B-114365, APR 25, 1967
Highlights
SUBJECT: REVISED PROCEDURES FOR SUBMITTING REQUESTS FOR APPROVAL OF ACCOUNTING SYSTEMS TO HEADS OF DEPARTMENTS AND AGENCIES: THE PRESCRIBED PROCEDURES FOR SUBMITTING REQUESTS FOR APPROVAL OF EXECUTIVE AGENCY ACCOUNTING SYSTEMS AS SET FORTH IN CHAPTER 3 OF TITLE 2 - ACCOUNTING - OF THE GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES ARE BEING AMENDED. THE PRINCIPAL CHANGE BEING MADE IS TO PROVIDE THAT FUTURE REQUESTS BY AGENCIES FOR APPROVAL OF THEIR ACCOUNTING SYSTEMS ARE TO BE SUBMITTED IN TWO STAGES. THE PURPOSE OF THIS CHANGE IS TO RECOGNIZE THE DESIRABILITY OF GIVING PRIORITY TO OBTAINING AGREEMENT ON THE UNDERLYING PRINCIPLES AND STANDARDS TO BE FOLLOWED IN ACCOUNTING SYSTEMS DEVELOPMENT WORK AND THEN CARRYING OUT SUCH DEVELOPMENT WORK IN THE LIGHT OF THE APPROVED PRINCIPLES AND STANDARDS.
B-114365, APR 25, 1967
SUBJECT: REVISED PROCEDURES FOR SUBMITTING REQUESTS FOR APPROVAL OF ACCOUNTING SYSTEMS
TO HEADS OF DEPARTMENTS AND AGENCIES:
THE PRESCRIBED PROCEDURES FOR SUBMITTING REQUESTS FOR APPROVAL OF EXECUTIVE AGENCY ACCOUNTING SYSTEMS AS SET FORTH IN CHAPTER 3 OF TITLE 2 - ACCOUNTING - OF THE GENERAL ACCOUNTING OFFICE POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES ARE BEING AMENDED. THE PRINCIPAL CHANGE BEING MADE IS TO PROVIDE THAT FUTURE REQUESTS BY AGENCIES FOR APPROVAL OF THEIR ACCOUNTING SYSTEMS ARE TO BE SUBMITTED IN TWO STAGES; NAMELY, (1) THE ACCOUNTING PRINCIPLES AND STANDARDS UNDERLYING THE SYSTEM, AND (2) THE DOCUMENTATION REPRESENTING THE ACCOUNTING SYSTEM, OR SEGMENTS THEREOF, IN OPERATION.
ARRANGEMENTS MAY BE MADE IN INDIVIDUAL CASES TO REQUEST APPROVAL CONSIDERATION IN ADDITIONAL STAGES WHERE DEEMED APPROPRIATE.
THE PURPOSE OF THIS CHANGE IS TO RECOGNIZE THE DESIRABILITY OF GIVING PRIORITY TO OBTAINING AGREEMENT ON THE UNDERLYING PRINCIPLES AND STANDARDS TO BE FOLLOWED IN ACCOUNTING SYSTEMS DEVELOPMENT WORK AND THEN CARRYING OUT SUCH DEVELOPMENT WORK IN THE LIGHT OF THE APPROVED PRINCIPLES AND STANDARDS. A RELATED REASON FOR THE CHANGE IS TO FACILITATE SYSTEMATIC AND EARLY IDENTIFICATION AND RESOLUTION OF POSSIBLE PROBLEM AREAS THAT MIGHT ADVERSELY AFFECT ULTIMATE APPROVAL OF AN ACCOUNTING SYSTEM. ON THE BASIS OF EXPERIENCE TO DATE, IT IS BELIEVED THAT THIS PROCEDURE WILL AVOID THE PREMATURE SUBMISSION OF REQUESTS FOR APPROVAL OF ACCOUNTING SYSTEMS BEFORE THEY HAVE BEEN, IN FACT, PROPERLY PLANNED AND DEVELOPED.
STATEMENTS SETTING FORTH PRINCIPLES AND STANDARDS OF ACCOUNTING TO BE FOLLOWED MAY BE FOR AN ENTIRE DEPARTMENT, FOR INDIVIDUAL SYSTEMS, OR FOR APPROPRIATE GROUPINGS OF INDIVIDUAL SYSTEMS. PRIORITY SHOULD BE GIVEN TO THE DEVELOPMENT OF THIS PHASE OF EACH SYSTEM AND OBTAINING COMPTROLLER GENERAL APPROVAL THEREOF.
REQUESTS FOR APPROVAL OF ACCOUNTING SYSTEMS CURRENTLY IN THE GENERAL ACCOUNTING OFFICE WILL BE CONSIDERED ON THE BASIS SUBMITTED IF A STATEMENT OF ACCOUNTING PRINCIPLES AND STANDARDS WAS INCLUDED.
AGENCIES MAY ELECT TO REQUEST APPROVAL OF THEIR SYSTEMS IN ACCORDANCE WITH PRIOR PROCEDURES AT ANY TIME UP TO JUNE 30, 1967, WITHOUT APPLYING THE TWO-STAGE CONCEPT, IF SYSTEMS DEVELOPMENT WORK HAS BEEN SUBSTANTIALLY COMPLETED.
THIS CHANGE IN APPROVAL PROCEDURES CONTEMPLATES THE FOLLOWING GENERAL PATTERN OF CONTINUING ACCOUNTING SYSTEMS DEVELOPMENT EFFORT FROM THE STANDPOINT OF THE GENERAL ACCOUNTING OFFICE:
1. COMPTROLLER GENERAL CONSIDERATION AND APPROVAL OF THE PRINCIPLES AND STANDARDS TO BE EMPLOYED IN AN ACCOUNTING SYSTEM IN ADVANCE OF APPROVAL CONSIDERATION OF THE ACCOUNTING SYSTEM IN OPERATION.
2. PREPARATION BY EACH AGENCY OF SPECIFIC WORK PLANS IDENTIFYING THE PROJECTS TO BE CARRIED OUT TO IMPLEMENT NEW OR REVISED SYSTEMS TO THE POINT OF COMPTROLLER GENERAL APPROVAL. SUCH PLANS SHOULD INCLUDE THE ESTABLISHMENT OF REALISTIC TARGET DATES FOR COMPLETING THE WORK PROJECTS.
3. COOPERATIVE ASSISTANCE BY THE GENERAL ACCOUNTING OFFICE IN THE PREPARATION OF WORK PLANS AND IN THE DEVELOPMENT OF ACCOUNTING SYSTEMS.
4. PERIODIC REPORTS TO THE CONGRESS ON AGENCY EFFORTS TO IMPROVE THEIR FINANCIAL MANAGEMENT SYSTEMS, INCLUDING ACCOUNTING SYSTEMS. SUCH REPORTS WILL BE BASED IN LARGE PART ON REVIEW OF PROGRESS MADE IN RELATION TO AGENCY WORK PLANS.
5. MORE EMPHASIS IN GAO AUDIT REPORTS ON REVIEWS OF APPROVED ACCOUNTING SYSTEMS IN OPERATION WITH PARTICULAR EMPHASIS ON THE MANAGEMENT USE MADE OF THE FINANCIAL DATA PRODUCED BY THE SYSTEMS AND OPPORTUNITIES FOR ADDITIONAL IMPROVEMENT. THESE REPORTS WILL ALSO DEVOTE MORE ATTENTION TO MANAGEMENT USE OF COST DATA IN COST-BASED BUDGETS FOR PURPOSES OF ADMINISTRATION AND OPERATION AS PROVIDED IN PUBLIC 84-863 (AUGUST 1, 1956). REPORTS ON SUCH REVIEWS WILL BE MADE TO THE CONGRESS AND TO EXECUTIVE AGENCIES AS APPROPRIATE.
CHAPTER 3 OF TITLE 2 OF THE GAO MANUAL IS BEING REPRINTED TO REFLECT THESE CHANGES IN APPROVAL PROCEDURES.
THE GENERAL ACCOUNTING OFFICE WILL CONTINUE TO WORK COOPERATIVELY WITH EACH AGENCY TO HELP IT BRING ITS ACCOUNTING SYSTEM TO A POINT WHERE IT CAN BE APPROVED. THIS OFFICE WILL ALSO CONTINUE ITS ASSISTANCE TO AGENCIES IN THEIR EFFORTS TO DEVELOP AND USE COST DATA AND OTHERWISE IMPROVE THEIR FINANCIAL MANAGEMENT PRACTICES.