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entitled 'Financial Audit: The Department of Homeland Security's Fiscal 
Year 2004 Management Representation Letter on Its Financial Statements' 
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July 14, 2005: 

The Honorable Andrew B. Maner: 
Chief Financial Officer: 
Department of Homeland Security: 

Mr. Richard L. Skinner:
Acting Inspector General: 
Department of Homeland Security: 

Subject: Financial Audit: The Department of Homeland Security's Fiscal 
Year 2004 Management Representation Letter on Its Financial Statements: 

As you know, the Secretary of the Treasury, in coordination with the 
Director of the Office of Management and Budget (OMB), is required to 
annually prepare and submit audited financial statements of the U.S. 
government to the President and the Congress. We are required to audit 
these consolidated financial statements (CFS) and report on the results 
of our work.[Footnote 1] In connection with fulfilling our requirement 
to audit the fiscal year 2004 CFS, we evaluated the Department of the 
Treasury's (Treasury) financial reporting procedures and related 
internal control over the process for compiling the CFS, including the 
management representation letter provided us by Treasury and OMB. 
Written representation letters from management, required by U.S. 
generally accepted government auditing standards, ordinarily confirm 
oral representations given to the auditor, indicate and document the 
continuing appropriateness of those representations, and reduce the 
possibility of a misunderstanding between management and the auditor. 

In our report, which is included in the fiscal year 2004 Financial 
Report of the United States Government,[Footnote 2] we reported a 
limitation on the scope of our work due to identified concerns with the 
adequacy of certain federal agencies' management representations on 
which Treasury and OMB depend to provide their representations to us 
regarding the CFS. Specifically, Treasury and OMB stated that their 
representation letter to us on the CFS was based primarily on the 
individual federal agency representation letters. Consequently, our 
audit considered the content of the individual federal agency letters, 
and the incompleteness of certain of these letters impaired our ability 
to obtain sufficient evidence in support of our audit of the CFS. This 
limitation contributed to our disclaimer of opinion on the CFS. We 
performed sufficient audit work to provide the disclaimer of opinion 
and issued our audit report, dated December 6, 2004, in accordance with 
U.S. generally accepted government auditing standards. 

As part of our audit of the fiscal year 2004 CFS, we received and 
reviewed selected federal agencies' management representation letters 
to assess their adequacy in support of our audit of the CFS. As the 
federal government gets closer to an opinion on its financial 
statements, it becomes more important that the federal agencies' 
management representation letters be complete and reliably prepared. 

The purpose of this report is to communicate our observations on the 
Department of Homeland Security's (DHS) fiscal year 2004 management 
representation letter. Our objective is to help ensure that future 
management representation letters submitted by DHS are sufficient to 
help support Treasury and OMB's preparation of the CFS management 
representation letter and our ability to rely on the representations in 
that letter in combination with individual federal agency 
representation letters. We reviewed five key areas in each management 
representation letter: (1) signatures, (2) materiality thresholds, (3) 
representations, (4) summary of unadjusted misstatements, and (5) 
reliability of representations. In reviewing the management 
representation letters, we applied the American Institute of Certified 
Public Accountants' (AICPA) Codification of Auditing Standards, AU 
Section 333, Management Representations; OMB Bulletin 01-02, Audit 
Requirements for Federal Financial Statements; and the GAO/President's 
Council on Integrity and Efficiency (PCIE) Financial Audit Manual (FAM) 
section 1001, entitled "Management Representations."[Footnote 3]

Results in Brief: 

DHS's fiscal year 2004 management representation letter did not provide 
all the information necessary to support Treasury and OMB's preparation 
of the CFS management representation letter. This in turn impacted our 
ability to rely on the representations in the CFS management 
representation letter in combination with individual federal agency 
representation letters. 

We identified some needed improvements in two of the five key areas we 
reviewed. First, DHS did not provide the materiality thresholds used to 
determine, for representation purposes, any matters that were 
individually or collectively material to its financial statements. Such 
individual federal agency thresholds are considered by Treasury and OMB 
in providing a materiality threshold for the CFS representation letter. 
In addition, DHS did not include a complete summary of unadjusted 
misstatements with its management representation letter and also did 
not distinguish between misstatements affecting intragovernmental 
accounts and misstatements affecting accounts with the public. 

We believe that these matters can be easily addressed. We are making 
two recommendations to DHS's Chief Financial Officer targeted to 
specific changes needed. Also, we are recommending that the DHS Acting 
Inspector General, with the contracted independent public accountant, 
work with the department to help ensure that future management 
representation letters meet the key conditions noted as needing 
improvements in this report. 

In commenting on a draft of this report, DHS's Offices of the Chief 
Financial Officer and Inspector General, in separate letters, concurred 
with our recommendations and stated that their offices will work to 
address the conditions noted in our report. 

Background: 

In conducting agency financial statement audits, U.S. generally 
accepted government auditing standards incorporate financial auditing 
fieldwork and reporting standards issued by the AICPA. Such auditing 
standards (AU Section 333) require auditors to obtain certain 
representations from agency management. These representations are part 
of the evidential matter to be considered by the auditor in its audit 
of the agency's financial statements. The representations obtained will 
depend on the circumstances of the engagement and the nature and basis 
of presentation of the financial statements. AU Section 333 discusses 
specific representations that should be obtained from management, 
including a requirement to attach a schedule of unadjusted financial 
statement misstatements for entities with uncorrected misstatements. 

In addition, OMB Bulletin 01-02 and FAM section 1001 contain guidance 
on preparing federal agencies' management representation letters. 
According to the FAM, in addition to the representations included in AU 
Section 333, the auditor generally should consider the need to obtain 
representations on other matters based on the circumstances of the 
audited entity. FAM section 1001A lists 35 specific representations 
ordinarily included in the management representation letter and also 
includes a requirement to attach a schedule of unadjusted financial 
statement misstatements for entities with uncorrected misstatements. 
(See enc. I for these representations.) Representations listed in FAM 
section 1001A should be customized to the situation of the entity being 
audited or excluded if inapplicable. We perform our audit of the CFS in 
accordance with the FAM and related auditing standards. 

Treasury and OMB are to receive management representation letters from 
certain federal agencies. This is important because U.S. generally 
accepted government auditing standards require that Treasury and OMB 
provide us, as principal auditor of the CFS, a management 
representation letter, and their letter depends on the information in 
such agencies' management representation letters. In their 
representation letter to us for the audit of the fiscal year 2004 CFS, 
Treasury and OMB stated that their representations are based primarily 
on the representations of those agencies covered by the Chief Financial 
Officers (CFO) Act and other selected agencies that were made in 
connection with the preparation of these entities' respective financial 
statements and provided to OMB and Treasury. For this reason, it is 
important that all federal agency representation letters be complete 
and reliable. 

Objectives, Scope, and Methodology: 

In connection with our audit of the fiscal year 2004 CFS, we evaluated 
Treasury's financial reporting procedures and related internal control, 
including the CFS management representation letter. For the fiscal year 
2004 CFS, 33 of the 35 "verifying agencies" submitted audited financial 
statements along with their management representation letters to 
Treasury.[Footnote 4] In our review of these 33 management 
representation letters, our overall objective was to assess their 
adequacy as it relates to our audit of the CFS. Specifically, we 
reviewed each agency management representation letter to determine 
whether the following five key conditions were met: 

* the management representation letter was signed by appropriate agency 
officials;

* the management representation letter included designation as to the 
amounts above which matters were considered material (materiality 
thresholds);

* the management representation letter included applicable 
representations from the FAM;

* the management representation letter included a properly prepared 
summary of unadjusted misstatements for agencies with uncorrected 
misstatements; and: 

* the representations in the management representation letter were 
reliable based on a review of findings in the auditor's report. 

This report is based on the audit work we performed for the audit of 
the fiscal year 2004 CFS, which was performed in accordance with U.S. 
generally accepted government auditing standards. 

We requested comments on a draft of this report from DHS's Chief 
Financial Officer and Inspector General or their designees. Written 
comments from DHS's Director of the GAO/OIG Liaison Office in the 
Office of the Chief Financial Officer and the Acting Inspector General 
are reprinted in enclosures II and III, respectively, and are also 
discussed in the Agency Comments section. 

Issues Identified with DHS's Fiscal Year 2004 Management Representation 
Letter: 

With respect to DHS's fiscal year 2004 management representation 
letter, we identified the following two areas that need some 
improvement: (1) providing the materiality thresholds used and (2) 
including a complete summary of unadjusted misstatements. Details 
regarding these issues are as follows. 

Providing the Materiality Thresholds Used: 

Management representations may be limited to matters that are 
considered individually or collectively material to the entity's 
financial statements, provided that management and the auditor have 
reached an understanding on the materiality thresholds to be used. 
Likewise, in preparing the overall management representation letter for 
the CFS, which is provided to us, Treasury and OMB limit the letter's 
representations to matters that are considered to be material. While an 
understanding between management and the auditor of materiality 
thresholds used is not explicitly required by auditing standards to be 
included in the management representation letter, Treasury and OMB use 
agency thresholds in providing a materiality threshold for the 
governmentwide management representation letter. 

For fiscal year 2004, because the materiality thresholds used were not 
included in DHS's and a number of other federal agencies' management 
representation letters, or otherwise provided to Treasury and OMB, 
Treasury and OMB's ability to represent that all matters material to 
the CFS were properly considered and included in the overall management 
representation letter for the CFS was impaired. 

Including a Complete Summary of Unadjusted Misstatements: 

U.S. generally accepted government auditing standards require that for 
each federal agency with uncorrected misstatements, a summary of 
unadjusted misstatements be attached to the agency's management 
representation letter. Treasury and OMB use the summaries of unadjusted 
misstatements to assess the impact of federal agencies' unadjusted 
misstatements on the CFS and make appropriate management 
representations to us at the governmentwide level. The summaries are 
also used by us, as principal auditor of the CFS, to develop an overall 
governmentwide summary of unadjusted misstatements, which is then 
attached to the CFS management representation letter prepared by 
Treasury and OMB. 

Also, in a matter related to the compilation process for the CFS, in 
fiscal year 2004, Treasury required agencies to submit a summary of 
unadjusted misstatements as part of the closing package using the 
standardized format provided for in the Treasury Financial Manual 
(TFM). The TFM, however, required additional details to be added to 
this summary of unadjusted misstatements than those called for by the 
FAM. Specifically, agencies were to also (1) include a description of 
the misstatements and (2) distinguish between misstatements affecting 
intragovernmental accounts and misstatements affecting accounts with 
the public. We need this additional information to develop the overall 
governmentwide summary of unadjusted misstatements. In order to avoid 
duplication of effort by the agencies in preparing two summaries of 
unadjusted misstatements, the additional information should also be 
included in the summary of unadjusted misstatements attached to the 
management representation letter. As such, we plan to work with PCIE to 
modify the FAM to call for these two additional disclosures to be 
included in the summary of unadjusted misstatements attached to the 
management representation letter. 

DHS included a summary of unadjusted misstatements with its management 
representation letter, but the summary did not separately identify the 
carry-forward effect of the prior year's unadjusted misstatements, as 
called for by the FAM. In addition, DHS submitted a summary of 
unadjusted misstatements as part of its closing package to Treasury as 
required by the TFM, but the summary did not distinguish between 
misstatements affecting intragovernmental accounts and misstatements 
affecting accounts with the public. 

Without a complete summary of unadjusted misstatements from each of the 
verifying agencies with uncorrected misstatements, it is not possible 
for us, as principal auditor of the CFS, to reasonably determine the 
audit risk exposure for each of the line items in the CFS or to prepare 
an adequate summary of unadjusted misstatements at the governmentwide 
level. 

Conclusions: 

In two of the five key areas we reviewed, DHS's fiscal year 2004 
management representation letter did not provide all the information 
necessary to support Treasury and OMB's preparation of the CFS 
management representation letter and our ability to rely on the 
representations in that letter in combination with individual federal 
agency representation letters, including that of DHS. The additional 
information needed from DHS is straightforward and should be easy to 
address. 

Recommendations for Executive Action: 

We recommend to DHS's Chief Financial Officer that in the future the 
management representation letter: 

* include materiality thresholds or such thresholds be provided 
separately to Treasury and OMB and: 

* include a complete summary of unadjusted misstatements, if there are 
any uncorrected misstatements, that also distinguishes between 
misstatements affecting intragovernmental accounts and misstatements 
affecting accounts with the public. 

We recommend that the DHS Acting Inspector General, with the contracted 
independent public accountant, work with the department to help ensure 
that future management representation letters meet the key conditions 
noted as needing improvements in this report. 

Agency Comments: 

In commenting on a draft of this report, DHS's Offices of the Chief 
Financial Officer and Inspector General, in separate letters, concurred 
with our recommendations and stated that their offices will work to 
address the conditions noted in our report. The comments are reprinted 
in enclosures II and III. 

Within 60 days of the date of this report, we would appreciate 
receiving a written statement on actions taken to address these 
recommendations. 

We are sending copies of this report to the Chairmen and Ranking 
Minority Members of the Senate Committee on Homeland Security and 
Governmental Affairs; the Subcommittee on Federal Financial Management, 
Government Information, and International Security, Senate Committee on 
Homeland Security and Governmental Affairs; the House Committee on 
Government Reform; and the Subcommittee on Government Management, 
Finance, and Accountability, House Committee on Government Reform. In 
addition, we are sending copies to the Fiscal Assistant Secretary of 
the Treasury and the Controller of OMB. Copies will be made available 
to others upon request. This report is also available at no charge on 
GAO's Web site at [Hyperlink, http://www.gao.gov]. 

We appreciate the courtesy and cooperation extended to us by your staff 
throughout our work. We look forward to continuing to work with your 
offices to help improve financial management in the federal government. 
If you have any questions about the contents of this report, please 
contact me at (202) 512-3406. 

Signed by: 

Gary T. Engel: 
Director: 
Financial Management and Assurance: 

Enclosures - 3: 

[End of section]

Enclosure I: Representations in FAM 1001A: 

Guidance contained in FAM 1001 and FAM 1001A deals with the management 
representations that the auditor should obtain from current management 
as part of the audit. This guidance also acknowledges that judgment 
needs to be exercised to obtain representations that depend on the 
circumstances of the engagement and the nature and basis of 
presentation of the financial statements. Representations given in FAM 
section 1001A should be customized to the situation of the entity being 
audited, and additional representations may need to be obtained. 

FAM 1001A lists 27 representations that are ordinarily included, if 
applicable, in the management representation letter that an agency 
provides to the auditor. For representations 3, 11, 16, and 18, the 
agency should address three separate components. As such, each agency 
is ordinarily expected to make a total of 35 representations. 
Representations 18, 19, 20, and 21 are not applicable unless the agency 
received an opinion on its internal control. In addition, 
representations 22, 23, and 24 address the three requirements of the 
Federal Financial Management Improvement Act of 1996 and are only 
applicable to the 24 CFO Act agencies. The 35 representations in FAM 
1001A are as follows. 

1. We are responsible for the fair presentation of the financial 
statements and stewardship information in conformity with U.S. 
generally accepted accounting principles. 

2. The financial statements are fairly presented in conformity with 
U.S. generally accepted accounting principles. 

3. We have made available to you all: 

a. financial records and related data;

b. where applicable, minutes of meetings of the Board of Directors [or 
other similar bodies, such as congressional oversight committees] or 
summaries of actions of recent meetings for which minutes have not been 
prepared; and: 

c. communications from the Office of Management and Budget (OMB) 
concerning noncompliance with or deficiencies in financial reporting 
practices. 

4. There are no material transactions that have not been properly 
recorded in the accounting records underlying the financial statements 
or disclosed in the notes to the financial statements. 

5. We believe that the effects of the uncorrected financial statement 
misstatements summarized in the accompanying schedule are immaterial, 
both individually and in the aggregate, to the financial statements 
taken as a whole. [If management believes that certain of the 
identified items are not misstatements, management's belief may be 
acknowledged by adding to the representation, for example, "We believe 
that items XX and XX do not constitute misstatements because 
[description of reason]."]

6. The [entity] has satisfactory title to all owned assets, including 
stewardship property, plant, and equipment; such assets have no liens 
or encumbrances; and no assets have been pledged. 

7. We have no plans or intentions that may materially affect the 
carrying value or classification of assets and liabilities. 

8. Guarantees under which the [entity] is contingently liable have been 
properly reported or disclosed. 

9. Related party transactions and related accounts receivable or 
payable, including assessments, loans, and guarantees, have been 
properly recorded and disclosed. 

10. All intraentity transactions and balances have been appropriately 
identified and eliminated for financial reporting purposes, unless 
otherwise noted. All intragovernmental transactions and balances have 
been appropriately recorded, reported, and disclosed. We have 
reconciled intragovernmental transactions and balances with the 
appropriate trading partners for the four fiduciary transactions 
identified in Treasury's Intra-governmental Fiduciary Transactions 
Accounting Guide, and other intragovernmental asset, liability, and 
revenue amounts as required by the applicable OMB Bulletin. 

11. There are no: 

a. possible violations of laws or regulations whose effects should be 
considered for disclosure in the financial statements or as a basis for 
recording a loss contingency,

b. material liabilities or gain or loss contingencies that are required 
to be accrued or disclosed that have not been accrued or disclosed, or: 

c. unasserted claims or assessments that are probable of assertion and 
must be disclosed that have not been disclosed. 

12. We have complied with all aspects of contractual agreements that 
would have a material effect on the financial statements in the event 
of noncompliance. 

13. No material events or transactions have occurred subsequent to 
September 30, 20X2 [or date of latest audited financial statements], 
that have not been properly recorded in the financial statements and 
stewardship information or disclosed in the notes. 

14. We are responsible for establishing and maintaining internal 
control. 

15. We acknowledge our responsibility for the design and implementation 
of programs and controls to prevent and detect fraud (intentional 
misstatements or omissions of amounts or disclosures in financial 
statements and misappropriation of assets that could have a material 
effect on the financial statements). 

16. We have no knowledge of any fraud or suspected fraud affecting the 
[entity] involving: 

a. management,

b. employees who have significant roles in internal control, or: 

c. others where the fraud could have a material effect on the financial 
statements. 

[If there is knowledge of any such instances, they should be 
described.] 

17. We have no knowledge of any allegations of fraud or suspected fraud 
affecting the [entity] received in communications from employees, 
former employees, or others. [If there is knowledge of any such 
allegations, they should be described.]

18. Pursuant to 31 U.S.C. 3512(c), (d) (commonly known as the Federal 
Managers' Financial Integrity Act), we have assessed the effectiveness 
of the [entity's] internal control in achieving the following 
objectives: 

a. reliability of financial reporting--transactions are properly 
recorded, processed, and summarized to permit the preparation of 
financial statements and stewardship information in accordance with 
U.S. generally accepted accounting principles, and assets are 
safeguarded against loss from unauthorized acquisition, use or 
disposition;

b. compliance with applicable laws and regulations--transactions are 
executed in accordance with (i) laws governing the use of budget 
authority and with other laws and regulations that could have a direct 
and material effect on the financial statements and (ii) any other 
laws, regulations, and governmentwide policies identified by OMB in its 
audit guidance; and: 

c. reliability of performance reporting--transactions and other data 
that support reported performance measures are properly recorded, 
processed, and summarized to permit the preparation of performance 
information in accordance with criteria stated by management. 

[If the entity bases its internal control assessment on suitable 
criteria other than 31 U.S.C. 3512(c), (d), this item should cite the 
criteria used (for example, Internal Control--Integrated Framework 
issued by the Committee of Sponsoring Organizations (COSO) of the 
Treadway Commission).]

19. Those controls in place on September 30, 20X2 [or date of latest 
audited financial statements], and during the years ended 20X2 and 
20X1, provided reasonable assurance that the foregoing objectives are 
met. [If there are material weaknesses, the foregoing representation 
should be modified to read: 

* Those controls in place on September 30, 20X2, and during the years 
ended 20X2 and 20X1, provided reasonable assurance that the foregoing 
objectives are met except for the effects of the material weaknesses 
discussed below or in the attachment. 

* or: Internal controls are not effective. 

* or: Internal controls do not meet the foregoing objectives.]

20. We have disclosed to you all significant deficiencies in the design 
or operation of internal control that could adversely affect the 
entity's ability to meet the internal control objectives and identified 
those we believe to be material weaknesses. 

21. There have been no changes to internal control subsequent to 
September 30, 20X2 [or date of latest audited financial statements], or 
other factors that might significantly affect it. [If there were 
changes, describe them, including any corrective actions taken with 
regard to any significant deficiencies or material weaknesses.]

22. We are responsible for implementing and maintaining financial 
management systems that substantially comply with federal financial 
management systems requirements, federal accounting standards (U.S. 
generally accepted accounting principles), and the U.S. Government 
Standard General Ledger at the transaction level. 

23. We have assessed the financial management systems to determine 
whether they substantially comply with these federal financial 
management systems requirements. Our assessment was based on guidance 
issued by OMB. 

24. The financial management systems substantially complied with 
federal financial management systems requirements, federal accounting 
standards, and the U.S. Government Standard General Ledger at the 
transaction level as of [date of the latest financial statements]. 

[If the financial management systems substantially comply with only one 
or two of the above elements, this representation should be modified as 
follows: 

* As of [date of financial statements], the [entity's] financial 
management systems substantially comply with [specify which of the 
three elements for which there is substantial compliance (e.g., federal 
accounting standards and the SGL at the transaction level)], but did 
not substantially comply with [specify which of the elements for which 
there was a lack of substantial compliance (e.g., federal financial 
management systems requirements)], as described below (or in an 
attachment).]

[If the financial management systems do not substantially comply with 
any of the three elements, the following paragraph should be used 
instead: 

* As of [date of financial statements], the [entity's] financial 
management systems do not substantially comply with the federal 
financial management systems requirements.]

[If there is a lack of substantial compliance with one or more of the 
three requirements, identify herein or in an attachment all the facts 
pertaining to the noncompliance, including the nature and extent of the 
noncompliance and the primary reason or cause of the noncompliance.]

25. We are responsible for the [entity's] compliance with applicable 
laws and regulations. 

26. We have identified and disclosed to you all laws and regulations 
that have a direct and material effect on the determination of 
financial statement amounts. 

27. We have disclosed to you all known instances of noncompliance with 
laws and regulations. 

[End of section]

Enclosure II: Comments From the Office of the Chief Financial Officer 
at the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528: 

June 10, 2005: 

MEMORANDUM FOR: Gary T. Engel: 
Director: 
Financial Management and Assurance:
United States Government Accountability Office: 

FROM: Steven J. Pecinovsky: (Signature)
Director, GAO/OIG Liaison Office: 
Office of the Chief Financial Officer: 

SUBJECT: GAO's Draft Financial Audit: The Department ofHomeland 
Security's Fiscal Year 2004 Management Representation Letter on Its 
Financial Statements: 

We have reviewed the draft report entitled "Financial Audit: The 
Department of Homeland Security's Fiscal Year 2004 Management 
Representation letter on Its Financial Statements."

We agree with your evaluation that the Department of Homeland 
Security's (DHS) fiscal year 2004 management representation letter did 
not provide all the information necessary to support the management 
representation letter for the United States consolidated financial 
statements. We will work with the DHS Inspector General and their 
independent auditor to help ensure that future management 
representation letters incorporate your recommendations. 

Should you have any questions, please call me, or your staff may 
contact John McNamara, Director, Office of Financial Management, at 
(202) 205-5833. 

cc: Acting Inspector General Richard L. Skinner, DHS: 

[End of section]

Enclosure III: Comments From the Office of the Inspector General at the 
Department of Homeland Security: 

U.S. Department of Homeland Security: 
Office of Inspector General:
Washington, DC 20528: 

June 13, 2005: 

MEMORANDUM FOR: 
Gary T. Engel: 
Director: 
Financial Management and Assurance: 

FROM:
Richard L. Skinner: (Signature)
Acting Inspector General: 

SUBJECT: GAO's Draft Financial Audit: The Department of Homeland 
Security's Fiscal Year 2004 Management Representation Letter on Its 
Financial Statements: 

We have reviewed the draft report entitled "Financial Audit: The 
Department of Homeland Security's Fiscal Year 2004 Management 
Representation letter on Its Financial Statements." The report 
recommends that the DRS 01G, with the contracted independent public 
accountant, work with the department to help ensure that future 
management representation letters meet the key conditions noted as 
needing improvements. We concur with the recommendation and have no 
other comments. 

Should you have any questions, please call me, or your staff may 
contact J. Richard Berman, Assistant Inspector General for Audits, at 
(202) 254-4100. 

CC: Under Secretary for Management; 
Chief Financial Officer, DHS: 

[End of section] 

(198380): 

FOOTNOTES

[1] The Government Management Reform Act of 1994 has required such 
reporting, covering the executive branch of government, beginning with 
financial statements prepared for fiscal year 1997. 31 U.S.C.  331 
(e). The federal government has elected to include certain financial 
information on the legislative and judicial branches in the CFS as 
well. 

[2] The fiscal year 2004 Financial Report of the United States 
Government was completed by the Department of the Treasury on December 
15, 2004, and is available through both GAO's Web site at www.gao.gov 
and Treasury's Web site at www.fms.treas.gov/fr/index.html. 

[3] GAO, GAO/PCIE: Financial Audit Manual: Update, GAO-04-1015G 
(Washington, D.C.: July 30, 2004), an update to Financial Audit Manual: 
Volumes 1 and 2, GAO-01-765G (Washington, D.C.: Aug. 1, 2001). 

[4] See Treasury Financial Manual, vol. I, part 2, ch. 4700, for a list 
of the 35 agencies. These agencies, for fiscal year 2004, consisted of 
23 CFO Act agencies and 12 material other agencies. The 33 agencies we 
reviewed did not include the U.S. Securities and Exchange Commission 
and the Smithsonian Institution because these audits were not complete 
before the fiscal year 2004 Financial Report of the United States 
Government was issued. The Department of Homeland Security (DHS) 
Financial Accountability Act, Pub. L. No. 108-330, 118 Stat. 1275 (Oct. 
16, 2004), added DHS to the list of CFO Act agencies, increasing the 
number of CFO Act agencies again to 24 for fiscal year 2005.