the expected net 
realizable value recognized as a loss (or gain)? (SFFAS 3, par. 30);

122. For excess, obsolete, or unserviceable inventory, are any 
subsequent adjustments to the inventory's net realizable value or any 
loss (or gain) upon disposal recognized as losses (or gains)? (SFFAS 3, 
par. 30);

123. When inventory is held for repair, is it valued using one of the 
following methods?

a. the allowance method (valued at the same value as a serviceable item 
and a contra-asset repair allowance account is established;

b. the direct method (valued at the same value as a serviceable item 
less estimated repair costs) (SFFAS 3, par. 32 & 33);

124. If inventory is transferred to "inventory held for repair," are 
estimated prior period repair costs either credited to the repair 
allowance (under the repair allowance method) or to the inventory 
account (under the direct method) and reported as an adjustment to 
equity? (SFFAS 3, par. 34);

125. Does the entity disclose the following about its inventory?

a. the general composition;

b. the basis for determining inventory values (including the valuation 
method and any cost flow assumptions)?

c. changes from prior years' accounting methods, if any;

d. balances for each of the following categories of inventory (unless 
otherwise presented on the financial statements):

i. inventory held for current sale;

ii. inventory held in reserve for future use;

iii. excess, obsolete, and unserviceable inventory;

iv. inventory held for repair;

e. the difference between the carrying amount of the inventory before 
identification as excess, obsolete, or unserviceable, and its expected 
net realizable value;

f. restriction on the sale of inventory;

g. the decision criteria for categorizing inventory;

h. changes in the criteria for categorizing inventory (SFFAS 3, par. 
18, 27-29, 31, 32 & 35; OMB Bulletin 01-09, pp. 74 & 75, section 9.9);

Assets; Operating Materials and Supplies (126-137):

Operating materials and supplies are tangible personal property to be 
consumed in normal operations. Excluded are (1) goods that have been 
acquired to construct real property and equipment for the entity's use 
(2) stockpile materials, (3) goods held under price stabilization 
programs, (4) foreclosed property, (5) seized and forfeited property, 
and (6) inventory. (SFFAS 3, par. 36 & OMB Bulletin 01-09, p.21, 
section 3.3);

126. Are operating materials and supplies recognized and reported as 
assets when produced or purchased? (SFFAS 3, par. 38);

127. Are operating materials and supplies valued at historical cost, 
including all appropriate purchase and production costs incurred to 
bring the items to their current condition and location? (SFFAS 3, par. 
42-43);

128. Are donated operating materials and supplies valued at their fair 
value at the time of donation? (SFFAS 3, par. 43);

129. Are operating materials and supplies acquired through exchange of 
nonmonetary assets (e.g., barter) valued at the fair value of the asset 
received at the time of the exchange? (SFFAS 3, par. 43);

130. Are operating materials and supplies acquired through exchange of 
nonmonetary assets (e.g., barter) valued at the fair value of the asset 
received at the time of exchange, and is any difference between the 
recorded amount of the asset surrendered and the fair value of the 
asset received recognized as a gain or loss? (SFFAS 3, par. 43);

131. Is one of the following historical cost flow assumptions used to 
value ending operating materials and supplies under the consumption 
method?

a. first-in, first-out (FIFO)?

b. weighted average;

c. moving average;

d. any other valuation method (such as a standard cost system) whose 
results reasonably approximate "a," "b," or "c" (SFFAS 3, par. 42 & 
44);

132. Are operating materials and supplies stocks, which are maintained 
because they are not readily available in the market or because there 
is more than a remote chance that they will eventually be needed 
(although not necessarily in the normal course of operations), 
classified as operating materials and supplies held in reserve for 
future use, and reported in one of the following manners?

a. included in the operating materials and supplies line item on the 
face of the financial statements with separate disclosure in the 
footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 45);

133. Are operating materials and supplies identified as excess, 
obsolete, or unserviceable reported in one of the following manners?

a. included in the operating materials and supplies line item on the 
face of the financial statements with separate disclosure in the 
footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 47);

134. Are excess, obsolete, and unserviceable operating materials and 
supplies valued at their estimated net realizable value? (SFFAS 3, par. 
48);

135. When operating materials and supplies are declared excess, 
obsolete, or unserviceable is the difference between the carrying 
amount before identification as excess, obsolete, or unserviceable and 
the estimated net realizable value recognized as a loss (or gain)? 
(SFFAS 3, par. 48);

136. For excess, obsolete, or unserviceable operating materials and 
supplies, are any subsequent adjustments to the operating materials and 
supplies' estimated net realizable value or any loss (or gain) upon 
disposal recognized as losses (or gains)? (SFFAS 3, par. 48);

137. Does the entity disclose the following information about its 
operating materials and supplies?

a. general composition;

b. basis for valuation (including valuation method and any cost flow 
assumptions)?

c. change from prior years' accounting methods, if any;

d. balances in each operating material and supply category[Footnote 
18];

e. the difference between the carrying amount of the operating 
materials and supplies before identification as excess, obsolete, or 
unserviceable and their estimated net realizable value;

f. restrictions on the use of materials and supplies, if any;

g. decision criteria for identifying each category to which material 
and supplies are assigned;

h. changes in the criteria for identifying the category to which the 
operating materials and supplies are assigned (SFFAS 3, par. 36, 37, 
45-47, 49, & 50; OMB Bulletin 01-09, p. 75, section 9.9);

Assets; Stockpile Materials (138-150):

Stockpile materials are strategic and critical materials held due to 
statutory requirements for use in national defense, conservation, or 
national emergencies. Not included under this category are (1) items 
held for sale or use in normal operations, (2) items held for use in 
the event of an agency's operating emergency or contingency, and (3) 
materials acquired to support market prices. (SFFAS 3, par. 51 & OMB 
Bulletin 01-09, p. 21, section 3.3);

138. Are stockpile materials recognized and reported as assets when 
acquired (i.e., recognized as assets using the consumption method)? 
(SFFAS 3, par. 52);

139. If the contract between the buyer and seller of the stockpile 
materials is silent regarding passage of the title, is title assumed to 
pass upon delivery of the goods? (SFFAS 3, par. 52);

140. Are stockpile materials valued at historical cost, including all 
appropriate purchase, transportation, and production costs incurred to 
bring the items to their current condition and location? (SFFAS 3, par. 
53);

141. Are abnormal costs, such as excessive handling or rework costs, 
charged to operations for the period? (SFFAS 3, par. 53);

142. Is one of the following historical cost flow assumptions used to 
value stockpile materials under the consumption method?

a. first-in, first-out (FIFO)?

b. weighted average;

c. moving average;

d. any other valuation method (such as a standard cost system) whose 
results reasonably approximate "a," "b," or "c" (SFFAS 3, par. 52 & 
53);

143. If stockpile materials have either suffered a permanent decline in 
value to an amount below cost or have become damaged or decayed, has 
their value been reduced to expected net realizable value? (SFFAS 3, 
par. 54);

144. Is the resultant decline in value recognized as a loss or expense 
in the period in which it occurs? (SFFAS 3, par. 54);

145. When stockpile materials are authorized to be sold, are those 
materials disclosed as stockpile materials held for sale? (SFFAS 3, 
par. 55);

146. Are the stockpile materials authorized for sale valued using the 
same basis used before they were authorized for sale? (SFFAS 3, par. 
55);

147. Is any difference between the carrying amount of the stockpile 
materials held for sale and their estimated selling price disclosed? 
(SFFAS 3, par. 55);

148. If stockpile materials are sold, is the cost removed from 
stockpile materials and reported as a cost of goods sold? (SFFAS 3, 
par. 55);

149. Is any gain (or loss) from the sale of stockpile materials 
recognized as a gain (or loss) at that time? (SFFAS 3, par. 55);

150. Does the entity disclose the following information about its 
stockpile materials?

a. general composition;

b. basis for valuing stockpile materials, including valuation method 
and any cost flow assumptions;

c. changes from prior year's accounting methods, if any;

d. restrictions on the use of the material;

e. balances in each category of stockpile material (i.e., stockpile 
materials and stockpile materials held for sale)?

f. decision criteria for grouping stockpile material as held for sale;

g. changes in criteria for categorizing stockpile materials as held for 
sale (SFFAS 3, par. 56; OMB Bulletin 01-09, pp. 75 & 76, section 9.9);

Assets; Seized Property (151-158):

Seized property includes monetary instruments, real property, and 
tangible personal property belonging to others in actual or 
constructive possession of the custodial agency. This includes illegal 
drugs, contraband, and counterfeit items seized by authorized law 
enforcement agencies (SFFAS 3, par. 59; OMB Bulletin 01-09, p. 22, 
section 3.3)?

There may be as many as three government entities involved with seized 
property: (1) the seizing agency, (2) the custodial agency, and (3) 
another agency with a "central fund" set up for financial recordkeeping 
of seizure activities. (SFFAS 3, par. 57);

151. If the central fund is other than the seizing or custodial entity, 
does the custodial entity maintain sufficient internal records to carry 
out its stewardship responsibility? (SFFAS 3, par. 60);

152. If monetary instruments are seized, are seized assets recognized 
at market value of the monetary instruments, and a corresponding 
liability equal to the seized asset value established? (SFFAS 3, par. 
61 & 65; OMB Bulletin 01-09, p. 22, section 3.3);

153. Is the existence of seized property other than monetary 
instruments disclosed in a note to the statements and accounted for in 
the entity's property management records? (SFFAS 3, par. 62);

154. Is seized property valued at its market value when seized (or as 
soon thereafter as reasonably possible if the market value cannot be 
readily determined)? (SFFAS 3, par. 63);

155. If no active market exists for the property in the general area in 
which it was seized, is a value in the principle market nearest the 
place of seizure used? (SFFAS 3, par. 63);

156. Is the valuation of property seized under the Internal Revenue 
Code based on the taxpayer's equity (market value less any third-party 
liens)? (SFFAS 3, par. 64);

157. Does the entity disclose the type of seized property in its 
custody and include the following information?

a. explanation of what constitutes a seizure and a general description 
of the composition of seized property;

b. valuation method(s)?

c. changes from prior years' accounting methods, if any;

d. analysis of change in seized property (including dollar value and 
number of seized properties) that are;

i. on hand at the beginning of the year,;

ii. seized during the year,;

iii. disposed of during the year, and;

iv. on hand at the end of the year, as well as known liens or other 
claims against the property (SFFAS 3, par. 66; OMB Bulletin 01-09, p. 
22, section 3.3; p. 76, section 9.9);

158. Does the entity also disclose the method of disposal of seized 
property, if material? (SFFAS 3, par. 66; OMB Bulletin 01-09, p. 76, 
section 9.9);

Assets; Forfeited Property (159-172):

Forfeited property consists of (a) property (i.e., monetary 
instruments, intangible property, real property, and tangible personal 
property) acquired through forfeiture proceedings, (b) property 
acquired to satisfy a tax liability, and (c) unclaimed and abandoned 
merchandise. (SFFAS 3, par. 67 & 68 & OMB Bulletin 01-09, p. 22, 
section 3.3);

159. When a forfeiture judgment is obtained for seized monetary 
instruments:

a. Are they reclassified as forfeited monetary instruments at the 
current market value?;

b. Is revenue recognized in an amount equal to the value of the 
monetary asset?;

c. Is the liability associated with the seized monetary instrument 
classification removed? (SFFAS 3, par. 69);

160. When a forfeiture judgment is obtained for real, tangible, and 
intangible property:

a. Is the property recorded as an asset at its fair value at the time 
of forfeiture?

b. Is an allowance account (contra-asset account) established for liens 
or claims from third party claimants against forfeited property?

c. Is offsetting deferred revenue recognized? (SFFAS 3, par. 70);

161. For forfeited property that cannot be sold due to legal 
restrictions, but may be either donated or destroyed, does the entity 
in lieu of recognizing financial value make the required disclosures 
concerning the composition, valuation, and disposition of the property? 
(SFFAS 3, par. 71 & 78);

162. Is revenue from the sale of forfeited property recognized when 
sold? (SFFAS 3, par. 72);

Assets; Forfeited Property (159-172):

Forfeited property not held for sale may be placed into official use, 
transferred to another federal agency, distributed to a state or local 
law enforcement agency, or distributed to a foreign government. (SFFAS 
3, par. 73);

163. When a determination is made that forfeited property will not be 
held for sale, but distributed in one of the manners described above, 
is the property reclassified as forfeited property held for donation or 
use? (SFFAS 3, par. 74);

164. Is revenue associated with property not disposed of through sale 
recognized upon approval of distribution and the previously established 
deferred revenue reversed? (SFFAS 3, par. 74);

165. Is a distinction maintained in the entity's accounting reports 
between revenue arising from the sale of forfeited property and revenue 
arising from forfeited property being transferred, donated, or placed 
into official use? (SFFAS 3, par. 72-75 & Table 1);

166. Is property acquired by the government to satisfy a taxpayer's 
liability recorded when title to the property passes to the federal 
government, and is a credit made to the related account receivable? 
(SFFAS 3, par. 76);

167. Is the property acquired in satisfaction of a taxpayer's liability 
valued at its market value less any third party liens? (SFFAS 3, par. 
76);

168. Upon sale of forfeited property acquired in satisfaction of a 
taxpayer's liability, is revenue recognized in the amount of the sale 
proceeds, and are the property and third party liens removed from the 
accounts? (SFFAS 3, par. 76);

169. Is unclaimed and abandoned merchandise recorded with an offsetting 
deferred revenue when statutory and/or regulatory requirements for 
forfeiture have been met? (SFFAS 3, par. 77);

170. Is unclaimed and abandoned merchandise valued at its market value? 
(SFFAS 3, par. 77);

171. Upon the sale of unclaimed and abandoned merchandise, is revenue 
recognized in the amount of the sale proceeds, and the merchandise and 
the deferred revenue removed from the accounts? (SFFAS 3, par. 77);

172. Does the entity disclose the following information about forfeited 
property?

a. composition of the property;

b. valuation method(s)?

c. restrictions on the use or disposition of forfeited property;

d. changes from prior year's accounting methods, if any;

e. analysis of the changes in forfeited property by dollar amount and 
number of forfeitures that includes:

i. forfeitures on hand at the beginning of the year;

ii. additions;

iii. disposals and method of disposition;

iv. forfeitures on hand at the end of the year;

f. if available, an estimate of the value of property or funds to be 
distributed to other federal, state, and local agencies in future 
reporting periods (SFFAS 3, par. 78; OMB Bulletin 01-09, p. 76, section 
9.9);

Assets; Goods Held Under Price Support and Stabilization Program (173-
186):

Goods acquired under price support and stabilization programs (i.e., 
commodities) are items of commerce or trade (usually farm commodities) 
having an exchange value. Producers of the goods (1) are either given 
nonrecourse loans under which they can, at their option, repay the loan 
with interest or surrender their commodity pledged as collateral for 
the loan or (2) may enter into purchase agreements that allow the 
producer of the option to sell commodities to the government (the 
Commodity Credit Corporation) at the price support rate. (SFFAS 3, par. 
92, 93, & 94);

173. Are nonrecourse loans recognized as assets when the loan principal 
is disbursed and recorded at the amount of the loan principal? (SFFAS 
3, par. 96);

174. Is interest accrued on nonrecourse loans? (SFFAS 3, par. 96);

175. When the entity has entered into a purchase agreement and there is 
an expected loss:

a. Is a loss[Footnote 19] recognized if it is probable that a loss has 
been incurred on purchase agreements outstanding and the amount of the 
loss can be reasonably measured?

b. Is a corresponding liability recognized? (SFFAS 3, par. 97 & 103);

176. If the contingent loss arising from a purchase agreement is not 
recognized because it is less than probable or is not reasonably 
measurable, is the contingent loss disclosed if it is at least 
"reasonably possible that a loss may occur?" (SFFAS 3, par. 98);

177. When commodities are acquired to satisfy a nonrecourse loan or 
purchase agreement, are they recognized and reported as assets at the 
lower of cost or net realizable value? (SFFAS 3, par. 99 & 104);

178. When commodities acquired to satisfy the terms of a nonrecourse 
loan or purchase agreement are sold:

a. Are revenues recognized?

b. Is the carrying amount of the commodities removed from the asset 
account and reported as a cost of goods sold? (SFFAS 3, par. 100);

179. When commodities are held for purposes other than sale, is the 
carrying amount reported as an expense and removed from the commodity 
asset account upon transfer? (SFFAS 3, par. 101);

180. Are all nonrecourse loans recorded at their face amounts, and is a 
valuation allowance set up to recognize losses on such loans when it is 
"more likely than not" (i.e., more than a 50 percent chance) that loans 
will not be totally collected? (SFFAS 3, par. 102);

181. Is this allowance reestimated on each financial reporting date? 
(SFFAS 3, par. 102);

182. Does the cost for the commodities acquired through a nonrecourse 
loan settlement include the following amounts?

a. loan principal (excluding interest);

b. processing and packaging costs incurred after acquisition;

c. other costs (e.g., transportation) incurred in taking title to the 
commodity (SFFAS 3, par. 105);

183. Does the cost for commodities acquired though a purchase agreement 
include the following amounts?

a. the unit price agreed upon in the purchase agreement multiplied by 
the number of units purchased;

b. other costs incurred in taking title to the commodity (SFFAS 3, par. 
106);

184. Is any adjustment necessary to reduce the carrying amount of the 
acquired commodities to the lower of cost or net realizable value 
recognized as a loss on farm price support in the current period and 
recorded in a commodity valuation allowance? (SFFAS 3, par. 107);

185. Are recoveries of losses recognized up to the point of any 
previously recognized losses on the commodities, and is the commodity 
valuation allowance reduced accordingly in the current period? (SFFAS 
3, par. 107);

186. Is the following information related to goods held under price 
support and stabilization programs disclosed?

a. basis for valuing commodities including valuation method and cost 
flow assumptions (e.g., FIFO, weighted average, moving average, 
specific identification)?

b. changes from prior years' accounting methods, if any;

c. restrictions on the use, disposal, or sale of commodities;

d. analysis of the changes in dollar amount and volume of commodities, 
including those;

i. on hand at the beginning of the year;

ii. acquired during the year;

iii. disposed of during the year by method of disposition;

iv. on hand at the end of the year;

v. on hand at year's end and estimated to be donated or transferred 
during the coming period;

vi. received as a result of surrender of collateral related to 
nonrecourse loans outstanding;

vii. dollar value and volume of purchase agreement commitments (SFFAS 
3, par. 108 & 109; OMB Bulletin 01-09, pp. 76 & 77, section 9.9);

Assets; General Property, Plant, & Equipment (Net) (187-233):

General property, plant, and equipment (PP&E) are any property, plant, 
and equipment used in providing goods or services. (SFFAS 6, par. 23);

187. Has the entity established, disclosed, and consistently followed 
appropriate capitalization thresholds for property, plant, and 
equipment (PP&E) suitable to its financial and operational conditions? 
(SFFAS 6, par. 13);

188. Does the entity follow a policy that ensures its PP&E consists of 
tangible assets, including land, that meet the following criteria?

a. have estimated useful lives of 2 years or more;

b. are not intended for sale in the ordinary course of operations;

c. are acquired or constructed with the intention of being used or 
being available for use by the entity (SFFAS 6, par. 17);

189. Does PP&E consist of the following items?

a. assets acquired through capital leases, including leasehold 
improvement;

b. property owned by the reporting entity in the hands of others (e.g., 
state and local governments, colleges and universities, federal 
contractors)?

c. land rights (SFFAS 6 par. 18)?

Capital leases are leases that transfer substantially all the benefits 
and risks of ownership to the lessee. Operating leases are leases in 
which the federal entity does not assume the risks of ownership of 
PP&E. Multiyear service contracts and multiyear purchase agreements for 
expendable commodities are not capital leases. (SFFAS 6, par. 20, 
footnote 22; SFFAS 5, par. 43);

190. Does the entity classify a lease as a capital lease if at its 
inception the lease meets one or more of the following criteria?

a. the lease transfers ownership of the property to the lessee by the 
end of the lease term;

b. the lease contains an option to purchase the leased property at a 
bargain price;

c. the lease term is equal to or greater than 75 percent of the 
estimated economic life of the leased property, and the beginning of 
the lease term does not fall within the last 25 percent of the total 
estimated economic life of the property;

d. the present value of rental and other minimum lease payments, 
excluding that portion of the payments representing executory cost, 
equals or exceeds 90 percent of the fair value of the leased property, 
and the beginning of the lease term does not fall within the last 25 
percent of the total estimated economic life of the property (SFFAS 6, 
par. 20; SFFAS 5, par. 43);

191. Does the general PP&E asset line item exclude the following items?

a. items held in anticipation of physical consumption such as operating 
materials and supplies;

b. items the federal entity has a reversionary interest in;

c. heritage assets (except multiuse heritage assets)[Footnote 20];

d. stewardship land (i.e., land not included in general PP&E) (SFFAS 6, 
par. 19, 21, 57, 58, & 68; SFFAS 16, par. 6);

192. In determining the level at which the entity categorizes its PP&E, 
has the entity considered the following factors?

a. the cost of maintaining different accounting methods for property 
and the usefulness of the information;

b. the diversity of the PP&E (e.g., useful lives, value, alternative 
uses);

c. the programs being served by the PP&E;

d. future disposition of the PP&E (SFFAS 6, par. 22);

193. Does the entity categorize an asset under general PP&E if it has 
one or more of the following characteristics?

a. it could be used for alternative purposes (e.g., by other federal 
programs, state or local governments, nongovernmental entities) but is 
used to produce goods or services or to support the mission of the 
entity;

b. it is used for business-type activities[Footnote 21];

c. it is used by entities in activities whose costs can be compared to 
those of other entities performing similar activities (e.g., federal 
hospital services in comparison to other hospitals) (SFFAS 6, par. 23; 
OMB Bulletin 01-09, p. 22, section 3.3);

194. Is PP&E of entities operating as business-type activities 
categorized as general PP&E whether or not it meets the definition of 
other PP&E categories (e.g., heritage assets)? (SFFAS 6, par. 24; OMB 
Bulletin 01-09, p. 22, section 3.3);

195. Are land and land rights specifically acquired for or in 
connection with other general PP&E included in general PP&E? (SFFAS 6, 
par. 25; OMB Bulletin 01-09, p. 22 & 23, section 3.3);

196. Is all general PP&E recorded at cost? (SFFAS 6, par. 26);

197. Does the cost of general PP&E include all costs incurred to bring 
the PP&E to a form and location suitable for its intended use, such as 
the following?

a. amounts paid to vendors;

b. transportation charges to the point of initial use;

c. handling and storage costs;

d. labor and other direct or indirect production costs (for assets 
produced or constructed)?

e. costs of engineering, architectural, and other outside services for 
designs, plans, specifications, and surveys;

f. acquisition and preparation costs of buildings and other facilities;

g. an appropriate share of the cost of the equipment and facilities 
used in construction work;

h. fixed equipment and related installation costs required for 
activities in a building or facility;

i. direct costs of inspection, supervision, and administration of 
construction contracts and construction work;

j. legal and recording fees and damage claims;

k. fair value of facilities and equipment donated to the government;

l. material amounts of interest costs paid (SFFAS 6, par. 26);

198. Is the cost of general PP&E acquired under a capital lease equal 
to the amount recognized as a liability[Footnote 22] for the capital 
lease at its inception? (SFFAS 6, par. 29);

199. Is the cost of general PP&E acquired through donation, will, or 
judicial process, excluding forfeiture, capitalized at estimated fair 
value at the time acquired by the government? (SFFAS 6, par. 30);

200. Is general PP&E transferred from other federal entities 
capitalized at the book value recorded by the transferring entity? 
(SFFAS 6, par. 31);

201. Is general PP&E transferred from other federal entities 
capitalized at the fair value at the time of the transfer, if the 
receiving entity cannot reasonably ascertain the book value of the PP&E 
being transferred? (SFFAS 6, par. 31);

202. If general PP&E is acquired through exchange between a federal 
entity and a nonfederal entity, is it capitalized at the fair value of 
the PP&E surrendered at the time of the exchange? (SFFAS 6, par. 32);

203. If general PP&E is acquired through exchange between a federal 
entity and a nonfederal entity and the fair value of the PP&E is more 
readily determinable than that of the PP&E surrendered, is the acquired 
general PP&E capitalized at it's fair value? (SFFAS 6, par. 32);

204. If general PP&E is acquired through exchange between a federal 
entity and a nonfederal entity and neither the fair value of the PP&E 
acquired or surrendered is determinable, is the acquired general PP&E 
capitalized at the book value of the PP&E surrendered? (SFFAS 6, par. 
32);

205. If cash is included in an exchange of general PP&E between a 
federal entity and a nonfederal entity, is the cost of PP&E acquired 
increased by the amount of cash surrendered or decreased by the amount 
of cash received? (SFFAS 6, par. 32);

206. For general PP&E acquired through exchange between a federal 
entity and a nonfederal entity, is any difference between the net 
recorded amount of the PP&E surrendered and the cost of the PP&E 
acquired recognized as a gain or loss? (SFFAS 6, par. 32);

207. Is PP&E recognized when title passes to the acquiring entity or 
when PP&E is delivered to the entity or to an agent of the entity? 
(SFFAS 6, par. 34);

208. If general PP&E is under construction, is it recorded as 
construction work in process until it is placed into service and 
transferred to general PP&E? (SFFAS 6, par. 34)?

Depreciation expense is calculated through the systematic and rational 
allocation of the cost of general PP&E, less its estimated salvage or 
residual value over its estimated useful life. (SFFAS 6, par. 35, OMB 
Bulletin 01-09, p. 23, section 3.3);

209. Is depreciation expense recognized on all general PP&E, except 
land and land rights of unlimited duration? (SFFAS 6, par. 35);

210. Do estimates of useful life of general PP&E consider such factors 
as physical wear and tear and technological change? (SFFAS 6, par. 35);

211. Are changes in estimated useful life or salvage and residual value 
of general PP&E accounted for in the period of change and future 
periods? (SFFAS 6, par. 35);

212. Is the depreciation method systematic, rational, and best 
reflective of the use of the PP&E, including the use of a composite or 
a group methodology[Footnote 23] whereby the costs of PP&E are 
allocated using the same allocation rate? (SFFAS 6, par. 35; SFFAS 23, 
par. 9(f));

213. Are depreciation and amortization expenses accumulated in contra-
asset accounts? (SFFAS 6, par. 36);

214. Are costs that either extend the useful life of existing general 
PP&E or enlarge or improve its capacity capitalized and depreciated/
amortized over the remaining useful life of the asset? (SFFAS 6, par. 
37);

215. When general PP&E is disposed of, retired, or removed from 
service, is the asset removed from the asset accounts along with the 
associated accumulated depreciation/amortization? (SFFAS 6, par. 38);

216. Are the differences between the book value of the PP&E and the 
amounts realized, recognized as a gain or loss in the period that the 
general PP&E is disposed of, retired or removed from service? (SFFAS 6, 
par. 38);

217. Is general PP&E removed from general PP&E accounts along with 
associated accumulated depreciation/amortization if prior to disposal, 
retirement, or removal from service, it no longer provides service in 
the operations of the entity? (SFFAS 6, par. 39);

218. Is such PP& E that has been removed from the asset accounts 
recorded in an appropriate asset account at its expected net realizable 
value? (SFFAS 6, par. 39);

219. Is any difference in the book value and its expected net 
realizable value of the about-to-be disposed, retired, or removal-from-
service PP&E recognized as a gain or loss in the period of adjustment? 
(SFFAS 6, par. 39);

220. Is the expected net realizable value of such PP&E assets adjusted 
at the end of each accounting period, and are any further adjustments 
in value recognized as a gain or loss? (SFFAS 6, par. 39);

221. If historical cost information for existing general PP&E has not 
been maintained, are cost estimates based on either of the following 
costs?

a. the cost of similar assets at the time of acquisition;

b. the current cost of similar assets discounted for inflation since 
the time of acquisition (SFFAS 6, par. 40);

222. For general PP&E previously considered national defense PP&E, is 
the initial capitalization amount for these assets the initial 
historical cost for the items including any major improvements or 
modifications? (SFFAS 23, par. 10);

223. For general PP&E previously considered national defense PP&E where 
obtaining initial historical cost is not practical, is estimated 
historical cost used, based on one of the following alternatives?

a. current replacement cost of similar items, deflated through the use 
of price-level indexes to the acquisition year or estimated acquisition 
year if the actual year is unknown;

b. other information indicating amount expended, such as budget, 
appropriation, or engineering documents and other reports reflecting 
amounts expended;

c. other reasonable approaches for estimating historical cost[Footnote 
24] (SFFAS 23, par. 12 & 13);

224. For general PP&E previously considered national defense PP&E that 
was in service upon implementation of SFFAS 23, are cleanup cost 
liabilities adjusted as needed?[Footnote 25] (SFFAS 23, par. 15);

225. Is accumulated depreciation/amortization recorded based on one of 
the following methods?

a. the estimated cost of the PP&E and the number of years the PP&E has 
been in use relative to its estimated useful life;

b. the PP&E's estimated net remaining cost[Footnote 26] and the 
depreciation/amortization charged over the remaining life based on that 
net remaining cost;

c. a composite or a group methodology whereby the costs of PP&E are 
allocated using the same allocation rate (SFFAS 6, par. 41; SFFAS 23, 
par. 9(f));

226. If general PP&E would have been substantially depreciated or 
amortized had it been recorded upon acquisition, does the entity weigh 
materiality and cost-benefit in considering either of the following 
alternatives?

a. record only improvements made during the period beyond the initial 
expected useful life of general PP&E;

b. make an aggregate entry for whole classes of PP&E (e.g., entire 
facilities rather than a building-by-building estimate). (SFFAS 6, par. 
42);

227. In recording existing general PP&E, is the difference in amounts 
added to asset and contra-accounts credited (or charged) to the net 
position of the entity, with the amount of the adjustment shown as a 
"prior period adjustment" in the Statement of Changes in Net Position? 
(SFFAS 6, par. 43);

228. In recording existing general PP&E previously identified as 
national defense PP&E, is the difference in amounts added to asset and 
contra accounts reported as a "change in accounting principle" and 
reflected as an adjustment to the beginning balance of cumulative 
results of operations in the statement of changes in net position, for 
the period the change is made? (SFFAS 23, par. 10 & 16);

229. Does the entity make the following minimum disclosures about its 
general PP&E?

a. the cost, associated accumulated depreciation, and book value by 
major class (e.g., building and structures, fixtures, equipment)?

b. the estimated useful lives for each major class;

c. the method(s) of depreciation for each major class;

d. capitalization threshold(s) including any changes in thresholds(s) 
during the period;

e. restrictions on the use or convertibility of general PP&E (SFFAS 6, 
par. 45; OMB Bulletin 01-09, p. 77, section 9.10)?

Property, plant, and equipment are classified as heritage assets if 
they have (1) historical or natural significance; (2) cultural, 
educational, or artistic importance; or (3) significant architectural 
characteristic. (SFFAS 6, par. 57)?

Multiuse heritage assets are heritage assets that are predominately 
used in general government operations (e.g., buildings such as the main 
Treasury building, which is used as an office building). (SFFAS 16, 
par. 6; OMB Bulletin 01-09, p. 23, section 3.3);

230. If the predominant use of the heritage asset(s) is in general 
government operations, is the acquisition, betterment, or 
reconstruction of the asset(s) capitalized as general PP&E and 
depreciated over its useful life? (SFFAS 16, par. 6 & 9; OMB Bulletin 
01-09, p. 23, section 3.3; p. 98, section 10.2A);

231. Does the entity also include a footnote disclosure explaining that 
"physical quantity" information for the multiuse heritage assets is 
included in supplemental stewardship reporting for heritage assets? 
(SFFAS 16, par. 9; OMB Bulletin 01-09, p. 23, section 3.3; p. 98, 
section 10.2A);

232. Are multiuse heritage assets acquired through donation or devise 
recognized as general PP&E at the assets' fair value? (SFFAS 16, par. 
11);

233. For multiuse heritage assets acquired through donation or devise, 
are the assets fair value also recognized as "nonexchange revenue," as 
defined in SFFAS 7? (SFFAS 16, par. 11);

Assets; Software (234-262):

Software includes the application and operating system programs, 
procedures, rules, and any associated documentation pertaining to the 
operation of a computer system or program?

"Internal use software" is software that is purchased from commercial 
vendors "off the shelf," internally developed, or contractor-developed 
solely to meet the entity's internal or operational needs. (SFFAS 10, 
par. 8);

234. Does the entity capitalize the cost of software when such software 
meets the following criteria?

a. specifically identifiable;

b. determinate life of 2 years or more;

c. not intended for sale in the ordinary course of operations;

d. acquired or developed with the intention of being used by the 
entity;

e. meets the criteria for general property, plant, and equipment in 
that it is used in providing goods and services (SFFAS 6, par. 17; 
SFFAS 10, par. 15 & 38);

235. Does the capitalized cost of internally developed software include 
the full cost (i.e., direct and indirect costs) incurred during the 
software development stage? (SFFAS 10, par. 16);

236. Are capitalized internally developed software development costs 
limited to costs incurred after the following steps have been taken?

a. management authorizes and commits to a computer software project and 
believes that it is more likely than not that the project will be 
completed and the software will be used to perform the intended 
function with an estimated service life of 2 years or more;

b. the conceptual formulation, design, and testing of possible software 
project alternatives (i.e., preliminary design stage) have been 
completed. (SFFAS 10, par. 16);

237. Do software capitalization costs include costs for new 
software[Footnote 27] and documentation manuals? (SFFAS 10, par. 17);

238. Do the capitalized costs for commercial off-the-shelf (COTS) 
software include the amount paid to the vendor? (SFFAS 10, par. 18);

239. Do the capitalized costs for contractor-developed software include 
the amount paid to a contractor to design, program, install, and 
implement the software? (SFFAS 10, par. 18);

240. Does the entity capitalize material internal costs incurred to 
implement the COTS or contractor-developed software and otherwise make 
it ready for use? (SFFAS 10, par. 18);

241. Does the entity expense as incurred all data conversion costs for 
internally developed, contractor-developed, or COTS software as well as 
the cost to develop or obtain software that allows for access or 
conversion of existing data to the new software? (SFFAS 10, par. 19);

242. Does the entity expense costs incurred after the completion of 
final acceptance testing? (SFFAS 10, par. 20);

243. Does the entity treat software that serves both internal uses and 
stewardship purposes[Footnote 28] as internal use software and 
capitalize it to the extent such software meets criteria for general 
PP&E? (SFFAS 10, par. 21);

244. Is computer software that is integrated into and necessary to 
operate general PP&E,[Footnote 29] rather than perform an application, 
considered part of the PP&E of which it is an integral part, and is it 
capitalized and depreciated accordingly? (SFFAS 10, par. 22);

245. If the entity purchased software as part of a package of products 
and services, does it use a reasonable estimate of the relative fair 
value of the individual elements in allocating the cost as 
capitalizable or noncapitalizable (i.e., expense) elements? (SFFAS 10, 
par. 23);

246. If the entity purchased software as part of a package of products 
and services, does it expense software costs that are not susceptible 
to allocation between maintenance and relatively minor enhancements? 
(SFFAS 10, par. 23);

247. Has the entity established capitalization thresholds for its 
internal-use software including bulk purchases of software programs and 
modules or components of a total software system? (SFFAS 10, par. 24);

248. Does the entity capitalize the acquisition cost of enhancements to 
existing internal-use software, as well as related modules, when it is 
more likely than not that they will result in significant additional 
capabilities? (SFFAS 10, par. 25);

249. Does the entity expense, in the period incurred, the cost of minor 
enhancements resulting from ongoing systems maintenance as well as the 
purchase of enhanced versions of software for a minimal charge? (SFFAS 
10, par. 26);

250. Are costs incurred solely to repair a design flaw or to perform 
minor upgrades that may extend the useful life of the software without 
adding capabilities expensed?[Footnote 30] (SFFAS 10, par. 27);

251. Does the entity recognize a loss upon impairment of computer 
software if either of these postimplementation/operational conditions 
apply?

a. the software is no longer expected to provide substantive service 
potential and will be removed from service;

b. a significant reduction occurs in the capabilities, functions, or 
uses of the software (or module thereof) (SFFAS 10, par. 28 & 29);

252. If impaired software is to remain in use, is the loss due to 
impairment measured as the difference between the book value and either 
of the following amounts?

a. the cost to acquire software that would perform similar remaining 
functions (i.e., unimpaired functions)?

b. the portion of book value attributable to the remaining functional 
elements of the software (SFFAS 10, par. 29);

253. If the loss due to impairment cannot be determined, is the book 
value of the software amortized over the remaining useful life of the 
software? (SFFAS 10, par. 29);

254. If impaired software is to be removed from use, is the loss due to 
impairment measured as the difference between the book value and any 
net realizable value (NRV)? (SFFAS 10, par. 30);

255. In situations of impaired software to be removed from use, does 
the entity transfer the NRV, if any, to an appropriate asset account 
until such time as the software is disposed of and the NRV realized? 
(SFFAS 10, par. 30);

256. If the entity's managers conclude that it is no longer "more 
likely than not" that developmental software or a module thereof will 
be completed and placed in service, is the accumulated book value or 
the balance in a work in process account, if applicable, reduced to 
reflect the expected NRV and a loss recognized? (SFFAS 10, par. 31);

257. Does the entity amortize capitalized internal use software 
systematically and rationally over the estimated useful life of the 
software? (SFFAS 10, par. 32);

258. Does amortization of each module or component of a software 
project begin when that module or component has been successfully 
tested? (SFFAS 10, par. 33);

259. If the use of a module is dependent on the completion of another 
module(s), does the amortization begin only when both that module and 
the other module(s) have successfully completed testing? (SFFAS 10, 
par. 33);

260. Are additions to the book value or changes in useful life of 
capitalized software treated prospectively (i.e., during the period of 
change and future periods only) when the software is amortized? (SFFAS 
10, par. 34);

261. When the entity replaces existing internal-use software with new 
software, is the unamortized cost of the old software expensed when the 
new software has successfully completed testing? (SFFAS 10, par. 34);

262. Does the entity disclose, if material, the following information 
regarding its capitalized software?

a. the cost, associated amortization, and book value;

b. the estimated useful life for each major class of software;

c. the method(s) of amortization (SFFAS 10, par. 35; SFFAS 6, par. 45);

Assets; Other Assets (263-268):

263. Does the entity include under the "other" assets category assets 
that are not reported in a separate category on the face of the balance 
sheet? (OMB Bulletin 01-09, p. 23, section 3.3);

264. Are other assets listed and described in a note to the financial 
statements and broken out by major homogenous components and 
intragovernmental versus other (nonfederal) entity assets)? (OMB 
Bulletin 01-09, p. 78, section 9.11)?

Advances are cash outlays made by a federal entity to its employees, 
contractors, grantees, or others to cover the recipient's anticipated 
expenses or as advance payments for the costs of goods and services 
acquired by an entity. (SFFAS 1, par. 57 & OMB Bulletin 01-09, p. 23, 
section 3.3)?

Prepayments are payments made by a federal entity to cover certain 
periodic expenses before those expenses are incurred (SFFAS 1, par. 58; 
OMB Bulletin 01-09, p. 23, section 3.3)?

Progress payments on work in progress are not included in advances and 
prepayments (OMB Bulletin 01-09, p. 23, section 3.3);

265. Are advances and prepayments recorded as assets and disclosed in 
the notes to the financial statements? (SFFAS 1, par. 59; OMB Bulletin 
01-09, p. 23, section 3.3);

266. Are amounts of advances or prepayments that are subject to a 
refund transferred to accounts receivable? (SFFAS 1, par. 59);

267. Are advances and prepayments paid out reported separately as 
assets and not netted against the liability for advances and 
prepayments that the entity received? (SFFAS 1, par. 60);

268. Are advances and prepayments that are made to federal entities 
accounted for and reported separately from those made to nonfederal 
entities? (SFFAS 1, par. 61);

Liabilities; Liabilities in General (269-272):

Liabilities of the federal agencies are reported under two major 
categories: (1) liabilities covered by budgetary resources[Footnote 31] 
and (2) liabilities not covered by budgetary resources.[Footnote 32] 
Within each of these two categories, liabilities are classified as (1) 
intragovernmental liabilities, which are amounts owed to other federal 
entities or (2) governmental liabilities, which are amounts owed to 
nonfederal entities by the federal government or an entity within the 
federal government. (SFFAS 1, par. 21; SFFAS 5, footnote 1 in summary; 
OMB Bulletin 01-09, p. 24, section 3.4 & pp. 78 & 79, section 9.12);

269. Are liabilities covered by budgetary resources and liabilities not 
covered by budgetary resources combined on the face of the balance 
sheet? (OMB Bulletin 01-09, p. 17, section 3.1, p. 24, section 3.4 & 
pp. 78 & 79, section 9.12);

270. Are the amounts and types of liabilities not covered by budgetary 
resources disclosed? (SFFAS1, par. 80 & 86; OMB Bulletin 01-09, p. 17, 
section 3.1 & p. 24, section 3.4);

Liabilities; Liabilities in General (269-272):

271. Does the federal entity recognize a liability for 
probable[Footnote 33] and measurable[Footnote 34] future outflows or 
other sacrifices of resources arising from one or more of the following 
events?

a. past exchange transactions;

b. government-related events, such as a federal entity accidentally 
causing damage to private property;

c. government-acknowledged events, such as natural disasters, for which 
the government has taken formal responsibility for the related costs;

d. nonexchange transactions that, according to current law and 
applicable policy, are unpaid amounts due as of the reporting date 
(SFFAS 5, par. 19-34; OMB Bulletin 01-09, p. 23, section 3.4);

272. Are liabilities recognized when incurred regardless of whether 
they are covered by available budgetary resources (including those 
liabilities related to appropriations canceled under subchapter IV of 
chapter 15 of title 31, United States Code (closing accounts)? (OMB 
Bulletin 01-09, p. 24, section 3.4);

Liabilities; Accounts Payable and Interest Payable (273-280):

Accounts payable are amounts owed by a federal entity for goods and 
services received from, progress in contract performance made by, and 
rents due to other entities. (SFFAS 1, par. 74; OMB Bulletin 01-09, p. 
24, section 3.4);

273. Do accounts payable exclude amounts related to ongoing continuous 
expenses, such as salary and related benefits expense, which are 
classified as other current liabilities? (SFFAS 1, par. 75);

274. Are (intragovernmental) accounts payable owed to other federal 
agencies reported separately from those owed to the public? (SFFAS 1, 
par. 76; OMB Bulletin 01-09, p. 18, section 3.2 & p. 24, section 3.4);

275. When an entity accepts title to goods, whether the goods are 
delivered or in transit, does the entity recognize a liability for the 
unpaid cost of goods? (SFFAS 1, par. 77);

276. If invoices for goods, for which the entity has accepted the 
title, are not available, does the entity estimate the amount owed? 
(SFFAS 1, par. 77);

277. For facilities or equipment constructed or manufactured by 
contractors or grantees according to agreements or contract 
specifications, are amounts recorded as payable based on an estimate of 
work completed under the contract or the agreement in accordance with 
the federal entity's engineering and management evaluation of actual 
performance progress and incurred costs? (SFFAS 1, par. 78 & 79);

278. Does the entity disclose accounts payable not covered by budgetary 
resources? (SFFAS 1, par. 80; OMB Bulletin 01-09, p. 24, section 3.4; 
p. 78, section 9.12);

279. Is interest incurred but unpaid on borrowed funds, late payments, 
and refunds recognized as interest payable and reported as a liability 
at the end of each period? (SFFAS 1, par. 81; OMB Bulletin 01-09, p. 
24, section 3.4);

280. Is interest payable to federal entities reported separately from 
interest payable to the public? (SFFAS 1, par. 82);

Liabilities; Liabilities for Loan Guarantees (281-294):

A loan guarantee is any guarantee, insurance (but not deposit 
insurance), or other pledge with respect to the payment of all or part 
of the principal or interest on any debt obligation of a nonfederal 
borrower to a nonfederal lender. (SFFAS 2, app. C)?

The Federal Credit Reform Act of 1990 requires federal entities to 
estimate and budget for the costs arising from default of guaranteed 
loans made after fiscal year (FY) 1991 (i.e., post 1991). (SFFAS 2, 
par. 7);

281. Is the present value of estimated net cash outflows from post-1991 
(i.e., committed after September 30, 1991) loan guarantees recognized 
as a liability? (SFFAS 2, par. 7 & 23);

282. Does the entity disclose by loan program the face value of 
guaranteed loans outstanding and the amount of outstanding principal 
guaranteed? (SFFAS 2, par. 23; OMB Bulletin 01-09, pp. 60, 65, & 72, 
section 9.8, item J);

283. Does the entity disclose by loan program the estimated 
liabilities[Footnote 35] arising from post-1991 loan guarantees? (OMB 
Bulletin 01-09, pp. 60, 61, 65, & 72, section 9.8, item K);

284. Is a liability for a pre-1992 (i.e., committed before October 1, 
1991) loan guarantee recognized when it is more likely than not that 
the loan guarantee will require a future cash outflow to pay a default 
claim? (SFFAS 2, par. 39 & app. B, part IV A);

285. Does the entity disclose by loan program the estimated liabilities 
arising from pre-1992 loan guarantees? (OMB Bulletin 01-09, p. 25, 
section 3.4; pp. 60 & 72, section 9.8, item K);

286. Are the liabilities for the pre-1992 loan guarantees reestimated 
each year as of the date of the financial statements? (SFFAS 2, par. 
39);

287. Does the entity disclose, by loan program, whether pre-1992 loan 
guarantees are reported on a present-value basis[Footnote 36] or under 
the allowance-for-loss method?[Footnote 37] (OMB Bulletin 01-09, p. 68, 
section 9.8, item A, 4th par.);

288. When the total loan guarantee liability for all of the credit 
programs is negative, is this reported as an asset? (OMB Bulletin 01-
09, p. 25, section 3.4);

289. If loan guarantee liability is the result of both positive and 
negative amounts of the various components, is the total shown as a 
liability, and are the negative components (of the loan guarantee 
liability) disclosed? (OMB Bulletin 01-09, p. 25, section 3.4);

290. When post-1991 loan guarantees are modified, is the existing book 
value of the related liability changed to an amount equal to the 
present value of net cash outflows that are projected under the 
modified terms from the time of the modification to the loan's 
maturity, and discounted at the original discount rate?[Footnote 38] 
(SFFAS 2, par. 50 & app. B, part III D(4); SFFAS 19, par. 7(d));

291. When pre-1992 loan guarantees are directly modified, does the 
following occur?

a. the loan guarantees are transferred from the liquidating account to 
a financing account;

b. the existing book value of the liability of the modified loan 
guarantees is changed to an amount equal to their postmodification 
liability (i.e., the present value of the net cash outflows under 
postmodification terms discounted at the current Treasury rate) (SFFAS 
2, par. 51 & app. B, part IV B (2) & (4));

292. When pre-1992 loan guarantees are indirectly modified, does the 
following occur?

a. The loan guarantees are kept in a liquidating account?

b. The related liability is reassessed and adjusted to reflect any 
change in the liability resulting from the modification. (SFFAS 2, par. 
51);

293. Are subsequent modifications of pre-1992 loan guarantees treated 
as modifications of post-1991 loan guarantees? (SFFAS 2, par. 51);

294. If a post-1991 or pre-1992 loan is sold with a recourse provision, 
is the present value (discounted at the Treasury rate in effect at the 
time of the sale) of the estimated losses recognized as a subsidy 
expense and a loan guarantee liability? (SFFAS 2, par. 54 & app. B, 
part I F(3));

Liabilities; Lease Liabilities (295-300):

Capital leases are leases that transfer substantially all of the 
benefits and risks of ownership to the lessee. (SFFAS 5, par. 43);

295. Is the amount recorded by the lessee as a liability under a 
capital lease arrangement the present value of rental and other minimum 
lease payments (excluding executory costs) during the lease term? 
(SFFAS 5, par. 44);

296. If the present value of the rental and other minimum lease 
payments during the lease term exceeds the fair value of the leased 
property, is the liability recorded as the fair value[Footnote 39] of 
the property at the inception of the lease? (SFFAS 5, par. 44);

297. Does the entity use the applicable Treasury borrowing rate to 
determine the discount rate charged on a capital lease unless both of 
the following apply?

a. It is practicable for the lessee to learn the implicit rate computed 
by the lessor?

b. The implicit rate is less than the Treasury borrowing rate. (SFFAS 
5, par. 45);

298. During the lease term, is each minimum lease payment allocated 
between a reduction of the obligation and interest expense so as to 
produce a constant periodic rate of interest on the remaining balance 
of the liability? (SFFAS 5, par. 46);

299. Does the entity disclose, in a note to the financial statements, 
the following information about its capital leases?

a. gross amounts of assets under capital lease by major asset category 
and the related total accumulated amortization;

b. description of the lease arrangements, for example, future funding 
commitments, lease terms, renewal options, escalation clauses, 
restrictions, amortization periods;

c. future payments due, by major asset category, and deductions for 
imputed interest and executory costs for all noncancelable leases with 
terms longer than 1 year;

d. a breakout of portions of the capital lease liability covered by 
budgetary resources and not covered by budgetary resources (OMB 
Bulletin 01-09, p. 84-85, section 9.17);

300. For operating leases, does the entity disclose the following 
information in a note to the financial statements?

a. description of the lease arrangements, such as future funding 
commitments, lease terms, renewal options, escalation clauses, 
restriction, amortization periods;

b. future payments due, by major asset category, for all noncancelable 
leases with terms longer than 1 year (OMB Bulletin 01-09, p. 84-85, 
section 9.17);

Liabilities; Federal Debt and Related Interest (301-311):

Debts are amounts borrowed from the Treasury, the Federal Financing 
Bank, other federal agencies, or the public under general or special 
financing authority such as Treasury bills, notes, bonds, and Federal 
Housing Administration (FHA) debentures. (SFFAS 5, par. 47; OMB 
Bulletin 01-09, p. 25, section 3.4);

301. Does the entity accounting for federal debt identify the amount of 
the outstanding debt liability at any given time and the related 
interest cost for each accounting period? (SFFAS 5, par. 48);

302. Are fixed-value securities with known redemption or maturity 
amounts at time of issue valued at their original face (par) value net 
of any unamortized discount or premium? (SFFAS 5, par. 50);

303. For fixed-value securities, is either the straight line or 
interest method[Footnote 40] of discount or premium amortization used 
in the following cases?

a. short-term securities with a maturity of 1 year or less;

b. longer term securities, where the difference between the amount of 
amortization under the interest and straight-line methods is immaterial 
(SFFAS 5, par. 50);

304. For fixed-value securities, is the interest method used for 
amortizing any discount or premium on all cases other than those 
described in the previous question? (SFFAS 5, par. 51);

305. If the entity has issued variable value securities of unknown 
redemption or maturity values, are they appraised at their original 
value and periodically revalued on the basis of the regulations or 
offering language? (SFFAS 5, par. 52);

306. Are old currencies issued by the federal government and not yet 
redeemed or written off identified as a noninterest bearing federal 
debt liability at face value? (SFFAS 5, par. 55);

307. Is all debt owed to Treasury, the Federal Financing Bank, or other 
federal agencies reported under intragovernmental liabilities on the 
balance sheet and disclosed by category? (OMB Bulletin 01-09, p. 18 & 
pp. 79-80, section 9.13);

308. Are the beginning balances, net borrowings, and ending balances of 
debt disclosed by the following categories?

a. total Treasury debt (reported by the Treasury Department only) 
broken out by government accounts and debt held by the public;

b. total agency debt issued under special financing authority (e.g., 
Federal Housing Administration (FHA) debentures and Tennessee Valley 
Authority (TVA) bonds) broken out by debt held by government accounts 
and debt held by the public;

c. other debt broken out by debt owed to the Treasury, debt owed to the 
Federal Financing Bank, and debt owed to other federal agencies (OMB 
Bulletin 01-09, pp. 79 & 80, section 9.13);

309. Is all debt owed to the public reported and disclosed as such? 
(OMB Bulletin 01-09, p. 18 & pp. 79-80, section 9.13);

310. Are the names of the agencies disclosed, other than Treasury or 
the Federal Financing Bank, to which intragovernmental debt is owed, 
and are the amounts disclosed? (OMB Bulletin 01-09, p. 80, section 
9.13);

311. Is other information relative to debt disclosed (e.g., redemption 
or call of debt owed to the public before maturity dates, write-offs of 
debts owed to Treasury or the Federal Financing Bank)? (OMB Bulletin 
01-09, p. 80, section 9.13);

Liabilities; Pensions, Other Retirement Benefits, and Postemployment 
Benefits (312 - 319):

Federal employee and veterans benefits include the actuarial portion of 
pensions, other retirement benefits, and other postemployment benefits. 
They do not include liabilities related to ongoing continuous expenses 
such as employees' accrued salary, accrued annual leave, unpaid 
portions of employee benefits, and other benefits that are currently 
due. These items are reported under the "other liabilities" line item. 
(SFFAS 1, par. 83 & 84; SFFAS 5, par. 56; OMB Bulletin 01-09, p. 25, 
section 3.4)?

In the context of accounting for pensions, other retirement benefits 
(ORB), and other postemployment benefits, the "administrative entity" 
manages and accounts for the pension or other employee plan, while the 
"employer entity" employs federal workers and generates employee costs, 
for which it would typically receive a salary and expense 
appropriation. (SFFAS 5, par. 57, footnote 38)?

The "aggregate entry age normal" actuarial cost method is one under 
which the expenses or liabilities arising from the actuarial present 
value of projected pension benefits are allocated on a level basis over 
the earnings or the service of the group between entry age and assumed 
exit ages. The portion of the actuarial present value allocated to a 
valuation year is called "normal cost." (SFFAS 5, par. 64);

312. Is the aggregate entry age normal actuarial cost method used to 
calculate, for the administrative entity financial statements, the 
liabilities arising from pension and ORB expenses? (SFFAS 5, par. 64 & 
82);

313. If other actuarial cost methods are used because the results are 
not materially different, does the entity provide an explanation why 
aggregate entry age normal is not used? (SFFAS 5, par. 64 & 82);

314. Does the administrative entity disclose the assumptions used to 
calculate the liability for pensions, other retirement benefits, and 
other postemployment benefits? (SFFAS 5, par. 67 & 83; OMB Bulletin 01-
09, p. 25, section 3.4; p. 80, section 9.14);

315. If the assumptions for a pension plan differ from the assumptions 
used by the three primary plans--Civil Service Retirement System 
(CSRS), Federal Employees Retirement System (FERS), and Military 
Retirement System (MRS)--does the administrative entity disclose how 
and why the assumptions differ from those of the primary plans? (SFFAS 
5, par. 67; OMB Bulletin 01-09, p. 80, section 9.14);

316. Does the administrative entity report pension and ORB assets 
separately from liabilities as opposed to netting them out? (SFFAS 5, 
par. 68 & 85);

317. Does the administrative entity carry pension and ORB assets at 
their acquisition cost, adjusted for amortization, if appropriate? 
(SFFAS 5, par. 68 & 85);

318. Does the administrative entity disclose the market value of 
pension and ORB investments in market-based and marketable securities? 
(SFFAS 5, par. 68 & 85);

319. Does the employer entity recognize the long-term other 
postemployment benefits liability as the present value of future 
payments discounted at the Treasury borrowing rate for securities of 
similar maturity? (SFFAS 5, par. 95);

Liabilities; Other Liabilities (320 - 353):

Unless they are reported separately, other liabilities cover 
liabilities not recognized in other categories. They may include, but 
are not limited to: capital leases, insurance, advances and 
prepayments, deposit funds held in escrow, accrued liabilities related 
to ongoing continuous expenses such as federal employee salaries and 
accrued employee annual leave, and estimated losses for claims and 
other contingencies. Claims and other contingencies include indemnity 
agreements, adjudicated claims, and commitments to international 
institutions. (SFFAS 1, par. 83-86; OMB Bulletin 01-09, p. 26, section 
3.4);

320. Does the entity separately report items within other liabilities 
if the amounts are material? (OMB Bulletin 01-09, p. 26, section 3.4);

321. Do all federal insurance and guarantee programs (except social 
insurance and loan guarantee programs) recognize a liability for unpaid 
claims incurred resulting from insured events that have occurred as of 
the reporting date? (SFFAS 5, par. 104; OMB Bulletin 01-09, p. 26, 
section 3.4);

322. Do federal insurance programs accrue a contingent liability when 
an existing condition, situation, or set of circumstances involving 
uncertainty as to possible loss exists, and when the following 
conditions apply?

a. the uncertainty will be resolved when one or more probable future 
events occur or fail to occur?

b. future outflow or other sacrifice of resources is probable and 
measurable. (SFFAS 5, par. 104 & 108; OMB Bulletin 01-09, pp. 26 & 27, 
section 3.4);

323. Does the entity also recognize a liability for future life 
insurance policy benefits (such as death or disability)? (SFFAS 5, par. 
104; OMB Bulletin 01-09, p. 27, section 3.4);

324. When insurance payments and losses extend beyond the current year, 
does the liability at the end of the year represent net losses 
calculated on a present-value basis to reflect the time value of money? 
(SFFAS 5, par. 109);

325. Does the entity report under "required supplementary information" 
(RSI) the major assumptions and "risks assumed" (i.e., the present 
value of unpaid expected losses net of associated premiums based on 
risk inherent in the insurance or guarantee coverage) for all sponsored 
insurance programs (except for social insurance, life insurance, and 
loan guarantee programs)? (SFFAS 5, par. 105 & 106; SFFAS 25, par. 4);

326. Does the entity also report under RSI the indicators of the range 
of uncertainty around insurance-related estimates and sensitivity of 
the estimates to changes in major assumptions? (SFFAS 5, par. 114; 
SFFAS 25, par.4);

Liabilities; Other Liabilities (320 - 353):

The liability for future policy benefits is the present value of future 
outflows to be paid to (or on behalf of) policyholders, less the 
present value of future related premiums. In general, for whole life 
policies, the liability for future policy benefits should be no less 
than the cash surrender value that accrues to the benefit of the 
policyholder. (SFFAS 5, par. 116);

327. Are liabilities for future benefits of whole life insurance 
policies reported and disclosed in accordance with private sector 
standards (i.e., Financial Accounting Standards Board (FASB) Statement 
of Accounting Standards (SFAS) 60, 97, & 120; American Institute of 
Certified Public Accountants (AICPA) Statement of Position (SOP) 95-1)? 
(SFFAS 5, par. 117; OMB Bulletin 01-09, p. 85, section 9.18);

328. Does the liability for future benefits relating to participating 
life insurance contracts equal the sum of the following amounts?

a. the net level premium reserve for death and endowment policy 
benefits;

b. liability for terminal dividends and;

c. any premium deficiency[Footnote 41] (SFFAS 5, par. 118 & 120);

329. Has the entity made an assessment to compare the liability for 
future policy benefits using actuarial assumptions applicable at the 
time the contract was made (contract assumptions) with the liability 
for future policy benefits using assumptions that consider the 
following factors?

a. current economic conditions (i.e., current and expected investments 
and expected long-term yields)?

b. experience (i.e., mortality, morbidity, and termination rates) 
(SFFAS 5, par. 119);

330. Does the entity separately disclose the components[Footnote 42] of 
the liability for future policy benefits of whole life insurance 
contracts along with a description of each amount and explanation of 
its projected use and any other potential uses? (SFFAS 5, par. 121; OMB 
Bulletin 01-09, p. 85, section 9.18);

331. Does the reporting entity disclose and break out the following 
items?

a. the portion of other liabilities covered by budgetary resources and 
the portion not covered by budgetary resources;

b. the portion of other liabilities payable to federal entities (i.e., 
intragovernmental liabilities) and the portion payable to nonfederal 
entities;

c. the portion of other liabilities that are noncurrent and the portion 
that are current (SFFAS 1, par. 85 & 86; OMB Bulletin 01-09, pp. 78 & 
79, section 9.l2 & pp. 81 & 82, section 9.16);

332. Does the agency record "unearned revenue" as a liability if it 
requests advances or progress payments prior to receipt of cash, and it 
records the amounts? (SFFAS 7, par. 37);

333. Are amounts payable for refunds, refund offsets,[43] and drawbacks 
[Footnote 44] recognized as liabilities when measurable and legally 
payable under established processes of the collecting entity? (SFFAS 7, 
par. 57);

334. Do amounts payable for refunds include refund claims filed by the 
taxpayer when the government has determined the amount refundable and 
identified the payee? (SFFAS 7, par. 57);

335. Are amounts payable for refunds with respect to returns or claims 
filed as of the end of the reporting period included in accounts 
payable for refunds if they do not require specific approval before 
payment? (SFFAS 7, par. 57);

336. For claims filed for refunds where specific administrative actions 
are required before payments can be made, are the amounts excluded from 
being recognized as a liability if the required administrative actions 
are not yet complete as of the close of the reporting period, even if 
reasonably estimable? (SFFAS 7, par. 58.1);

337. Are unasserted claims for refunds by taxpayers or importers, such 
as unfiled claims for refunds or drawbacks for which no claim has been 
filed, excluded from being recognized as a liability, even if 
reasonably estimable? (SFFAS 7, par. 58.2);

338. Are amounts voluntarily made as deposits, such as those made to 
stop the accrual of interest or those made pending settlements and 
judgments, separately recognized as deposit liabilities? (SFFAS 7, par. 
59)?

A loss contingency is an existing condition, situation, or set of 
circumstances involving uncertainty as to possible loss to an entity. 
The uncertainty should ultimately be resolved when one or more future 
events occur or fail to occur. (SFFAS 5, par. 35; OMB Bulletin 01-09, 
pp. 85 & 86, section 9.19);

339. Does the entity recognize estimated losses for claims or other 
contingencies if all of the following conditions apply?

a. a past event or exchange transaction has occurred;

b. a future outflow or other sacrifice of resources is probable 
[Footnote 45];

c. the future outflow or sacrifice of resources is measurable (e.g., 
the federal entity's management determines an estimated settlement 
amount) (SFFAS 5, par. 38; SFFAS 6, par. 91; SFFAS 12, par. 10 & 11; 
OMB Bulletin 01-09, p. 26, section 3.4);

340. When determining an estimated contingent liability, if some amount 
within a range of amounts is a better estimate than any other amount 
within the range, is that amount recognized? (SFFAS 5, par. 39);

341. When determining an estimated contingent liability, if no amount 
within a range of amounts is a better estimate than any other amount, 
does the entity recognize a minimum amount in the range and disclose a 
description of the nature of the contingency? (SFFAS 5, par. 39);

342. If any one of the conditions for recognizing a contingent 
liability is not met and there is at least a "reasonable possibility" 
[Footnote 46] that a loss or additional loss may be incurred, does the 
entity disclose the nature of the contingency [Footnote 47] and one of 
the following?

a. an estimate of the possible liability;

b. an estimate of the range of the possible liability;

c. a statement that such an estimate cannot be made (SFFAS 5, par. 36, 
38, 40, & 41);

343. If information about remote contingencies, or related to remote 
contingencies, is included in general purpose federal financial 
reports, [Footnote 48] is the information labeled to avoid the 
misleading implication that there is more than a remote chance of a 
loss of that amount? (SFFAS 5, par. 42);

344. Does the entity disclose the following related to commitments and 
contingencies?

a. an estimate of obligations related to canceled appropriations for 
which the reporting entity has a contractual commitment for payment;

b. amounts for contractual arrangements that may require future 
financial obligations (OMB Bulletin 01-09, p. 27, section 3.4 & pp. 85 
& 86, section 9.19);

345. If material, does the entity separately recognize a contingent 
liability for environmental clean-up costs [Footnote 49] for PP&E if 
the following criteria apply?

a. they are related to a past transaction or event;

b. the related costs are probable and measurable (SFFAS 5, par. 38 & 
SFFAS 6, par. 91-93; OMB Bulletin 01-09, pp. 25 & 26, section 3.4);

346. When clean-up costs are paid, are the payments recognized as a 
reduction in the liability for clean-up costs? (SFFAS 6, par. 100);

347. If clean-up costs have not been previously recognized, is a 
liability recognized for the portion of the estimated total clean-up 
cost that is attributable to either the portion of the physical 
capacity used or the portion of the estimated useful life that has 
passed since the PP&E was placed into service? (SFFAS 6, par. 104-106);

348. Are any subsequent changes (made in periods following 
implementation) in estimated total clean-up cost immediately expensed 
(if costs are to be recovered though user charges) and reflected in the 
related liability balance? (SFFAS 6, par. 104);

349. When clean-up costs are recognized for the first time, is the 
offsetting charge for any liability for clean-up costs shown as a 
"prior-period adjustment?" (SFFAS 6, par. 105; SFFAS 21, par. 13);

350. Are the amounts of prior-period adjustments arising from belated 
recognition of clean-up costs and liabilities disclosed and, if 
possible, are amounts associated with current and prior periods noted? 
(SFFAS 6, par. 105; SFFAS 21, par. 13);

351. Does the entity also disclose the following information related to 
clean-up costs?

a. the sources (i.e., applicable laws and regulations) of clean-up 
requirements;

b. the method for assigning estimated total clean-up costs to current 
operating periods (e.g., physical capacity versus passage of time)?

c. the unrecognized portion of estimated total clean-up costs 
associated with PP&E;

d. the material changes in total estimated clean-up costs due to 
changes in laws, technology, or plans;

e. the portion of change in an estimate that relates to prior-period 
operations;

f. the nature of estimates and the disclosure of information regarding 
possible changes due to inflation, deflation, technology, or applicable 
laws and regulations (SFFAS 6, par. 107-111; OMB Bulletin 01-09, p. 81, 
section 9.15);

Social insurance programs provide for the maintenance and distribution 
of incomes and medical benefits during periods of unemployment, 
disability, and retirement. These programs are Social Security, 
Medicare, Railroad Retirement Benefits, Black Lung Benefits, and 
Unemployment Insurance. Expense and liability recognition for these 
programs is the same for both the consolidated governmentwide entity 
and for the component entities. (SFFAS 17, par. 2, 4, 14, 15, 19, 30, & 
app. D, glossary);

352. Does the entity recognize a liability for social insurance 
benefits due and payable including claims incurred but not reported? 
(SFFAS 17, par. 22);

353. Does the liability for unemployment insurance include the 
following amounts?

a. amounts due to states and territories for benefits they have paid to 
beneficiaries but for which they have not withdrawn funds from the 
federal unemployment trust fund (UTF) as of the fiscal year end;

b. estimated amounts to be withdrawn from UTF and benefits paid by 
states and territories after fiscal year end for compensatory days 
occurring prior to fiscal year end (SFFAS 17, par. 23);

Net Position; Unexpended Appropriations & Cumulative Results of 
Operations (354 - 355):

354. Does the line item "unexpended appropriations" include both the 
portion of the entity's appropriation represented by undelivered orders 
and unobligated balances? (OMB Bulletin 01-09, p. 27, section 3.5);

355. Does the line item "cumulative results of operations" include the 
following items?

a. the net results of operations since inception;

b. the cumulative amount of prior-period adjustments;

c. the cumulative amount of donations and transfers of assets in and 
out without reimbursement (OMB Bulletin 01-09, p. 27, section 3.5);

[End of section]

Section IV: Statement of Net Cost:

Cost Accounting in General:

1. Overall Requirements; Question Numbers: 1 - 13:

2. Responsibility Segments; Question Numbers: 14 - 18:

3. Full Cost; Question Numbers: 19 - 26:

4. Interentity Costs; Question Numbers: 27 - 33:

5. Costing Methodology; Question Numbers: 34 - 40:

Revenues; Question Numbers: 41 - 63:

Costs:

6. Pensions and Other Retirement and Postemployement Benefits; Question 
Numbers: 64 - 91:

7. Inventory, Materials, Supplies, and Commodities; Question Numbers: 
92 - 100:

8. Property, Plant, and Equipment; Question Numbers: 101 - 117:

9. Clean-up Costs; Question Numbers: 118 - 126:

10. Interest; Question Numbers: 127 - 128:

11. Insurance and Subsidies; Question Numbers: 129 - 132:

12. Credit Programs; Question Numbers: 133 - 180:

The questions related to the Statement of Net Cost are presented under 
three general captions and 12 sections. The question numbers related to 
each caption and section are identified below.

Cost Accounting in General; Overall Requirements (1 - 13):

The Statement of Net Cost is designed to show separately the components 
of the net cost of the reporting entity's operations for the period. 
The statement and any related supporting schedules classify revenue and 
cost information by suborganization or responsibility segment. (OMB 
Bulletin 01-09, p. 28, section 4.1)?

Managerial cost accounting is the process of accumulating, measuring, 
analyzing, interpreting, and reporting cost information useful to both 
internal and external groups concerned with the way in which the 
organization uses, accounts for, safeguards, and controls its resources 
to meet its objectives. (SFFAS 4, par. 42)?

A cost accounting "system" is a continuous and systematic cost 
accounting process that may be designed to accumulate and assign costs 
to a variety of objects routinely or as desired by management. (SFFAS 
4, par. 74)?

Cost finding is a method for determining the cost of producing goods or 
services using appropriate procedures, for example, special cost 
studies or analyses. (SFFAS 4, par. 76);

1. Are net costs reported for the entity as a whole and for its 
suborganizations [Footnote 50] and major programs? (OMB Bulletin 01-09, 
p. 28, section 4.1);

2. Does the entity present responsibility segments that align directly 
with the major goals and outputs described in the entity's strategic 
and performance plans, required by the Government Performance and 
Results Act of 1993 (GPRA)? (SFFAS 4, par. 69; OMB Bulletin 01-09, p. 
28, section 4.1);

3. In its Statement of Net Cost, does the entity show the following?

a. the gross cost of goods and services provided to federal government 
agencies (intragovernmental)?

b. the gross cost of goods, services, transfers, and grants provided to 
the public;

c. related exchange revenues;

d. excess of costs over exchange revenues (net program costs)?

e. costs that cannot be assigned to specific programs or outputs;

f. the exchange revenues that cannot be attributed to specific programs 
and outputs (SFFAS 7, par. 43 & 44; OMB Bulletin 01-09, pp. 28 & 29, 
section 4.1 & p. 30, section 4.2);

4. Are the costs related to the production of goods and services 
provided to other programs (intragovernmental) reported separately from 
the costs of goods, services, transfers, and grants provided to the 
public? (OMB Bulletin 01-09, p. 31, section 4.3);

5. Are costs related to the production of outputs reported separately 
from costs that are not related to the production outputs (i.e., 
nonproduction costs)? (OMB Bulletin 01-09, p. 31, section 4.3);

6. Are costs that cannot be directly traced or assigned on a cause-and-
effect basis, or reasonably allocated to segments and their outputs and 
programs reported on the Statement of Net Cost as "Costs not assigned 
to programs?" (SFFAS 4, par. 92; OMB Bulletin 01-09, p. 32, section 
4.6);

7. Has the entity established appropriate procedures and practices to 
enable the consistent and regular collection, measurement, 
accumulation, analysis, interpretation, and communication of cost 
information? (SFFAS 4, par. 68-70);

8. As a means of providing cost information in an efficient and 
reliable manner on a continuing basis, does the reporting entity 
regularly accumulate and report the costs of its activities either by 
means of cost accounting systems or cost finding techniques? (SFFAS 4, 
par. 68-70);

9. Does the reporting entity's cost accounting system or cost finding 
technique, at a minimum, do the following?

a. collect cost information by responsibility segments identified by 
management;

b. define outputs for each responsibility segment;

c. measure the full cost (including the cost of goods or services 
provided by other entities) of outputs so that total operational costs 
and total unit costs of outputs can be determined;

d. use a costing methodology (e.g., activity-based, job order, standard 
costing) that is appropriate for management's needs and the operating 
environment;

e. provide information needed to determine and report service efforts 
and accomplishments and information necessary to meet the requirements 
of GPRA (or interface with a system that provides such information)?

f. report cost information in a timely manner and on a regular basis 
consistent with the needs of management and budgetary and financial 
reporting requirements;

g. rely on the United States Standard General Ledger as a basis for 
integrating its cost information with its general financial accounting 
capability;

h. supply cost data precise enough to provide reliable and useful 
information to internal and external users in making evaluations or 
decisions but also avoid unnecessary precision and refinement of data;

i. accommodate management's special cost information needs (SFFAS 4, 
par. 71);

10. Are all managerial cost accounting activities, processes, and 
procedures documented? (SFFAS 4, par. 71);

11. In determining the appropriate detail for its cost accounting 
processes and procedures, has the reporting entity considered the 
following?

a. nature of its operations;

b. the precision desired and needed in cost information;

c. the practicality of data collection and processing;

d. the availability of electronic data-handling facilities;

e. the cost of installing, operating, and maintaining the cost 
accounting processes;

f. any specific information needs of management (SFFAS 4, par. 72);

12. Has the entity used similar or compatible cost accounting processes 
throughout its component units? (SFFAS 4, par. 73);

13. Does the line item "net cost of operations," as reported on the 
Statement of Net Cost, agree with the line items of the same name that 
are reported on the Statement of Changes in Net Position and Statement 
of Financing? (OMB Bulletin 01-09, p. 38, section 5.6 & p. 51, section 
7.7);

Cost Accounting in General; Responsibility Segments (14 - 18):

A responsibility segment is a component of a reporting entity that is 
responsible for carrying out a mission, conducting a major line of 
activity, or producing one or a group of related products or services. 
(SFFAS 4, par. 78);

14. Has the management of the reporting entity defined and established 
responsibility segments? (SFFAS 4, par. 77);

15. Does management designate or establish responsibility segments 
based on the following?

a. the entity's organizational structure;

b. its lines of responsibility and missions;

c. its output (goods or services it delivers)?

d. budget accounts and funding authorities (SFFAS 4, par. 86);

16. For each responsibility segment, does the entity do the following?

a. define and accumulate outputs and, if feasible, quantify each type 
of output in units;

b. accumulate costs and quantitative units of resources consumed in 
producing the outputs;

c. assign costs to outputs and calculate the cost per unit of each type 
of output;

d. establish cost centers within responsibility segments, as needed 
(SFFAS 4, par. 79 & 88);

17. Does the reporting entity include supporting schedules in the notes 
to the financial statements if the suborganization's summary 
information provided in the Statement of Net Cost does not fully 
display the suborganization's major programs and activities? (OMB 
Bulletin 01-09, pp. 88-90, section 9.21);

18. Does the reporting entity disclose gross cost and earned revenue, 
[Footnote 51] by budget functional classification? (OMB Bulletin 01-09, 
p. 91, section 9.25);

Cost Accounting in General; Full Cost (19 - 26):

Full cost is the sum of all costs that contribute to an output and 
includes direct and indirect costs regardless of funding sources. It 
also includes the costs of supporting services provided by other 
responsibility segments or entities. (SFFAS 4, par. 89)?

Output is any product or service generated from the consumption of 
resources. (SFFAS 4, par. 89)?

Direct costs are costs that can be specifically identified with an 
output. (SFFAS 4, par. 90)?

Indirect costs are costs of resources that are jointly or commonly used 
to produce two or more types of outputs, but are not specifically 
identifiable with any of the outputs. (SFFAS 4, par. 91);

19. Does the reporting entity include all direct costs in the full cost 
of outputs? (SFFAS 4, par. 90);

20. Does the reporting entity also include the following in the full 
cost of outputs?

a. indirect costs incurred within a responsibility segment;

b. the costs of support services that a responsibility segment receives 
from other segments or entities (SFFAS 4, par. 91, 122, & 123);

21. Are the costs of employee benefits [Footnote 52] included as part 
of the cost of outputs? (SFFAS 4, par. 93-97);

22. Are the costs of other postemployment benefits reported as expenses 
for the period during which a future outflow or other sacrifice of 
resources is probable and measurable on the basis of an event occurring 
on or before the accounting date? (SFFAS 4, par. 96-97);

23. Are the full costs of transfer payments for welfare, insurance, 
grants, and other public assistance programs separately identified from 
the costs of operating such programs? (SFFAS 4, par. 98-101; OMB 
Bulletin 01-09, pp. 30-32, section 4.3);

24. Is depreciation expense incurred by responsibility segments on 
general PP&E included in the full costs of the goods and services that 
the segments produce? (SFFAS 4, par. 102);

25. Are the costs of acquiring or constructing heritage assets excluded 
from the full cost of goods and services and treated as a program cost 
[Footnote 53] or period expense? (SFFAS 4, par. 103);

26. Are nonproduction costs incurred by responsibility segments, such 
as reorganization costs and nonrecurring clean-up costs resulting from 
facility abandonment, excluded from the full cost of outputs and 
treated as current-period expenses? (SFFAS 4, par. 104);

Cost Accounting in General; Interentity Costs (27 - 33):

Within the federal government, some reporting entities rely on other 
federal entities to help them achieve their missions. Often, this 
involves support services, but may include the provision of goods. The 
reporting entity generally must account for the full cost of goods or 
services provided to or received from other federal entities. (SFFAS 4, 
par. 105-108)?

Costs between reporting entities that are part of the same department 
or larger reporting entity (such as bureaus, components or 
responsibility segments within a department) are considered 
intradepartmental costs. Reporting entities should account for imputed 
intradepartmental costs in accordance with the full cost provisions of 
SFFAS 4. (FASAB Interpretation Number 6, par. 4 & 8);

27. Does the reporting entity include in its Statement of Net Cost the 
full costs of goods and services received from other federal entities 
whether or not the providing entity is fully reimbursed? (SFFAS 4, par. 
105; OMB Bulletin 01-09, p. 31, section 4.3);

28. Does the reporting entity recognize the following costs, including 
the portions that are funded through the Office of Personnel 
Management, the Department of Defense, the Department of the Treasury, 
the Department of Labor, or other agencies:

a. employee pension, postretirement health, and life insurance 
benefits;

b. other postemployment benefits for retired, terminated, and inactive 
employees, which included unemployment and workers compensation under 
the Federal Employees' Compensation Act;

c. losses in litigation proceedings? [Footnote 54] (SFFAS 4, par. 110; 
OMB Bulletin 01-09, p. 31, section 4.3);

29. Does the entity providing goods or services to another reporting 
entity recognize in its accounting records, as well as disclose to the 
receiving entity, the full cost of goods and services provided? (SFFAS 
4, par. 108);

30. Is recognition of interentity costs that are not fully reimbursed 
limited to material items based on an assessment of the importance of 
the individual interentity transaction in light of the following 
factors?

a. significance to the entity;

b. directness of relationship to the entity's operations;

c. identifiability (SFFAS 4, par. 112);

31. Are the costs of broad, general support services provided by a 
federal entity to other federal entities excluded from the costs of the 
recipient entity unless such services are integral to the receiving 
entity (e.g., Treasury check-writing services provided for the Social 
Security Administration)? (SFFAS 4, par. 112);

32. If the receiving entity cannot get complete information on the full 
cost of goods or services provided by another reporting entity, does 
the receiving entity use a reasonable estimate of the cost of the goods 
or services received or the market value of the goods or services 
received if an estimate of the cost cannot be made? (SFFAS 4, par. 
109);

33. Are interentity expenses and financing sources eliminated for any 
consolidated financial statements covering both entities? (SFFAS 4, 
par. 109);

Cost Accounting in General; Costing Methodology (34 - 40):

Cost accumulation is the process of collecting cost data in an 
organized way by responsibility segment. (SFFAS 4, par. 117)?

Cost assignment is a process that identifies accumulated costs with 
reporting periods and cost objects. Three methods of cost assignment 
are direct tracing, cause and effect, and allocating costs on a 
reasonable and consistent basis. (SFFAS 4, par. 120);

Cost object or cost objective is an activity, output, or item the cost 
of which is to be measured. (SFFAS 4, par. 121)?

Entities are not required to use a particular costing system or costing 
methodology, but the costing system or methodology used should be 
appropriate to the entity's operating environment and used 
consistently. Four examples of acceptable (but not necessarily mutually 
exclusive) costing methodologies are activity-based costing, job order 
costing, process costing, and standard costing. (SFFAS 4, par. 144-
147);

34. Is the entity's accounting system capable of identifying costs with 
responsibility segments? (SFFAS 4, par. 118);

35. Are the costs of resources consumed by responsibility segments 
classified by type of resource, such as costs of employees, materials, 
capital, utilities, and rent? (SFFAS 4, par. 119);

36. Are data on the quantity of units (e.g., staff days, gallons of 
gasoline consumed) related to the various cost categories maintained, 
when appropriate and feasible? (SFFAS 4, par. 119);

37. Are costs assigned to outputs using the methods in the following 
order of preference?

a. directly tracing costs used in the production of an output, wherever 
economically feasible [Footnote 55];

b. assigning costs on a cause-and-effect basis;

c. allocating costs on a reasonable and consistent basis (SFFAS 4, par. 
124);

38. For cost allocation purposes, do indirect costs assigned to a given 
cost pool have similar characteristics? (SFFAS 4, par. 136);

39. Are common costs [Footnote 56] assigned to activities either on a 
cause-and-effect basis, if feasible, or through reasonable allocations? 
(SFFAS 4, par. 140);

40. Are the full costing methodologies that are most appropriate to a 
segment's operating environment used and consistently followed, and any 
changes made documented and explained? (SFFAS 4, par. 145 & 146);

Revenues (41 - 63):

Revenues are inflows of resources that the government demands, earns, 
or receives by donation. Revenue comes from two sources: exchange 
transactions and nonexchange transactions. (SFFAS 7, par. 30)?

Exchange (or earned) revenues arise when a government entity provides 
goods or services to the public or to another government entity for a 
price. (SFFAS 7, par. 30; OMB Bulletin 01-09, p. 32, section 4.4)?

Nonexchange revenues arise primarily from the government's power to 
demand payments from the public (e.g., taxes, duties, fines), and also 
include donations. (SFFAS 7, par. 30)?

The net cost of a program is the difference between its gross costs and 
related exchange revenues. (OMB Bulletin 01-09, p. 32, section 4.5)?

The net cost of operations by a reporting entity consists of gross cost 
incurred by the reporting entity less any exchange revenue earned from 
its activities. (OMB Bulletin 01-09, p. 28, section 4.1 & p. 33, 
section 4.8);

41. Are earned revenues deducted from the full cost of outputs or 
outcomes, if practical, to determine their net costs? (SFFAS 7, par. 
43; OMB Bulletin 01-09, p. 32, section 4.4);

42. Is the net amount of gains (or losses) subtracted from (or added 
to) the gross cost to determine net cost of operations and programs? 
(SFFAS 7, par. 44; OMB Bulletin 01-09, p. 28, section 4.1);

43. Is earned revenue that is insignificant or cannot be attributed to 
particular outputs or programs reported separately as a deduction in 
arriving at the net cost of operations of the suborganization or 
reporting entity as a whole? (SFFAS 7, par. 44; OMB Bulletin 01-09, p. 
30, section 4.2 & p. 33, section 4.7);

44. Are nonexchange revenues and other financing sources excluded from 
calculating net cost of operations for the reporting entity? (SFFAS 7, 
par. 44);

45. If the entity incurs virtually no cost in connection with earning 
exchange revenue, is such revenue not recognized in the Statement of 
Net Cost, but shown as a financing source on the Statement of Changes 
in Net Position or (if appropriate) Statement of Custodial Activity? 
(SFFAS 7, par. 45);

46. Is any portion of exchange revenue that cannot be retained by the 
entity reported as a transfer-out on the Statement of Changes in Net 
Position? (OMB Bulletin 01-09, p. 32, section 4.4);

47. Does a reporting entity that provides goods or services to the 
public or other government entity disclose the following in a note or 
narrative?

a. a pricing policy that differs from the full cost or market pricing 
guidance set forth in OMB Circular No. A-25 and the possible effect on 
demand and revenue if prices were raised to reflect the market or full 
cost;

b. exchange transactions with the public in which prices are set by law 
or executive order and are not based on full cost or market price, or 
the possible effect on demand and revenue if prices were raised to 
reflect the market or full cost;

c. the nature of intragovernmental exchange transactions in which goods 
or services are provided free or at less than full cost and the reasons 
for disparities between billing (if any) and full cost;

d. the full amount of any expected loss when specific goods or services 
are provided or made to order under a contract and a loss is both 
probable and measurable (SFFAS 7, par. 46 & 47);

48. Is collected custodial nonexchange revenue that is legally retained 
by the collecting entity as reimbursement for the cost of collection, 
recognized as exchange revenue in determining the collecting entity's 
net cost of operations? (SFFAS 7, par. 60.3; OMB Bulletin 01-09, p. 52, 
section 8.1);

49. Is revenue received from the public or other government entity in 
return for providing goods or services recognized and reported in the 
Statement of Net Cost as exchange revenue? (SFFAS 7, par. 34; OMB 
Bulletin 01-09, p. 32, section 4.4);

50. If an exchange transaction is likely to be unusual or nonrecurring 
for a particular entity, is a gain or loss recognized rather than a 
revenue or expense? (SFFAS 7, par. 35);

51. Is exchange revenue recognized when services are performed for 
transactions in which services are provided to the public or another 
government entity? (SFFAS 7, par. 34 & 36(a));

52. If specific goods or services are made to order under terms of a 
contract, is exchange revenue (and any probable loss) recognized in 
proportion to estimated total cost when goods and services are acquired 
to fulfill the contract? (SFFAS 7, par. 36(b));

53. When goods are kept in inventory so that they are available to 
customers when ordered, is exchange revenue recognized when the goods 
are delivered to the customer? (SFFAS 7, par. 36(c));

54. If services are rendered continuously or the right to use an asset 
extends continually over time, is exchange revenue recognized in 
proportion to the passage of time or the use of the asset? (SFFAS 7, 
par. 36(d));

55. Is interest received on intragovernmental loans recognized as 
exchange revenue if the source of borrowed funds is predominately 
exchange revenue? (SFFAS 7, par. 36(d));

56. When an asset other than inventory is sold, is any gain (or loss) 
recognized when the asset is delivered to the purchaser? (SFFAS 7, par. 
36(e));

57. When advance fees or payments are received, such as for large-
scale, long-term projects, is revenue recognized only as the cost of 
providing the corresponding goods and services is incurred? (SFFAS 7, 
par. 37);

58. Is the measurement of revenue from exchange transactions based on 
the actual price received or receivable under established pricing 
arrangements? (SFFAS 7, par. 38);

59. To the extent that realization of the full amount of exchange 
revenue is not probable due to credit losses (caused by the failure of 
the debtor to pay the established or negotiated price), is an expense 
recognized and the allowance for bad debts increased, if the bad debts 
can be reasonably estimated? (SFFAS 7, par. 40);

60. If the realization of the full amount of exchange revenue is not 
probable for reasons apart from credit losses (e.g., returns and 
allowances), is a provision made to reduce the recognized revenue (if 
amounts can be reasonably estimated), with the provision recognized as 
a revenue adjustment? (SFFAS 7, par. 41);

61. Is exchange revenue recognized regardless of whether the entity 
retains the revenue for its own use or transfers it to other entities? 
(SFFAS 7, par. 43);

62. Is exchange revenue broken out by major category and linked, where 
possible, to the net costs of related outputs, programs, organizations, 
or suborganizations in the Statement of Net Cost? (SFFAS 7, par. 43; 
OMB Bulletin 01-09, p. 32, section 4.4);

63. As the lessor in any lease arrangements, does the entity disclose 
the following in a note to the financial statements?

a. any information necessary to disclose the commitment of the entity's 
assets including but not limited to the major asset category and lease 
terms;

b. future lease revenues, by major asset category, for all 
noncancelable leases with terms longer than one year;

c. other information necessary for understanding leases not disclosed 
in the above categories. (OMB Bulletin 01-09, p. 85, section 9.17B);

Costs; Pensions and Other Retirement and Post Employment Benefits (64 - 
91):

Pension benefits include all retirement, disability, and survivor 
benefits financed through a pension plan, including unfunded pension 
plans. Required federal payments to social insurance plans (i.e., 
Social Security and Medicare) and matching federal payments to defined 
contribution pension plans are also considered to be plan expenses. 
(SFFAS 5, par. 61)?

Costs of pensions and other retirement benefits (ORB), whether they are 
paid for in part or in total by other governmental entities, are 
included in the costs of program outputs. (SFFAS 4, par. 95))?

Recognition of other postemployment benefits (OPEB) is linked to the 
occurrence of an OPEB event rather than the production of an output. 
OPEB costs are generally treated as period expenses. Special-purpose 
cost studies may distribute OPEB costs over a number of prior years to 
determine the cost of outputs OPEB recipients helped produce. (SFFAS 4, 
par. 96 & 97)?

In accounting for pensions, ORB, and OPEB, the "administrative entity," 
typically manages and accounts for the related assets and liabilities. 
The "employer entity" accounts for the related costs of pensions, ORB, 
and OPEB. For these costs the employer entity receives a salary and 
expense appropriation, imputes a financing source, or both. (SFFAS 5, 
par. 57, footnote 38)?

The "aggregate entry age normal" actuarial cost method is one under 
which the expenses or liabilities arising from the actuarial present 
value of projected pension benefits are allocated on a level basis over 
the earnings or the service of the group between entry age and assumed 
exit ages. The portion of the actuarial present value of pension plan 
and benefits and expenses that is allocated to a valuation year is 
called "normal cost." (SFFAS 5, par. 64);

64. Are pensions and ORB recognized as expenses at the time the 
employee's services are rendered? (SFFAS 5, par. 59);

65. Are postemployment benefits recognized as expenses at the time the 
accountable event occurs? (SFFAS 5, par. 59);

66. Is the "aggregate entry age normal" actuarial cost method (or other 
actuarial cost method, if the results are not materially different and 
an explanation is provided) used to calculate pension expense, the 
liability for the administrative entity financial statements, and the 
expense for the employer entity financial statements? (SFFAS 5, par. 
64);

67. When using the "aggregate entry age normal" actuarial cost method, 
does the entity allocate pension expenses on the basis of a level 
percentage of earnings? (SFFAS 5, par. 64);

68. Does the administrative entity base its actuarial assumptions for 
pension plans on the experience of the covered groups, long-term 
trends, and guidance of the Actuarial Standards Board? (SFFAS 5, par. 
65);

69. Does the administrative entity base its interest rate assumptions 
on the estimated long-term investment yield for the pension plan or, if 
the plan is not being funded, on some other appropriate long-term 
assumption (e.g., the federal long-term borrowing rate)? (SFFAS 5, par. 
66);

70. Does the administrative entity disclose the assumptions used to 
calculate pension benefit expenses? (SFFAS 5, par. 67);

71. When a new pension plan is initiated or current one amended, does 
the administrative entity recognize all past and prior service costs 
[Footnote 57] or gains immediately, without amortization? (SFFAS 5, 
par. 69 & 70);

72. Does the administrative entity recognize actuarial gains and losses 
[Footnote 58] immediately, without amortization? (SFFAS 5, par. 69 & 
70);

73. Does the administrative entity report a pension expense for the net 
of the following components, with disclosure of the individual 
components?

a. normal cost;

b. interest on pension liability during the period;

c. prior (and past) service cost from plan amendments (or the 
initiation of a new plan) during the period, if any;

d. actuarial gains or losses (including any gains or losses due to a 
change in the medical inflation rate assumption) during the period, if 
any (SFFAS 5, par. 72; OMB Bulletin 01-09, p. 80, section 9.14);

74. Does the administrative entity report pension plan revenue for the 
sum of contributions from the following entities?

a. the employer;

b. its employees [Footnote 59];

c. interest on the plan's investments (SFFAS 5, par. 73 & 78);

75. Does the employer entity recognize a pension expense that equals 
the service cost (normal cost) for its employees for the accounting 
period, less the amount contributed by the employees, if any? (SFFAS 5, 
par. 74);

76. Is the employer entity's pension expense balanced by (1) a decrease 
to its "fund balance with Treasury" for the amount of its contribution 
to the pension plan, if any; and if this does not equal the full 
pension expense, by (2) an increase to an account representing an 
intragovernmental financing source (e.g., "imputed financing-expenses 
paid by other agencies." (SFFAS 5, par. 75);

77. If the employer entity is also the administrative entity, does it 
also report the liability [Footnote 60] and recognize the expense for 
all components of the pension plan's cost? (SFFAS 5, par. 71 & 76)?

ORB includes all retirement benefits other than pension benefits. The 
predominant ORB expense in the federal government is retirement health 
benefits. (SFFAS 5, par. 58 & 79);

78. Is the "aggregate entry age normal" actuarial cost method (or other 
actuarial cost method, if the results are not materially different and 
an explanation is provided) used to calculate the ORB expense and 
liability for the administrative entity financial statements and the 
expense for the employer entity financial statements? (SFFAS 5, par. 
82);

79. Are expenses and other liabilities attributable to ORB expenses 
allocated based on the service rendered by each employee? (SFFAS 5, 
par. 82);

80. Do the amounts calculated for financial reports prepared for ORB 
plans reflect the following?

a. general actuarial and economic assumptions that are consistent with 
those used for pensions;

b. a health care cost trend assumption that is consistent with Medicare 
projections or other authoritative sources appropriate for the 
population covered by the plan (SFFAS 5, par. 83);

81. Does the administrative entity discount the projected ORB costs at 
the rate of expected return of plan assets, if the plan is being 
funded, or on some other long-term assumptions (e.g., the long-term 
federal government borrowing rate) for unfunded plans? (SFFAS 5, par. 
83;

82. Does the administrative entity disclose the assumptions used to 
calculate projected ORB costs? (SFFAS 5, par. 83);

83. Is the accrual period for ORB based on the expected retirement age 
rather than the age when the employee first becomes eligible for 
retirement benefits? (SFFAS 5, par. 84);

84. When a new ORB plan is initiated or current one amended, does the 
administrative entity recognize all past and prior service costs or 
gains immediately, without amortization? (SFFAS 5, par. 86 & 87);

85. Does the administrative entity recognize all actuarial gains and 
losses from changes in the ORB liability immediately, without 
amortization? (SFFAS 5, par. 86 & 87);

86. Does the administrative entity report an ORB expense (e.g., health 
insurance) for the net of the following components with disclosure of 
the individual components?

a. normal cost;

b. interest on the ORB liability during the period;

c. prior (and past) service cost from plan amendments (or the 
initiation of a new plan) during the period, if any;

d. any gains/losses due to a change in the medical inflation rate 
assumption;

e. other actuarial gains or losses during the period, if any (SFFAS 5, 
par. 88; OMB Bulletin 01-09, p. 80, section 9.14);

87. Does the administrative entity report ORB revenue for the sum of 
contributions from the employer entity and its employees? (SFFAS 5, 
par. 89);

88. In the financial report, does the employer entity recognize ORB 
expenses equal to the service cost (normal cost) for its employees for 
the accounting period, less the amount contributed by the employees, if 
any? (SFFAS 5, par. 90);

89. Is the employer entity's ORB expense balanced by either of the 
following?

a. a decrease to its "fund balance with Treasury" for the amount of its 
contribution to the ORB plan, if any;

b. an increase to an account representing an intragovernmental imputed 
financing source (e.g., "imputed financing-expenses paid by other 
entities") (SFFAS 5, par. 91);

90. If the employer entity is also the administrative entity, does it 
also report the liability [Footnote 61] and recognize the expense for 
all components of the ORB's cost? (SFFAS 5, par. 88 & 92)?

OPEB are provided to former or inactive employees, beneficiaries, and 
covered dependents outside pension or ORB plans. Postemployment 
benefits can include salary continuation, severance benefits, 
counseling and training, continuation of health care or other benefits, 
unemployment workers' compensation, and veterans' disability 
compensation benefits paid by the employer. (SFFAS 4, par. 96; SFFAS 5, 
par. 57 & 94);

91. Does the employer recognize an expense and a liability for OPEB 
when a future outflow or other sacrifice of resources is probable 
(i.e., more likely than not) and measurable? (SFFAS 5, par. 95);

Costs; Inventory, Materials, Supplies, and Commodities (92 - 100):

92. Upon sale or use of inventory, is the related expense recognized 
and the cost of those goods removed from the inventory asset account? 
(SFFAS 3, par. 19);

93. To arrive at the historical cost of ending inventory and cost of 
goods sold, is one of the following cost flow assumptions used?

a. first-in, first-out;

b. weighted average;

c. moving average;

d. any other valuation method (such as a standard cost system) whose 
results reasonably approximate one of the above historical cost methods 
(SFFAS 3, par. 22);

94. Are operating materials and supplies expensed using the consumption 
method (i.e., reported as an operating expense as they are issued to 
the end user for consumption in normal operations)? (SFFAS 3, par. 38 & 
39);

95. Are operating materials and supplies expensed upon purchase 
(purchase method) if they meet one of the following attributes?

a. they are of insignificant amounts;

b. they are in the hands of the end user for use in normal operations;

c. it is not cost beneficial to apply the consumption method (SFFAS 3, 
par. 40 & 41);

96. Are inventory and operating materials and supplies acquired through 
a nonmonetary exchange valued at the fair value of the items received 
at the time of the exchange, and is the difference between the fair 
value of the acquired items and the recorded amount surrendered 
reported as a gain or loss? (SFFAS 3, par. 21 & 43);

97. Are abnormal costs associated with inventory and operating 
materials and supplies, such as excessive handling or rework costs, 
charged to operations of the period? (SFFAS 3, par. 21 & 43);

98. Are any unrealized gains or losses resulting from periodic 
revaluations of inventory captured in a designated allowance account? 
(SFFAS 3, par. 23 & 24);

99. Is the cost of stockpile materials removed from the corresponding 
asset account and reported as an operating expense when issued for use 
or sale? (SFFAS 3, par. 52);

100. Are abnormal costs of stockpile materials, such as excessive 
handling and rework costs, expensed in current operations? (SFFAS 3, 
par. 53);

Costs; Property, Plant, and Equipment (101 - 117):

A common expense related to PP&E that is included in the Statement of 
Net Cost is depreciation. Other PP&E-related expenses that are reported 
in the Statement of Net Cost include all current cost of acquiring and 
maintaining stewardship land and heritage assets (other than multiuse 
heritage assets.) (SFFAS 6, par. 35, & 69; SFFAS 16, par. 8)?

Depreciation expense is calculated through systematic and rational 
allocation of the cost of PP&E, less its estimated salvage or residual 
value, over its estimated useful life. A composite or group 
methodology, [Footnote 62] whereby the costs of PP&E are allocated 
using the same allocation rate, is permissible. (SFFAS 6, par. 35; 
SFFAS 23, par. 9, item f);

101. Is depreciation expense recognized on all general PP&E? (SFFAS 6, 
par. 35);

102. If historical cost information has not been maintained for 
existing PP&E, does the entity depreciate or amortize the estimated net 
remaining cost over its remaining useful life in a systematic and 
rational manner? (SFFAS 6, par. 35, 40, & 41);

103. In an exchange transaction with a nonfederal entity, is the 
difference between the book value (i.e., cost less accumulated 
depreciation) of PP&E surrendered and the cost of PP&E acquired 
[Footnote 63] recognized as either a gain or a loss? (SFFAS 6, par. 
32);

104. In the event that cash consideration is included in the exchange 
transaction with a non federal entity, is the cost of PP&E acquired 
either increased by the amount of cash consideration surrendered or 
decreased by the amount of cash consideration received? (SFFAS 6, par. 
32);

105. When assets have been removed from PP&E in anticipation of 
disposal, retirement, or removal from service, has the entity stopped 
recording depreciation and amortization expenses for such assets? 
(SFFAS 6, par. 38 & 39);

106. For general PP&E that is disposed of, retired or removed from 
service, is any difference between the book value of the PP&E and 
amounts realized recognized as a gain or a loss in the period of 
disposal, retirement, or removal from service? (SFFAS 6, par. 38);

107. For PP&E assets removed from general PP&E accounts prior to 
disposal, retirement or removal from service, is the expected net 
realizable value of these assets adjusted at the end of each accounting 
period, and is any adjustment made recognized as either a gain or loss? 
(SFFAS 6, par. 39);

108. Are costs to acquire, improve, reconstruct, or renovate heritage 
assets, other than multiuse heritage assets, recognized and reported 
separately on the Statement of Net Cost for the period in which the 
costs are incurred? (SFFAS 16, par. 8; OMB Bulletin 01-09, pp. 31 & 32, 
section 4.3 & p. 91, section 9.22);

109. Do the recognized costs of heritage assets also include all costs 
incurred during the period to bring the items to their current 
condition at its initial location? (SFFAS 16, par. 8);

110. Are amounts for heritage assets or stewardship land acquired 
through donation or devise excluded from the calculation of net cost? 
(SFFAS 8, par.79; SFFAS 16, par. 10; OMB Bulletin 01-09, p. 91, section 
9.23);

111. Is the fair value, if known and material, of heritage assets 
acquired through donation or devise disclosed in notes to the financial 
statements in the year received? (SFFAS 16, par. 10; OMB Bulletin 01-
09, p. 91, section 9.23);

112. If the fair value of donated or bequeathed heritage assets is not 
known or reasonably estimable, is information as to the type and 
quantity of assets received disclosed in the notes to the financial 
statements in the year received? (SFFAS 16, par. 10; OMB Bulletin 01-
09, p. 91, section 9.23);

113. Are costs to acquire, as well as costs incurred to bring the 
stewardship land to its current condition or prepare it for its 
intended use, recognized as a cost of the period incurred and disclosed 
as "Cost of Stewardship Land?" (SFFAS 6, par. 69 & 73; SFFAS 8, par. 77 
& 119; OMB Bulletin 01-09, p. 91, section 9.22);

114. Is the fair value, if known and material, of stewardship land 
acquired through donation or devise disclosed in notes to the Statement 
of Net Cost in the year received? (SFFAS 6, par. 71; OMB Bulletin 01-
09, p. 91, section 9.23);

115. If the fair value of donated or willed stewardship land is not 
estimable, is information as to the type and quantity of assets 
received disclosed in notes to the Statement of Net Cost in the year 
received, if material? (SFFAS 6, par. 71; OMB Bulletin 01-09, p. 91, 
section 9.23);

116. If land included in PP&E is transferred to another federal entity 
to be used as stewardship land, is the cost to the receiving entity of 
the transferred land recognized at the book value on the transferring 
entity's books? (SFFAS 6, par. 72);

117. If the receiving entity does not know the book value of the 
transferred land, is the transfer disclosed in the notes to the 
Statement of Net Cost, if material? (SFFAS 6, par. 72);

Costs; Clean-up Costs (118 - 126):

Clean-up costs are the costs of removing, containing, and/or disposing 
of (1) hazardous waste from property or (2) material and/or property 
that consists of hazardous waste upon permanent or temporary closure or 
shutdown of associated PP&E. Clean-up costs may include, but are not 
limited to, decontamination, decommissioning, site restoration, site 
monitoring, closure, and postclosure costs. (SFFAS 6, par. 85 & 87);

118. When PP&E is placed into service, does the entity estimate the 
associated clean-up costs? (SFFAS 6, par. 94);

119. In estimating clean-up costs and liability, has the entity 
considered the following?

a. the level of restoration to be performed;

b. current legal and regulatory requirements;

c. current technology;

d. current costs (i.e., amount that would be paid if all goods and 
services included in the clean-up estimate were acquired in the current 
period) (SFFAS 6, par. 95);

120. Are estimated clean-up costs periodically revised to account for 
material changes due to inflation or deflation and changes in 
regulations, plans, and/or technology? (SFFAS 6, par. 96);

121. When PP&E is placed into service, does the entity recognize 
cleanup costs during each period that general PP&E is in operation, in 
a systematic and rational manner based on one of the following methods?

a. based on the physical capacity of the PP&E, (e.g., expected usable 
landfill area)?

b. if physical capacity is not applicable or estimable, based on the 
estimated useful life of the associated PP&E (SFFAS 6, par. 97);

122. Does recognition of the cleanup costs and the accumulation of the 
related liability begin on the date that the associated PP&E is placed 
into service, continue in each period that operation continues, and end 
when the PP&E ceases operation? (SFFAS 6, par. 98);

123. If clean-up costs are reestimated, are the cumulative effects of 
changes in total estimated cleanup costs related to current and past 
operations of PP&E immediately recognized as an expense and is the 
corresponding liability adjusted? (SFFAS 6, par. 99);

124. When stewardship PP&E is placed into service, does the entity 
expense the total estimated clean-up costs and establish a liability in 
the period the asset is placed into service? (SFFAS 6, par. 101);

125. If clean-up costs for stewardship PP&E are reestimated, are any 
adjustments to the liability associated with clean-up costs expensed in 
the period of the change in estimate? (SFFAS 6, par. 102);

126. Does the entity disclose the following related to cleanup costs?

a. the applicable laws and regulations covering clean-up requirements;

b. the method for assigning estimated total clean-up costs to current 
operating periods (e.g., physical capacity versus passage of time)?

c. the unrecognized portion of estimated total clean-up costs for 
clean-up costs associated with PP&E;

d. material changes in total estimated clean-up costs due to changes in 
laws, technology, or plans, as well as the portion of the change in 
clean-up cost estimates that relates to prior-period operations;

e. the nature of estimates and information regarding possible changes 
due to inflation, deflation, technology, or applicable laws and 
regulations (SFFAS 6, par. 107-111);

Costs; Interest (127 - 128):

Interest incurred results from borrowing funds from Treasury, Federal 
Financing Bank, other federal entities, or the public. Interest also 
should be recorded on late payment of bills by the federal entity and 
on refunds. (SFFAS 1, par. 81)?

Interest costs are generally related to securities and other debt 
instruments issued by the U.S. Treasury or other federal agencies. 
(SFFAS 5, par. 47-48);

127. Does the related interest cost of federal debt include the 
following?

a. the accrued (prorated) share of the nominal interest incurred during 
the accounting period;

b. the amortized discounts or premiums for each accounting period for 
fixed value securities;

c. the amount of change in the current value for the accounting period 
for variable value securities (SFFAS 5, par. 53);

128. If securities are retired before maturity, is the difference 
between the reacquisition price and net carrying value of the 
extinguished debt recognized in the period of extinguishment as a gain 
or loss? (SFFAS 5, par. 54);

Costs; Insurance and Subsidies (129 - 132):

Federal insurance and guarantee programs are established to assume 
risks that private sector entities are unwilling or unable to assume or 
to subsidize the provision of insurance to achieve social objectives. 
For life insurance, a premium deficiency occurs if the liability for 
future policy benefits using current conditions exceeds the liability 
for future policy benefits using contract conditions. (SFFAS 5, par. 97 
& 120);

129. If an insured event has occurred as of the financial statement 
reporting date, has the federal entity recognized an expense for all 
claims incurred during the period, including, when appropriate, those 
incurred but not reported and contingencies that meet the criteria for 
recognition? (SFFAS 5, par. 104 & 109);

130. Are changes in estimates of claim cost resulting from (1) the 
present value calculations, (2) the continuous review process, and (3) 
differences between the estimates and actual payments for claims, 
recognized as charges against operations of the period in which the 
estimates are changed or payments are made? (SFFAS 5, par. 109);

131. If the liability for future [Footnote life insurance] policy 
benefits using current conditions exceeds the liability for future 
policy benefits under contract conditions (resulting in a premium 
deficiency), is the difference recognized as a charge to operations in 
the current period? (SFFAS 5, par. 120);

132. Does the entity recognize an expense for social insurance 
[Footnote 64] benefits paid during the reporting period plus any 
increase (or less any decrease) in the liability for social insurance 
benefits due and payable to or on behalf of beneficiaries, from the end 
of the prior period to the end of the current period? (SFFAS 17, par. 
22);

Costs; Credit Programs (133 - 180):

In accordance with the Federal Credit Reform Act of 1990, as amended, a 
subsidy expense is recognized for direct or guaranteed loans disbursed 
during the fiscal year. The amount of the subsidy expense equals the 
present value of estimated cash outflows over the life of the loans 
minus the present value of the estimated cash inflows. The discount 
rate used to calculate the present value is the average interest rate 
on marketable Treasury securities of similar maturity to the cash flows 
of the direct loan or loan guarantee for which the estimate is being 
made. (SFFAS 2, par. 6, 7, 24, 30, & 31; SFFAS 19, par. 6 & 7);

133. For post-1991 direct or loan guarantee programs, is the present 
value of estimated cash outflows over the life of the loans minus the 
present value of estimated cash inflows discounted at the interest rate 
of marketable Treasury securities with similar maturity to the cash 
flows? (SFFAS 2, par. 24; SFFAS 19, par. 6);

134. For post-1991 direct or loan guarantee programs, are the net 
present values recognized as expense in the year the loan is disbursed? 
(SFFAS 2, par. 24; SFFAS 19, par. 6);

135. Are the following components of estimated subsidy costs (and 
offsetting receipts) of post-1991 loans and guarantees separately 
recognized?

a. interest subsidy costs [Footnote 65];

b. default costs [Footnote 66];

c. present value of fees and other collections;

d. other subsidy costs (SFFAS 2, par. 25-29);

136. Is the subsidy cost allowance for post-1991 direct loans amortized 
using the interest method? [Footnote 67] (SFFAS 2, par. 30, 31, and 
app. B, part I B (2); SFFAS 19, par. 7(a));

137. If the effective interest for post-1991 direct loans is less than 
the nominal interest, is the subsidy cost allowance increased by the 
difference and recognized as a reduction in interest income? (SFFAS 2, 
par. 30 & app. B, part I B (2); SFFAS 19, par. 7(a));

138. If the effective interest for post-1991 direct loans is greater 
than the nominal interest, is the subsidy cost allowance decreased by 
the difference and recognized as an increase in interest income? (SFFAS 
2, par. 30 & app. B, part I B (2); SFFAS 19, par. 7(a));

139. Is interest accrued and compounded on the liabilities of post-1991 
loan guarantees at the interest rate that was originally used to 
calculate the present value of the loan guarantee liabilities when the 
guaranteed loans were disbursed, after adjusting for the interest 
reestimate? (SFFAS 2, par. 31 & app. B, part III B (2); SFFAS 19, par. 
7(b));

140. Is the interest accrued and compounded on the liabilities of post-
1991 loan guarantees recognized as an interest expense? (SFFAS 2, par. 
31 & app. B, part III B (2))?

Two kinds of reestimates for the subsidy cost allowance for outstanding 
direct loans and the liability for outstanding loan guarantees are (1) 
interest rate reestimates and (2) technical/default reestimates. An 
interest rate reestimate is due to a change in the interest rates from 
those that were assumed in budget preparation and used in calculating 
the subsidy expense to the interest rates that are prevailing during 
the periods in which the direct or guaranteed loans are disbursed. A 
technical/default reestimate is due to changes in projected cash flows 
of outstanding direct loans and loan guarantees after reevaluating the 
underlying assumptions and other factors (except for interest rate 
reestimates) that affect cash flow projections as of the financial 
statement date. (SFFAS 18, par. 9);

141. Does the entity measure and disclose reestimates of allowances for 
subsidy costs of post-1991 loans and liabilities for guarantees in two 
components separately, specifically: the interest rate reestimate and 
the technical/default reestimate? (SFFAS 18, par. 9);

142. Is any increase (or decrease) in the subsidy cost allowance of 
post-1991 direct loans or loan guarantee liabilities resulting from the 
interest rate and technical /default reestimates recognized as a 
subsidy expense (or a reduction in subsidy expense) and disclosed 
separately by component? (SFFAS 2, par. 32; SFFAS 18, par. 9; OMB 
Bulletin 01-09, pp. 62 & 71, section 9.8, item E2 & pp. 66 & 73, 
section 9.8, item L2);

143. If the assumed interest rates used in calculating the subsidy 
expenses for cohorts [Footnote 68] from which direct or guaranteed 
loans are disbursed differ from the rates prevailing at the time of the 
loan disbursement, is an interest rate reestimate for those cohorts 
made as of the date of the financial statements? (SFFAS 18, par. 9 
(A));

144. Do technical/default reestimates take into consideration all 
factors that may have affected various components of projected cash 
flows, including defaults, delinquencies, recoveries, and prepayments? 
(SFFAS 18, par. 9 (B));

145. Are technical/default reestimates made each year as of the date of 
the financial statements? (SFFAS 18, par. 9 (B));

146. In a note to the financial statement, does the entity display a 
reconciliation between the beginning and ending balances of the 
following?

a. the subsidy cost allowances for outstanding direct loans;

b. the liability for outstanding loan guarantees reported in the 
entity's balance sheet (SFFAS 18, par. 10);

147. Does the reconciliation of beginning and ending subsidy cost 
allowances and loan guarantee liability balances include changes in the 
following?

a. interest subsidy costs, default costs, fees and other collections, 
and other subsidy costs;

b. interest rate and technical/default reestimates;

c. other adjustments (SFFAS 2, par. 25-29; SFFAS 18, par. 10);

148. For direct loans, do other adjustments include loan modifications, 
fees received, loans written off, foreclosed property or other 
recoveries acquired, and subsidy allowance amortization? (SFFAS 18, 
par. 10);

149. For loan guarantees, do other adjustments include loan guarantee 
modifications, fees received, interest supplements paid, claim payments 
made to lenders, foreclosed property or other recoveries acquired, and 
interest accumulated on the loan guarantee liability? (SFFAS 18, par. 
10);

150. In its notes to the financial statements, does the entity include 
a description of the characteristics of the program it administers, 
including the following?

a. the total amount of direct or guaranteed loans disbursed for the 
current and preceding reporting years;

b. interest subsidy costs, default costs, fees and other collections, 
and other subsidy costs;

c. interest rate and technical/default reestimates (SFFAS 18, par. 11 
(A));

151. Does the reporting entity disclose, at the program level, the 
subsidy rates [Footnote 69] for direct loans and loan guarantees in the 
current year's budget for the current year's cohorts, the following 
items?

a. total subsidy cost;

b. interest subsidy costs;

c. default costs (net of recoveries)?

d. fees and other collections;

e. other costs (SFFAS 18, par. 11 (B));

152. If the entity uses trend data to display significant fluctuations 
in subsidy rates, are these data accompanied by an analysis that 
explains the underlying causes for the fluctuations? (SFFAS 18, par. 11 
(B));

153. Does the reporting entity disclose, discuss, and explain events 
and changes in economic conditions, other risk factors, legislation, 
credit policies, [Footnote 70] and subsidy estimation methodologies and 
assumptions that have had a significant and measurable effect on 
subsidy rates, subsidy expenses, and subsidy reestimates? (SFFAS 18, 
par. 11 (C));

154. Does the disclosure and discussion also include events and changes 
that have occurred and are more likely than not to have a significant 
impact, but whose effects are not measurable at the reporting date? 
(SFFAS 18, par. 11 (C));

155. Are default costs estimated and periodically reestimated for each 
post-1991 loan and loan guarantee program on the basis of separate 
cohorts and risk categories? (SFFAS 2, par. 33);

156. In estimating default costs, has the entity considered the 
following factors?

a. loan performance experience;

b. the current and forecasted international, national, or regional 
economic conditions that may affect the performance of the loans;

c. financial and other relevant characteristics of borrowers;

d. the value of collateral to loan balance;

e. changes in recoverable value of collateral;

f. newly developed events that could affect the loans' performance;

g. improvements in methods to reestimate defaults (SFFAS 2, par. 34);

157. In estimating and reestimating future default costs for each 
group, cohort, and risk category of loan and guarantee, has the agency 
used a systematic methodology based on actual historical experience? 
(SFFAS 2, par. 35 & 36);

158. Is interest (at the discount rate in effect when the loans were 
first disbursed) accrued on post-1991 direct loans, including amortized 
interest, recognized as interest income? (SFFAS 2, par. 37 & app. B, 
part I B (2) & C);

159. Is interest (at the original discount rate) accrued on debt to the 
Treasury arising from post-1991 direct loans recognized as interest 
expense? (SFFAS 2, par. 37 & app. B, part I B (2) & C);

160. Is interest (at the discount rate in effect when the loans were 
first disbursed) accrued on liability of post-1991 loan guarantees 
recognized as interest expense? (SFFAS 2, par. 37 & app. B, part III B 
(2) & C);

161. Is interest (at the original discount rate) due from the Treasury 
on uninvested funds associated with post-1991 loan guarantee 
liabilities recognized as interest income? (SFFAS 2, par. 37 & app. B, 
part III B (2) & C);

162. Are costs for administering credit activities (such as salaries, 
legal fees, and servicing) incurred in support of direct loan and 
guaranteed loan programs recognized as administrative expenses and not 
included in direct loan and loan guarantee subsidy costs? (SFFAS 2, 
par. 38);

163. Are administrative expenses for loans and guarantees broken out 
and disclosed by program, if material? (OMB Bulletin 01-09, p. 67 & 74, 
section 9.8, item O);

164. Are losses (as well as valuation allowances and corresponding 
liabilities) of direct loans obligated and loan guarantees committed 
before October 1, 1991, recognized when it is more likely than not that 
the direct loans will not be totally collected or that the loan 
guarantees will require a future cash outflow to pay default claims? 
(SFFAS 2, par. 39)?

Foreclosed properties are assets received in satisfaction of a loan 
receivable or as a result of payment of a claim under a guaranteed or 
insured loan (excluding commodities acquired under price support 
programs.) All properties included in foreclosed property are assumed 
to be held for sale. Pre-1992 foreclosed property refers to property 
associated with direct loans obligated or loan guarantees committed 
before October 1, 1991. Post-1991 foreclosed property refers to 
property associated with direct loans obligated or loan guarantees 
committed after September 30, 1991. (SFFAS 3, par. 79 & 80);

165. If, at the time of the foreclosure, the expected net realizable 
value of pre-1992 foreclosed property is less than the cost (i.e., the 
carrying amount of the loan, or for a loan guarantee, the amount of the 
claim paid), is the loss charged to operations and tracked in a 
valuation allowance account? (SFFAS 3, par. 86);

166. If the pre-1992 foreclosed asset's net realizable value 
subsequently increases or decreases, does the entity credit or charge 
this amount to results of operations and adjust the valuation 
allowance? (SFFAS 3, par. 86);

167. Upon sale of foreclosed property, is any difference between the 
net carrying amount of foreclosed property and the net proceeds of the 
sale recognized as a component of operating results? (SFFAS 3, par. 
89);

168. For post-1991 foreclosed property, is interest income accrued from 
the previous periodic adjustment in the carrying amount up to the sale 
date? (SFFAS 3, par. 89);

169. For post-1991 foreclosed property, is the resulting difference 
between the adjusted carrying amount and the net sales proceeds 
recognized as a reestimate of "subsidy expense?" (SFFAS 3, par. 89);

170. For pre-1992 foreclosed property, is the difference between the 
adjusted carrying amount and net sales proceeds recognized as a gain or 
a loss on the sale of foreclosed property? (SFFAS 3, par. 89)?

The term modification, as it applies to direct loans and loan 
guarantees, means a federal government action, including new 
legislation or administrative action that directly or indirectly alters 
the estimated subsidy cost and the present value of outstanding direct 
loans, or the liability of loan guarantees. The cost of the 
modification is the excess of the premodification value of a direct 
loan (or postmodification liability of loan guarantees) over the 
postmodification value of a direct loan (or premodification liability 
of loan guarantees), both of which have been discounted at the Treasury 
rate in effect when the modification occurred. (SFFAS 2, par. 41; SFFAS 
2, par. 45, notes 3 & 4 & par. 49, notes 6 & 7; SFFAS 19, par. 6);

The book value of the loan or guarantee is discounted at the Treasury 
rate originally used to calculate the present value of the direct loan 
or loan guarantee liability when the loan was originally disbursed. 
(SFFAS 2, par. 48 & 50, app. B parts I D (4 & 5), II B (4), III B (4), 
& IV B (4))?

The sale of post-1991 and pre-1992 direct loans is treated as a direct 
modification of the loans sold if the sale proceeds were not included 
in the cash flows estimates for the initial subsidy calculation. The 
cost of modification is determined on the basis of the premodification 
value of the loans sold. However, if sale proceeds were included in the 
cash flow estimates for the initial subsidy calculation, the effect of 
the loan sale on the cost of the program is recognized in the 
reestimates. (SFFAS 2, par. 53, Appendix B. par 1F);

171. If pre-1992 or post-1991 direct loans are modified, is the excess 
of the premodification value [Footnote 71] over the postmodification 
value [Footnote 72] recognized as a modification expense? (SFFAS 2, 
par. 45 & app. B, parts I D (1-3) & II B (1-3));

172. If the cost of modifying pre-1992 or post-1991 loans is greater 
than the decrease in the loans' book value, is the difference 
recognized as a gain? [Footnote 73] (SFFAS 2, par. 48 & app. B, parts I 
D (4 & 5) & II B (4 & 5));

173. If the cost of modifying pre-1992 or post-1991 loans is less than 
the decrease in the loans' book value, is the difference recognized as 
a loss? [Footnote 74] (SFFAS 2, par. 48 & app. B, parts I D (4 & 5), & 
part II B (4 & 5));

174. If pre-1992 or post-1991 loan guarantees are modified, is the 
excess of the postmodification liability [Footnote 75] over the 
premodification liability [Footnote 76] recognized as a modification 
expense? (SFFAS 2, par. 49 & app. B, parts III D (1-3), & IV B (1-3));

175. If the cost of modifying pre-1992 or post-1991 loan guarantees is 
greater than the increase in the book value of the related loan 
guarantee liabilities, is the difference recognized as a gain? (SFFAS 
2, par. 52 & app. B, parts III D (4 & 5), & IV B (5));

176. If the cost of modifying pre-1992 or post-1991 loan guarantees is 
less than the increase of the related loan guarantee liabilities, is 
the difference recognized as a loss? (SFFAS 2, par. 52 & app. B, parts 
III D (4 & 5) & IV B (5));

177. If the premodification value of post-1991 and pre-1992 loans sold 
[Footnote 77] exceeds the net proceeds from the sale, is the excess 
treated as the cost of modification and recognized as a modification 
expense? (SFFAS 2, par. 45 & 53 & app. B, part I F (1));

178. If a loan is sold with recourse, is the present value of estimated 
losses under the recourse or guarantee obligations recognized as a 
subsidy expense and as a loan guarantee liability? (SFFAS 2, par. 54);

179. If the modification expense arising from a loan sale is greater 
than the book value loss, is the difference recognized as a gain? 
(SFFAS 2, par. 55 & app. B, part I F (2));

180. If the modification expense arising from a loan sale is less than 
the book value loss, is the difference recognized as a loss? (SFFAS 2, 
par. 55 & app. B, part I F (2));

[End of section]

Section V: Statement of Changes in Net Position:

The 39 questions in this section are related to the Statement of 
Changes in Net Position:

1. General; Question Numbers: 1 - 5;

2. Budgetary Financing Sources; Question Numbers: 6 - 22;

3. Other Financing Sources; Question Numbers: 23 - 39;

General (1 - 5):

The Statement of Changes in Net Position reports the change in net 
position during the reporting period. Net position is affected by 
changes to its two components: Cumulative Results of Operations and 
Unexpended Appropriations. They are broken out into two separate 
columns in the Statement of Changes in Net Position. (OMB Bulletin 01-
09, pp. 34 & 35, sections 5.1 & 5.2);

1. Do beginning balances of Cumulative Results of Operations and 
Unexpended Appropriations agree with the amounts reported as net 
position on the prior year's balance sheet? (OMB Bulletin 01-09, p. 35, 
section 5.3);

2. Are "beginning balances, as adjusted," equal to the sum of the 
beginning balances of net position as reported on the prior year's 
balance sheet, and prior period adjustments? (OMB Bulletin 01-09, p. 
36, section 5.3);

3. When errors [Footnote 78] are discovered after the issuance of 
financial statements, and if the financial statements would be 
materially misstated absent correction of the errors, are the 
corrections made as follows in the statement of changes in net 
position?

a. If only the current period statement is presented, the cumulative 
effect of correcting the error is reported as a prior period adjustment 
to the beginning balance of the cumulative results of operations?

b. If comparative financial statements are presented, individual 
amounts on the financial statements are corrected in the earliest 
affected period presented?

c. If the earliest period presented in the comparative financial 
statements is not the period in which the error occurred and the 
cumulative effect is attributable to prior periods, the cumulative 
effect is reported as a prior period adjustment to the beginning 
balance of cumulative results of operations in the statement of net 
position for the earliest period presented. (SFFAS 21, par. 10 & 11);

4. Is the nature of an error in previously issued financial statements 
and the effect of its correction on relevant balances disclosed? (SFFAS 
21, par. 10 (c));

5. If changes in accounting principles [Footnote 79] would have 
resulted in a change to prior period financial statements, are they 
handled in the following manner?

a. the cumulative effect of the change on prior periods is reported as 
a "change in accounting principle" and reported as an adjustment to the 
beginning balance of the cumulative results of operations in the 
Statement of Changes in Net Position for the period that the change is 
made;

b. prior period financial statements presented for comparative purposes 
are presented as previously reported;

c. the nature of the changes in accounting principle and its effect on 
relevant balances are disclosed in the current period [Footnote 80] 
(SFFAS 21, par. 12 & 13; SFFAS 23, par. 17 & 18);

Budgetary Financing Sources (6 - 22):

The section, "Budgetary Financing Sources," displays financing sources 
and nonexchange revenue that are also budgetary resources, or 
adjustments to these resources, as reported on the Statement of 
Budgetary Resources and defined as such by OMB Circular No. A-11, Part 
4 [Footnote 81] "Instructions on Budget Execution," as amended. (OMB 
Bulletin 01-09, p. 36, section 5.4);

6. Do budgetary "appropriations received" [Footnote 82] reported under 
"Budgetary Financing Sources" agree with the amount reported on the 
line item "appropriations received" in the Statement of Budgetary 
Resources? (OMB Bulletin 01-09, p. 36, section 5.4);

7. Are unexpended appropriations reduced as appropriations are used? 
(SFFAS 7, par. 71);

8. Are unexpended appropriations adjusted for other changes in 
budgetary resources, such as rescissions and transfers? (SFFAS 7, par. 
71);

9. Do "appropriations transferred in/out (+/-)" equal the amount of 
appropriations received in the current or prior year(s) that have been 
transferred in or out during the current reporting year? (OMB Bulletin 
01-09, p. 36, section 5.4);

10. Do "other adjustments [Footnote 83] (rescissions, etc.) (+/-)" 
include adjustments to either cumulative results of operations or 
unexpended appropriations? (OMB Bulletin 01-09, p. 36, section 5.4);

11. Are appropriations used by collecting entities to provide refunds 
of monies deposited to Treasury and trust funds reported under "other 
adjustments (rescissions, etc. (+/-))" rather than as an 
"appropriations used?" (OMB Bulletin 01-09, p. 36, section 5.4);

12. Are "appropriations used" recognized as a financing source when 
goods and services are received or when benefits and grants are 
provided? [Footnote 84] (SFFAS 7, par. 72; OMB Bulletin 01-09, p. 36, 
section 5.4);

13. Is the amount of appropriations used subtracted from unexpended 
appropriations and added to cumulative results of operations for a net 
zero effect on net position as a whole? (OMB Bulletin 01-09, p. 36, 
section 5.4);

14. Do "appropriations [Footnote 85] used" exclude the following?

a. undelivered orders;

b. unobligated appropriations;

c. dedicated tax receipts, earmarked receipts, and donations [Footnote 
86] (OMB Bulletin 01-09, p. 36, section 5.4);

15. Is nonexchange revenue recognized as a financing source (and not as 
a deduction in determining the net cost of operations)? (SFFAS 7, par. 
60);

16. Does the entity recognize nonexchange revenues, such as taxes, if 
it is legally entitled to the revenue? (SFFAS 7, par. 48 & 49);

17. Is nonexchange revenue recognized when the government's claim to 
resources can be characterized as follows?

a. specifically identifiable;

b. legally enforceable;

c. reasonably estimable;

d. more likely than not collectable (SFFAS 7, par. 48);

18. Is revenue recognized by the recipient entities the sum of the 
following?

a. cash or cash equivalents transferred to them by the collecting 
entities;

b. the net change in any related interentity balances between the 
collecting and the receiving entities (i.e., the amount to be 
transferred to the recipient entities from the collecting entity or 
vice versa) (SFFAS 7, par. 60);

19. Do "donations and forfeitures of cash and cash equivalents" include 
voluntary gifts and involuntary forfeitures of resources to the federal 
government by nonfederal entities? (OMB Bulletin 01-09, p. 37, section 
5.4);

20. Do "transfers-in/out without reimbursement (+/-)" under "budgetary 
financing sources" include intragovernmental nonappropriated [Footnote 
87] balance transfers in or out during the current reporting year? (OMB 
Bulletin 01-09, p. 37, section 5.4);

21. Is exchange revenue (included in calculating an entity's net cost 
of operations) required to be transferred to the Treasury or another 
federal entity recognized as a transfer out? (OMB Bulletin 01-09, p. 
37, section 5.4);

22. Do "other budgetary financing sources" include other financing 
sources that affect budgetary resources that have not been covered by 
the preceding questions? (OMB Bulletin 01-09, p. 37, section 5.4);

Other Financing Sources (23 - 39):

"Other financing sources," displays financing sources and nonexchange 
revenue that do not represent budgetary resources as reported on the 
Statement of Budgetary Resources and defined as such by OMB Circular 
No. A-11, Part 4 (OMB Bulletin 01-09, p. 37, section 5.5);

23. Do the items reported in the "other financing sources" section 
equal the amounts reported as similar line items in the "other 
resources" [Footnote 88] section on the Statement of Financing? (OMB 
Bulletin 01-09, p. 35, section 5.2, pp. 37 & 38, section 5.5, p. 46, 
section 7.2 & p. 48, section 7.3);

24. Is revenue arising from donations of property measured at the 
estimated fair value of the contribution at the time of the donation? 
(SFFAS 6, par. 30; SFFAS 7, par. 62, OMB Bulletin 01-09, p. 37, section 
5.5);

25. Are transferred assets recorded at the book value of the 
transferring entity, or, if the receiving entity does not know the book 
value, is the asset recorded at its estimated fair value as of the date 
of the transfer? [Footnote 89] (SFFAS 7, par. 74; OMB Bulletin 01-09, 
p. 37, section 5.5);

26. When assets [Footnote 90] are transferred in or out by entities 
without reimbursement:

a. Does the receiving entity recognize the transfer-in as an increase 
in financing sources in its statement of net position?;

b. Does the transferring entity recognize the transfer out as a 
decrease in financing sources in its statement of changes in net 
position? (SFFAS 7, par. 74, OMB Bulletin 01-09, p. 37, section 5.5);

27. Does the reporting entity recognize an imputed financing source for 
costs funded through other federal entities as well as nonreimbursed 
costs of goods and services provided by other federal entities? (SFFAS 
4, par. 109; SFFAS 7, par. 73; OMB Bulletin 01-09, p. 37, section 5.5);

28. Do imputed financing costs reported on the Statement of Changes in 
Net Position equal the amount of imputed financing costs as reported on 
the statement of net cost? (OMB Bulletin 01-09, p. 37, section 5.5);

29. Do "other financing sources" include other financing sources that 
do not represent budgetary resources and that have not been covered by 
the preceding questions (i.e., nos. 23-28)? (OMB Bulletin 01-09, p. 38, 
section 5.5);

30. Is exchange revenue transferred to another government entity or to 
the Treasury recognized as a "transfer out" in determining the net 
results of operations? (SFFAS 7, par. 75);

31. Is a gain [Footnote 91] from the modification [Footnote 92] of 
post-1991 loans reported as a reduction in financing source and paid to 
the Treasury as a "modification adjustment transfer?" (SFFAS 2, par. 
48, & app. B, part I D (5));

32. Is a loss [Footnote 93] from the modification of post-1991 loans 
reported as a financing source when the reporting entity receives from 
the Treasury a "modification adjustment transfer?" (SFFAS 2, par. 48 & 
app. B, part I D (5));

33. Is a gain [Footnote 94] resulting from a modification of post-1991 
loan guarantees reported as a reduction in financing source and paid to 
the Treasury as a "modification adjustment transfer?" (SFFAS 2, par. 52 
& app. B, part III D (5));

34. Is a loss [Footnote 95] resulting from a modification of post-1991 
loan guarantees reported as a financing source when the reporting 
entity receives from the Treasury a "modification adjustment transfer" 
to offset the difference? (SFFAS 2, par. 52 & app. B, part III D (5));

35. Is a gain on the sale of a post-1991 loan reported as a reduction 
in financing source and paid to the Treasury as a "modification 
adjustment transfer?" (SFFAS 2, par. 55 & app. B, part I F (2));

36. Is a loss on the sale of a post-1991 loan reported as a financing 
source when the reporting entity receives from the Treasury a 
"modification adjustment transfer?" (SFFAS 2, par. 55 & app. B, part I 
F (2));

37. Does the amount "net cost of operations" reported under cumulative 
results of operations agree with "net cost of operations" as reported 
on the Statement of Net Cost and Statement of Financing? (OMB Bulletin 
01-09, p. 38, section 5.6 & p. 51, section 7.7);

38. Is the difference between the net cost of operations and the sum of 
the financing sources (i.e., budgetary and other) equal to the ending 
balance of net position as it relates to the cumulative results of 
operations? (OMB Bulletin 01-09, p. 38, section 5.6);

39. Do the ending balances of the cumulative results of operations and 
unexpended appropriations agree with the amounts reported as net 
position on the current year's balance sheet? (OMB Bulletin 01-09, p. 
38, section 5.7);

[End of section]

Section VI: Statement of Budgetary Resources:

The 27 questions in this section concern the Statement of Budgetary 
Resources.

Statement of Budgetary Resources (1 - 27):

The budget is the primary financial planning and control tool of the 
government. The Statement of Budgetary Resources and the related 
disclosures provide information about how budgetary resources were made 
available as well as their status at the end of the period. It is the 
only financial statement exclusively derived from an entity's budgetary 
general ledger, prepared in accordance with budgetary accounting rules, 
which are incorporated into Generally Accepted Accounting Principles 
(GAAP) for the federal government. (SFFAS 7, par. 77; OMB Bulletin 01-
09, p. 39, section 6.1);

1. Is the recognition and measurement of budgetary information reported 
on the Statement of Budgetary Resources (SBR) based on budget 
terminology, definitions, and guidance in OMB Circular No. A-11, 
[Footnote 96] Preparation, Submission and Execution of the Budget, 
(July 2003)? (SFFAS 7, par. 78; OMB Bulletin 01-09, p. 39, section 
6.1);

2. Is information on the SBR consistent with budget execution 
information reported on the Report on Budget Execution and Budgetary 
Resources (SF 133) and with information reported in the Budget of the 
United States Government? (OMB Bulletin 01-09, p. 39, section 6.1);

3. Does the entity disclose and explain any material differences 
between comparable information contained in the three reports (i.e., 
SBR, SF 133 and the Budget of the United States Government)? (OMB 
Bulletin 01-09, p. 6, section 1.7 & p. 39, section 6.1);

4. Is budgetary information aggregated for purposes of the Statement of 
Budgetary Resources disaggregated [Footnote 97] for each of the 
reporting entity's major budget accounts and presented as required 
supplementary information? (SFFAS 7, par. 78; OMB Bulletin 01-09, p. 
112, section 11.4);

5. Do the major accounts and the aggregate of small budget accounts 
agree, in total, with the amounts reported on the face of the Statement 
of Budgetary Resources? (OMB Bulletin 01-09, p. 112, section 11.4);

6. Is the budgetary information in the SBR presented on a combined 
basis that is consistent with the aggregate of the account-level 
information presented on the SF 133s? (OMB Bulletin 01-09, p. 39, 
section 6.2);

7. Are nonbudgetary credit financing accounts reported separately from 
the budgetary accounts? (OMB Bulletin 01-09, p. 40, section 6.3);

8. Does the entity include in its SBR the following under "Budgetary 
Resources"?

a. budget authority, including if applicable;

i. appropriations received;

ii. borrowing authority;

iii. contract authority;

iv. net transfers (+/-)?

v. other;

b. unobligated balances, including if applicable;

i. beginning of period balances;

ii. net transfers, actual (+/-)?

iii. anticipated transfer balances;

c. spending authority from offsetting collections, including, if 
applicable;

i. earned authority that is collected and/or receivable from federal 
services;

ii. changes in unfilled customer orders that are advance(s) received, 
and/or without advance(s) from federal sources;

iii. anticipated collections for the rest of the year without advances;

iv. transfers from trust funds;

d. recoveries of prior year obligations;

e. budgetary resources temporarily not available pursuant to public 
law;

f. budgetary resources permanently not available (OMB Bulletin 01-09, 
p. 41, section, 6.4; SFFAS 7, par. 77);

9. Do the budgetary resources reported in this section agree with the 
total budgetary resources reported for all of the budget accounts on 
the year-end SF 133? (OMB Bulletin 01-09, p. 42, section 6.5);

10. Does the line item "appropriations received" [Footnote 98] reported 
on the SBR equal the amount reported as "appropriations received" on 
the Statement of Changes in Net Position? (OMB Bulletin 01-09, p. 36, 
section 5.4 & p. 43, section 6.5);

11. Does the line item entitled "permanently not available" on the SBR 
include items reported under "other adjustments (rescissions, etc.)" on 
the Statement of Changes in Net Position? (OMB Bulletin 01-09, p. 36, 
section 5.4 & p. 43, section 6.5);

12. Does the entity include the following under "Status of Budgetary 
Resources" on the SBR?

a. obligations incurred that are;

i. direct and/or;

ii. reimbursable;

b. unobligated balance(s) that are;

i. apportioned;

ii. exempt from apportionment;

iii. otherwise available;

c. unobligated balance(s) not available (OMB Bulletin 01-09, p. 42, 
section 6.4; SFFAS 7, par. 77);

13. Does the total amount displayed for the "status of budgetary 
resources" section of the SBR equal "total budgetary resources" 
available to the reporting entity as of the reporting date? (OMB 
Bulletin 01-09, p. 43, section 6.6);

14. Does the status of budgetary resources reported on the SBR agree 
with the total status reported for each budget account on the year-end 
SF 133? (OMB Bulletin 01-09, p. 43, section 6.6);

15. Does the entity's SBR include the following under "Relationship of 
Obligations to Outlays?";

a. obligated balance, net, beginning of period;

b. obligated balance transferred, net (+/-)?

c. obligated balance, net, end of period that are;

i. accounts receivable;

ii. unfilled customer orders from federal sources;

iii. undelivered orders;

iv. accounts payable;

d. outlays that are;

i. disbursements;

ii. collections;

e. less, if applicable, offsetting receipts [Footnote 99] (OMB Bulletin 
01-09, p. 40, section 6.3 & p. 42, section 6.4);

16. Do the outlays [Footnote 100] reported in "Relationship of 
Obligations to Outlays" section agree with the agency outlay totals 
reported in the Budget of the United States Government? [Footnote 101] 
(OMB Bulletin 01-09, p. 43, section 6.7);

17. Do the outlays also agree with the aggregate of outlays reported on 
the year-end SF 133 for all budget accounts, including nonbudgetary 
financing accounts and the disbursements and collections reported to 
Treasury on a monthly basis [Footnote 102] as per OMB Circular No. A-
11? [Footnote 103] (OMB Bulletin 01-09, p. 43, section 6.7)?

Offsetting receipts are collections that are credited to general fund, 
special fund, or trust fund receipt accounts and that offset gross 
outlays. Unlike offsetting collections, which are credited to 
expenditure accounts and offset outlays at the account level, 
offsetting receipts are credited to receipt accounts and offset outlays 
at the agency or governmentwide level?

Offsetting receipts may be distributed or undistributed to agencies. 
Distributed offsetting receipts offset the outlays of the agency, while 
undistributed offsetting receipts offset governmentwide outlays. 
Distributed offsetting receipts typically offset the outlays of the 
agency that conducts the activity, generating the receipts and the 
subfunction to which the activity is assigned. Offsetting receipts are 
composed of proprietary receipts from the public, receipts from 
intragovernmental transactions, and offsetting governmental receipts. 
(OMB Bulletin 01-09, pp. 43 & 44, section 6.7);

18. Does the line item "offsetting receipts" on the SBR include all 
distributed offsetting receipts for the agency? [Footnote 104] (OMB 
Bulletin 01-09, p. 44, section 6.7);

19. Does the agency include the following receipt accounts from the 
Treasury Annual Report Appendix, Part 4, Other Information/Receipts by 
Department, in the SBR?

a. Proprietary Receipts from the Public;

b. Intrabudgetary Receipts Deducted by Agencies;

c. Offsetting Governmental Receipts (OMB Bulletin 01-09, p. 44, section 
6.7);

20. Is the amount of distributed offsetting receipts reported in SBR 
the aggregate of cash collected in these receipt accounts and reported 
to Treasury on a monthly basis? [Footnote 105] (OMB Bulletin 01-09, p. 
44, section 6.7);

21. Does the amount of offsetting receipts that are distributed to 
agencies and reported on the SBR agree with the deductions for 
offsetting receipts as reported in the Budget of the United States 
Government, if available by the time the financial statements must be 
finalized and submitted (OMB Bulletin 01-09, p. 44, section 6.7);

22. Are undistributed offsetting receipts, which are credited to 
governmentwide outlay totals, excluded from the SBR? (OMB Bulletin 01-
09, p. 44, section 6.7);

23. Do the net outlays in the SBR agree with the net outlays [Footnote 
106] as reported in the Budget of the United States Government, if 
available by the time the financial statements must be finalized and 
submitted? (OMB Bulletin 01-09, p. 44, section 6.7);

24. Does the entity disclose the amount of direct and reimbursable 
obligations incurred against amounts apportioned under category 
[Footnote 107] "A," "B," and "exempt from apportionment"? (OMB Bulletin 
01-09, p. 93, section 9.27);

25. Does the disclosure of the amount of direct and reimbursable 
obligations incurred against amounts apportioned under category 
[Footnote 108] "A," "B," and "exempt from apportionment" agree with the 
aggregate of the related information as reported on the agency's year-
end SF 133, and the amounts reported under direct and reimbursable 
obligations incurred, reported on the SBR? (OMB Bulletin 01-09, p. 93, 
section 9.27);

26. Does the entity disclose the following information related to the 
status of budgetary resources?

a. the amount of budgetary resources obligated for undelivered orders 
at the end of the period;

b. available borrowing and contract authority at the end of the period;

c. repayment requirements, financing sources for repayment, and other 
terms of borrowing authority used;

d. amounts adjusted to "budgetary resources available at the beginning 
of the year," during the reporting period, as well as an explanation of 
the adjustments;

e. existence, purpose, and availability of permanent, indefinite 
appropriations;

f. information about legal arrangements affecting the use of 
unobligated balances of budget authority, such as time limits, purpose, 
and obligation limitations;

g. explanations of any material differences between the budgetary 
resources reported in the SBR and "actual" amounts in the Budget of the 
United States Government [Footnote 109];

h. the amount of unfunded liabilities, and an explanation that includes 
identification of balance sheet components, when unfunded liabilities 
do not equal the total financing sources yet to be provided;

i. the amount of any capital infusion received during the reporting 
period (SFFAS 7, par. 79 & 209-212; OMB Bulletin 01-09, p. 93 & 94, 
sections 9.27-9.34);

27. In order to ensure consistency between the information presented in 
the SBR and the Budget of the United States Government, does the entity 
do the following?

a. post all known audit adjustments to the Federal Agencies Centralized 
Trial-balance System II (FACTS II) during the window of time specified 
for posting corrections to the budget information;

b. post all known audit adjustments to OMB's MAX A-11 budget 
preparation system during the time frames provided by OMB (OMB Bulletin 
01-09, pp. 5 & 6, section 1.7);

[End of section]

Section VII: Statement of Financing:

The 27 questions in this section are related to the Statement of 
Financing.

1. Resources Used to Finance Activities; Question Numbers: 1-8;

2. Resources Used to Finance Items Not Part of the Net Cost of 
Operations; Question Numbers: 9-14;

3. Components of the Net Cost of Operations that Will Not Require or 
Generate Resources in the Current Period Resources; Question Numbers: 
15-24;

4. Disclosure Items; Question Numbers: 25-27.

Resources Used to Finance Activities (1 - 8);

The Statement of Financing is the bridge between an entity's budgetary 
and financial (i.e., proprietary) accounting. The Statement of 
Financing articulates the relationship between net obligations derived 
from an entity's budgetary accounts and net cost of operations derived 
from the entity's proprietary accounts by identifying and explaining 
key differences between the two numbers?

Most entity transactions are recorded in both budgetary and proprietary 
accounts. However, because different accounting bases are used for 
budgetary and proprietary accounting, some transactions may appear in 
only one set of accounts (e.g., accrual of environmental and disposal 
liabilities, which is recorded only in the proprietary records). 
Furthermore, not all obligations or offsetting collections may result 
in expenses or exchange revenue (e.g., purchase of a building is 
capitalized on the balance sheet in the proprietary accounts but 
obligated and outlayed in the budgetary accounts)?

The statement is structured to first identify total resources used by 
an entity during the period (budgetary and other) and then make 
adjustments to the resources based upon how they were used to finance 
net obligations or net cost. Budgetary resources reported in this 
statement are those resources as defined in OMB Circular No. A-11 
[Footnote 110] and are also reported on the Statement of Budgetary 
Resources. Other resources reported in this statement are also 
reflected in the Statement of Changes in Net Position. (OMB Bulletin 
01-09, p. 45, section 7.1; SFFAS 7, par. 80 & 95)?

The section "Resources Used to Finance Activities" reflects the 
budgetary resources obligated and other resources that are used to 
finance the activities of the agency. The obligations of budgetary 
resources are net of offsetting collections, recoveries, and offsetting 
receipts. The other resources are financing sources that increase net 
position but are not budgetary resources. Every line item in this 
section is mirrored on either the Statement of Budgetary Resources or 
the Statement of Changes in Financial Position. (OMB Bulletin 01-09, p. 
47, section 7.3);

1. Is the budgetary information used to calculate net obligations 
[Footnote 111] in the "Resources Used to Finance Activities" section of 
the Consolidated Statement of Financing, presented on a combined basis 
[Footnote 112] to enable agreement with similar amounts reported on the 
Statement of Budgetary Resources? (OMB Bulletin 01-09, p. 6, section 
1.8 & p. 46, section 7.1);

2. Does the amount reported as "obligations incurred" equal the 
obligations incurred [Footnote 113] line item as reported on the 
Statement of Budgetary Resources, and does this include all budget 
accounts, including nonbudgetary financing accounts? (OMB Bulletin 01-
09,p. 47, section 7.3);

3. Does the line item "less: spending authority from offsetting 
[Footnote 114] collections and recoveries" [Footnote 115] agree with 
the spending authority from offsetting collections and recoveries as 
reported on the Statement of Budgetary Resources, and does this include 
all budget accounts, including nonbudgetary financing accounts? (OMB 
Bulletin 01-09, p. 47, section 7.3);

4. Is "Obligations net of offsetting collections and recoveries" equal 
to the difference between "obligations incurred" and "spending 
authority from offsetting collections and recoveries?" (OMB Bulletin 
01-09, p. 48, section 7.3);

5. Does the amount reported as "less: offsetting receipts" equal the 
offsetting receipts [Footnote 116] line item as reported on the 
Statement of Budgetary Resources? (OMB Bulletin 01-09, p. 48, section 
7.3);

6. Do "net obligations" [Footnote 117] equal the difference between 
"obligations net of offsetting collections and recoveries" and 
"offsetting receipts?" (OMB Bulletin 01-09, p. 48, section 7.3);

7. Does the entity's Statement of Financing include other nonbudgetary 
resources used to finance activities, and do the line item amounts as 
reported on the Statement of Financing equal the following 
corresponding line item amounts reported as "other financing sources" 
on the Statement of Changes in Net Position?

a. donations and forfeitures of property;

b. transfers in/out without reimbursement;

c. imputed financing from costs absorbed by others;

d. other (OMB Bulletin 01-09, p. 48, section 7.3);

8. Is "total resources used to finance activities" equal to the sum of 
net obligations [Footnote 118] and net other (nonbudgetary) resources 
used to finance activities? (OMB Bulletin 01-09, p. 46, section 7.2);

Resources Used to Finance Items Not Part of the Net Cost of Operations 
(9 - 14):

The section, "Resources Used to Finance Items Not Part of the Net Cost 
of Operations," in the Statement of Financing adjusts total resources 
used to finance the activities of the entity to account for items that 
were included in net obligations and other resources, but which were 
not part of the net cost of operations. This section would include 
items in which the expense was recognized in a prior period but the 
budgetary resource and obligation are recognized in the current period 
(e.g., upward/downward reestimates of subsidy expense accrued in the 
prior period but obligated in the current period). It would also 
include budgetary resources and obligations recognized in the current 
period that do not affect the net cost of operations (e.g., the 
acquisition of assets reflected in net obligations but not in net cost 
of operations for the period). (OMB Bulletin 01-09, p. 48, section 
7.4);

9. Does the line item, "change in budgetary resources obligated for 
goods, services, and benefits ordered but not yet provided (+/-)," 
[Footnote 119] reflect undelivered orders, or adjustments thereof, that 
are included in net obligations, but which are not part of the net cost 
of operations? (OMB Bulletin 01-09, p. 48, section 7.4);

10. Does the line item, "resources that fund expenses recognized in 
prior periods," [Footnote 120] reflect the obligation of resources that 
were part of the net cost of operations in a prior period? (OMB 
Bulletin 01-09, p. 48, section 7.4);

11. Do the line items included under "budgetary offsetting collections 
and receipts that do not affect net cost of operations" reflect 
offsetting collections and receipts [Footnote 121] that are not 
reported as exchange revenue in the Statement of Net Cost? (OMB 
Bulletin 01-09, pp. 48 & 49, section 7.4);

12. Does the line item, "resources that finance the acquisition of 
assets," reflect budgetary resources obligated [Footnote 122] that are 
not expenses as reported on the Statement of Net Cost? (OMB Bulletin 
01-09, p. 49, section 7.4);

13. Does the agency include under the line item, "Other resources or 
adjustments to net obligated resources that do not affect net cost of 
operations," activities [Footnote 123] not otherwise classified under 
the line items in this section of the Statement of Financing? (OMB 
Bulletin 01-09, p. 49, section 7.4);

14. Does the line item, "total resources used to finance the net cost 
of operations," consist of the difference between the line items "total 
resources used to finance activities" and "total resources used to 
finance items not part of the net cost of operations?" (OMB Bulletin 
01-09, p. 46, section 7.2 & p. 48, section 7.4);

Components of the Net Cost of Operations that Will Not Require or 
Generate Resources in the Current Period (15-24):

The section, "Components of the Net Cost of Operations that will not 
Require or Generate Resources in the Current Period," identifies (1) 
items that are recognized as a component of the net cost of operations 
(i.e., current period expenses and exchange revenues) for which 
budgetary resources (and related obligations) will not be provided (or 
incurred) until a subsequent period and (2) items (i.e., current period 
expenses) that are recognized as a part of the net cost of operations 
for the period but will not generate or require the use of resources in 
the current period. (OMB Bulletin 01-09, p. 49, section 7.5 & p. 50, 
section 7.6);

15. Does the line item, "increase in annual leave liability," include 
the expense related to the increase [Footnote 124] in annual leave 
liability for which the budgetary resources will be provided in a 
subsequent period? (OMB Bulletin 01-09, p. 50, section 7.5);

16. Does the line item, "increase in environmental and disposal 
liability," include the expense related to the increase in 
environmental and disposal liability for which the budgetary resources 
will be provided in a subsequent period? (OMB Bulletin 01-09, p. 50, 
section 7.5);

17. Does the line item "upward/downward reestimates of credit subsidy 
expense (+/-)," include the expense recognized as a result of an 
upward(+) or downward(-) reestimate of credit program subsidy cost for 
which budgetary resources (or obligations) will be provided (or 
incurred) in a subsequent period? [Footnote 125] (OMB Bulletin 01-09, 
p. 50, section 7.5);

18. Are these credit subsidy reestimates reflected as liabilities 
covered by budgetary resources? [Footnote 126] (OMB Bulletin 01-09, p. 
50, section 7.5);

19. Does the line item, "increase in exchange revenue receivable from 
the public," include exchange revenue recognized as a component 
[Footnote 127] of the net cost of operations for the period? (OMB 
Bulletin 01-09, p. 50, section 7.5);

20. Does the entity report as "other" under the section "Components 
Requiring or Generating Resources in Future Periods," all other 
expenses and exchange revenue not specifically mentioned in the 
preceding questions that do not require or generate resources in the 
current period but will do so in a subsequent period? (OMB Bulletin 01-
09, p. 50, section 7.5);

21. Does the line item, "depreciation and amortization," reflect the 
current period usage of assets [Footnote 128] or amortization of 
liabilities [Footnote 129] for which budgetary resources were obligated 
in a prior period? (OMB Bulletin 01-09, p. 50, section 7.6);

22. Does the line item, "revaluation of assets and liabilities," 
include gains and losses recognized [Footnote 130] during the 
revaluation of assets or liabilities? (OMB Bulletin 01-09, p. 50, 
section 7.6;);

23. Does the entity report as "other" under the section "components not 
requiring or generating resources," all other expenses [Footnote 131] 
and exchange revenue not specifically mentioned in the preceding 
questions that will not require or generate resources in the current or 
future periods? (OMB Bulletin 01-09, p. 50, section 7.5);

24. Does the sum of the line items "total resources used to finance net 
cost of operations" and "total components of net cost of operations 
that will not require or generate resources in the current period" 
agree with the net cost of operations as reported in the Statement of 
Net Cost as well as the Statement of Changes in Net Position? (OMB 
Bulletin 01-09, p. 51, section 7.7);

Disclosure Items (25-27):

25. Has the entity identified and explained in a note to the financial 
statements the relationship between amounts reported as "liabilities 
not covered by budgetary resources" reported on the Balance Sheet and 
amounts reported as "components requiring or generating resources in 
future periods" on the Statement of Financing? (OMB Bulletin 01-09, p. 
94, section 9.35)?

When budget authority and other resources are allocated to another 
agency or bureau, [Footnote 132] the parent (transferor of the 
appropriation) should report the activity in its financial statements 
unless the allocation transfer is material to the child's (recipient of 
the transfer) financial statements. If the allocation transfer is 
material to the child's financial statements, the child entity should 
report the activity relating to the allocation in all of its financial 
statements, except the Statement of Budgetary Resources (SBR). In this 
case, the parent entity should continue to report the appropriation and 
the related budgetary activity in its SBR. It is the responsibility of 
the parent to ensure that the reporting to Treasury, through FACTS I, 
is consistent with the presentation in the financial statements. (OMB 
Bulletin 01-09, p. 94, section 9.36);

26. When the child entity reports material allocation transfers in its 
Statement of Net Cost, do both the parent and the child report a 
reconciling item on their respective Statements of Financing? (OMB 
Bulletin 01-09, p. 95, section 9.36);

27. Do both parent and child entities provide a general description of 
the funds transferred or received, including the nature and purpose of 
the transfer and any additional details deemed necessary? (OMB Bulletin 
01-09, p. 95, section 9.36);

[End of section]

Section VIII: Statement of Custodial Activity:

1. General; Question Numbers: 1 - 2:

2. Sources of Collections; Question Numbers: 3 - 10:

3. Disposition of Collections; Question Numbers: 11 - 15:

4. Disclosures; Question Numbers: 16 - 19:

5. Dedicated Collections and Other Accompanying Information; Question 
Numbers: 20 - 27;

The 27 questions in this section are related to the Statement of 
Custodial Activity.

General (1-2):

Entities that collect nonexchange revenue for the General Fund of the 
Treasury, a trust fund, or other recipient entities account for the 
sources and disposition of these collections in a Statement of 
Custodial Activity.

An exception to requiring preparation of the Statement of Custodial 
Activity is made when collecting entities have custodial collections 
that are immaterial and incidental to their primary mission. In these 
cases, the sources and disposition of the collections may be disclosed 
in accompanying footnotes. (OMB Bulletin 01-09, p. 52, section 8.1);

1. If some of the nonexchange revenue is transferred to others and some 
of the nonexchange revenue is retained as a reimbursement for the costs 
of collection, are the transferred amounts reported on the Statement of 
Custodial Activity, and are the retained amounts reported on the 
Statement of Net Cost? (OMB Bulletin 01-09, p. 52, section 8.1);

2. If the entity collects exchange revenue (e.g., rents and royalties) 
on behalf of other entities and recognizes virtually no costs in 
connection with earning that revenue, does the entity account for it as 
a custodial activity? (SFFAS 7, par. 45);

Sources of Collections (3-10):

3. Are the following transactions recognized as taxes and other 
nonexchange revenues from the public?

a. individual and corporate income taxes, social insurance taxes and 
contributions, excise taxes, estate and gift taxes, and customs duties;

b. social insurance taxes and contributions paid by federal employees;

c. deposits by states for unemployment trust funds;

d. user fees and harbor maintenance trust fund payments;

e. customs service fees;

f. deposits of earnings from the Federal Reserve System;

g. donations, except types of PP&E that are expensed;

h. fines and penalties;

i. penalties due to delinquent taxes in connection with custodial 
activity;

j. forfeitures (SFFAS 7, par. 49; SFFAS 7, Appendix B, par. 242 - 264);

4. Does the collecting entity measure taxes and duties on a cash basis 
and then modify that with an accrual adjustment to determine the amount 
of revenue to be recognized? (SFFAS 7, par. 49 & 52; OMB Bulletin 01-
09, p. 54, section 8.3);

5. Except for deposits, are cash collections [Footnote 133] based on 
amounts actually received during the fiscal period including 
withholdings, estimated payments, final payments, and collections of 
receivables? (SFFAS 7, par. 50 & 59);

6. Are the components of cash collections classified by source and 
nature of collection, such as by type of tax or duty? (OMB Bulletin 01-
09, pp. 53 & 54, section 8.3);

7. Are cash refunds of nonexchange revenue based on refunds of taxes 
and duties during the period? (SFFAS 7, par. 51);

8. Do cash refunds of nonexchange revenue for taxes and duties include 
refund offsets [Footnote 134] and drawbacks? [Footnote 135] (SFFAS 7, 
par. 51);

9. Are cash refunds, if material in relation to gross collections, 
disclosed separately by component in the notes to the financial 
statement? (OMB Bulletin 01-09, p.54, section 8.3);

10. Are accrual adjustments, [Footnote 136] if material in relation to 
gross collections, disclosed separately in the notes to the financial 
statement? (SFFAS 7, par. 52; OMB Bulletin 01-09, p. 54, section 8.3);

Disposition of Collections (11-15):

11. Do the amounts transferred to others, reported in the "disposition 
of collections" section, identify the specific agencies to which 
collections were transferred and the amounts transferred? (OMB Bulletin 
01-09, p. 53, section 8.2 & p. 54, section 8.4);

12. Does the collecting entity report the change in liability for 
accrued and collected revenue yet to be transferred? (OMB Bulletin 01-
09, p. 53, section 8.2 & p. 54, section 8.4);

13. Are the amounts of refunds and other payments made reported 
separately in the "disposition of collections" section of the Statement 
of Custodial Activity? (OMB Bulletin 01-09, p. 53, section 8.2 & p. 54, 
section 8.4);

14. Are collections retained by the entity separately reported as 
exchange revenue in the Statement of Net Cost and treated as a 
disposition of collections revenue in the statement of custodial 
activity? (OMB Bulletin 01-09, p. 52, section 8.1, p. 53, section 8.2. 
& p. 54, section 8.4);

15. In the Statement of Custodial Activity, do total sources of 
collections equal total disposition of collections (revenue) so that 
the net custodial activity is zero? (OMB Bulletin 01-09, p. 54, section 
8.5);

Disclosures (16-19):

16. If custodial revenues are immaterial and incidental to the entity's 
primary mission and are not reported separately on the Statement of 
Custodial Activity, are the sources and amounts of the collections and 
amounts to be distributed to others disclosed? (OMB Bulletin 01-09, p. 
52, section 8.1 & p. 95, section 9.37);

17. Does the collecting entity disclose and explain the following 
information?

a. the basis of accounting when application of the general rule for 
recognizing nonexchange revenue (i.e., specifically identifiable, 
legally enforceable, and reasonably estimable) results in a modified 
cash basis of accounting;

b. the specific potential accruals that are not made as a result of 
using the modified cash basis accounting;

c. the practical and inherent limitations affecting the accrual of 
taxes and duties;

d. the use of accrual-based accounting, if applicable (SFFAS 7, par.48 
& 64);

18. Do entities that collect taxes and duties disclose the following 
information in a note or narrative?

a. basis of accounting;

b. factors affecting the collectibility and timing of taxes and other 
nonexchange revenues;

c. cash collections and refunds by tax year and type of tax for the 
reporting period (SFFAS 7, par. 65.1 & 65.3; OMB Bulletin 01-09, p. 95, 
section 9.38);

19. If trust fund revenues are not recorded in accordance with 
applicable law, do the collecting and recipient entities disclose the 
reasons? (SFFAS 7, par. 66);

Dedicated Collection and Other Accompanying Information (20-27):

Dedicated collections are funds held with the expectation that they 
will be held for and applied to the purposes for which the funds were 
dedicated. Such funds include all funds within the budget classified as 
trust funds, those funds within the budget that are classified as 
"special funds" but that are similar in nature to trust funds, and 
those funds within the federal universe (inside or outside the budget) 
that are fiduciary in nature. (SFFAS 7, par. 83; OMB Bulletin 01-09, p. 
95, section 9.39);

20. Does the management of a reporting entity identify, track, and 
disclose the receipts and expenditures of dedicated trust funds, 
"special funds," and fiduciary or deposit funds (both inside and 
outside the budget) for which it is responsible? (SFFAS 7, par. 83; OMB 
Bulletin 01-09, pp. 95 & 96, section 9.39);

21. Does management provide separate financial information about these 
dedicated funds if they are material to the reporting entity, the 
beneficiary, or the contributors? (SFFAS 7, par. 84; OMB Bulletin 01-
09, pp. 95 & 96, section 9.39);

22. Is the following information reported for individual funds that 
account for dedicated collections?

a. a description of each fund's purpose, how the administrative entity 
accounts for and reports the fund, and its authority to use those 
collections;

b. the sources of revenue or other financing for the period and an 
explanation of the extent to which they are inflows of resources to the 
government or the result of intragovernmental flows;

c. condensed information about assets and liabilities showing 
investments in Treasury securities, other assets, liabilities due and 
payable to beneficiaries, other liabilities, and fund balance;

d. condensed information on net cost and changes to fund balance 
showing revenues by type (exchange or nonexchange), program expenses, 
other expenses, other financing sources, and other changes in fund 
balance;

e. the amounts of any revenues--other financing sources or costs 
attributable to the fund under accounting standards--that are not 
legally allowable as credits or charges to the fund (SFFAS 7, par. 85; 
OMB Bulletin 01-09, pp. 95 & 96, section 9.39);

23. If revenues, other financing sources, or costs (such as item "e" of 
the previous question) are associated with but not legally allowable to 
a fund, does the larger reporting entity of which the fund is a 
component recognize them? (SFFAS 7, par. 86; OMB Bulletin 01-09, p. 96, 
section 9.39);

24. If more than one reporting entity is responsible for carrying out a 
program financed with dedicated collections, does the entity with the 
largest share of the activity take responsibility for reporting all 
revenues, other financing sources, assets, liabilities, and costs of 
the fund? (SFFAS 7, par. 87);

25. If information on actual collections is not currently available 
from the collecting entity, do the trust funds that are legally 
entitled to receive only excise taxes that are actually collected by 
the collecting entity recognize revenue from excise taxes on the basis 
of assessments in lieu of excise taxes actually collected? (SFFAS 7, 
par. 60.1);

26. Is the amount of revenue accrued and recognized by the social 
security trust fund based on the best available information (i.e., on 
the basis of the higher of the amount of Internal Revenue Service (IRS) 
assessments or the amounts actually reported by employers to Social 
Security)? (SFFAS 7, par. 60.2);

27. Does the collecting entity report the following as other 
accompanying information?

a. income tax burden borne by different classes of taxpayers and the 
effects of tax rates, deductions, credits, etc. (required of IRS)?

b. available information on the size of the tax gap, including;

i. explicit definitions of the estimated amounts reported (e.g., 
whether the tax gap includes estimates on illegally earned income)?

ii. appropriate explanations of the limited reliability of the 
estimates;

iii. cross references to portions of the tax gap due from identified 
noncompliant taxpayers and importers;

c. appropriate explanations and qualifications, if information about 
tax expenditures related to entity programs is present;

d. a description of the basis for the estimates and appropriate 
cautionary language about reliability, if information about estimated 
directed flows of resources related to an entity's programs is 
presented (SFFAS 7, par. 69.1 - 69.4; OMB Bulletin 01-09, p. 114 
section 12.3 & p. 115, section 12.4);

[End of section]

Section IX: Notes to Financial Statements:

The five questions in this section are related to the disclosure of 
significant accounting policies.

Notes to Financial Statements (1-5):

1. Is a description of the reporting entity presented in the disclosure 
of significant accounting policies, along with identification of the 
entity's major components? (OMB Bulletin 01-09, p. 55, section 9.1);

2. Does the entity identify and describe accounting principles it 
follows, and methods of applying those principles in a note to the 
financial statements? (OMB Bulletin 01-09, p. 55, section 9.1);

3. Does the entity's disclosure of its accounting policies include its 
rationale for the valuation, recognition, and allocation of assets, 
liabilities, expenses, revenues, and other financing sources? (OMB 
Bulletin 01-09, p. 55, section 9.1);

4. Does the entity disclose any significant changes in its composition 
or manner in which it aggregates information for financial reporting 
purposes? (OMB Bulletin 01-09, p. 55, section 9.1);

5. If changes in the composition of the reporting entity or manner in 
which the reporting entity aggregates information for financial 
reporting purposes, in effect, result in a new reporting entity, has 
the entity restated financial statements for all prior periods 
presented to correspond to the changes? (OMB Bulletin 01-09, pp. 55 & 
56, section 9.1);

[End of section]

Section X: Supplementary Information:

The questions related to the Supplementary Information are organized in 
the following eight categories.

1. Required Supplementary Stewardship Information: Property, Plant, & 
Equipment; Question Numbers: 1 - 14;

2. Required Supplementary Stewardship Information: Stewardship 
Investments; Question Numbers: 15 - 42;

3. Required Supplementary Information: Risk-Assumed Information; 
Question Numbers: 43;

4. Required Supplementary Information: Custodial Activity; Question 
Numbers: 44 - 45;

5. Required Supplementary Information: Segment Information; Question 
Numbers: 46 - 47;

6. Required Supplementary Information Management's Discussion and 
Analysis; Question Numbers: 48 - 61;

7. Required Supplementary Information: Deferred Maintenance; Question 
Numbers: 62 - 65;

8. Required Supplementary Information: Intragovernmental Amounts; 
Question Numbers: 66 - 78;

See Section XI for Social Insurance Information.

Required Supplementary Stewardship Information: Property, Plant, & 
Equipment (1 - 14):

Stewardship reporting requires the federal government to report on its 
stewardship over certain resources entrusted to it and certain 
responsibilities assumed by it that cannot be measured in traditional 
financial reports. These resources and responsibilities do not meet the 
criteria for assets and liabilities that are required to be reported in 
the financial statements, but are important to understanding the 
operations and financial condition of the federal government at the 
date of the financial statements and in subsequent periods?

Stewardship PP&E consists of items whose physical properties resemble 
those of general PP&E traditionally capitalized in financial 
statements. However, because of the nature of these assets, valuation 
may be difficult, and matching costs with specific periods would not be 
meaningful?

Stewardship PP&E includes:

-heritage assets, such as federal monuments and memorials, that are of 
historical, natural, cultural, educational, architectural, or artistic 
significance and;

-stewardship land, such as national forests and parks that have not 
been acquired for or in connection with general PP&E. (SFFAS 8, par.7-
11 & 17; OMB Bulletin 01-09, p. 97, section 10.1 and p. 98, section, 
10.2);

1. Except for multi-use heritage assets in which the predominant use of 
the asset is in general government operations, are heritage assets 
reported as Required Supplementary Stewardship Information (RSSI) 
accompanying the financial statements rather than as asset amounts on 
the balance sheet? (SFFAS 8, par.43; OMB Bulletin 01-09, p. 23, section 
3.3 & p. 98, section 10.2A);

2. Are heritage assets (including multiuse heritage assets) reported in 
RSSI in terms of physical units rather than in terms of cost, fair 
value, or other monetary values? (SFFAS 8, par. 46; SFFAS 16, par.9; 
OMB Bulletin 01-09, p. 23, section 3.3 & p. 98, section 10.2A);

3. Does the reporting entity provide relevant RSSI in the financial 
statements, such as the following information about its heritage 
assets?

a. a description of each major category of heritage asset and whether 
it is collectible or noncollectible;

b. a description of the methods of acquisition and withdrawal of 
heritage assets;

c. an accounting for the physical units by major category including:

i. beginning balances;

ii. additions;

iii. withdrawals;

iv. ending balances;

d. a description of the condition of the assets unless it is already 
reported in deferred maintenance information included elsewhere in the 
report, in which case a reference to the information will suffice;

e. a reference to deferred maintenance information, if deferred 
maintenance is reported for the assets (SFFAS 8, par. 50, SFFAS 14, 
par. 10-11; OMB Bulletin 01-09, pp. 99-100, section 10.2D);

4. Are federal land [Footnote 137] and land rights owned by the federal 
government and not acquired for or in connection with other general 
PP&E reported as stewardship land in the RSSI of the financial 
statements? (SFFAS 6, par. 66-68, SFFAS 8, par. 74);

5. Is stewardship land quantified and reported in terms of physical 
units (e.g., acres) in the RSSI rather than in monetary values? (SFFAS 
8, par. 75; OMB Bulletin 01-09, p. 99, section 10.2C);

6. Is the cost of a structure acquired with stewardship land that is to 
be used in operations included in the acquisition cost of the land if 
one of the following conditions applies?

a. the structure's value is insignificant compared to the value of the 
land;

b. the structure has little or no inherent value;

c. the structure is merely a byproduct of the acquisition of the land 
(SFFAS 6, par. 70);

7. If a significant structure acquired with stewardship land has an 
operating use (e.g., a recently constructed hotel or employee-housing 
block), is its cost segregated from the cost of the stewardship land 
acquired and capitalized as general PP&E? (SFFAS 6, par. 70; SFFAS 8, 
par. 78);

8. If the fair value of stewardship land acquired through donation or 
devise is known and material, is it disclosed in the notes to the 
financial statements? (SFFAS 6, par. 71; SFFAS 8, par. 79);

9. If the fair value of the stewardship land acquired through donation 
or devise is not estimable, is information as to the type and quantity 
of the assets disclosed? (SFFAS 6, par. 71; SFFAS 8, par. 79);

10. Is the cost of stewardship land transferred from another federal 
entity recorded at the book value of the land on the transferring 
entity's books? (SFFAS 6, par. 72);

11. If stewardship land is transferred from another federal entity, and 
the receiving entity does not know its book value, is the transfer 
disclosed in the notes if material? (SFFAS 6, par. 72);

12. Are all transfers of stewardship land disclosed in the notes if 
material? (SFFAS 6, par. 72);

13. Is acquisition cost of stewardship land recorded in the following 
manner?

a. recognized as a cost in the period incurred;

b. include all costs incurred to bring the stewardship land to its 
intended use, current condition, and location (including razing a 
building)?

c. disclosed [Footnote 138] as "cost of stewardship land" (SFFAS 6, 
par. 69 & 73; SFFAS 8, par. 80);

14. With regard to stewardship land, does the reporting entity include 
in its RSSI the following information?

a. a description, by principal organization, significant holdings of 
stewardship land by category of major use [Footnote 139];

b. a description of the methods of acquisition and withdrawal of 
stewardship land;

c. an accounting for physical units by major category including:

i. beginning balance;

ii. additions;

iii. withdrawals;

iv. ending balance;

d. the condition of the stewardship land, unless it is already reported 
elsewhere in the report (in which case a reference to the information 
will suffice)?

e. a reference to the applicable information if deferred maintenance is 
reported for the assets. (SFFAS 6, par. 69 & 73; SFFAS 8, par. 80 & 81; 
SFFAS 14, par. 10 & 11; OMB Bulletin 01-09, pp. 99 & 100, section 
10.2D);

Required Supplementary Stewardship Information: Stewardship 
Investments (15 - 42);

Stewardship investments are substantial investments made by the federal 
government for the benefit of the nation. When incurred, they are 
treated as expenses in calculating net cost, but they are also 
separately reported as RSSI to highlight the extent of investments that 
are made for long-term benefit. (SFFAS 8, par. 12)?

Stewardship investments include:

nonfederal physical property: federally financed (but not federally 
owned) purchases, construction, or major renovation of physical 
property owned by state and local governments, including major 
additions, alterations, and replacements, the purchase of major 
equipment; and the purchase or improvement of other physical assets. 
[Footnote 140];

human capital: expenses incurred for programs for education and 
training of the public [Footnote 141] that are intended to increase or 
maintain national productive capacity and that produce outputs and 
outcomes that provide evidence of maintaining or increasing national 
productive capacity?

research & development: expenses incurred to support the search for new 
or refined knowledge and ideas and for the application or use of such 
knowledge and ideas for the development of new or improved products and 
processes with the expectation of maintaining or increasing national 
productive capacity or yielding other future benefits. (SFFAS 8, par. 
12, 83, 89, 90, & 96; OMB Bulletin 01-09, p. 100, section 10.3);

15. Are nonfederal physical property investments reported in nominal 
dollars on the basis of "expenses incurred" and measured on the same 
basis of accounting used for financial statement purposes, including 
appropriate accrual adjustments, general and administrative overhead, 
and costs of facilities? (SFFAS 8, par. 84);

16. Are investments in nonfederal physical property and related cash 
grants recognized and reported as expenses in arriving at the net cost 
of operations? (SFFAS 8, par. 85; OMB Bulletin 01-09, p. 100, section 
10.3A);

17. Are expenses incurred for nonfederal physical property program 
costs, contracts, or grants with split purposes [Footnote 142] reported 
in RSSI on the basis of a logical allocation? (SFFAS 8, par. 86);

18. If an allocation of such program costs, etc. is not feasible, is 
the investment reported on the basis of the predominant application of 
the expenses incurred? (SFFAS 8, par. 86);

19. Does the reporting entity provide in its RSSI a dollar amount and a 
narrative description of its investment in nonfederal physical property 
for the year being reported on as well as at least the preceding 4 
years? (SFFAS 8, par. 87; OMB Bulletin 01-09, p. 100, section 10.3A & 
p. 102, section 10.3D);

20. Is expense or outlay data for investments in nonfederal physical 
property reported at a meaningful category or level (e.g., by major 
program or department)? (SFFAS 8, par. 87; OMB Bulletin 01-09, p. 102, 
section 10.3D);

21. Does the reporting entity also include in its RSSI a description of 
federally owned physical property transferred to state and local 
governments for the year being reported on as well as at least the 
preceding 4 years? (SFFAS 8, par. 87; OMB Bulletin 01-09, p. 102, 
section 10.3D);

22. If expense data for the purchase of PP&E for state and local 
governments for the year being reported on and for the preceding 4 
years are not available, does the entity report outlay data, if 
available? (SFFAS 8, par. 87; OMB Bulletin 01-09, p. 102, section 
10.3D);

23. If neither historical expense nor outlay data are available on 
stewardship investments for the year being reported on and the 
preceding 4 years, does the entity report expense data for the current 
reporting year and such other years, as available? (SFFAS 8, par. 87; 
OMB Bulletin 01-09, p. 102, section 10.3D);

24. Are investments in human capital reported in nominal dollars on the 
basis of "expenses incurred" and measured on the same basis of 
accounting used for financial statement purposes, including appropriate 
accrual adjustments, general and administrative overhead, and costs of 
facilities? (SFFAS 8, par. 91);

25. Are expenses incurred for human capital program costs, contracts, 
or grants with split purposes [Footnote 143] reported in RSSI on the 
basis of a logical allocation? (SFFAS 8, par. 92);

26. If an allocation of such program costs, etc. is not feasible, is 
the investment reported on the basis of the predominant application of 
the expenses incurred? (SFFAS 8, par. 92);

27. Does the entity link its investments in human capital to outcomes 
that can be described in financial, economic, or quantitative terms? 
(SFFAS 8, par. 93);

28. If outcome data are not available, does the reporting entity report 
output data that best provide indications of the intended program 
outcomes? (SFFAS 8, par. 93);

29. Does the reporting entity include in its RSSI the dollar amount and 
a narrative description of its investment in human capital for the year 
being reported on as well as the preceding 4 years? (SFFAS 8, par. 94; 
OMB Bulletin 01-09, p. 101, section 10.3B);

30. If expense data for the investments in human capital for the year 
being reported and for the preceding 4 years are not available, does 
the entity report outlay data, if available? (SFFAS 8, par. 94; OMB 
Bulletin 01-09, p. 102, section 10.3D);

31. If neither historical expense nor outlay data for the investments 
in human capital are available for the year being reported on and the 
preceding 4 years, does the entity report expense data for the current 
reporting year and such other years, as available? (SFFAS 8, par. 94; 
OMB Bulletin 01-09, p. 102, section 10.3D);

32. Is expense or outlay data for investments in human capital reported 
at a meaningful category or level (e.g., by major program or 
department)? (SFFAS 8, par. 94);

33. Is the investment in research and development reported in nominal 
dollars on the basis of "expenses incurred" and measured on the same 
basis of accounting used for financial statement purposes, including 
appropriate accrual adjustments, general and administrative overhead, 
and costs of facilities? (SFFAS 8, par. 97);

34. Are expenses incurred for research and development program costs, 
contracts, or grants with split purposes [Footnote 144] reported in 
RSSI on the basis of a logical allocation? (SFFAS 8, par. 98);

35. If an allocation of such program costs, etc. is not feasible, is 
the investment reported on the basis of the predominant application of 
the expenses incurred? (SFFAS 8, par. 98);

36. Does the entity link its investments in research and development to 
program outcome data via a narrative discussion of the major results 
achieved by the program during the year along the following lines?

a. basic research, which refers to an identification of any major new 
discoveries that were made during the year;

b. applied research, which refers to an identification of any major new 
applications that were developed during the year;

c. development, which refers to the progress of major developmental 
projects including the results with respect to projects completed or 
otherwise terminated during the year and the status of projects that 
will continue (SFFAS 8, par. 99);

37. If outcome data are not available, does the reporting entity use 
output data [Footnote 145] that best provide indications of the 
intended program outcomes? (SFFAS 8, par. 99);

38. Does the reporting entity include in its RSSI the dollar amount and 
a narrative description of its investment in major research and 
development programs for the year being reported on as well as the 
preceding 4 years? (SFFAS 8, par. 100; OMB Bulletin 01-09, p. 101, 
section 10.3C & p. 102, section 10.3D);

39. If expense data for the investments in research and development for 
the year being reported and for the preceding 4 years are not 
available, does the entity report outlay data, if available? (SFFAS 8, 
par. 100; OMB Bulletin 01-09, p. 102, section 10.3D);

40. If neither historical expense nor outlay data are available for the 
year being reported on and the preceding 4 years, does the entity 
report expense data for the current year and such other years as 
available? (SFFAS 8, par. 100; OMB Bulletin 01-09, p. 102, section 
10.3D);

41. Is expense or outlay data for investments in research and 
development reported at a meaningful category or level (e.g., by major 
program or department)? (SFFAS 8, par. 100; OMB Bulletin 01-09, p. 102, 
section 10.3D);

42. Does the entity report in its RSSI the amounts of significant 
contributions from state, local, private, and other sources to its 
investments in nonfederal physical property, human capital, and 
research and development? [Footnote 146] (SFFAS 8, par. 88, 95, & 101);

Required Supplementary Information: Risk Assumed Information (43):

Risk-assumed information is generally measured by the present value of 
unpaid expected losses net of associated premiums based on the risk 
inherent in the insurance or guarantee coverage in force. (SFFAS 5, 
par. 105 & 106; OMB Bulletin 01-09, p.103, section 10.4A);

43. Does the entity include as Required Supplementary Information (RSI) 
the current amount and periodic changes of "risk assumed" arising from 
insurance and guarantee programs? (SFFAS 5, par. 105, 106, 110; SFFAS 
25, par. 2; OMB Bulletin 01-09, p. 103, section 10.4A);

Required Supplementary Information: Custodial Activity (44 - 45):

44. Do entities that collect taxes and duties provide the following 
supplementary information relating to their potential revenue and 
custodial responsibilities?

a. the estimated realizable value, as of the end of the reporting 
period, of compliance assessments and, if reasonably estimable, pre-
assessment work in process, based on management's best estimate that is 
appropriately identified as to their reliability;

b. if reasonably estimable, other claims for refunds not yet accrued 
but likely to be paid when administrative action is complete, based on 
management's best estimates;

c. amount of assessments defined as written-off (i.e., no further 
collection potential) that continues to be statutorily collectable;

d. amounts by which trust funds may be overfunded or underfunded in 
comparison with the requirements of the law, if reasonably estimable 
(SFFAS 7, par. 67.1-67.4; OMB Bulletin 01-09, pp.112-113, section 
11.5);

45. If the entity receiving funds from the collecting entity is itself 
a trust fund, does it provide as supplementary information amounts by 
which related trust funds may be overfunded or underfunded in 
comparison with the requirements of the law, if reasonably estimable? 
(SFFAS 7, par. 67.4, 68; OMB Bulletin 01-09, p. 113, section 11.5);

Required Supplementary Information: Segment Information (46 - 47):

46. Do all franchise and other intragovernmental support revolving 
funds report the following supplementary information?

a. a brief description of the services provided by the fund and the 
identity of the fund's major customers (i.e., organizations that 
account for more than 15 percent of the fund's revenues);

b. a summary for the reporting period, by product or line of business, 
including the following items;

i. the full cost of goods and services provided;

ii. the related exchange revenues;

iii. the excess of full costs over exchange revenues (OMB Bulletin 01-
09, p. 113, section 11.6);

47. If a franchise fund or other intragovernmental support revolving 
fund is not separately reported on the entity's principal statements, 
does the entity report as supplementary information a summary of the 
fund's assets, liabilities, and net position that includes the 
following items as of the reporting date?

a. fund balance;

b. accounts receivable;

c. property, plant, and equipment;

d. other assets;

e. liabilities due and payable for goods and services received;

f. deferred revenues;

g. other liabilities;

h. cumulative results of operations (OMB Bulletin 01-09, p. 113, 
section 11.6);

Required Supplementary Information: Management's Discussion and 
Analysis (48 - 61):

48. Does the entity include as RSI a section devoted to management 
discussion and analysis (MD&A) of the financial statements and related 
information? (SFFAS 15, par. 1; SFFAC 3, par. 1 & 2; OMB Bulletin 01-
09, p. 105, section 11.1);

49. In general, does the MD&A provide a clear, concise, and balanced 
description of the reporting entity and its mission, activities, 
program and financial performance, systems, controls, legal compliance, 
financial position, and financial condition? (SFFAS 15, par. 1; SFFAC 
3, par. 1; OMB Bulletin 01-09, p. 105, section 11.1);

50. Does the MD&A, at a minimum, contain sections that address the 
following items concerning the entity?

a. mission and organizational structure;

b. performance goals, objectives, and results;

c. financial statements;

d. systems, controls, and legal compliance;

e. forward-looking information, either as a separate section of MD&A or 
incorporated with the sections listed above;

f. important problems that need to be addressed and action taken or 
planned, either as a separate section of the MD&A or incorporated with 
the sections listed above (SFFAS 15, par. 2-4; OMB Bulletin 01-09, pp. 
105 & 106, section 11.1A);

51. Does the MD&A limit itself to the most important matters that 
could, for example, have the following impact?

a. lead to significant actions or proposals by top management of the 
reporting unit;

b. be significant to the managing, budgeting, and oversight functions 
of Congress and the administration;

c. significantly affect the judgment of citizens about the efficiency 
and effectiveness of their federal government (SFFAS 15, par. 5 & 6);

52. Does the MD&A section on the entity's mission and organizational 
structure contain a brief description of the mission(s) of the entity 
and its related organizational structure, that is consistent with the 
entity's strategic plan? (OMB Bulletin 01-09, p. 106, section 11.1B);

53. Are the entity's programs and financial results expressed in terms 
of objective and relevant measures that disclose the extent to which 
its programs are achieving their intended objectives? (OMB Bulletin 01-
09, p. 106, section 11.1C);

54. Has the entity attempted to develop and report objective measures 
that provide information about the cost effectiveness of programs? (OMB 
Bulletin 01-09, pp. 106 & 107, section 11.1C);

55. Are the performance measures presented in the MD&A consistent with 
the measures previously included in the budget and planning documents? 
(OMB Bulletin 01-09, p. 107, section 11.1C);

56. Does the entity explain what needs to be done and what is planned 
to improve financial or program performance? (OMB Bulletin 01-09, p. 
107, section 11.1C);

57. Does the entity's discussion of performance goals, objectives, and 
results indicate the extent to which its programs are achieving their 
intended goals and objectives, and are these clearly linked to cost 
categories (responsibility segments) featured in the Statement of Net 
Cost? (OMB Bulletin 01-09, p. 106, section 11.1C);

58. Does the MD&A section on the entity's performance goals, 
objectives, and results also provide the following information?

a. a discussion of the strategies and resources the agency uses to 
achieve its performance goals;

b. a clear picture of planned and actual performance;

c. an explanation of the procedures that management has designed and 
followed to provide reasonable assurance that reported performance 
information is relevant and reliable;

d. an explanation of performance trends;

e. an evaluation of the significance of underlying factors that may 
have affected the reported performance (OMB Bulletin 01-09, p. 106, 
section 11.1C);

59. In reporting on the status of systems and internal controls that 
support preparation of the financial statements, performance 
information, and compliance with applicable laws, does the entity 
describe material problems revealed by audits or otherwise known to 
management as well as corrective actions taken or planned? (OMB 
Bulletin 01-09, p. 107, section 11.1E);

60. Does the entity's discussion of the possible future effects of 
existing events and conditions include at least the following 
information?

a. demographic characteristics;

b. claims;

c. deferred maintenance;

d. commitments;

e. major unfunded liabilities (OMB Bulletin 01-09, p. 108, section 
11.1F);

61. Does the entity note the following in the section on limitations of 
the Financial Statements?

a. the principal financial statements have been prepared to report the 
financial position and results of operations of the entity, pursuant to 
the requirements of 31 U.S.C. 3515(b)?

b. while the statements have been prepared from the books and records 
of the entity in accordance GAAP for federal entities and the formats 
prescribed by OMB, the statements are in addition to the financial 
reports used to monitor and control budgetary resources which are 
prepared from the same books and records;

c. the statements should be read with the realization that they are for 
a component of the U.S. government (OMB Bulletin 01-09, p. 108, section 
11.1G);

Required Supplementary Information: Deferred Maintenance (62 - 65):

Maintenance is the act of keeping fixed assets in acceptable condition. 
Maintenance includes preventive maintenance, normal repairs, 
replacement of parts and structural components, and other activities 
needed to preserve the asset so that it continues to provide acceptable 
services and achieves its expected life?

Maintenance excludes activities aimed at expanding the capacity of an 
asset or otherwise upgrading it to serve needs different from, or 
significantly greater than, originally intended?

Deferred maintenance is maintenance that was not performed when it 
should have been, or was scheduled to be, and that, therefore, is put 
off or delayed for a future period. (SFFAS 6, par. 77 & 78);

62. Does the entity report under required supplementary information the 
following information for each major category of its PP&E (i.e., 
general PP&E, heritage assets, and stewardship land)?

a. the identity (e.g., building, equipment, land) of each major class 
of asset for which maintenance was deferred;

b. the method of measuring deferred maintenance (SFFAS 6, par. 83; 
SFFAS 14, par. 1; OMB Bulletin 01-09, pp. 108-109, section 11.2);

Amounts reported for deferred maintenance may be measured using 
condition assessment surveys or life-cycle cost forecasts?

Condition assessment surveys are periodic inspections of PP&E, based on 
generally accepted and consistently applied methods, to determine 
PP&E's current condition and the estimated cost to correct any 
deficiencies. (SFFAS 6, par. 81)?

Life-cycle costing is an acquisition or procurement technique that 
considers operating, maintenance, and other costs in addition to the 
acquisition cost of assets. (SFFAS 6, par. 82);

63. If the condition assessment survey method is used to measure 
deferred maintenance, is the following information presented for each 
major class of PP&E in supplementary information?

a. a description of requirements or standards for acceptable operating 
condition;

b. any changes in the condition requirements or standards;

c. asset condition and a range estimate of the dollar amount of 
maintenance needed to return it to its acceptable operating condition 
(SFFAS 6, par. 83);

64. If the total life cycle cost method is used to measure deferred 
maintenance, is the following information presented for each major 
class of PP&E?

a. the original date of the maintenance forecast and an explanation for 
any changes to the forecast;

b. prior-year balance of the cumulative deferred maintenance amount;

a. the dollar amount of maintenance that was defined by the 
professionals who designed, built, or managed the PP&E as required 
maintenance for the reporting period;

b. the dollar amount of maintenance actually performed during the 
period;

c. the difference between the forecast and actual maintenance;

d. any adjustments to the scheduled amounts deemed necessary by the 
managers of the PP&E;

e. the ending cumulative balance for the reporting period for each 
major class of asset experiencing deferred maintenance (SFFAS 6, par. 
83);

65. If management elects to break out deferred maintenance by critical 
and noncritical amounts needed to bring each class of asset to its 
acceptable operating condition, does it also include its definition of 
these categories? (SFFAS 6, par. 84);

Required Supplementary Information: Intragovernmental Amounts (66 - 
78):

Intragovernmental amounts represent transactions between federal 
entities included in the Financial Report of the United States 
Government. These transactions include activities with federal CFO Act 
and non-CFO Act entities as identified in the Treasury Financial 
Manual. (OMB Bulletin 01-09, p.109, section 11.3);

66. Does the entity report, as required supplementary information and 
intragovernmental amounts, the following items?

a. assets;

b. liabilities;

c. nonexchange revenue;

d. for certain reporting entities, earned revenue from trade (buy/sell) 
transactions along with the gross cost to generate such revenue (OMB 
Bulletin 01-09, p. 109, section 11.3);

67. Does the entity report intragovernmental assets, liabilities, and 
earned revenue from trade transactions and nonexchange revenue by 
trading partner (i.e., reciprocal federal entity)? (OMB Bulletin 01-09, 
p. 109, section 11.3);

68. Does the entity report intragovernmental gross cost to generate 
earned revenue from trade transactions by budget functional 
classification? (OMB Bulletin 01-09, p. 109, section 11.3);

69. Do intragovernmental asset and liability categories reported as 
required supplementary information agree with the intragovernmental 
asset and line items reported on the balance sheet? (OMB Bulletin 01-
09, p. 109, section 11.3);

70. Are transactions with components of federal departments and 
agencies (e.g., Forest Service of the USDA) not reported separately, 
but included in the activity reported for the federal department or 
agency? (OMB Bulletin 01-09, p. 109, section 11.3);

71. Are all intragovernmental amounts net of intra-entity transactions? 
(OMB Bulletin 01-09, p. 109, section 11.3);

72. Does the entity reconcile intragovernmental asset, liability, and 
revenue amounts with its trading partners at least quarterly? (OMB 
Bulletin 01-09, pp. 109 & 110, section 11.3);

73. Do intragovernmental assets and liabilities reported as required 
supplementary information (RSI) agree with the intragovernmental asset 
and liability line items and totals on the reporting entity's 
consolidated agencywide balance sheet? (OMB Bulletin 01-09, pp. 110 & 
111, section 11.3);

74. For each intragovernmental asset and liability line item on the 
consolidated agencywide balance sheet, does the entity identify in the 
supplementary information the trading partner balances that make up the 
line item? [Footnote 147] (OMB Bulletin 01-09, pp. 110 & 111, section 
11.3);

75. If intragovernmental transactions with a trading partner are 
material in one asset or liability category but immaterial in another 
category, does the entity report transactions with the trading partner 
for each category? OMB Bulletin 01-09, pp. 110 & 111, section 11.3);

76. If the entity has total intragovernmental earned revenues from 
trade transactions (net of intra-entity activity) of greater than $500 
million, does it report such intragovernmental revenues by trading 
partner? (OMB Bulletin 01-09, p. 111, section 11.3);

77. If the entity reports intragovernmental earned revenues, does it 
also report, by budget functional classification, the gross cost of 
goods, services, and other transactions that generated the 
intragovernmental earned revenues? [Footnote 148] (OMB Bulletin 01-09, 
p. 111, section 11.3);

78. Does the entity report, by trading partner, intragovernmental 
nonexchange revenues transferred in and out? (OMB Bulletin 01-09, p. 
112, section 11.3);

[End of section]

Section XI: Social Insurance:

The 24 questions in this section are related to social insurance 
programs covered by SFFAS 17.

Social Insurance Programs (1 - 24);

Social insurance programs covered by SFFAS 17, Accounting for Social 
Insurance, have the following five common characteristics?

a. financing from participants or their employers;

b. eligibility from taxes or fees paid and time worked in covered 
employment;

c. benefits not directly related to taxes or fees paid;

d. benefits prescribed in law;

e. programs intended for the general public;

The following social insurance programs are specifically covered by 
SFFAS 17?

a. Old-Age, Survivors, and Disability Insurance (OASDI, i.e., Social 
Security)?

b. Hospital Insurance (HI or Medicare Part A) and Supplementary Medical 
Insurance (SMI or Medicare Part B)?

c. Railroad Retirement Benefits (RRB)?

d. Black Lung Benefits;

e. Unemployment Insurance (UI) (SFFAS 17, par. 14 &, 15; OMB Bulletin 
01-09, pp.103 & 104, section 10.4B);

On July 17, 2003, FASAB issued SFFAS 25, Reclassification of 
Stewardship Responsibilities and Eliminating the Current Services 
Assessment. For periods beginning after September 30, 2004, the 
information required by paragraphs 27(3) and 32(3) of SFFAS 17 
(checklist questions 17-20 below) shall be presented as a basic 
financial statement and other social insurance information shall be 
presented as Required Supplementary Information (RSI), except to the 
extent that the preparer elects to include some or all of that 
information in notes that are presented as an integral part of the 
basic financial statements.

FASAB issued an exposure draft in March 2004, which would amend SFFAS 
25 to make the significant assumptions underlying projections and 
estimates (other information required by SFFAS 17) [Footnote 149] 
required disclosures to the social insurance basic financial statement.

Although earlier implementation is encouraged, for periods ending as of 
or before September 30, 2004, all social insurance information required 
by SFFAS 17 can be presented as Required Supplementary Stewardship 
Information (RSSI).

1. In general, does the entity responsible for a given social insurance 
program provide a clear and concise description of the program 
including its financing, calculation of benefits, and actuarial status 
[Footnote 150] ? (SFFAS 17, par. 24; OMB Bulletin 01-09, p.104, section 
10.B);

2. Does this description include the following information?

a. discussion of the long-term sustainability and financial condition 
of the program;

b. an illustration and explanation of the long-term trends revealed in 
the data (SFFAS 17, par. 24; OMB Bulletin 01-09, p.104, section 10.B);

3. Does the reporting entity describe statutory or other material 
changes, and implications thereof, affecting the program after the 
current fiscal year? (SFFAS 17, par. 24);

4. Are projections and estimates based on the entity's best estimates 
of demographic and economic assumptions? (SFFAS 17, par. 25);

5. Does the entity disclose significant assumptions used in making 
estimates and projections? (SFFAS 17, par. 25);

6. Are all projections and estimates made as of a date (i.e., the 
valuation date) as close to the end of the fiscal year (i.e., current 
year) being reported on as possible and no more than 1 year prior to 
the end of the current year? (SFFAS 17, par. 26);

7. Does the entity consistently follow this valuation date from year to 
year? (SFFAS 17, par. 26);

8. Does information on the financial and actuarial status of the social 
insurance programs include actuarial projections that are indicative of 
long-term sustainability and show the annual cash flows in nominal 
dollars for current and future participants? (SFFAS 17, par. 27 (1));

9. Are the actuarial projections of cash flow amounts reported for at 
least every fifth year in the projection period? (SFFAS 17, par. 27 (1) 
(a));

10. Does the cash flow information show the following amounts?

a. total cash inflow from all sources (i.e., by and on behalf of 
participants) less net interest on intragovernmental borrowing and 
lending;

b. total cash outflow (SFFAS 17, par. 27 (1) (a));

11. Does the narrative accompanying the cash flow data include 
identification of any year or years during the projection period when 
cash outflow exceeds cash inflow, with and without interest on 
intragovernmental borrowing or lending (the "cross-over points")? 
(SFFAS 17, par. 27 (1) (a));

12. Does the narrative provide an explanation of the significance of 
the cash flow "cross-over points" where cash outflows begin exceeding 
cash inflows? (SFFAS 17, par. 27 (1) (a));

13. Do the cash flow projections (net of interest on intragovernmental 
borrowing/lending) for Social Security and Medicare Part A include an 
estimate of cash flows as a percentage of taxable payroll? (SFFAS 17, 
par. 27 (1) (b));

14. Do the cash flow projections (net of interest on intragovernmental 
borrowing/lending) for Social Security and Medicare (Parts A & B) 
include an estimate of cash flows as a percentage of gross domestic 
product? (SFFAS 17, par. 27 (1) (b));

15. For Social Security and Medicare, Part A programs, does the 
entity's cash flow information show its estimate of the ratio of the 
number of contributors to the number of beneficiaries during the same 
projection period as for cash flow projections? (SFFAS 17, par. 27 
(2));

16. At a minimum, is the ratio of contributors to beneficiaries for 
Social Security and Medicare, Part A reported for the beginning and end 
of the projection period? (SFFAS 17, par. 27 (2));

17. For all enumerated social insurance programs except Unemployment 
Insurance (UI), does the responsible entity present a statement of 
actuarial present values of the following items? [Footnote 151];

a. all future expenditures during the projection period related to 
benefit payments;

i. to or on behalf of current participants who have not yet attained 
retirement age;

ii. to or on behalf of current participants who have attained 
retirement age;

iii. to or on behalf of those who are expected to become plan 
participants;

b. all future contributions and tax income (from taxation of benefits) 
during the projection period;

i. from or on behalf of current participants who have not yet attained 
retirement age;

ii. from or on behalf of current participants who have attained 
retirement age;

iii. from or on behalf of those who are expected to become plan 
participants;

c. cash flow during the projection period [Footnote 152] (SFFAS 17, 
par. 27 (3) (a)-(g); OMB Bulletin 01-09, p. 104, section 10.4B);

18. With the exception of Unemployment Insurance (UI), does the entity 
disclose the accumulated excess of all past cash receipts, including 
interest on investments, over all cash disbursements within the social 
insurance program represented by the fund balance at the valuation 
date? [Footnote 153] (SFFAS 17, par. 27 (3) (h));

19. Does the entity also disclose how it calculated the actuarial net 
present value of future benefits and contributions from or on behalf of 
current participants of all social insurance programs except UI? 
[Footnote 154] (SFFAS 17, par. 27 (3) (i));

20. If available, does the entity provide estimates of the actuarial 
present values and fund balances of the social insurance programs 
(except UI) under its purview for each of the 4 preceding years? 
[Footnote 155] (SFFAS 17, par. 27 (3) (j));

21. For all social insurance programs except UI, does the responsible 
entity illustrate the sensitivity of the projections of cash flows and 
actuarial present values to changes in the most significant individual 
assumptions? (SFFAS 17, par. 27 (4) (a));

22. At a minimum, do the Social Security and Medicare programs analyze 
assumptions regarding the following factors?

a. birth and death rates;

b. net immigration;

c. real wage differential;

d. real interest rate (SFFAS 17, par. 27 (4) (a));

23. Does the sensitivity analysis for UI programs show the effects of 
increasing the unemployment rate as follows?

a. by approximately one percentage point;

b. to a level sufficient to put stress on the system (e.g., to simulate 
the largest recession occurring within the last 25 years) (SFFAS 17, 
par. 27 (4) (b); OMB Bulletin 01-09, p. 104, section 10.4B);

24. Does information on the UI program provide a state-by-state 
analysis illustrating the relative solvency of individual state 
programs, including the ratio of each state's current accumulated fund 
balance to a year's projected benefit payments based on the highest 
level of annual benefit payments experienced by that state over the 
last 20 years? (SFFAS 17, par. 27 (5); OMB Bulletin 01-09, p.104, 
section 10.4B);

[End of section]

Section I FOOTNOTES:

[1] The American Institute of Certified Public Accountants recognizes 
the federal accounting standards promulgated by the Federal Accounting 
Standards Advisory Board (FASAB) as generally accepted accounting 
principles.

[2] FASAB promulgates accounting standards after considering the 
financial and budgetary information needs of Congress, executive 
agencies, other users of federal financial information, and comments 
from the public.

[3] SFFAS 11 was rescinded in its entirety by SFFAS 23.

[4] SFFAS 25 changes reporting requirements for social insurance 
information required by SFFAS 17, effective for periods beginning after 
September 30, 2004, with earlier implementation encouraged.

Section II through Section XI FOOTNOTES:

[1] Other accounting literature includes for example, FASAB Concept 
Statements, Governmental Accounting Standards Board (GASB) Statements, 
Interpretations, Technical Bulletins, and Concept Statements, and AICPA 
Issue Papers?

[2] Interim financial statements shall be prepared on a comparative 
basis beginning 1 year following their initial preparation. That is, 
statements shall be comparative for fiscal year 2004 for the year-to-
date ending December 31, 2003, March 31, 2004, and June 30, 2004.

[3] Entity assets are assets that the reporting entity has authority to 
use in its operations. Nonentity assets are assets that are held by an 
entity but are not available to the entity, for example, income tax 
receivables. (OMB Bulletin 01-09, p. 19, section 3.3)?

[4] Government sponsored enterprises are federally chartered but 
privately owned and operated entities?

[5] Contract authority is a statutory authority under which contracts 
or other obligations may be entered into prior to receiving an 
appropriation for the payment of obligations?

[6] The obligated balance not yet disbursed is the amount of funds 
against which budgetary obligations have been incurred, but 
disbursements have not been made?

[7] The unobligated balance is the amount of funds available to the 
entity against which no claims have been recorded. (SFFAS 1, par. 38)?

[8] Discrepancies due to time lag should be reconciled and 
discrepancies due to error should be corrected when financial reports 
are prepared?

[9] See also Federal Claims Collection Standards, 4 CFR Part 103 par. 
102.13)?

[10] Section 506 (a) of the Federal Credit Reform Act, as amended, 
exempts the credit activities of certain agencies, such as the Federal 
Deposit Insurance Corporation (FDIC) and the Tennessee Valley Authority 
(TVA). These agencies can report in accordance with other requirements?

[11] Undelivered orders are the value of goods and services ordered and 
obligated but not yet received. The term is synonymous with 
unliquidated obligations. (The Federal Budget Politics, Policy, 
Process; copyright 1995 by Allen Schick; p. 216)?

[12] That is, the sum of (1) defaulted guaranteed loans receivable 
gross, (2) interest receivable, and (3) foreclosed property, less the 
allowance for subsidy cost at present value?

[13] Under the present value method, the nominal amount of the direct 
loans is reduced by an allowance equal to the difference between the 
nominal amount and the present value of the expected net cash flows 
from the loans. (OMB Bulletin 01-09, p. 68, section 9.8, 4th par.)?

[14] Under the allowance-for-loss method, the nominal amount of the 
direct loans is reduced by an allowance for uncollectible amounts. (OMB 
Bulletin 01-09, p. 68, section 9.8, 4th par.)?

[15] Nonentity cash is always restricted. Restricted cash also includes 
cash held in escrow to pay property taxes and insurance related to 
property associated with defaulted loans?

[16] Revaluation results in recognition of unrealized holding gains/
losses in the ending inventory value. Upon adjustment for unrealized 
holding gains/losses, the latest acquisition cost method then results 
in an approximation of historical cost?

[17] Cost of goods sold under the latest acquisition cost method equals 
(1) beginning inventory at beginning-of-the period latest acquisition 
cost, less: beginning allowance for unrealized holding gains/losses, 
plus: actual purchases; and (2) resulting cost of goods available for 
sale, less: ending inventory at end-of-the period latest acquisition 
cost, plus: ending allowance for unrealized holding gains/losses?

[18] Major categories of operating materials and supplies include (1) 
items held for use; (2) items held in reserve for future uses; and (3) 
excess, obsolete, and unserviceable items.;

[19] The loss amount is the difference between the contract price and 
the net realizable value of the commodities?

[20] Multiuse heritage assets are heritage assets used predominately in 
general government operations (e.g., the main Treasury building, which 
is used as an office building).;

[21] A business-type activity is defined as a significantly self-
sustaining activity that finances its continuing cycle of operations 
through the collection of exchange revenue?

[22] The liability is the net present value of lease payments unless 
the net present value of the lease payments exceeds the fair value of 
the asset, in which case the amount recorded as the liability would be 
the fair value of the asset. (SFFAS 5, par. 44)?

[23] The composite methodology is a method of calculating depreciation 
that applies a single average rate to a number of heterogeneous assets 
that have dissimilar characteristics and service lives. The group 
methodology is a method of calculating depreciation that applies a 
single, average rate to a number of homogenous assets having similar 
characteristics and service lives?

[24] For example, the latest acquisition cost may be substituted for 
current replacement cost in some situations?

[25] This adjustment may be needed because the Department of Defense 
may have already recognized the total estimated cleanup costs as a 
liability and expense for some military equipment (per paragraph 101 of 
SFFAS 6)?

[26] Net remaining cost is the original cost of the asset less any 
accumulated depreciation/amortization to date (i.e., book value).

[27] Examples of costs for new software are salaries of programmers, 
systems analysts, project managers, and administrative personnel; 
associated employee benefits; outside consultants' fees; rent; and 
supplies?

[28] Software that serves both internal uses and stewardship purposes 
is referred to as multiuse software. An example is a global positioning 
system used in connection with national defense activities and general 
operating activities and services?

[29] For example, such software could include software necessary to 
operate airport radar and computer operated lathes?

[30] SFFAS 10 provides that material expenditures to add software 
capability/functionality would be capitalized but that expenditures 
that result in extending useful life or capacity would be expensed. 
(SFFAS 10, par. 42 & 43)?

[31] Liabilities covered by budgetary resources are liabilities covered 
by realized budgetary resources as of the balance sheet date. Budgetary 
resources include (1) new budget authority, (2) unobligated balances of 
budgetary resources at the beginning of the year or net transfers of 
prior year balances during the year, (3) spending authority from 
offsetting collections (credited to an appropriation or fund account), 
(4) recoveries of unexpired budget authority through downward 
adjustments of prior year obligations, and (5) permanent indefinite 
appropriations or borrowing authority, which have been enacted and 
signed into law as of the balance sheet date, provided that the 
resources may be apportioned by OMB without further action by the 
Congress and without a contingency having to be met?

[32] Liabilities not covered by budgetary resources are liabilities for 
which congressional action is needed before budgetary resources can be 
provided?

[33] Probable refers to that which can be reasonably expected or is 
believed to be more likely than not on the basis of available evidence 
or logic. However, in the context of assessing the outcome of matters 
of pending or threatened litigation and unasserted claims and 
recognizing an associated liability, "probable" refers to that which is 
likely, not to that which is "more likely than not.";

[34] Measurable refers to that which can be quantified in monetary 
units with sufficient reliability to be reasonably estimable?

[35] The present value of the estimated net cash flows (outflows less 
inflows) to be paid by the entity arising from loan guarantees?

[36] Under the present-value method, the liability for loan guarantees 
is the present value of the expected net cash outflows due to the loan 
guarantees.;

[37] Under the allowance-for-loss method, the liability for loan 
guarantees is the amount the agency estimates will more likely than not 
require future cash outflow to pay default claims?

[38] The original discount rate is the rate that was originally used to 
calculate the present value of the liability when the guaranteed loans 
were disbursed, after adjusting for the interest rate reestimate?

[39] Fair value is the price for which an asset could be bought or sold 
in an arm's-length transaction between unrelated parties. Roman L. Well 
and Patrick C. O'Brien, Accounting: The Language of Business, 9th ed. 
(Sun Lakes, Arizona: Thomas Horton and Daughters, 1994)?

[40] The interest method for amortizing a bond premium or discount 
reduces the discount or premium by the difference between the effective 
interest and stated interest on the bond. (SFFAS 1, app B, tables 1 & 
2)?

[41] A premium deficiency occurs if the liability for future policy 
benefits using current conditions exceeds the liability for future 
policy benefits using contract conditions?

[42] The net-level premium reserve for a death and endowment policy and 
the liability for terminal dividends?

[43] Refund offsets are amounts withheld from refunds on behalf of 
other agencies. (OMB Circular No. A-129 (revised), app. A, Part V, 
section 2.c.i. (1))?

[44] Drawbacks are refunds payable on all or part of duties paid on 
imported goods that are subsequently exported or destroyed. (SFFAS 7, 
app. C, glossary)?

[45] In the context of pending or threatened litigation, "probable" is 
taken to mean "likely;" otherwise, "probable" refers to that which is 
believed to be more "likely than not" or can be reasonably expected?

[46] The chance of a future event occurring is less than "probable" but 
more than "remote.";

[47] Examples of claims or other contingencies include (1) indemnity 
agreements-reimbursements due to licenses or contractors for losses 
incurred in support of federal activities; (2) adjudicated claims 
(i.e., claims against the federal government that are in the process of 
judicial proceedings); and (3) commitments to international 
institutions-payment due to international institutions.;

[48] An example of information related to a remote contingency would be 
the total face amount of insurance and guarantees in force?

[49] Clean-up costs are the costs of removing, containing, and/ or 
disposing of (1) hazardous waste from property, or (2) material and/or 
property that consists of hazardous waste at permanent or temporary 
closure or shutdown of associated PP&E. (SFFAS 6, par. 85)?

[50] Suborganizations are considered to be generally equivalent to 
responsibility segments;

[51] Gross cost and earned revenue should be net of intra-entity 
transactions (consolidated)?

[52] These include health and life insurance, pension, and other 
retirement benefits, but not other postemployment benefits.;

[53] Acquisition costs of heritage assets are part of the costs of the 
entity or the program that makes the property acquisitions?

[54] See FASAB Interpretation Number 2, Accounting for Treasury 
Judgment Fund Transactions?

[55] A method is economically feasible if the benefits resulting from 
implementing the method outweigh its costs?

[56] Common costs refers to the costs of maintaining and operating 
facilities and other resources that cannot be directly traced to any of 
the activities or outputs that share resources?

[57] Past service costs result from retroactive benefits granted when a 
new plan is initiated. Prior service costs result from retroactive 
benefits granted in a plan amendment?

[58] Actuarial gains and losses are changes in the balance of the 
pension liability that result from (1) deviations between actual 
experience and the actuarial assumptions used or (2) changes in 
actuarial assumptions?

[59] The administrative entity may also receive financing from the 
general fund to cover prior service or other costs for which 
contributions were not provided by the employer or employee.;

[60] The liability is the actuarial present value of all future 
benefits, based on projected salaries and total projected service, less 
the actuarial present value of future normal cost contributions that 
would be made for and by the employees under the plan?

[61] The liability is the actuarial present value of all future 
benefits less the actuarial present value of future normal cost 
contributions that would be made for and by the employees under the 
plan. (SFFAS 5, par. 88)?

[62] The composite methodology is a method of calculating depreciation 
that applies a single average rate to a number of heterogeneous assets 
that have dissimilar characteristics and service lives. The group 
methodology is a method of calculating depreciation that applies a 
single, average rate to a number of homogeneous assets having similar 
characteristics and service lives?

[63] The cost of the PP&E acquired is recorded at the cost of the PP&E 
surrendered net of any accumulated depreciation or amortization when 
the fair value of the PP&E surrendered or acquired is not determinable?

[64] Social insurance programs include Social Security, Medicare, 
Railroad Retirement, Black Lung Benefits, and Unemployment Insurance 
(SFFAS 17, par. 14)?

[65] The interest subsidy cost of direct loans is the excess of the 
amount of the loans disbursed over the present value of the interest 
and principal payments required by loan contracts discounted at the 
applicable Treasury rate; for loan guarantees it is the present value 
of estimated interest supplement payments?

[66] The default cost of direct loans or loan guarantees is measured at 
the present value of projected payment delinquencies and omissions 
minus projected net recoveries?

[67] Under the interest method, the amortized amount is the difference 
between the nominal interest (face amount of loan times stated 
interest) and effective interest (present value of loan times discount 
rate). The effective interest rate is the average interest rate of 
marketable Treasury securities with similar maturity that was used to 
calculate the present value of the direct loans when the direct loans 
were disbursed, after adjusting for the interest rate reestimate?

[68] Cohort, as it is used here, is a budget term that refers to all 
direct loans or loan guarantees of a program for which a subsidy 
appropriation is provided for a given fiscal year, even if 
disbursements occur in subsequent years?

[69] The subsidy rate is the dollar amount of the subsidy component as 
a percentage of the direct loans or loan guarantees obligated in the 
cohort?

[70] Changes in legislation or credit policies include, for example, 
changes in borrowers' eligibility, the levels of fees or interest rates 
charged to borrowers, the maturity terms of loans, and the percentage 
of private loans that are guaranteed?

[71] This is the present value of the net cash inflows estimated under 
premodification terms discounted at the current Treasury rate?

[72] This is the present value of the net cash inflows estimated under 
postmodification terms discounted at the current Treasury rate?

[73] A gain from a modification occurs when the cost of a modification 
is greater than the decrease in book value of a direct loan (or 
increase in the liability of a loan guarantee). (SFFAS 2, par. 46, 48 
note 5, 50, & 52 note 8; SFFAS 19, par. 7);

[74] A loss from a modification occurs when the cost of a modification 
is less than the decrease in book value of a direct loan (or increase 
in the liability of a loan guarantee) that was discounted at the 
Treasury rate in effect when the loan was made. (SFFAS 2, par. 46, 48 
note 5, 50, & 52 note 8; SFFAS 19, par. 17)?

[75] This is the present value of the net cash flows under 
postmodification terms discounted at the current Treasury rate?

[76] This is the present value of the net cash flows under 
premodification terms discounted at the current Treasury rate?

[77] This is the present value of the loans' net cash inflows 
discounted at the current discount rate?

[78] Errors in financial statements result from mathematical mistakes, 
mistakes in the application of accounting principles, or oversight or 
misuse of facts that existed at the time the financial statements were 
prepared?

[79] A change in accounting principle is a change from one generally 
accepted accounting principle to another one that can be justified as 
preferable; this would also include changes occasioned by the adoption 
of new federal accounting standards?

[80] Financial statements of subsequent periods need not repeat the 
disclosure?

[81] OMB Circular No. A-11 superceded OMB Circular No. A-34 in June 
2002 and was revised on July 25, 2003?

[82] Appropriations received do not include appropriated dedicated and 
earmarked receipts. Dedicated and earmarked receipts are accounted for 
as either exchange or nonexchange revenue in accordance with SFFAS No. 
7)?

[83] Some examples of adjustments include rescissions of appropriations 
and cancellations of expired appropriation expenditure accounts, which 
would also be included in line 6, "Permanently not Available" on the 
Statement of Budgetary Resources?

[84] This is true whether the goods, services, and benefits are payable 
or paid as of the reporting date and whether the appropriations are 
used for items that are expensed or capitalized?

[85] Appropriations used does not increase net position. It is 
subtracted from "unexpended appropriations" and added to "cumulative 
results of operations," which are line items on the balance sheet?

[86] Those financing sources are reported as either exchange or 
nonexchange revenue?

[87] Nonappropriated balances include financing sources and revenue not 
reported as unexpended appropriations?

[88] Other resources increase net position but are not budgetary 
resources as reported on the "Statement of Budgetary Resources" or 
defined as such in OMB Circular No. A-11, Part 4. OMB Circular No. A-11 
superceded OMB Circular No. A-34 in June 2002 and was revised on July 
25, 2003?

[89] FASAB Technical Bulletin 2003-1 offers specific guidance dealing 
with transfers arising from the creation of the Department of Homeland 
Security and other transfers of operations between federal entities 
directed by the Homeland Security Act of 2002?

[90] This amount includes intragovernmental transfers in to or out of 
capitalized assets during the current reporting year?

[91] The excess of the cost of the modification over the decrease in 
loan book value discounted at the Treasury rate?

[92] A modification means a federal government action, including new 
legislation or administration action, which directly or indirectly 
alters the estimated subsidy cost and present value of outstanding 
loans or the liability of loan guarantees. (SFFAS 2, par. 41)?

[93] The excess of the decrease in loan book value, discounted at the 
Treasury rate, over the cost of the modification?

[94] The excess of the cost of the modification over the increase in 
liability discounted at the Treasury rate?

[95] The excess of the increase in liability, discounted at the 
Treasury rate, over the cost of the modification?

[96] OMB Circular No. A-11 superceded OMB Circular No. A-34 in June 
2002 and was revised on July 25, 2003?

[97] Small budgetary accounts may be aggregated?

[98] Appropriations received do not include appropriated, dedicated and 
earmarked receipts. Dedicated and earmarked receipts, typically in 
special and nonrevolving trust funds, are accounted for as either 
exchange or nonexchange revenue in accordance with SFFAS No. 7?

[99] Offsetting receipts offset budget authority and outlays at the 
agency level in the Budget of the United States Government, but are not 
reflected in budget execution reports (SF 133s), which provide account-
level information only. Since the SBR is an agencywide report, 
offsetting receipts must be included to reconcile to information in the 
Budget of the United States Government?

[100] Outlays consist of disbursements net of offsetting collections.;

[101] That is, do the outlays agree with the aggregate of the outlays 
for accounts within the Budget of the United States Government?

[102] Agencies report their disbursements and collections using the SF 
224, Statement of Transactions; SF 1219, Statement of Accountability; 
and SF 1220, Statement of Transactions?

[103] OMB Circular No. A-11 superceded OMB Circular No. A-34 in June 
2002 and was revised on July 25, 2003?

[104] A list of distributed offsetting receipt accounts can be found in 
the Treasury Annual Report Appendix, Part 4, Other Information?

[105] Agencies use the SF 224, Statement of Transactions; SF 1219, 
Statement of Accountability; and SF 1220, Statement of Transactions?

[106] Net outlays are equal to gross outlays less offsetting 
collections and receipts?

[107] Apportionment categories are to be determined in accordance with 
guidance provided in OMB Circular No. A-11, Part 4, Instructions on 
Budget Execution, which superceded Circular No. A-34.;

[108] Apportionment categories are to be determined in accordance with 
guidance provided in OMB Circular No. A-11, Part 4 Instructions on 
Budget Execution, which superceded Circular No. A-34.;

[109] FASAB Technical Bulletin 2002-2 indicates what disclosures should 
be made when the entity issues financial statements for a given year 
before the Budget of the United States Government with actual budget 
numbers for the same fiscal year is published.

[110] OMB Circular No. A-11, Part 4, Instructions on Budget Execution, 
has superceded OMB Circular No A-34?

[111] The budgetary information includes the line items (1) " 
obligations incurred," (2) "Less: spending authority from offsetting 
collections and recoveries," (3) "obligations net of offsetting 
collections and recoveries," and 4) "less: offsetting receipts.";

[112] A combined basis means the aggregation of account-level 
information as opposed to a consolidation that implies the elimination 
of inter-account transactions.;

[113] This is not to be confused with total budgetary resources; e.g., 
with total appropriations received and available, as the statement of 
financing is not concerned with total resources or restrictions on 
OMB's ability to apportion or the agency's ability to allot total 
resources. (SFFAS 7 Implementation Guide (April 2002), par. 14)?

[114] "Offsetting" in the term "offsetting collections" means that the 
resources generated by the collecting activity are added to the 
expenditure accounts and hence "offset" gross obligations. (SFFAS 7 
Implementation Guide (April 2002), par. 22)?

[115] Recoveries are budgetary resources that offset obligations on the 
Statement of Budgetary Resources, but are not a proprietary financing 
source used to offset costs on the Statement of Net Cost. (OMB Bulletin 
01-09, p. 49, section 7.4)?

[116] Offsetting receipts differ from "offsetting collections." 
Offsetting collections are included in the entity's expenditure account 
and thus are usually available for spending for the purposes of the 
account without further action by Congress. (SFFAS 7 Implementation 
Guide (April 2002), par. 23)?

[117] Net obligations reflect obligations incurred net of offsetting 
collections, recoveries, and offsetting receipts?

[118] One of the reasons that net obligations does not equal the amount 
of the net cost of operations is that there are resources that are not 
reported in the Budget of the United States Government that may finance 
the net cost of operations or other activities of the agency?

[119] This line item is used to explain the difference between the 
total resources used to finance activities and the net cost of 
operations because of the change in "budgetary resources obligated for 
goods, services, and benefits ordered but not yet provided," i.e., 
"undelivered orders." Undelivered orders are part of "obligations 
incurred," but they do not affect the net cost of operations. Thus, for 
a transaction involving the placing a $100 undelivered order, 
obligations incurred would increase by $100 but would be shown as a 
negative or a reduction to total resources used to finance activities. 
(SFFAS 7 Implementation Guide (April 2002), par. 53-55)?

[120] This line item is used to explain differences in resources and 
net cost of operations caused by expenses, which were accrued in 
previous periods but paid in the current period. If, for example, the 
amount of annual leave taken or obligated was worth $250 but the amount 
of annual leave earned (i.e., expensed) for the period was $200, the 
difference of $50 between obligation and expense would be shown as a 
negative. (SFFAS 7 Implementation Guide (April 2002), par. 56-58)?

[121] Examples of offsetting collections and receipts that are not 
exchange revenue are (1) collections of subsidy expenses for post -1991 
credit programs, (2) collections of exchange revenue receivable from 
the public, and (3) advances (i.e., unfilled customer orders) for work 
not performed, with the caveat that in most cases, orders from the 
public without advances cannot be accepted. This line item is usually 
shown as a positive, the opposite (i.e., negative) of what is included 
under the line item, "less: spending authority from offsetting 
collections and recoveries," unless there is a net decrease in unfilled 
customer orders. (SFFAS 7 Implementation Guide (April 2002), par. 59-
61)?

[122] An example of this activity is the purchase of capital assets. 
(SFFAS 7 Implementation Guide (April 2002), par. 62);

[123] This activity may include noncash recoveries of prior year 
obligations. Recoveries are budgetary resources that offset obligations 
on the Statement of Budgetary Resources, but which are not a 
proprietary financing source used to offset costs on the Statement of 
Net Cost?

[124] An increase in annual leave liability has no effect on budgetary 
accounts, because it is not funded on an accrual basis. It is financed 
when it is taken and the amounts are paid to employees who took the 
leave. Thus, budgetary resources are zero, but the net cost of 
operations includes the amount of accrued leave. (SFFAS 7 
Implementation Guide (April 2002), par. 40)?

[125] The Credit Reform Act of 1990, as amended, provides that agencies 
will receive subsidies to cover defaults and other situations for 
direct loans and loan guarantees obligated after September 30, 1991. 
(SFFAS 7 Implementation Guide (April 2002), par. 66)?

[126] Budget authority to fund reestimates is permanent and indefinite 
and no further congressional action is needed to provide the resources?

[127] Absent specific legislation to the contrary, public receivables 
do not count as budgetary resources until they are collected. Hence, 
the revenue related to accruals of those resources is not reflected in 
offsetting collection activity at the time they are accrued. (SFFAS 7 
Implementation Guide (April 2002) par. 70)?

[128] Budgetary resources are obligated when the asset is acquired, not 
when it is depreciated or used up. No budgetary resources are used when 
an asset is depreciated. (SFFAS Implementation Guide, par. 44)?

[129] Budgetary resources are obligated when an allowance (i.e., 
liability or contra-asset) for a subsidy is set up, and as the 
estimated expenses are realized the allowance account is amortized. The 
budgetary accounts, which have already recognized the obligation and 
offsetting collection for subsidy expense, are not affected by the 
transaction. (SFFAS 7 Implementation Guide (April 2002), par. 92)?

[130] Gains are shown as a negative; losses are shown as a positive?

[131] An example of this would be default expenses of pre-credit reform 
(or pre-1992) loans?

[132] See OMB Circular No. A-11, sections 20.4 (l) and 71.6;

[133] Cash collections include any amounts paid in advance of due dates 
unless they are deposits. Deposits are amounts voluntarily paid to 
reporting entities, such as those made to stop the accrual of interest 
or those made pending settlements and judgments. Such Deposits are 
separately recognized as deposit liabilities?

[134] Refund offsets are amounts withheld from refunds on behalf of 
other agencies and paid to such agencies?

[135] Drawbacks are refunds of duties paid on imported goods that are 
subsequently exported or destroyed?

[136] Accrual adjustments, which modify the net of cash collections and 
refunds to determine the amount of revenue recognized, are the net 
increases or decreases during the reporting period in accounts 
receivable, allowance for uncollectable accounts, and accounts payable 
for refunds?

[137] Land is defined as the solid part of the surface of the earth. 
Excluded from the definition of land are materials beneath the surface 
(i.e., depletable resources such as mineral deposits and petroleum), 
the space above the surface (i.e., renewable resources such as timber), 
and the outer-continental shelf resources?

[138] Disclosure shall be either on the face of the statement of net 
cost or in footnotes, depending on the materiality of the amounts and 
the need to distinguish such amounts from other costs relating to 
measures of outputs or outcomes of the reporting entity?

[139] Where parcels of stewardship land have more than one use, the 
predominant use of the land shall be considered the major use?

[140] Grants for maintenance and operations are not considered 
investments in nonfederal physical property?

[141] The definition excludes education and training expensed for 
federal civilian and military personnel?

[142] An example of an investment with a split purpose is a grant 
issued to a state to construct segments of the National Highway System 
and to conduct highway research?

[143] An example of an investment with a split purpose is a grant 
issued to a teaching hospital for both medical education and medical 
research?

[144] ibid?

[145] In research and development programs, output data might consist 
of a number of new projects initiated, or the number of projects 
continued, completed, or terminated. It also might consist of 
quantitative measures such as publication counts, citation counts, 
patent counts, or scientific and engineering personnel funded?

[146] This reporting is encouraged, but is not required?

[147] Reporting entities may aggregate trading partners whose 
individual totals for a particular asset category collectively comprise 
less than 20 percent of the total asset line item category?

[148] The costs that generate intragovernmental earned revenues may not 
be intragovernmental in and of themselves. For example, if the General 
Services Administration (GSA) sells pencils to Agency A, GSA would 
report the revenue earned by selling the pencils to Agency A 
(intragovernmental) and report the cost of purchasing those pencils 
from Vendor B (public) by budget functional classification?

[149] As discussed in checklist question 5 below?

[150] This is the status of a program based on statistical calculations 
and actuarial assumptions about future economic, demographic, and other 
conditions and events?

[151] For periods beginning after September 30, 2004 this information 
shall be presented as a basic financial statement rather than as a 
component of RSSI (SFFAS 25, par. 6 & 7)?

[152] Cash flow during the projection period is derived from 
subtracting the actuarial present value of future contributions and tax 
income during the projection period (17b above) from the actuarial 
present value of future expenditures for the projection period (17a 
above)?

[153] For periods beginning after September 30, 2004 this information 
shall be presented as a basic financial statement rather than as a 
component of RSSI (SFFAS 25, par. 6 & 7)?

[154] ibid?

[155] ibid.

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