B-114365, APR 4, 1967

B-114365, APR 4, 1967

SUBJECT: ACCOUNTING SUPPORT FOR PLANNING-PROGRAMMING-BUDGETING SYSTEM

TO HEADS OF DEPARTMENTS AND AGENCIES:

THE STATEMENT OF ACCOUNTING PRINCIPLES, STANDARDS, AND RELATED REQUIREMENTS PRESCRIBED FOR EXECUTIVE AGENCIES IS BEING AMENDED TO MAKE IT CLEAR THAT THE ACCOUNTING SYSTEMS OF EXECUTIVE AGENCIES MUST BE CAPABLE OF PROVIDING ADEQUATE SUPPORT IN THE FORM OF COST AND OTHER FINANCIAL INFORMATION FOR THE PLANNING-PROGRAMMING-BUDGETING SYSTEM PRESCRIBED BY THE PRESIDENT FOR EXECUTIVE AGENCIES.

THIS STATEMENT IS CONTAINED IN TITLE 2 - ACCOUNTING - OF THE GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES, PORTIONS OF WHICH WILL BE REPRINTED TO REFLECT THESE CHANGES.

THE PRINCIPAL CHANGES BEING MADE ARE AS FOLLOWS:

IN SECTION 8 - STANDARDS FOR ACCOUNTING SYSTEMS - REVISE FIRST PARAGRAPH TO:

THE ACCOUNTING SYSTEM OF EACH FEDERAL AGENCY SHALL BE DESIGNED TO MEET ALL INTERNAL NEEDS FOR COST AND OTHER FINANCIAL DATA FOR PLANNING, PROGRAMMING, BUDGETING, CONTROL, AND REPORTING OF AGENCY OPERATIONS.

THE ACCOUNTING SYSTEM MUST PROVIDE NOT ONLY THE BASIS FOR CONTROL OVER FUNDS, PROPERTY, AND OTHER ASSETS BUT MUST PROVIDE AN ACCURATE AND RELIABLE BASIS FOR DEVELOPING AND REPORTING COSTS OF PERFORMANCE IN ACCORDANCE WITH (A) MAJOR ORGANIZATIONAL SEGMENTS, (B) BUDGET ACTIVITIES, AND (C) THE PROGRAM STRUCTURE ADOPTED UNDER THE PLANNING PROGRAMMING- BUDGETING SYSTEM PRESCRIBED BY THE PRESIDENT FOR EXECUTIVE AGENCIES.

EACH ACCOUNTING SYSTEM MUST ALSO PROVIDE FOR THE REQUIREMENTS OF OTHER ORGANIZATIONS OF THE EXECUTIVE BRANCH, PARTICULARLY THOSE OF THE BUREAU OF THE BUDGET IN ASSISTING THE PRESIDENT IN THE DISCHARGE OF HIS BUDGETARY AND OTHER MANAGEMENT RESPONSIBILITIES AND THOSE OF THE TREASURY DEPARTMENT IN CONNECTION WITH ITS CENTRAL ACCOUNTING AND REPORTING RESPONSIBILITIES. IN SECTION 16 - COSTS - REVISE FOURTH PARAGRAPH TO:

TO MEET THE STATUTORY OBJECTIVES OF FULL DISCLOSURE OF THE FINANCIAL RESULTS OF AGENCY ACTIVITIES, THE PRODUCTION OF ADEQUATE FINANCIAL INFORMATION FOR AGENCY MANAGEMENT PURPOSES, AND SUPPORT OF BUDGET JUSTIFICATIONS WITH PERFORMANCE AND PROGRAM COST DATA, THE ACCOUNTING SYSTEM MUST PROVIDE FOR THE SYSTEMATIC ACCUMULATION OF COST INFORMATION BY:

1. MAJOR ORGANIZATIONAL SEGMENTS

2. BUDGET ACTIVITIES

3. THE PROGRAM STRUCTURE ADOPTED UNDER THE PLANNING-PROGRAMMING BUDGETING SYSTEM PRESCRIBED BY THE PRESIDENT FOR EXECUTIVE AGENCIES

SUCH DATA MAY BE OBTAINED FROM EITHER THE ACCOUNTS EMPLOYED OR BY APPROPRIATE COST-ANALYSIS TECHNIQUES IN CIRCUMSTANCES WHERE THE MAINTENANCE OF DETAILED ACCOUNT CLASSIFICATIONS FOR THIS PURPOSE WOULD NOT BE JUSTIFIED.