Quiz 19: Federal Government Accounting

Business

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A. The Department of the Treasury is part of the executive branch of the government. It is headed by the Secretary of the Treasury. The Treasury acts as both the chief accountant and the banker for the federal government. Its financial management responsibilities include: Central accounting and reporting for the federal government as a whole, including development of government-wide consolidated financial statements. Cash receipt and disbursement management, including supervising the federal depository system and disbursing cash for virtually all civilian agencies. Management of the public debt, including the scheduling of borrowing to meet current needs, repayment of debt principal, and meeting interest requirements. Supervision of agency borrowing from the Treasury. Maintenance of the government-wide Standard General Ledger (SGL). B. Office of Management and Budget (OMB) is an agency within the Executive Office of the President. It has broad financial management powers and prepares the budget for submission to Congress. Its financial management responsibilities include: To apportion enacted appropriations among the agencies and establish reserves in anticipation of cost savings, contingencies, etc. To set forth the requirements for accounting and reporting on budget execution. To prescribe the form and content of financial statement consistent with applicable accounting principles, standards, and requirements. To provide guidance on all matters related to budget preparation and execution. C. Government Accountability Office (GAO) is headed by the Comptroller General of the United States. The GAO is an arm of the Congress and assists it in the general overall oversight of the executive branch while serving as the independent legislative auditor of the federal government. Its primary financial management responsibilities are: Prescribing principles and standards for federal agency accounting and financial reporting, internal control, accounting systems, and auditing. Auditing the financial statements of the federal agencies. D. Federal Accounting Standards Advisory Board (FASAB) is an independent agency created by the Treasury, OMB, and GAO to promulgate the accounting principles and standards to be followed by the federal agencies. FASAB standards are recognized as GAAP for federal agencies by the AICPA. The Department of the Treasury, OMB, and GAO each has veto power over any standard issued by the FASAB. However, the AICPA has said it would remove the GAAP status of the FASAB should this veto ever occur.

A