Financial Audit: Issues Regarding Reconciliations of Fund Balances With Treasury Accounts

FMS started sending agencies that make their own disbursements a report that provides details on the types of differences between the agencies' and Treasury's records of receipts and disbursements. Based on GAO's work, FMS also changed procedures to provide Statement of Differences reports, which include transaction detail, for all unresolved differences instead of transferring differences over 6 months old to Budget Clearing Accounts (BCAs). After differences were transferred to the BCAs, FMS reported net BCA balances to agencies, but no longer reported individual differences outstanding or the transaction detail for the differences. As a result of these improvements in FMS' reports, agencies will have more detail on the differences to assist them in reconciling their Fund Balances with Treasury accounts.

FMS' Fund Balance Team developed a comprehensive set of standard operating procedures (SOPs) for use by the federal agencies in reconciling Fund Balance with Treasury accounts. The procedures include steps for reconciling monthly Statement of Differences and Fund Balance with Treasury accounts. Overall, the SOPs cover the routine transactions an agency has to record and ultimately reconcile, that affect its Fund Balance accounts. The SOPs were made available to the agencies on the Treasury Fund Balance with Treasury website and are an attachment to the Treasury Financial Manual.

FMS has taken several actions to better assist agencies with Fund Balance with Treasury accounts reconciliation problems and ensure that agencies receive assistance from knowledgeable staff. FMS has: (1) established a Fund Balance Team that is making on-site visits to agencies experiencing reconciliation problems; (2) created a Fund Balance web site that details the resources available to agencies; and (3) held conferences on the Fund Balance with Treasury (FBWT) reconciliation process for agencies at Treasury Regional Finance Centers. FMS also provided training to its staff on FBWT reconciliation. All of FMS' Financial Analysis Branch staff attended the "Reconciling Fund Balance with Treasury" training course.

FMS developed a curriculum that provides agencies with a wide range of resources to develop in-house training programs. These resources include: (1) materials that agencies can use for in-house training courses; (2) written guidance for reconciling FBWT accounts; (3) Treasury personnel who are available to make on-site visits to agencies to train agency personnel; and (4) Treasury- hosted regional conferences on FBWT reconciliations for agency personnel. As a result of FMS' new curriculum, agencies now have better resources available to train their personnel in performing effective FBWT reconciliations.

Treasury has recognized that the current Government On-line Accounting Link System (GOALS) technology is outdated and is developing an new enhanced GOALS II system. FMS began implementation of GOALS II applications in August 2000 with the rollout of the SF224/1219 (Statement of Transactions) applications. Several other applications used by the agencies in reconciling their FBWT accounts, such as warrant and statement of differences, were implemented during fiscal year 2001.