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Highlights

GAO reviewed government corporations' compliance with the Chief Financial Officers Act's (CFO) management reporting requirements, focusing on whether the corporations: (1) submitted 1992 financial statements that reasonably reflected their financial condition; (2) adequately assessed their internal controls; and (3) had sufficient guidance to effectively implement the act's reporting requirements.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget 1. To improve the usefulness of CFO audit and reporting requirements for government corporations and to enhance the consistency of management reporting to Congress, the Director, OMB, should work closely with the heads of government corporations to establish an appropriate framework for corporations to follow in assessing and reporting on internal controls.
Closed - Implemented
OMB has not taken any direct action on the recommendation to work with government corporations to establish an appropriate framework for assessing and reporting on internal controls. OMB did send the government corporations copies of its recently revised executive agency guidance (Circular A-123 Revised, June 21, 1995) on assessing and reporting on management controls under FMFIA. For those government corporations that choose to follow the revised guidance, OMB believes the resulting assessment of and report on internal controls will be done following an appropriate framework and should, at least, partially satisfy GAO's recommendation. OMB does not plan to take any further action on this recommendation because of the generally good state of internal controls at government corporations and OMB's need to focus its attention and resources on improving management accountability and reporting for executive department and agencies covered by FMFIA and the CFO Act.
Office of Management and Budget 2. To improve the usefulness of CFO audit and reporting requirements for government corporations and to enhance the consistency of management reporting to Congress, the Director, OMB, should work closely with the heads of government corporations to establish an appropriate framework for corporations to follow in determining when a reconciliation to budget is appropriate and, if so, what it should contain.
Closed - Implemented
OMB has not taken any direct action to work with government corporations to determine when a reconciliation to budget is appropriate and, if so, its form and content. However, OMB, through its participation with FASAB has worked to propose requirements for a new Statement of Budgetary Resources and a Statement of Financing which, upon adoption, would address the form and content aspects of the recommendation. Once finalized as an FASAB standard, OMB plans to prescribe, through its authority to set form and content, that these statements would be prepared. Any government corporations that follow the FASAB standards and reporting requirements would then be expected to comply. Beyond finalizing the FASAB standard and prescribing related form and content requirements, OMB does not plan to take any further action on this recommendation.
Office of Management and Budget 3. To improve the usefulness of CFO audit and reporting requirements for government corporations and to enhance the consistency of management reporting to Congress, the Director, OMB, should work closely with the heads of government corporations to establish an appropriate framework for corporations to follow in establishing the nature and extent of other information to be included in corporations' annual management reports.
Closed - Implemented
OMB has not taken any direct action to work with government corporations to establish the nature and extent of other information to be included in annual management reports. Through its participation with FASAB, OMB is working to establish basic reporting guidance for performance and other information. It is anticipated that these efforts will culminate in a requirement for management to discuss and analyze performance and other information that will likely accompany the entity's financial statements. Once finalized as an FASAB standard, OMB would prescribe that this other information be reported. Any government corporation that follows the FASAB standards and reporting requirements would be expected to comply. Beyond working through the FASAB standard-setting process, OMB does not plan to take any further action with government corporations on this recommendation.

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