WPC =cT^qP#\2ʬW`.g}&'aq 񂂙=C)4/VjA, R՘T!/OYbtQMhF=/R8`k(hvE&SqPbޏqu~;qKIJKȱ-RoX;>ms)4EHC5dK||j}zr*fcW=Q&wY?V? TkG3&,RYBlh#zcZ m묖gf89ˆLa:9'z[Sڟ VMat3L$pW Bij<OH>[Ѷ,! u_;Tz\߂v`ҹ~^B،[7W8+RR "cS mm"lc؋fl")lJb/UxD2 0~ 0x: 0k 0k 0 0~- 0 0 0v 0' 0) 0)> 0<g 0N 0a 0R 0, 0 0! 0X" 0# 0# 0$ 0w%U@%& %e& 0k& ( 0C(UB)F`) 0C) D+)* 0C* 0J+ AMg+@+ 0+c-F2.@x. 0.0F0@)1 0A12F3@3 045Fw6@6 06p8F?9@9 096;F<@K< 0]<=F>@? 0%?@FA@A 0ACF_D@D 0DXFF'G@mG 0G IFI@5J 0GJKFL@L 0MNFO@O 0O|QFKR@R 0RLTFU@aU 0sUWFW@)X 0;XYFZ@Z 0[\Fs]@] 0]l_F;`@` 0`4bFc@Ic 0[cdFe@f 0#fgFh@h 0hjFak@k 0k`mF/n@un 0n.pFp@Cq 0[qrFs@t 0z)t 0t \u 0=mu 0Fu 0Pu 1@v 0v 1w 0x=y 0C|E} 0}~F@ 0FN@ 1 0C3 1v 1 1 0Ɇ 1s D3 15 0vĈ 1:n B #!! 0 (BNjw@l4 mhٍ 1A 0wȐ 0? 0 ɑ 0i 1 1 1; 1” 1I 0 Е 1 12 0 1 11"UENUN0 ~2Dv 0 g~ 1 1ul 0C 0c$ 1 1 1 0  0<,UNK 0< 0բ i5٣ 1 0& 0B 1 0, 1kU<U;0W 1 1 0e[UN 0g 0P5bUN ATvVʴ^ ', 0S 0  0U>߾ 0  0dq 014 0 1UB 1W 0N.< 07jMF C 1 B* B Bfa 1 1 1 1 12 1 1@U!N 1 1# 1B 1 1l 1 1z 1 2 1 1QLfU.BxWa 1V& 8Document[8]Document Style0..8` ..` Vy8Document[4]Document Style.. . V 9{8Document[6]Document Style8..V 9w8Document[5]Document Style0..V:8Document[2]Document Style   2A.3  Ԁ   V& 8Document[7]Document Style0..0` ..` z` :Right Par[1]Right-Aligned Paragraph Numbers..  2I.3  Ԁ..0..zs B:Right Par[2]Right-Aligned Paragraph Numbers..` ..  2A.3  Ԁ..0` ..` VJ8Document[3]Document Style..   21.3  Ԁ   z :Right Par[3]Right-Aligned Paragraph Numbers..` ..`  ..P   21.3  Ԁ` ..` 0 .. z &:Right Par[4]Right-Aligned Paragraph Numbers..` ..`  .. ..   2a.3  Ԁ .. 0..z {j:Right Par[5]Right-Aligned Paragraph Numbers..` ..`  .. ..h..  2(1)3  Ԁ..0h..hz Ĵ:Right Par[6]Right-Aligned Paragraph Numbers..` ..`  .. ..h..h..  2(a)3  Ԁh..h0..z :Right Par[7]Right-Aligned Paragraph Numbers..` ..`  .. ..h..h....  2i)3  Ԁ..0..z :Right Par[8]Right-Aligned Paragraph Numbers..` ..`  .. ..h..h....p..  2a)3  Ԁ..0p..pVc08Document[1]Document Style  @..^    2I.3  Ԁ     Ԉ l= g:Technical[5]Technical Document Style..   2(1)3  Ԁ. l= :Technical[6]Technical Document Style..   2(a)3  Ԁ. l:%:Technical[2]Technical Document Style   2A.3  Ԁ   .. l7!:Technical[3]Technical Document Style   21.3  Ԁ   .. l6! ):Technical[4]Technical Document Style   2a.3  Ԁ   .. lE0 D:Technical[1]Technical Document Style    2I.3  Ԁ     .. l<a~:Technical[7]Technical Document Style..   2i)3  Ԁ. l<a:Technical[8]Technical Document Style..   2a)3  Ԁ. (`(NewCenturySchlbkX<PP:CG Letterhea  X &%&QA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A  (2$ !  $ `*Times New RomanTT <  '  XXX(2$ !  'dxd Level 1 Level 2 Level 3 Level 4 Level 5(2$ !  ("$ Figure    "#$!A<< ccg.eps<PYP:GS&C Letterh(  )X &%*QA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXgsc.eps<Px:Cong Contact,  -X &%.QA=z h{# `{#@ H@EX{#z#X{##&&XXXXXXXX )  XXX#&XPage@    1  A   <  '  XXXocrmemo.eps<P@:ACG Letterhe0  1X &%2QA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXacg.eps<PP:AIMD Letterh4  5X &%6QA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXaimd.eps<PP:GGD Letterhe8  9X &%:QA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXggd.eps<PP:HEHS Letterh<  =X &%>QA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXhehs.eps<P1:Memorandum P@  AX &%BQA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXmemo.eps<PQ:NSIAD LetterD  EX &%FQA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXnsiad.eps<P9Q:OIMC LetterhH  IX &%JQA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXoimc.eps<PUQ:PEMD LetterhL  MX &%NQA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXpemd.eps<PqQ:RCED LetterhP  QX &%RQA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXrced.eps<P:Atlanta LettT  UX &%VQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXatlro.eps<P:Boston/New YX  YX &%ZQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXbosny.eps<P6:Chicago/Detr\  ]X &%^QA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXchicdetr.eps<PR:Dallas Lette`  aX &%bQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXdaro.eps<Pn:Denver Letted  eX &%fQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXdero.eps<P:Los Angeles h  iX &%jQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXlaro.eps<P:Norfolk Lettl  mX &%nQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXnorf.eps<P:Seattle Lettp  qX &%rQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXsero.eps<P:San Francisct  uX &%vQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXsfro.eps<P:Kansas City x  yX &%zQA=z h# `{#@ H@EX##X#&&XXXXXXXX )  XXX&XPage@    1  A   <  '  XXXkcro.eps<PfQ:ATC Tech Eva|  }X &%~QA=z h{# `{#@ H@EX{#z#X{##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXatceval.eps<PQ:ATC Tech Sta  X &%QA=z h{# `{#@ H@EX{#z#X{##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXatcstan.eps<PQ:ATC Findings  X &%QA=z h{# `{#@ H@EX{#z#X{##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXatcfind.eps<PQ:ATC Project   X &%QA=z h{# `{#@ H@EX{#z#X{##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXatcproj.eps<PQ:ATC Tech Not  X &%QA=z h{# `{#@ H@EX{#z#X{##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXatcnote.epsR& 8BibliogrphyBibliography0....fE2Doc InitInitialize Document Style(    (($0 ($0 0 (($0 0 0   A_ekqwDocumentDocument StyleI.1.A.a.(1)(a)i)a)jD4Tech InitInitialize Technical Style(  ( CuyTechnicalTechnical Document Style11.11.1.11.1.1.11.1.1.1.11.1.1.1.1.11.1.1.1.1.1.11.1.1.1.1.1.1.1x?v2PleadingHeader for numbered pleading paper   (  XXXXX?'*dE*??'*dE*?\\1\\2\\3\\4\\5\\6\\7\\8\\910111213141516171819202122232425262728  .+(2$ !  4P J2OCR Memo  X &%QA=z h{# `{#@ H@EX{#z#X{##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXocrmemo.eps<PS:OAM Letterhe  X &%QA=z h# `{#@ H@EX##X##&&XXXXXXXX  9 )  XXX#&XPage@    1  A   <  '  XXXoam.eps(EGOW_gowAutoList39(1)(1)(1)(1)(1)(1)(1)(1)($     CEMU]emu}AutoList6(1)(a)(1)(1)(i)(1)(1)(1)(hCEKQW]cioAutoList7a.a.a.a.a.a.a.a.(MEGOW_gowAutoList10(i)(i)(i)(i)(i)(i)(i)(i)  [$Ӏ  6    _XXXXԀTherequirementforcomponentstopreparefinancialstatementsmaybesatisfiedbypresentingthe  componentsseparatelyinconsolidatingagencywidefinancialstatementsandconductinganaudit,inaccordancewiththisBulletin,attheconsolidatingfinancialstatementlevel.<77Dp4:QuickFormat1XXX  XXX   EEGOW_gowAutoList13(a)(a)(a)(a)(a)(a)(a)(a)'dxd(EEGOW_gowAutoList15(a)(a)(a)(a)(a)(a)(a)(a)(-!2[$ !  Ӏ  0    CRight ParRight-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)3|x3(`(NewCenturySchlbkXXr PyQXP$ `*Times New RomanTTW P&QP<6X9`(CourierchlbkXXx6X@QX@ d0($ 3E33E33D3333{3vP&z 7U  P.L. GMRAxxxxxxxxxRaines CFOsFFMIA xxxxxxxxxxxxxx IGsi SGLFASABSFFASsSFFASnonfederalthroughsforcastsWALKTHROUGHSLOOKBACKparticularilyFMFIA TtheJFMIPFFMSRFFMIAFederalFollowupunasserted AUPs OPF CSRS FERS FEHB APOsFEGLI CEKQW]emsAutoList5a.a.a.a.(i)(A)a.a.(O;$0  2#  a  .3  0` (#(#(b$0  0` (#(#2#   .3  0 ` (#` (#(xir$0  0` (#(#0 ` (#` (#2#(  0  )3  0 (# (#($0  0` (#(#0 ` (#` (#0 (# (#2#(  a  )3  0h(#(#(EEGOW_gowAutoList11(a)(a)(a)(a)(a)(a)(a)(a)(EEGOW_gowAutoList12(a)(a)(a)(a)(a)(a)(a)(a)(5EGMSY_ekqAutoList16a.a.a.a.a.a.a.a. M/EGMS[agmsAutoList17a.a.(1)a.a.a.a.a. PEGMSW_ekqAutoList18a.a."(a)a.a.a.a.($0  0` (#(#0 ` (#` (#0 (# (#0h(#(#0h(#h(#2#  0  )3  0(#(#(hCEKQW]cioAutoList8a.a.a.a.a.a.a.a. hCEKQW]cioAutoList9a.a.a.a.a.a.a.a.({$0  0` (#(#0 ` (#` (#0 (# (#0h(#(#0h(#h(#0(#(#2#  a  )3  0p(#(#`8G_cgmquy}Bullet ListBullet List1. EEGOW_gowAutoList14(a)(a)(a)(a)(i)(a)(a)(a)  [$Ӏ  5    _XXXXԀAnillustrativeauditor'sreportoncompliancewithlawsandregulationsisprovidedinAppendixG.  Useofthisguidanceisoptional.(  Z6Times New Roman Regular(hH  Z 6Times New Roman Regulara, b, c,Level 1Level 2Level 3Level 4Level 5C:\PROGS\WP\STANDARD.WPT6#`n4Quick a.   .0 (5hCEKQW]cioAutoList1a.a.a.a.a.a.a.a.3#37=CIQYag1.a.i.(1)(a)(i)1)a)($    (;3$2#  0  .3  0  (EhCEKQW]cioAutoList2a.a.a.a.a.a.a.a.(UhCEKQW]cioAutoList3a.a.a.a.a.a.a.a.(ehCEKQW]cioAutoList4a.a.a.a.a.a.a.a.(F$0  0` (#(#0 ` (#` (#0 (# (#0h(#(#2#(   )3  0h(#h(#<:Default Para " [$Ӏ  1    _XXXXԀThislistisincludedinOMBBulletin9701(OMB'sFormandContentBulletin),whichprescribes  thePrincipalStatementsthatshallbeprepared.(hH  Z 6Times New Roman Regular<:footnote ref<j^: footnote teQ\  `$Times NewRomanQXXXE2 `CG TimesE-%(EGMSY_ekqAutoList32A.A.A.A.A.A.A.A.&$1<:endnote refe(eEGMSY_ekqAutoList191.1.1.1.1.1.1.1.&$2$35;AGOW_e31.a.i.(1)(a)(i)1.a.\  `$Times NewRoman2 `CG Times(EGMSY_ekqAutoList201.1.1.1.1.1.1.1.(zEGMSY_ekqAutoList21A.A.A.A.A.A.A.A.1, 2, 3,Level 1Level 2Level 3Level 4Level 54#hN2Quick 1.  .0   [$Ӏ  2    _ThefollowingXXXXFederalfinancialmanagementsystemsrequirementsdonotrequiretestingastheydo  notaffectthereportingentitysabilitytopreparefinancialstatementsinaccordancewithFederalaccountingstandards:L 8` L 3   3283  0    requirementscontainedintheFrameworkforFederalFinancialManagementSystems;and3݌(#(# Ќ   3   3283  0    requirementsforsystemsthatproduceinformationwhichisnotmaterialtothefinancial  statements,e.g.,travelsystems.(hH  Z 6Times New Roman Regulari., ii., iii.,Level 1Level 2Level 3Level 4Level 56#in4Quick i.   .0 ((3/g$ !   d  + [$Ӏ  4    _XXXXԀAnillustrativeauditorsreportoninternalcontrolisprovidedinAppendixF.Useofthisguidance  isoptional.#XXXX^#(  Z6Times New Roman Regular  [$Ӏ  8    _XXXXԀInverylimitedcircumstances,reportableconditionsthatsignificantlyimpairanentitysabilityto  meetFederalfinancialmanagementsystemsrequirements(suchasreportableconditionsrelatedtocomputersecurityoverfinancialinformationcoveredbyOMBCircularA130,Appendix3)mayrepresentconditionsreportableunderFFMIA.#XXXX^##y  <<= 8C J [$Ӏ  9    _XXXX#XXXX^#XXXXԀInverylimitedcircumstances,reportableconditionsthatsignificantlyimpairanentitysabilityto  meetFederalfinancialmanagementsystemsrequirements(suchasreportableconditionsrelatedtocomputersecurityoverfinancialinformationcoveredbyOMBCircularA130,Appendix3)mayrepresentconditionsreportableunderFFMIA.#XXXX# L !  _    10  ڀXXXXThisillustrativemanagementrepresentationlettermustbecustomizedtothesituationofthe  auditedentity.Representationsnumber113relatetotheopiniononthefinancialstatements;numbers1416relatetomanagement'sassertionabouttheeffectivenessofinternalcontrol;numbers1719relatetomanagement'sassertionaboutthefinancialmanagementsystems'substantialcompliancewithFederalfinancialmanagementsystemrequirements;andnumbers2022relatetocompliancewithlawsandregulations.AUSection333,"ManagementRepresentations,"CodificationofStatementson   AuditingStandards,providesexamplesofadditionalrepresentationsthatmaybeappropriate.a&c  [$Ӏ  11    _ԀXXXXIftheobjectiveistoexpressanopinionontheagencysinternalcontroloverfinancialreporting,  theauditorshouldfollowStatementonStandardsforAttestationEngagementsNo.2, Reportingonan  EntitysInternalControlOverFinancialReporting,issuedbytheAmericanInstituteofCertifiedPublicAccountants.#XXXX`#64Heading 3  5+ ` hp x (#5XXXE2 `CG TimesE    8.` hp x (#8S\  `&Times New RomanS:ao8Body Text 2XXXE2 `CG TimesE S\  `&Times New RomanS 86Block Text X X 2( ` hp x 2XXXE2 `CG TimesE   8.` hp x (#8S\  `&Times New RomanS\  `&Times New Roman  [$Ӏ  13    _ԀXXXXIftheobjectiveistoexpressanopinionontheagencyscompliancewithlawsandregulations,the  auditorshouldfollowStatementonStandardsforAttestationEngagementsNo.3, Compliance  Attestation,issuedbytheAmericanInstituteofCertifiedPublicAccountants.<ll:Endnote TextXXXS\  `&Times New RomanSS\  `&Times New RomanS64Body Text8.` hp x (#8XXXE2 `CG TimesE8.` hp x (#8S\  `&Times New RomanS<:Body Text In X 5+ ` hp x (#5XXXE2 `CG TimesE  8.` hp x (#8S\  `&Times New RomanS6&&4Hyperlink            $359=AEIMQ4 1111111$35;?CGKOS5i.1111111($     mailto:finance@opm.gov6yz4Heading 1  XXXE2 `CG TimesE     S\  `&Times New RomanS  < [$Ӏ  12    _ԀXXXXFFMIAdoesnotimposeanycompliancerequirements;rather,itrequiresreportingonwhetheran  agency'sfinancialmanagementsystemssubstantiallycomplywiththefinancialmanagementsystemsrequirementscontainedingovernmentwidepolicies,e.g.,OMBCircularA127,"FinancialManagementSystems;"StatementsofFederalFinancialAccountingStandards;andtheUnitedStates  GovernmentStandardGeneralLedgerpublishedbytheDepartmentoftheTreasury.FFMIAimposesadditionalreportingrequirementswhentestsdiscloseinstancesinwhichagencysystemsdonotsubstantiallycomplywiththeforegoingrequirements.#XXXX`# d(5EGMSY_ekqAutoList221.1.1.1.1.1.1.1.&$ d d% %dK KdTABLE A(EGOW_gowAutoList23(1)(1)(1)(1)(1)(1)(1)(1)(UEGMSY_ekqAutoList241.1.1.1.1.1.1.1.(eEGMSY_ekqAutoList251.1.1.1.1.1.1.1.(EGOW_gowAutoList26(1)(1)(1)(1)(1)(1)(1)(1) EGMSY_ekqAutoList27a.a.1.a.a.a.a.a.(EGMSY_ekqAutoList28A.A.A.A.A.A.A.A.(EGMSY_ekqAutoList29a.a.a.a.a.a.a.a.(hH  Z 6Times New Roman Regular EGMS[agmsAutoList301.1.(1)1.1.1.1.1.(eEGMSY_ekqAutoList31a.a.a.a.a.a.a.a.  [$Ӏ  14    _XXXXManagementandtheauditorshouldagreeonamaterialityleveltouseintheletterofinquiry.A  guidelineforsettingthematerialitylevelforthelegalletteris0.5percentofplanningmateriality,asdefinedinthePCIEPolicyManual:FederalFinancialStatementAuditManualandGAOsFinancial  AuditManual.#XXXX_#(EGMSY_ekqAutoList331.1.1.1.1.1.1.1.  '  _XX  OMBBulletin99__0 @` AuditsofAgencyFinancialStatements󀀀 DRAFT07/22/99#XX.#   [$Ӏ  7    _Theauditorisnotexpectedtotestallprovisionsofeachlawpresented.However,theauditoris  expectedtotest,ataminimum,theprovisionscitedabove.(EGOW_gowAutoList34(1)(1)(1)(1)(1)(1)(1)(1)(EGMSY_ekqAutoList35a.a.a.a.a.a.a.a.(դEGMSY_ekqAutoList38a.a.a.a.a.a.a.a.(EGMSY_ekqAutoList361.1.1.1.1.1.1.1. [$Ӏ  15    _ThisillustrativeresponseisbasedonexamplespresentedinAUSection337CoftheCodification  ofStatementsonAuditingStandards.(EGOW_gowAutoList40(1)(1)(1)(1)(1)(1)(1)(1) ( [$Ӏ  16    _SeeParagraph3oftheAmericanBarAssociation(ABA)StatementofPolicyandthe  accompanyingCommentaryforguidancewheretheresponseislimitedtomaterialitems.hͶEGKOSW[_cAutoList37"""""""")1)a)('EGOW_gowAutoList42(1)(1)(1)(1)(1)(1)(1)(1)  [$Ӏ  3    _ForthoserequirementswhichwereupdatedandreissuedduringFY1999,auditorsshouldtest  systemsforcompliancewithpreFY1999requirementsandareencouragedtoadviseentitymanagementofpotentialnoncompliancewithnewrequirementsthatcometotheauditorsattention.AuditorsshouldtestforcompliancewithFY1999requirementsduringFY2000audits.  [$Ӏ  1    _Asrequiredbyparagraph8.b.ofOMBBulletinNo.99__,theCFOshallprepareandtheauditorshallreviewasummaryofthe  informationcontainedinthelegalcounselsresponseusingthisformat.AnelectronicversionofthisformisavailableinMircosoftExcelatOMBs_website_ԀontheInternetathttp://www.whitehouse.gov/WH/EOP/omb.http://www.whitehouse.gov/OMB./(under<6X9`(Courier    n [$Ӏ  1    _Asrequiredbyparagraph8.b.ofOMBBulletinNo.99__,theCFOshallprepareandtheauditorshallreviewasummaryofthe  informationcontainedinthelegalcounselsresponseusingthisformat.AnelectronicversionofthisformisavailableinMircosoftExcelatOMBs_website_ԀontheInternetat34)    5  3http://www.whitehouse.gov/3WH/EOP33/omb33OMB333.333/(under336   7 t3333 333b333B33ulleti333ngz333ns)3. TABLE B(EGMSY_ekqAutoList41a.a.a.a.a.a.a.a. !  _WXXXX    o[Xr` hp x (#%'0*,.8135@8:<H?AXo8+l+XXdd8TRX3'X3' Letter3' Letter3'T,P.+(#(#K(#__[OMBletterhead]OMBBULLETIN99__TOTHEHEADSANDINSPECTORSGENERALOFEXECUTIVEDEPARTMENTSANDESTABLISHMENTSSUBJECT:AuditRequirementsforFederalFinancialStatements1.Purpose.ThisBulletin,whichincludesanAttachmentandAppendicesAthroughI,establishes i  minimumrequirementsforauditsofFederalfinancialstatements.TheBulletinisissuedundertheauthorityoftheBudgetandAccountingActof1921,asamended,andtheBudgetandAccountingProceduresActof1950,asamended.ItimplementstheauditprovisionsoftheChiefFinancialOfficers(CFOs)Actof1990(P.L.101-576),asamended,theGovernmentManagementReformAct(GMRA)of1994(P.L.103356),andtheFederalFinancialManagementImprovementActof1996(P.L.104208).TherequirementsofthisBulletinaresetforthintheAttachment.2.Applicability.TheprovisionsoftheBulletinapplytoauditsoffinancialstatementsofexecutive 9 departmentsandagenciesandcertaincomponentsoftheseagencies,listedinAppendicesAandB,respectively.3.EffectiveDate.TheprovisionsofthisBulletinareeffectiveforauditsoffinancialstatementsforfiscal !j yearsendingonorafterSeptember30,1999.AuditreportsshallbesubmittedtotheagencyheadinsufficienttimetoenabletheagencyheadtomeettheduedateforsubmittingtheauditedfinancialstatementunderGMRA,nolaterthanMarch1followingtheendofthefiscalyearforwhichthefinancialstatementsareprepared.4.Inquiries.FurtherinformationconcerningthisBulletinmaybeobtainedbycontactingtheOfficeof #F ManagementandBudget(OMB),OfficeofFederalFinancialManagement,Washington,DC20503,telephone(202)395-3993.5.Copies.IndividualcopiesofthisBulletinmaybeobtainedfromtheOMBhomepageonthe '."# Internetathttp://www.whitehouse.gov/WH/EOP/omb. ((#$  r  `     h      p JacobJ.LewDirectorAttachment#XXXXN#  - () ,P ,  ,  **/ddd Xdd Xdd X(#(#, dd ,* dd ,X dd +    XXXX  vXX SignificantRevisionstoOMBBulletinNo.98-08, d Q4Xr` hp x (#Xr` XQ"AuditRequirementsforFederalFinancialStatements,asamended #XXv ##XXXX # * ;  *   OMB9808,asamended 8 LocationReference ' 2  'm  OMB99__ 8 TechnicalChange ' 2  '  PurposeofChange  2" ^ XXParagraph6.a.(1)(c)  w   Deletedsection.  w   StatementofFederalFinancial w   AccountingStandards(SFFAS)No.14, AmendmentstoDeferred  R  MaintenanceReporting,whichiseffectiveforperiodsbeginningafterSeptember30,1998,changedthelocationofdeferredmaintenanceinformationfromanotetotheprincipalstatementstorequiredsupplementalinformation.    Paragraph6.a.(2)  . NochangeforFY1999audits.Addedsentencestodescribefuturerequirements. w ForFY2000andbeyond,OMBwillrequireexaminationlevelassuranceforstewardshipPP&EusingtheAICPAsattestationstandards.ThisrequirementiscontingentonmodificationstotheaccountingstandardsrelatingtoreportingtheconditionofstewardshipPP&E.<Z Xx:xj(XXr` X<  ?" Paragraph6.a.(3)  S# NochangeforFY1999audits.Addedsentenceto_descibe_Ԁfuturerequirements.  .& ForFY2000andbeyond,willrequireexaminationlevelassuranceforstewardshipinvestmentsusingtheAICPAsattestationstandards..  * Paragraph6.a.(5)   T+ NochangeforFY1999audits.Addedsentencetodescribefuturerequirements.  !. ToadviseauditorsofOMBsintenttorevisetheauditrequirementsforL 8`3Lsocialinsuranceinformationforsubsequentperiodsinwhichtheapplicableaccountingstandardsbecomeeffective.@Xr` XZ Xx:xj(XF@ #A4 Paragraph6.e.  U%5 UpdatedlistofJFMIPfunctionalrequirementsforFederalfinancialsystems.  &0!8 Updatedforfunctionalrequirementsreissuedin1999.ClarifiedwhenauditorsshouldtestforcompliancewithJFMIPrequirementsissuedduringthecurrentyear.  y("= Paragraph6._i._  )$> RelocateddiscussionoflegalletterstoParagraph8.  *$@ Providesadditionalguidanceonthepreparationoflegalletters.  *$B AppendixC  +E&C Addedspecificprovisionsofgenerallawstobetested.  ,'E ToclarifythatallprovisionsofthegenerallawslistedinAppendixCneednotbetested.  -'H .+ . .  AppendixF&G  d RevisedillustrativeauditorsreportstoreflectrequirementsofStatementsonAuditingStandards(SAS)#87, 3Restr333cio333i333v333ctingtheUseofanAuditors333r333R33eport3.  ?  IllustratesrequirementsofSAS#87andclarifiestheauditorsresponsibilityforinternalcontrolandcompliance.  v  AppendixH     OPMsAgreedUponProcedures(AUPs),formerlypresentedinAppendixH,havebeenredesignatedAppendixI.OPMsAUPsrevisedtoreflecttheuseofRITSdatavs.datafromForm2812.   Revisionsreflectmorewidespreaduseofelectronicinformation.  e  NewAppendix  /  AddednewAppendixH,withthreedistinctdocuments(H1,H2,H3).IncludedanewrequirementforCFOstoprepareandauditorstoreviewasummaryoftheinformationprovidedinlegalresponsesusingaprescribedformat.  e ProvidesadditionalguidanceonthepreparationoflegalletterstomorecloselycomportwithAUSection337requirementsoftheCodification A  ofStatementonAuditingStandards,  S ! andtofacilitatethecollectionofdataconcerninglitigation,claims,andassessmentsforagencywideandgovernmentwidereporting. .w%   'p% XX OMBBulletinNo.99__  0 h  h(#h(#  r  `     h   AUDITSOFFEDERALFINANCIALSTATEMENTS1.BACKGROUND.TheGovernmentManagementReformAct(GMRA)of1994amendedtherequirementsoftheChiefFinancialOfficers(CFOs)Actof1990byrequiring,amongotherthings,theannualpreparationandauditoforganizationwidefinancialstatementsof24executivedepartmentsandagencies(AppendixA).TheGMRAalsorequiresauditedfinancialstatementsofcomponentsofexecutivedepartmentsandagenciesdesignatedbytheDirectoroftheOfficeofManagementandBudget(OMB),whichareidentifiedinAppendixB.Inaddition,theFederalFinancialManagementImprovementAct(FFMIA)of1996requires,amongotherthings,thatthereportontheseauditsstatewhethertheagencyfinancialmanagementsystemscomplysubstantiallywithFederalfinancialmanagementsystemsrequirements,applicableFederalaccountingstandards,andtheU.S.GovernmentStandardGeneralLedgeratthetransactionlevel.2.DEFINITIONS.ForthepurposesofthisBulletin,thefollowingdefinitionsapply:0 r a.0` r(#r(#"AnnualFinancialStatement"meansthefinancialstatementofareportingentityas ] describedinSection3515ofTitle31oftheUnitedStatesCodeandOMBBulletin9701,"FormandContentofAgencyFinancialStatements"andsubsequentissuances(OMB'sFormandContentBulletin),and,shallbecomprisedof: ` (#` (# 0 r 0` r(#r(#(1)0 ` (#` (#OverviewoftheReportingEntity(alsocalledManagement'sDiscussionand ? Analysis).  (# (# 0 r 0` r(#r(#(2)0 ` (#` (#PrincipalStatementsandRelatedNotes.ThePrincipalStatements   1      ׀includethe 3 followingfinancialstatementsandnotesthereto:  (# (# 0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#BalanceSheet.!!(#(# 0 r 0` r(#r(#0 ` (#` (#(b)0 (# (#StatementofNetCost."(#(# 0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#StatementofChangesinNetPosition.#(#(# 0 r 0` r(#r(#0 ` (#` (#(d)0 (# (#StatementofBudgetaryResources.$ (#(# 0 r 0` r(#r(#0 ` (#` (#(e)0 (# (#StatementofFinancing.% !(#(# 0 r 0` r(#r(#0 ` (#` (#(f)0 (# (#StatementofCustodialActivity,ifapplicable.&!"(#(# 0 r 0` r(#r(#0 ` (#` (#(g)0 (# (#NotestoPrincipalStatements.'!#(#(#  ("$ 0 r 0` r(#r(#(3)0 ` (#` (#RequiredSupplementaryStewardshipInformation,ifapplicable. (# (# 0 r 0` r(#r(#(4)0 ` (#` (#RequiredSupplementaryInformation,ifapplicable. (# (# 0 r 0` r(#r(#(5)0 ` (#` (#OtherAccompanyingInformation,ifapplicable. (# (# L h(`L 3   0 r 3.2h  b  .3  0` r(#r(#  CodificationofStatementsonAuditingStandardsisacodificationofStatementson   AuditingStandardsissuedbytheAmericanInstituteofCertifiedPublicAccountants(AICPA).TheAICPA'sstandardsoffieldworkandreportingareincorporatedintheirentiretyinGovernmentAuditingStandardsbyreference.3.9.݌ ` (#` (# Ќ  L h((L 3    r 302h  c  .3  0 `   "Federalaccountingstandards"arethosestandardsincludedinthehierarchyofFederal   accountingstandardsdescribedinparagraph5ofthisBulletin.300݌ ` (#` (# Ќ  L Uh((L 3    r 3B22Uh  d  .3  0 `   "Federalfinancialmanagementsystemsrequirements"arethoserequirementsdescribed o  inOMBCircularA127, FinancialManagementSystems.3B2y2݌ ` (#` (# Ќ   r &  e.0 ` GovernmentAuditingStandardsarethosestandardsissuedbytheComptrollerGeneral ] oftheUnitedStates.']3 ` (#` (# 0 r f.0` r(#r(#"Independentauditor"meansanauditorwhomeetstheindependencestandards K specifiedintheGovernmentAuditingStandards.E` (#` (# 0 r g.0` r(#r(#"Internalcontrol,"asitrelatestothePrincipalStatementsandRequiredSupplementary 9 StewardshipInformation,isaprocess,effectedbytheagency'smanagementandotherpersonnel,designedtoprovidereasonableassurancethatthefollowingobjectivesaremet: ` (#` (# Ѐ0 r 0` r(#r(#0 ` (#` (#0 (# (#0h(#(#0h(#h(#0(#(#0p(#(#0p(#p(#0 (#(#0x (# (#0 x(#x(#0@ $ $!j (# (# 0 r 0` r(#r(#&  (1)0 ` (#` (#Reliabilityoffinancialreportingtransactionsareproperlyrecorded, d processed,andsummarizedtopermitthepreparationofthePrincipalStatementsandRequiredSupplementaryStewardshipInformationinaccordancewithFederalaccountingstandards,andthesafeguardingofassetsagainstlossfromunauthorizedacquisition,use,ordisposition;'7  (# (# 0 r 0` r(#r(# ` (#` (# 0 r 0` r(#r(#(2)0 ` (#` (#Compliancewithapplicablelawsandregulationstransactionsareexecutedin $@  accordancewith:(a)lawsgoverningtheuseofbudgetauthorityandotherlawsandregulationsthatcouldhaveadirectandmaterialeffectonthePrincipalStatementsorRequiredSupplementaryStewardshipInformation,and(b)anyotherlaws,regulations,andgovernmentwidepoliciesidentifiedbyOMBinAppendixCofthisBulletin;and  (# (#   *%& 0 r 0` r(#r(#(3)0 ` (#` (#Reliabilityofperformancereportingtransactionsandotherdatathatsupport   reportedperformancemeasuresareproperlyrecorded,processed,andsummarizedtopermitthepreparationofperformanceinformationinaccordancewithcriteriastatedbymanagement.  (# (#  0 r h.0` r(#r(#"Managementletter"meansaletterpreparedbytheauditorwhichdiscussesfindings   andrecommendationsforimprovementsininternalcontrol,thatwereidentifiedduringtheauditandwerenotrequiredtobeincludedintheauditor'sreportoninternalcontrol,andothermanagementissues.SeeChapter5,paragraph5.28ofGovernmentAuditing   Standards. ` (#` (# in  0 r inP?i  .0` r(#r(#  "Materialweaknessesininternalcontrol"arereportableconditionsinwhichthedesign u  oroperationoftheinternalcontroldoesnotreducetoarelativelylowleveltheriskthaterrors,fraudornoncomplianceinamountsthatwouldbematerialinrelationtothePrincipalStatementsorRequiredSupplementaryStewardshipInformationbeingauditedormaterialtoaperformancemeasureoraggregationofrelatedperformancemeasuresmayoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.Theauditorshallusethisdefinitionofmaterialweaknessestoreportonanentity'sinternalcontrolinaccordancewiththerequirementsofGovernmentAuditingStandardsandthisBulletinratherthan E thedefinitionofmaterialweaknessesusedbymanagementtoprepareanagency'sFederalManagers'FinancialIntegrityAct(FMFIA)of1982report.inP?w?ی ` (#` (# Ќ  ݀0 r j.0` r(#r(#"OverviewoftheReportingEntity"meansabriefnarrativeoverview,preparedby -v management,alsocalledManagement'sDiscussionandAnalysis(MD&A),whichdescribesthereportingentityanditsmission,activities,programandfinancialresults,andfinancialcondition.OMBsFormandContentBulletinfurtherdefinesthe"OverviewoftheReportingEntity." ` (#` (#  `n  0 r `nEk  .0` r(#r(#  "Reportableconditions"arematterscomingtotheauditor'sattentionthat,inthe  "R auditor'sjudgment,shouldbecommunicatedbecausetheyrepresentsignificantdeficienciesinthedesignoroperationofinternalcontrol,thatcouldadverselyaffecttheorganization'sabilitytomeettheobjectivesinparagraph2.g.ofthisBulletin.`nEE ی ` (#` (# Ќ  0 r l.0` r(#r(#"ReportingEntity"meansoneoftheexecutivedepartmentsandagenciesand &4!" componentsofsuchdepartmentsandagencieslistedinAppendicesAandB,oranagency,bureau,orotherorganizationthatrepresentsameaningfulunitforprogrammanagement,forwhichafinancialstatementisprepared,andforwhichmanagementchosetohaveanauditperformedinaccordancewiththisBulletin.OMBsFormandContentBulletinfurtherdefines"ReportingEntity."+&'` (#` (# 0 r  r(#r(#  L eh((L r m.0 ` "UnitedStatesGovernmentStandardGeneralLedger(SGL)"meanstheuniformchart  ofaccountsprescribedbytheDepartmentoftheTreasuryinitsTreasuryFinancial  Manual.` (#` (# 3.FREQUENCYOFAUDIT.Auditsshallbeperformedannually.4.RESPONSIBILITYFORAUDIT.ForpurposesofthisBulletin,thefollowingresponsibilitiesapply:0 r a.0` r(#r(#Forthe24executivedepartmentsandagenciesandselectedcomponentsofsuch {  departmentsandagencieslistedinAppendicesAandB,theauditsoffinancialstatementsshallbeperformedbytheInspectorGeneral(IG)oftheexecutivedepartmentoragencyorbyanindependentauditorasdeterminedbytheIG. ` (#` (# 0 r b.0` r(#r(#GMRAprovidesthat,inlieuofanauditotherwiserequired,theComptrollerGeneralof ] theUnitedStatesmay,athisorherdiscretionandfollowingconsultationwiththeIG,performtheaudit. ` (#` (# 5.ACCOUNTINGPRINCIPLESANDSTANDARDS.TheFederalAccountingStandardsAdvisoryBoard(FASAB)wasestablishedbytheSecretaryoftheTreasury,theDirectorofOMB,andtheComptrollerGeneral(thePrincipals)torecommendFederalaccountingstandardstothePrincipals.SpecificstandardsagreeduponbythePrincipalsareissuedbytheDirectorofOMBandtheComptrollerGeneralasStatementsofFederalFinancialAccountingStandards(SFFASs).FederalagenciesarerequiredtofollowthesestandardsinthepreparationoffinancialstatementspursuanttoGMRA.RecognizingthattheSFFASsmaynotexplicitlyaddressalltransactionsofdepartmentsandagencies,thePrincipalsadoptedthefollowinghierarchyofFederalaccountingstandards:0 r a.0` r(#r(#Individualstandards(SFFASs)agreedtobytheDirectorofOMB,theComptroller !X General,andtheSecretaryoftheTreasuryandpublishedbyOMBandtheGeneralAccountingOffice. ` (#` (# 0 r b.0` r(#r(#InterpretationsrelatedtotheSFFASsissuedbyOMBinaccordancewiththe $@  proceduresoutlinedinOMBCircularA134,"FinancialAccountingPrinciplesandStandards." ` (#` (# 0 r c.0` r(#r(#RequirementscontainedinOMB'sFormandContentBulletinineffectfortheperiod ((#$ coveredbythefinancialstatements. ` (#` (#   *%& 0 r d.0` r(#r(#Accountingprinciplespublishedbyotherauthoritativestandardsettingbodiesandother   authoritativesources(a)intheabsenceofotherguidanceinthefirstthreepartsofthishierarchy,and(b)iftheuseofsuchaccountingprinciplesimprovesthemeaningfulnessofthefinancialstatements. ` (#` (# 6.SCOPEOFAUDIT.FinancialstatementsshallbeauditedinaccordancewithGovernment   AuditingStandardsandtheprovisionsofthisBulletin.    L  (Lf0 r &  a.0` r(#r(#WithrespecttothePrincipalStatementsandRequiredSupplementaryStewardship   Information,theauditorshall: ` (#` (# 0 r 0` r(#r(#(1)0 ` (#` (#' ]WDeterminewhetherthePrincipalStatementspresentfairly,inallmaterial 'p  respects,inconformitywithFederalaccountingstandards,theassets,liabilities,andnetposition;netcosts;changesinnetposition;budgetaryresources;reconciliationofnetcoststobudgetaryobligations;and,ifapplicable,custodialactivity.  (# (#  0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#Ifconsolidatingstatementsarepresented,theauditorshallconsiderthe g consolidatingstatementssupplementalinformation&  andreportinaccordancewithparagraph7.c.(1)(a)ofthisBulletin,unlesstheauditor'sobjectiveistoexpressanopinionontheconsolidatingstatements.'GZ (#(# 0 r 0` r(#r(#0 ` (#` (#(b)0 (# (#IftheauditorisunabletodeterminewhetherthePrincipalStatements  arefairlypresentedbecause,forexample,oftheauditor'sinabilitytoobtainsufficientcompetentevidentialmatterduetoinadequateaccountingrecords,theauditorshall,totheextentpracticable,obtainsufficientevidenceaboutclosingbalancestoenabletheauditortoopineonthesubsequentyear'sfinancialstatements. (#(# 0 r 0` r(#r(#(2)0 ` (#` (#Considerstewardshipproperty,plant,andequipment(PP&E)required   supplementaryinformationandperformtheproceduresdescribedinAUSection558,"RequiredSupplementaryInformation,"oftheCodificationof "  StatementsonAuditingStandards.Pendingmodificationsoftheapplicable g#! accountingstandardsthatrequirereportingontheconditionofstewardshipPP&E,forfiscalyear2000andbeyond,OMBwillrequireexaminationlevelassuranceforstewardshipPP&EusingtheAICPAsAttestationStandards.  (# (# 0 r 0` r(#r(#(3)0 ` (#` (#Considerstewardshipinvestments(includingnonFederalphysicalproperty '"& (suchashighways),humancapital(expendituresfortrainingandeducation),andresearchanddevelopment)requiredsupplementaryinformationandperformtheproceduresdescribedinAUSection558,"RequiredSupplementaryInformation,"oftheCodificationofStatementsonAuditing G+%* Standards.Forfiscalyear2000andbeyond,OMBwillrequireexamination ',p&+ levelassuranceforstewardshipinvestmentsusingtheAICPAsAttestationStandards.  (# (# L   L 3   0 r 0` r(#r(#3&c2(  4  )3  0 ` (#` (#  Determinewhetherriskassumedinformation(includingprojectionsofpension, W deposit,andotherinsuranceprogramsrequiredbySFFASNo.5,"AccountingforLiabilitiesoftheFederalGovernment")ispresentedfairlyinallmaterialrespects,inaccordancewiththerequirementsofSFFASNo.5,andanysubsequentrevisions.Inassessingthereasonablenessofriskassumedinformation,theauditorshallconsidertheneedtofollowtheguidanceinAuditing(AU)Section336, UsingtheWorkofaSpecialist,oftheCodificationofStatementsonAuditingStandards.3&cqc݌w  (# (# Ќ  0 r 0` r(#r(# ` (#` (# f?W    f0 r 0` r(#r(#2(  5  )3  0 ` (#` (#  Considersocialinsuranceinformation,whenpresented,otheraccompanying 7  information.SeeAUSection551,CodificationofStatementsonAuditing 1z  Standards.Forfutureperiods,OMBwillmodifytheauditrequirementsfor +t  socialinsuranceinformationwhentheapplicableaccountingstandardsbecomeeffective.fg݌  (# (# Ќ   r L M/  L 3   0 r 3i2M/  b  .3  0` r(#r(#  Withrespecttotheinternalcontrolobjectivesdescribedinparagraphs2.g.(1)and(2) \ ofthisBulletinrelatingtothePrincipalStatementsandRequiredSupplementaryStewardshipInformation,theauditorshallobtainanunderstandingofthecomponentsofinternalcontrol(seeAUSection319.07,CodificationofStatementsonAuditing J Standards)andassessthelevelofcontrolriskrelevanttotheassertionsembodiedin D theclassesoftransactions,accountbalances,anddisclosurecomponentsofthefinancialstatements.SuchcontrolsincluderelevantEDPgeneralandapplicationcontrolsandcontrolsrelatingtointraagencyandintragovernmentaltransactionsandbalances.Forthoseinternalcontrolsthathavebeenproperlydesignedandplacedinoperation,theauditorshallperformsufficientteststosupportalowassessedlevelofcontrolrisk.SeeAUSection319.45.63oftheCodificationofStatementsonAuditing   Standards.Thoseinternalcontrolsthathavenotbeenproperlydesignedorplacedin   operationandthoseinternalcontrolsthatarefoundtobeineffectiveshallbereportedinaccordancewithparagraph7ofthisBulletin.3ii݌ ` (#` (# Ќ      zo0 r 0` r(#r(#2M/(  1  )3  0 ` (#` (#  Inobtaininganunderstandingofthecomponentsofinternalcontrol,particularly $! theriskassessmentcomponent,andassessingcontrolrisk,theauditorshallobtainanunderstandingoftheprocessbywhichtheagencyidentifiesandevaluatesweaknessesrequiredtobereportedunderFMFIAandrelatedagencyimplementingprocedures.zoo݌  (# (# Ќ      q0 r 0` r(#r(#2M/(  2  )3  0 ` (#` (#  Theauditorshallcomparematerialweaknessesdisclosedduringtheauditwith *$' thosematerialweaknessesreportedintheagency'sFMFIAreportthatrelateto +%( thefinancialstatementsoftheentityunderauditanddocumentmaterialweaknessesdisclosedbyauditthatwerenotreportedintheagencysFMFIAreport.Theauditorshouldconsiderwhetherthefailuretodetectandreportmaterialweaknessesconstitutesareportableconditionormaterialweaknessintheentitysinternalcontrol.qq݌  (# (# Ќ  0 r c.0` r(#r(#Withrespecttotheinternalcontrolobjectivedescribedinparagraph2.g.(3)ofthis   Bulletinrelatingtoperformancemeasures,theauditorshallobtainanunderstandingofthecomponentsofinternalcontrolrelatingtotheexistenceandcompletenessassertionsrelevanttotheperformancemeasuresincludedintheOverviewoftheReportingEntity.Thoseinternalcontrolsthathavenotbeenproperlydesignedandplacedinoperationshallbereportedinaccordancewithparagraph7ofthisBulletin.Theobjectiveofgaininganunderstandingofinternalcontrolinthissubparagraphistoreportdeficienciesinthedesignofinternalcontrol,ratherthantoplanthefinancialstatementaudit.Forfutureperiods,OMBisconsideringexpandingauditcoveragetoincludegaininganunderstandingofcomponentsofinternalcontrolrelatingtoeachofthefiveassertions(existenceoroccurrence;completeness;rightsandobligations;valuationorallocation;andpresentationanddisclosure)relevanttotheperformancemeasuresincludedintheOverviewoftheReportingEntity. ` (#` (# 0 r d.0` r(#r(#Withrespecttocompliancewithapplicablelawsandregulations,theauditorshall ? performtestsofcompliancewithlawsandregulationsthatcouldhaveadirectandmaterialeffectonthePrincipalStatementsandRequiredSupplementaryStewardshipInformation,andanyotherlaws,regulations,andgovernmentwidepoliciesidentifiedbyOMBinAppendixCofthisBulletin. ` (#` (# L P  L0 r e.0` r(#r(#WithrespecttocompliancewithgovernmentwidepoliciescontainedinOMBCircular d A127,usingtheguidanceinAppendixD,theauditorshallperformtestsofcompliancewithFederalfinancialmanagementsystemsrequirements   2      ,applicableFederal !X accountingstandards,andtheSGLatthetransactionlevel.ThisprovisiononlyappliestoauditsofentitieslistedinAppendicesAandB.CircularA127requirestheagencytoestablishandmaintainasingle,integratedfinancialmanagementsystemthatcomplies #F withcharacteristicsstatedtherein,thatincludemaintainingaccountingdatatopermitreportinginaccordancewithFederalaccountingstandards,applicationoftheSGLatthetransactionlevel,andincorporationofthefunctionalrequirementsissuedbytheJointFinancialManagementImprovementProgram(JFMIP)initsseriesFederalFinancial  ManagementSystemsRequirements(FFMSR).AsofthedateofthisBulletin,the   issuancesinthisseriesare: ` (#` (#  r  `     0 r 0` r(#r(#0 ` (#` (#FrameworkforFederalFinancialManagementSystems,FFMSR0,January   1995,  (# (# 0 r 0` r(#r(#0 ` (#` (#CoreFinancialSystemRequirements,JFMIPSR994,February1999,*  (# (# 0 r 0` r(#r(#0 ` (#` (#HumanResourcesandPersonnelPayrollSystemRequirements,JFMIPSR {  995,April1999,*  (# (# 0 r 0` r(#r(#0 ` (#` (#TravelSystemRequirements,FFMSR3,January1991,o  (# (# 0 r 0` r(#r(#0 ` (#` (#Seized/ForfeitedAssetSystemRequirements,FFMSR4,March1993,i  (# (# 0 r 0` r(#r(#0 ` (#` (#DirectLoanSystemRequirements,JFMIPSR998,June1999*c  (# (# 0 r 0` r(#r(#0 ` (#` (#GuaranteedLoanSystemRequirements,FFMSR6,December1993,] (# (# 0 r 0` r(#r(#0 ` (#` (#InventorySystemRequirements,FFMSR7,June1995,andW (# (# 0 r 0` r(#r(#0 ` (#` (#ManagerialCostAccounting,FFMSR8,February1998.Q (# (# L %Ͷh L r  ` *denotesrequirementsthathavebeenupdatedandreissuedduringFY1999'   3       E 0 r f.0` r(#r(#WithrespecttoinformationaccompanyingthePrincipalStatements,theauditorshall 9 assesswhethertheinformationandmannerofitspresentationintheOverviewoftheReportingEntity(orMD&A)andanyotheraccompanyinginformationismateriallyinconsistentwiththeinformationinthePrincipalStatements. ` (#` (#  r 0 r g.0` r(#r(#Withrespecttorequiredsupplementaryinformationreferredtoinparagraph2.a.(4)of d thisBulletin,theauditorshallperformtheproceduresdescribedinAUSection558,CodificationofStatementsonAuditingStandards.!X` (#` (# 0 r h.0` r(#r(#Theauditorshallobtainwrittenrepresentationfrommanagementaspartofanaudit #L conductedinaccordancewiththisBulletin.SeeAUSection333,"ManagementRepresentations,"oftheCodificationofStatementsonAuditingStandards.An $@  illustrativemanagementrepresentationletterisprovidedinAppendixE.%: !` (#` (# Ї7.AUDITREPORT.0 r a.0` r(#r(#Anauditreport,orseparateauditreports,onthePrincipalStatements,internalcontrol,  andcomplianceshallbepreparedatthecompletionoftheaudit.Theauditreport(s)shallbesubmittedtotheagencyheadinsufficienttimetoenabletheagencyheadtomeettheduedateforsubmittingtheauditedfinancialstatementunderGMRA,nolaterthanMarch1followingtheendofthefiscalyearforwhichthefinancialstatementswereprepared.Theauditresultsshallbediscussedwithmanagementassoonaspracticablebut,inanycase,priortoissuanceoftheauditreport. ` (#` (# 0 r b.0` r(#r(#Theauditreport(s)shallstatethattheauditwasmadeinaccordancewithGovernment {  AuditingStandardsandtheprovisionsofthisBulletin.u ` (#` (# 0 r c.0` r(#r(#Theauditreport(s)shallinclude:i ` (#` (# 0 r 0` r(#r(#(1)0 ` (#` (#Anopinionastowhetherthereportingentity'sPrincipalStatementsarefairly ] presentedinallmaterialrespectsinconformitywithFederalaccountingstandards.SeeAUSection623.05oftheCodificationofStatementson Q AuditingStandards.K (# (# 0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#Withrespecttoreportingonotheraccompanyinginformation,which ? includestheinformationreferredtoinparagraphs2.a.(1),2.a.(5),and6.a.(5)ofthisBulletin,theauditorshallfollowAUSection551,CodificationofStatementsonAuditingStandards.-v(#(# 0 r 0` r(#r(#0 ` (#` (#(b)0 (# (#WhenstewardshipPP&Eandstewardshipinvestmentsreferredtoin !j paragraphs6.a.(2)and(3),respectively,andrequiredsupplementaryinformationreferredtoinparagraph2.a.(4)ofthisBulletinarepresented,theauditorshallfollowAUSection551.15,Codificationof !X StatementsonAuditingStandards. "R(#(# 0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#IfthePrincipalStatementsarenotpreparedinaccordancewithFederal #F accountingstandards,theauditorshallreportthedeparture(s)fromthosestandardsand,ifpracticable,theeffectsofthedeparture(s)onassets,liabilities,andnetposition;netcosts;changesinnetposition;budgetaryresources;reconciliationofnetcoststobudgetaryobligations;and,ifapplicable,custodialactivityeitherdirectlyintheauditor'sreportonthePrincipalStatementsorbyreferenceintheauditor'sreporttoanexplanatorynoteintheNotestoPrincipalStatementspreparedbymanagement.+&'(#(# Ї0 r 0` r(#r(#0 ` (#` (#(d)0 (# (#Iftheauditordisclaimsanopinion,thereportshalldescribewhythe  auditorwasunabletoconducttheauditinaccordancewithGovernmentAuditingStandardsandthisBulletin.Ifmaterial  weaknessesandotherreportableconditionspreventedtheconductoftheauditinaccordancewithGovernmentAuditingStandardsandthis   Bulletin,suchconditionsshallbeincludedinthereportoninternalcontroldescribedinparagraph7.c.(2),alongwithrecommendationsforcorrectingthecondition(s). (#(# 0 r 0` r(#r(#0 ` (#` (#(e)0 (# (#Whenthereisachangeinaccountingprinciples,forexample,changes   tocomplywithSFFASs,theauditorsreportonthePrincipalStatementsshallincludeanexplanatoryparagraphidentifyingthenatureofthechangeandreferringthereadertothenotetothePrincipalStatementsthatdiscussesthechangeindetail. (#(# 0 r 0` r(#r(#(2)0 ` (#` (#Areportoninternalcontrol   4      ,whichshallataminimum:] (# (# 0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#Statethat,withrespecttointernalcontroloverfinancialreportingas Q describedinparagraphs2.g.(1)and(2)ofthisBulletin,theauditorobtainedanunderstandingofthedesignofinternalcontrols,determinedwhethertheyhavebeenplacedinoperation,assessedcontrolrisk,and&  performedtestsofthereportingentity'sinternalcontrols.'˝ (#(#  0 r 0` r(#r(#0 ` (#` (#(b)0 (# (#Statethat,withrespecttotheinternalcontrolobjectivedescribedin -v paragraph2.g.(3)ofthisBulletin,andrelatingtotheperformancemeasuresincludedintheOverviewoftheReportingEntity,theauditorobtainedanunderstandingofthedesignofinternalcontrolsrelatingtotheexistenceandcompletenessassertionsanddeterminedwhethertheyhavebeenplacedinoperation. (#(# 0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#Statewhetherornotthetestsperformedprovidedsufficientevidenceto #L supportanopiniononinternalcontrols. (#(# 0 r 0` r(#r(#0 ` (#` (#(d)0 (# (#Describereportableconditionsandmaterialweaknessesidentified %: ! duringtheaudit. (#(#  '."# 0 r 0` r(#r(#0 ` (#` (#(e)0 (# (#Identifythosematerialweaknessesdisclosedbyauditthatwerenot  reportedinthereportingentitysFMFIAreport. (#(# 0 r 0` r(#r(#(3)0 ` (#` (#Areportonthereportingentity'scompliancewithapplicablelaws,regulations,  andgovernmentwidepolicyrequirements.   5        (# (#  0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#Theauditorshallreportnoncompliancewithlawsandregulations   disclosedbyaudit,exceptforthoseinstancesofnoncompliancethat,intheauditor'sjudgment,areclearlyinconsequential.Inmeetingthisrequirement,theauditorshalllistthoselawsandregulationsthattestsdisclosedreportableinstancesofnoncompliance. (#(# L E h%L 3   0 r 0` r(#r(#0 ` (#` (#3X2E(  c  )3  0 (# (#  Withrespecttolawsandregulationstestedforwhichtheaudit o  disclosednoreportableinstancesonnoncompliance,thereportshallstatethattheauditdisclosednoreportableinstancesofnoncompliancewiththeselawsandregulations.Alistingoftheselawsandregulationsisnotrequired.3X݌ (#(# Ќ  0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#Forcompliancewithgovernmentwidepolicyrequirementscontainedin K OMBCircularA127andreferredtoinFFMIA,theauditorshallreportwhetherthereportingentitysfinancialmanagementsystemssubstantiallycomplywithFederalfinancialmanagementsystemsrequirements,Federalaccountingstandards,andtheSGLatthetransactionlevel.Tomeetthisrequirement,theauditorsreportshallstatetheauditorsreportingrequirementandthattheauditorperformedtestsofcomplianceinaccordancewiththerequirementsofthisBulletin(seeAppendixD).TheauditreportshallreflectinstancesinwhichthereportingentityssystemsdidnotsubstantiallycomplywiththethreeFederalfinancialmanagementsystemsrequirements,orstatethattheauditdisclosednoinstancesinwhichthereportingentityssystemsdidnotsubstantiallycomplywiththethreerequirements.Inaddition,asrequiredbyFFMIA,wheretestsdisclosedthatthereportingentityssystemsdidnotsubstantiallycomplywiththethreerequirements,theauditorsreportoncomplianceshall: (#(#   &4!"     0 r 0` r(#r(#0 ` (#` (#0 (# (#2E(  i  )3  0h(#(#  Identifytheentityororganizationresponsibleforthefinancial   managementsystemsthatwerefoundnottocomplywiththerequirements.݌ h(#h(# Ќ      E0 r 0` r(#r(#0 ` (#` (#0 (# (#2E(  ii  )3  0h(#(#  Includeallfactspertainingtothenoncompliance,includingthe   natureandextentofthenoncompliance,theprimaryreasonorcauseofthenoncompliance,andanyrelevantcommentsfromreportingentitymanagementoremployeesresponsibleforthenoncompliance.Ep݌ h(#h(# Ќ  0 r 0` r(#r(#0 ` (#` (#0 (# (#(iii)0h(#(#Providerecommendedremedialactionsandthetimeframesto {  implementsuchactions. h(#h(# L E( L 3   0 r 0` r(#r(#0 ` (#` (#32E(  d  )3  0 (# (#  Withrespecttotheobjectivesoftestsofcompliancegenerally,the i  auditorsreportoncomplianceshallstatewhetherornotprovidinganopiniononcompliancewasanobjectiveoftheauditandwhetherornotthetestsperformedprovidedsufficientevidencetosupportanopinion.3݌ (#(# Ќ  0 r d.0` r(#r(#Inpreparingthereportsinparagraph7.c.,theauditorshallreportthestatusofknown K butuncorrectedmaterialfindingsandrecommendationsfrompriorauditsthataffectthecurrentauditobjectives.SeeChapter4,paragraphs4.7,4.10,and4.11ofGovernmentAuditingStandards.9` (#` (# 0 r e.0` r(#r(#Thereportingentityshallprovidecommentsontheauditor'sfindingsand -v recommendationsincludedintheauditreport,includingcorrectiveactionstakenorplannedandcommentsonthestatusofcorrectiveactionstakenonpriorfindings.Totheextentpractical,thesecommentsshallbeincludedintheauditreportsoninternalcontrolorreportoncompliance.Ifcorrectiveactionsarenotnecessary,anexplanatorystatementshallbeincludedintheapplicableauditreport. ` (#` (# 0 r f.0` r(#r(#Copiesoftheauditreportshallbedistributedtotheheadoftheexecutivedepartment #L oragencyandsubsequentlyincludedintheCFOsannualreportortheagencysAccountabilityReport. ` (#` (#  r 8.LEGALLETTERS.Theauditorshallrequestentitymanagementtosendaletterofinquirytothoselawyerswithwhommanagementconsultedconcerninglitigation,claims,andassessments.SeeAUSection337,"InquiryofaClient'sLawyerConcerningLitigation,Claims,andAssessments,"oftheCodificationofStatementsonAuditingStandards. )"$%   *%& 0 r a.0` r(#r(#TheletterofinquiryshallbesenttolegalcounselnolaterthanOctober15andshall   includearequestforaninterimresponsetobeeffectivenoearlierthanDecember1,exceptasnotedinparagraph8.d,andsubmittedtotheauditorbyDecember15followingtheendofthefiscalyearforwhichthefinancialstatementsareprepared.Inaddition,theletterofinquiryshallincludearequestforanupdatedresponsetobeeffectivenoearlierthanFebruary15andsubmittedtotheauditorbyMarch1followingtheendofthefiscalyearforwhichthefinancialstatementsareprepared.(SeeAppendixH1forillustrativeletterofinquiryfromentitymanagementtolegalcounselandAppendixH2forillustrativeletterofresponsefromlegalcounseltotheauditor.) ` (#` (# 0 r b.0` r(#r(#TheCFOshallprepareandtheauditorshallreviewasummaryoftheinformation {  containedinthelegalcounselsresponse.(SeeAppendixH3forformattobeusedtocompilelegalrepresentationletterdataforfinancialreportingpurposes.) ` (#` (# 0 r c.0` r(#r(#TheIGshallsubmittoOMB(DeputyController,OfficeofFederalFinancial c  Management),DepartmentoftheTreasury(Commissioner,FinancialManagementService),andtheGeneralAccountingOffice(AssistantComptrollerGeneral,AccountingandInformationManagementDivision)copiesoftheinterimandupdatedlegalresponsesdescribedinparagraph8.a.,andacopyoftheCFOssummarydescribedinparagraph8.b.byDecember31andMarch10,respectively. ` (#` (# L դ((L0 r  3   3p2դ  d  .3  0` r(#r(#  IftheauditiscompletedpriortoDecember1,thelegalresponseprovidedin 9 connectionwiththeauditmaybeusedinplaceoftheinterimresponsedescribedinparagraph8.a.Inaddition,anupdatedlegalresponsetobeeffectivenoearlierthanFebruary15shallbeprovided.TheselegalresponsesandcopiesoftheCFOssummariesdescribedinparagraph8.b.shallbesubmittedinaccordancewithparagraph8.c.3p݌ ` (#` (# Ќ  9.MANAGEMENTLETTER.Conditionsthatarenotrequiredtobeincludedintheauditreport,butthattheauditorconsidersnecessarytocommunicate,shouldbeseparatelycommunicatedtomanagementofthereportingentityinamanagementletter.Ifamanagementletterisissued,theauditorshallrefertothatmanagementletterintheauditor'sreportoninternalcontrol(seeparagraph5.28ofGovernmentAuditingStandards). $@   10.XXXXAGREEDUPONPROCEDURES:RETIREMENT,HEALTHBENEFITS,ANDLIFE &4!" INSURANCEWITHHOLDINGS/CONTRIBUTIONSANDSUPPLEMENTALSEMIANNUALHEADCOUNTREPORTSUBMITTEDTOTHEOFFICEOFPERSONNELMANAGEMENT(OPM). TheAgreedUponProcedures(AUPs)enumeratedinAppendixI1shallbeperformed )"$% annuallyforeachentitylistedinAppendixA.#XXXX#SeeAUSection622,"EngagementstoApplyAgreed *%& UponProcedurestoSpecifiedElements,Accounts,orItemsofaFinancialStatement"ofthe +&' CodificationofStatementsonAuditingStandards.XXXXԀTheAUPsaredesignedtoassistOPMinassessing  thereasonablenessoftheRetirement,HealthBenefits,andLifeInsurancewithholdings/contributionsaswellassemiannualHeadcountinformationsubmittedbyagencies.TheAUPsshallbeappliedtothe12monthsendedSeptember30ofeachyear.#XXXX#  L (( L 3   XXXX r 32  a  .3  0 `   TheAUPsshallbeappliedseparately,andtheresultsreportedseparately,foreach   AgencyPayrollOffice(APO)thatservices30,000ormoreemployees.3݌ ` (#` (# Ќ   r L  (L    r0 r 0` r(#r(#2(  1  )3  0 ` (#` (#  IfanagencydoesnothaveanAPOthatservices30,000ormoreemployees,it   shallperformtheAUPsonitslargestAPO.r݌  (# (# Ќ   X XE( ` hp x Xr` XEXXXXX XXXXX XX  #XXXX#XXXX   ݌̌ X X'Xr` XX'XXXXXXXX   r  ` (2)0 Ifanagencyperformspayrollcrossservicingfunctionsforotheragencies u  (referredtoasclientagencies),theauditorofthecrossservicingagencywillbetheprincipalauditorforthepurposeofapplyingtheseAUPs.Accordingly,theauditorforanagencyperformingpayrollcrossservicingfunctionsshallapplytheAUPsandreporttheresultsseparatelyforeachAPOthatservices30,000ormoreemployees.#XXXX#XXXXԀTheextentofparticipationbytheauditorsfortheclient W APOsshouldbedeterminedinconjunctionwiththeprincipalauditor.#XXXX#Q (# (# L e( L 3    r 332e  b  .3  0 `   Thereportontheapplicationoftheseproceduresshallbesubmittednolaterthanthe E December15followingtheendofthefiscalyearforwhichthefinancialstatementsare ? prepared.Totheextentpractical,managementscommentsontheauditorsfindingsshallbeincludedinthereport.AgenciesshallnotifyOPMbyNovember15ofeach 3| yearofanyanticipateddelaysordifficultiesincompletingtheAUPsandsubmittingtherequiredreportbytheDecember15deadline.33j݌'p` (#` (# Ќ   r c.0 ` Agenciesshallsubmitthreecopiesofthereportontheapplicationoftheseprocedures d totheInspectorGeneralofOPMatthefollowingaddress: ` (#` (#  K.` hp x (#Xr` XK0   `  U.S.OfficeofPersonnelManagement (#(#    `  OfficeofInspectorGeneralXXXXE.` hp x (#XE #L 0   `  Room6400 (#(# 0   `  1900EStreet,_N.W._ (#(# 0   `  Washington,DC20415 (#(#  E.` hp x (#XE#XXXX# &4!" &   XXXX11.INSPECTORGENERALOVERSIGHT.  L h (L ;   ;0  2h  a  .3  0` (#(#  IGsshall:;݌` (#` (# Ќ  0  0` (#(#(1)0 ` (#` (#Ensurethatauditsareperformedandauditreportscompletedinatimely   mannerandinaccordancewiththerequirements'ԀofthisBulletin.ThisresponsibilitypertainstoauditsconducteddirectlybyIGstaffandauditsconductedbyindependentauditorsundercontract.  (# (# 0  0` (#(#(2)0 ` (#` (#Providetechnicaladviceandliaisontoagencyofficialsandindependent   externalauditors.  (# (# 0  0` (#(#(3)0 ` (#` (#Obtainormakequalitycontrolreviewsofauditsmadebyindependentexternal o  auditorsandprovidetheresults,whenappropriate,tootherinterestedorganizations.  (# (# 0  0` (#(#(4)0 ` (#` (#Monitorandreportonmanagement'sprogressinresolvingauditfindingsrelated W toauditsmadepursuanttothisBulletin,inaccordancewiththeInspectorGeneralActof1978,asamended,theprovisionsofOMBCircularA-50,"AuditFollowup,"andFFMIA.  (# (# L ( L   3   32  b  .3  0 `   IGsareencouragedtoworkwithCFOstoacceleratethepreparationoffinancial 9 statements,andtoacceleratethecompletionofaudits.3݌ ` (#` (# Ќ   'p         TableofAppendices   eAppendixA:0 ` ExecutiveDepartmentsandAgenciesRequiredtoPrepareFinancialStatements` (#` (# AppendixB:0 ` ComponentsofExecutiveDepartmentsandAgenciesRequiredtoPrepareFinancial   Statements ` (#` (# AppendixC:0 ` GeneralLaws ` (#` (# AppendixD:0 ` TheFederalFinancialManagementImprovementActof1996!OMBImplementation   GuidanceforCFOsandIGs ` (#` (# AppendixE:0 ` IllustrativeManagementRepresentationLettero ` (#` (# AppendixF:0 ` IllustrativeAuditorsReportonInternalControlc ` (#` (# AppendixG:0 ` IllustrativeAuditorsReportonCompliancewithLawsandRegulationsW` (#` (# AppendixH:0 ` GuidanceRegardingLegalLetters#XXXX+#XXXXK` (#` (# AppendixI:0 ` AgreedUponProcedures:Retirement,HealthBenefits,andLifeInsurance ? Withholdings/ContributionsandSupplementalSemiannualHeadcountReportSubmittedtotheOfficeofPersonnelManagement#XXXXa#XXXX3|` (#` (#   'p    APPENDIXA     EXECUTIVEDEPARTMENTSANDAGENCIESREQUIREDTOPREPAREFINANCIAL  STATEMENTS     DepartmentofAgricultureDepartmentofCommerceDepartmentofDefenseDepartmentofEducationDepartmentofEnergyDepartmentofHealthandHumanServicesDepartmentofHousingandUrbanDevelopmentDepartmentoftheInteriorDepartmentofJusticeDepartmentofLaborDepartmentofStateDepartmentofTransportationDepartmentoftheTreasuryDepartmentofVeteransAffairsAgencyforInternationalDevelopmentEnvironmentalProtectionAgencyFederalEmergencyManagementAgencyGeneralServicesAdministrationNationalAeronauticsandSpaceAdministrationNationalScienceFoundationNuclearRegulatoryCommissionOfficeofPersonnelManagementSmallBusinessAdministrationSocialSecurityAdministration  !X    APPENDIXB    COMPONENTSOFEXECUTIVEDEPARTMENTSANDAGENCIESREQUIREDTOPREPAREFINANCIALSTATEMENTS   6          DepartmentofAgriculture   0  FoodandNutritionService (#(# 0  ForestService (#(# 0  RuralDevelopmentMissionArea (#(# DepartmentofDefense u  0  DepartmentofArmyGeneralFunds (#(# 0  DepartmentofNavyGeneralFunds (#(# 0  DepartmentofAirForceGeneralFunds (#(# 0  MilitaryRetirementTrustFund0h(#(#]h(#h(# 0  U.S.ArmyCorpsofEngineersCivilWorksProgram (#(# 0  DepartmentofArmyWorkingCapitalFund (#(# 0  DepartmentofNavyWorkingCapitalFund (#(# 0  DepartmentofAirForceWorkingCapitalFund (#(# 0   (#(# DepartmentofHealthandHumanServices 9 0  HealthCareFinancingAdministration (#(# &  DepartmentofLabor 'p 0  UnemploymentTrustFund (#(# '!DepartmentofTransportation  ^ 0  FederalAviationAdministration (#(# 0  HighwayTrustFund (#(#   #L &   DepartmentoftheTreasury  0  BureauofAlcohol,TobaccoandFirearms0(#(#(#(# 0  InternalRevenueService (#(# 0  UnitedStatesCustomsService (#(# OfficeofPersonnelManagement   0  CivilServiceRetirementandDisabilityFund (#(# 0  FederalEmployeesHealthBenefitsProgram (#(# 0  FederalEmployeesLifeInsuranceProgram'7  (#(#   APPENDIXC    GENERALLAWS    7        @*Anti-DeficiencyAct(codifiedasamendedin31U.S.C.1341,1342,1351,1517)L 8`(L 3     3283  0 `   31U.S.C.1341(a)(1)(A)and(C)3R݌ ` (#` (# Ќ   3     3283  0 `   31U.S.C.1517(a)31݌ ` (#` (# Ќ  ProvisionsGoverningClaimsoftheUnitedStatesGovernmentasprovidedprimarilyinsections37113720EofTitle31,UnitedStatesCode(includingprovisionsoftheDebtCollectionImprovementActof1996,Pub.L.No.104134,110Stat.1321358,whichalsoiscodifiedinvarioussectionsof5U.S.C.,18U.S.C.,26U.S.C.,28U.S.C.,31U.S.C.,42U.S.C.)#XXXX#XXXX   3   3283  0 `   21U.S.C.371121#XXXXX#XXXX3݌o ` (#` (# Ќ     3   3283  0 `   21U.S.C.3717(a),(b),(c),(e)and(f)#XXXX(#XXXX3݌i ` (#` (# Ќ     3   3283  0 `   21U.S.C.3719#XXXXS#XXXX3݌c ` (#` (# Ќ  FederalCreditReformActof1990,Pub.L.No.101-508,104Stat.1388-610(codifiedinvarioussectionsof2U.S.C.)#XXXXc#XXXX0   3   3283  0` (#(#  2U.S.C.661c(b)and(e)3݌K` (#` (# Ќ  PayandAllowanceSystemforCivilianEmployeesasprovidedprimarilyinChapters5159ofTitle5,UnitedStatesCode#XXXX_#XXXX 3   0  3283  0` (#(#  5U.S.C.5332and53433N݌3|` (#` (# Ќ   3     3283  0 `   29U.S.C.2063,݌-v` (#` (# Ќ  PromptPaymentAct(codifiedasamendedin31U.S.C.39013907)#XXXX#XXXX 3   0  3F283  0` (#(#  31U.S.C.3902(a)and(b)3F}݌d` (#` (# Ќ   3   0  3'283  0` (#(#  31U.S.C.3902(f)3'^݌ ^` (#` (# Ќ   3   0  3283  0` (#(#  31U.S.C.390438݌!X` (#` (# Ќ   3   0  3283  0` (#(#  31U.S.C.3906(a)(1)3݌  "R` (#` (# Ќ    APPENDIXD      THEFEDERALFINANCIALMANAGEMENTIMPROVEMENTACTOF1996  OMBIMPLEMENTATIONGUIDANCEFORCFOsandIGs    Introduction    TheFederalFinancialManagementImprovementActof1996(FFMIA),31U.S.C.3512,fundamentallydoestwothings:L 8``L 3   3283  0    establishesinstatutecertainfinancialmanagementsystemrequirementsthatarealready {  establishedbyExecutiveBranchpolicies,and3݌ (#(# Ќ   3   3283  0    establishesnewrequirementsforauditorstoreportonagencycompliancewiththesebasic i  requirements,andforagencyheadsandagencymanagementtocorrectdeficiencieswithinacertaintimeperiod.3 ݌ (#(# Ќ  TheActappliesonlytoauditsoftheentitieslistedinAppendicesAandBoftheBulletin. Substantivestatutoryrequirement  E The1997OmnibusConsolidatedAppropriationsActincludesTitleVIII,theFederalFinancialManagementImprovementActof1996.Section803(a)oftheActstates:0  InGeneral!EachagencyshallimplementandmaintainfinancialmanagementsystemsthatcomplysubstantiallywithFederalfinancialmanagementsystemsrequirements,applicableFederalaccountingstandards,andtheUnitedStatesGovernmentStandardGeneralLedger(SGL)atthetransactionlevel. (#(# Thesethreerequirements!Federalfinancialmanagementsystemrequirements,applicableFederalaccountingstandards,andtheSGL!arealreadywell-establishedinExecutiveBranchpolicydocuments.Thesedocuments,whicharedescribedinmoredetailbelow,include:OMBCirculars(A-127, FinancialManagementSystemsandA-134, FinancialAccountingPrinciplesandStandards),JointFinancialManagementImprovementProgram(JFMIP)documents(suchastheCoreSystemRequirements),andTreasuryDepartmentpolicies.Section803(a)ofFFMIAdoesnotestablishanynewfinancialsystemrequirements,butitprovidesstatutoryauthorityforexistingExecutiveBranchfinancialsystemrequirements.  *%& OthersectionsofFFMIAestablishnewproceduralrequirements.However,thesenewrequirements followthebasicprinciplesestablishedinFederalauditpolicies: 3   3283  0    Section803(b)(1)requiresthatauditorsreportwhetheragencysystemssubstantiallycomply  withFederalfinancialmanagementsystemsrequirements;3݌ (#(# Ќ   3   3283  0    Section803(c)(1)requiresthattheheadofeachagencydeterminewhethertheagencys   financialmanagementsystemscomplywiththeAct,basedonareviewofthereportontheapplicableagencywideauditedfinancialstatementandanyotherinformationtheheadoftheagencyconsidersrelevantandappropriate;3݌ (#(# Ќ   3   3283  0    Section803(c)(3)requiresthat,whentheagencyheaddisagreeswiththeauditorsfindings, u  theDirectorofOMBshallreviewsuchdeterminationsandprovideareportonthefindingstotheappropriatecommitteesoftheCongress;3݌ (#(# Ќ   3   3283  0    Section803(c)(3)requiresthatwhentheagencyheadagreeswiththeauditorsfindingsof ] noncompliance,a_remediation_Ԁplanshallbedeveloped,inconsultationwithOMB,thatdescribestheresourcesandmilestonesforachievingcompliance;and3݌ (#(# Ќ   3   3p283  0    Section804(b)requiresthattheInspectorGeneral(IG)reportonagencyprogressinachieving E complianceintheIGssemiannualreportrequiredbytheIGAct,asamended.3p݌ (#(# Ќ  Inadditiontothesereportingrequirements,bothOMBandGAOhaveannualreportingrequirementsundertheAct.Moredetailedinformationregardingagencyresponsibilitiesfollows. RelationshiptoSection4ofFMFIA(theIntegrityAct)  !j Thereisaclose,ifnotoverlapping,relationshipbetweenFFMIAandtheFederalManagersFinancialIntegrityAct(FMFIA).Sincetheacronymsaresimilar,thisguidancereferstoFMFIAastheIntegrityAct.TheIntegrityActrequiresthattheagencyhead,onanannualbasisnolaterthanDecember31,provideanassurancestatementwithrespecttoagencymanagementcontrols(Section2)andagencycompliancewithfinancialmanagementsystemrequirements(Section4).Forthemostpart,inmanyagencies,theIntegrityActstatementofassuranceforSection4providesmanagementsassertionofcompliancewithsection803(a)ofFFMIA. Section803,ImplementationofFFMIA  '."# Section803(a),citedabove,states: InGeneral--Eachagencyshallimplementandmaintainfinancial managementsystemsthatcomplysubstantiallywithFederalfinancialmanagementsystems *%& requirements,applicableFederalaccountingstandards,andtheUnitedStatesGovernmentStandardGeneralLedger(SGL)atthetransactionlevel. Thissectionoftheguidancemorefullydescribes(1)Federalfinancialmanagementsystemsrequirements;(2)applicableFederalaccountingstandards;and(3)theSGLatthetransactionlevel.Ineachsection,informationisprovidedonsubstantialcomplianceandtypesofindicatorstobeusedinassessingwhetheranagencyisinsubstantialcompliance.Thecriteriaarebroadandflexible;yet,theyprovideapracticalbasisformeasuringachievementincomplyingwiththeFFMIArequirements.(1)Federalfinancialmanagementsystemsrequirements   CircularA-127prescribespoliciesandstandardsforagenciestofollowindeveloping,operating,evaluating,andreportingonfinancialmanagementsystems.Inaddition,CircularA-127alsoincorporatesbyreference:CircularA-123, ManagementAccountabilityandControl;CircularA-130, ManagementofFederalInformationResources;otheroperatingpoliciesandrelatedrequirementsprescribedbyOMB;andFederalFinancialManagementSystemsRequirementsissuedbyJFMIP.ThefinancialmanagementsystemssubjecttotherequirementsofFFMIAareincludedintheinventoryoffinancialmanagementsystemssubjecttotherequirementsofSection4oftheIntegrityAct.CompliancewiththefinancialmanagementsystemsrequirementsofFFMIAappliestoallfinancialmanagementsystemsessentialtomeetingfinancialstatementpreparationandbudgetaryreportingrequirements.AnagencyoftheFederalGovernmentisconsideredtobeinsubstantialcompliancewithfinancialmanagementsystemrequirementsif: 3   3$283  0    FinancialmanagementsystemsmeetCircularA-127requirementswhich,forpurposesof !X complyingwiththisAct,callforsystemsto:supportmanagementsfiduciaryrole;supportthelegal,regulatory,andotherspecialmanagementrequirementsoftheagency;supportthebudgetexecutionfunctions;supportfiscalmanagementofprogramdeliveryandprogramdecisionmaking;complywithinternalandexternalreportingrequirements,including,asnecessary,therequirementforfinancialstatementspreparedinaccordancewiththeformandcontentprescribedbyOMBandreportingrequirementsprescribedbyTreasury;andbemonitoredbyagencystafftoensuretheintegrityoffinancialdata.Thisisaccomplishedthroughaunifiedsetofsystemscomprisedoffinancialsystemsandfinancialportionsofmixedsystems.ThesesystemsmayormaynotbeoperatedbytheCFOsoffice.3$$݌ (#(#    *%&  3   3(283  0    FinancialmanagementsystemsfollowrequirementspublishedinJFMIPsFederalFinancial   ManagementSystemRequirementsserieswhichprescribethefunctionsthatmustbeperformedbysystemstocaptureinformationforfinancialstatementpreparation.3()݌ (#(# Ќ   3   3*283  0    Compensatingproceduresareappliedtofinancialmanagementinformationproducedbythird   parties,suchasservicebureaus,whenitisdeterminedthatsystemsusedbythirdpartiestoprovidethoseservicesdonotcomplywiththeprovisionsoftheFFMIA.3**݌ (#(# Ќ   3   3a,283  0    SecurityoverfinancialinformationisprovidedinaccordancewithCircularA-130,Appendix3.3a,,݌ (#(# Ќ   3   3t-283  0    Internalcontrolsoverfinancialmanagementsystemsaredesignedproperlyandoperating {  effectively.Internalcontrolsaredescribedinparagraph2ofOMBBulletin99__.ItisnotexpectedthatthescopeoftheauditorsworkinthisareawouldextendbeyondtherequirementsoftheBulletin.3t--݌ (#(# Ќ  Indicators: 3   3m/283  0    AnnualassurancestatementissuedpursuanttotheSection4IntegrityActreportdoesnot Q reflectanymaterialnonconformancerelatedtofinancialmanagementsystemscoveredbyFFMIA.3m//݌ (#(# Ќ   3   30283  0    Auditproceduresperformedforthepurposeofobtainingevidenceinsupportoftheauditors 9 opiniononthefinancialstatementsdidnotdisclosematerialweaknessesornoncompliancewithlegalorregulatoryrequirementsoftheagency.   8      301݌-v(#(# Ќ   3   32283  0    Standardbudgetexecutioninformation(e.g.,FACTSIIreportingforthoseaccountsrequired !j tocomplywithFACTSII)isprovidedonatimelybasistoOMBandTreasuryinthemannerrequestedandisconsistentwithbudgetexecutioninformationusedinternallywithintheagency.323݌ (#(# Ќ   3   34283  0    Agencyseniormanagementandprogrammanagershaveaccesstotimelyfinancialinformation  "R onthestatusoffunds(commitments,reservationandobligations)byoperatingunitsandprogramsthatallowsanalysisofdatafordecisionmaking.344݌ (#(#    $@   3   36283  0    Fundscontroldecisionsarebasedoninformationprovidedfromtheagencysfinancial   managementsystems.366݌ (#(# Ќ   3   37283  0    Theagencycorefinancialsystem,supportedbyothersystemscontainingthedetaileddata  summarizedinthecorefinancialsystem,isthesourceofinformationusedinthepreparationoftheannualfinancialstatementsandotherinternalandexternalreportingrequirements,includingcertainactualdatapresentedinthePresidentsBudget.Detailedinformationcontainedintheseothersystemsalsomaybeusedasthesourceinformationforreportingwheresummarizedinformationcontainedintheagencycoresystemdoesnotprovidethedetailsnecessarytomeetreportingrequirements.377݌ (#(# Ќ  0   (#(#  3   3:283  0    Theagencyhasamanagementcontrolprogramthatidentifiesandreportsdeficienciesin u  financialmanagementsystems,includingdeficienciesresultinginalackofsubstantialcompliancewiththethreerequirementsofFFMIA,andensuressuchdeficienciesarecorrected.3:';݌ (#(# Ќ  &  (2)FederalAccountingStandards ] AnagencyoftheFederalGovernmentwillbeconsideredinsubstantialcompliancewithFederalaccountingstandardsiftheagencypreparesauditedfinancialstatementsinaccordancewiththe']<hierarchyofFederalaccountingstandardsincludedinparagraph5ofOMBBulletin99__.SubstantialcompliancedoesnotrequirealltransactionstobeinfullcompliancewithFederalaccountingstandardsatthepointoforiginalentry,butthatfinancialinformationusedinthepreparationoffinancialstatements,basedonsuchtransactions,isadequatelysupportedbydetailedfinancialrecords(automatedormanual).Indicators:L 8``L 3   3?283  0    Anunqualifiedopinionontheagencysfinancialstatements.Foraqualifiedopinion,areviewof  ^ theunderlyingreasonsforthequalifiedopinionisneededtodeterminewhetherornottheagencyisinsubstantialcompliancewiththisrequirement.Inlimitedcircumstances,aqualifiedopinionontheagencysfinancialstatementsmayindicatesubstantialcompliancewiththisrequirementwhenitissolelyduetoreasonsotherthantheagencysabilitytoprepare_auditable_financialstatements.Further,adisclaimerofopinionmaynotindicatethatthereisalackofsubstantialcompliancewiththisrequirementwhenitresultsfromamaterialuncertainty,suchasresolutionoflitigationorprojectingfutureeconomicevents.3?@݌ (#(#    '."#  3!   3C283  0    Theauditdisclosednomaterialweaknessesininternalcontrolsthataffecttheagencysabilityto  prepare_auditable_Ԁfinancialstatementsandrelateddisclosures.   9      3CC݌(#(#   (3)SGLattheTransactionLevel  ImplementingtheSGLatthetransactionlevelrequiresthattheCoreFinancialSystemGeneralLedgerManagementFunctionisinfullcompliancewiththeSGLchartofaccountsdescriptions,relatedattributes,andpostingrules;transactionsfromfeedersystemsaresummarizedandfedintotheCoreFinancialSystem'sGeneralLedgerfollowingSGLrequirementsthroughaninterface(automatedormanual);detailsupportingtheinterfacetransactionscanbetracedbacktothesourcetransactionsinthefeedersystems;andthefeedersystemsprocesstransactionsconsistentwithSGLaccountdescriptions,relatedattributes,andpostingrules.AnagencyoftheFederalGovernmentwillbeconsideredinsubstantialcompliancewiththeSGLatthetransactionlevelrequirementiftheagencysclassificationoffinancialeventsforitsfinancialstatementsandrequiredfinancialinformationprovidedtotheDepartmentoftheTreasuryandOMB,includingyearendbudgetreporting,isconsistentwiththeaccountdescriptions,relatedattributes,andpostingrules,asapprovedbytheSGLBoardandpublishedbytheTreasuryDepartmentsFinancialManagementServiceintheTreasuryFinancialManual. K Indicators:L 8``L 3"   3K283  0    TheagencyscorefinancialsystemusestheSGLnumbertocapturefinancialinformation,orthe 3| agencyusesanalternativecode(pseudo-code)followingthesameaccountdescriptions,relatedattributes,andpostingrulesthatareusedbytheSGLtocapturefinancialinformation,andtheinformationcanbeappropriatelymatchedtoSGLcodesforreportingtoOMBorTreasuryandforpreparingfinancialstatements.TheuseoftheSGLcodeinthefeedersystemisnotnecessaryaslongasthecodedefinitionsusedtocaptureinformationareconsistentwiththeSGLdefinitions.3KDK݌ (#(# Ќ  L 8``L 3#   3kN283  0    SystemsmustcaptureinformationusingthesamedescriptionsandpostingrulesasintheSGL. #L DetailedinformationcapturedinfeedersystemscanbesummarizedintheCoreFinancialSystem;however,informationshallbecapturedandsummarizedsothatitfollowstheSGLdescriptionsandpostingrulesandiscapturedatthelevelnecessarytomeetOMBorTreasury %: ! reportingrequirements(e.g.,FACTSIIreportingforthoseaccountsrequiredtocomplywithFACTSII)andforpreparingfinancialstatements.3kNN݌ (#(# Ќ   3$   3;Q283  0    Transactionscanbetracedbacktothesource/point-of-entryinthefeedersystemsandto  supportinginformation.3;QfQ݌ (#(# Ќ   AuditConsiderations    Basedontheforegoing,theauditorshalluseprofessionaljudgmentindeterminingsubstantialcompliancewiththesystemsrequirementsofFFMIA.However,lackofsubstantialcompliancewiththerequirementsinanyoneormoreofthethreeareasincludedinFFMIA!Federalfinancialmanagementsystemrequirements,Federalaccountingstandards,andtheSGL!wouldresultinlackofsubstantialcompliancewithFFMIA.Further,alackofsubstantialcompliancewithanyoneormoreoftheindicatorsdescribedhereinwouldtypicallyresultinalackofsubstantialcompliancewithoneormoreofthethreeareasdescribedaboveand,thus,alackofsubstantialcompliancewiththesystemsrequirementsofFFMIA.Judgmentshallbeusedindeterminingalackofsubstantialcompliancewithanindicator.Forinstance,ifanauditorfindsthatafewbudgetexecutionreportsweresubmittedlatetoOMBandcontainedminorinaccuracies,thismaynotresultinalackofsubstantialcompliancewiththeindicatorregardingstandardbudgetexecutioninformation.  ?   APPENDIXE  V  ILLUSTRATIVEMANAGEMENTREPRESENTATIONLETTER   10            [EntityLetterhead]W[Dateofauditor'sreport]0    (#(# [Nameandtitleofheadofauditorganization][Addressofauditorganization]Dear[nameofheadofauditorganization]:Thisletterisinconnectionwithyourauditsofthe[entity's]PrincipalStatements(alsoreferredtoas financialstatements")[listPrincipalStatements]asof[endofyear(s)coveredbyPrincipalStatementsandfortheyear(s)thenended]forthepurposesof(1)expressinganopinionastowhetherthePrincipalStatementsarepresentedfairly,inallmaterialrespects,inconformitywithFederalaccountingstandards,and(2)reportingwhethertheagencysfinancialmanagementsystemssubstantiallycomplywithFederalfinancialmanagementsystemsrequirements,applicableFederalaccountingstandards,andtheU.S.GovernmentStandardGeneralLedgeratthetransactionlevelasof[theendoftheperiod(s)coveredbythefinancialstatements].Weconfirm,tothebestofourknowledgeandbelief,thefollowingrepresentationsmadetoyouduringyouraudits,thattheserepresentationsareasofthedateofyourauditorsreport,andpertaintotheperiod[orperiods]coveredbythefinancialstatements.[Ifcomparativestatementsarepresented !j thefollowingsentenceshouldbeadded: Theserepresentationsupdatetherepresentationswe d providedinconjunctionwithyourauditofthefinancialstatementsasofandfortheyearended(stateyear).]   "R 1.0  WeareresponsibleforthefairpresentationofthePrincipalStatementsandRequired   SupplementaryStewardshipInformationinconformitywithFederalaccountingstandards[or,whereapplicable,forthefairpresentationofthefinancialstatementsinconformitywithgenerallyacceptedaccountingprinciples]. (#(# 2.0  ThefinancialstatementsarefairlypresentedinconformitywithFederalaccountingstandards   [or,whereapplicable,generallyacceptedaccountingprinciples]. (#(# 3.0  Wehavemadeavailabletoyou,all0(#(#0(#(#0p(#(#0p(#p(#0 (#(#0x (# (#0 x(#x(#0@ $ $  (# (# 0  a.0` (#(#financialrecordsandrelateddata;{ ` (#` (#  `n  0  `nab  .0` (#(#  whereapplicable,minutesofmeetingsoftheBoardofDirectors[orothersimilar o  bodies]orsummariesofactionsofrecentmeetingsforwhichminuteshavenotbeenprepared;and`nabی ` (#` (# Ќ  `n  0  `ngcc  .0` (#(#  communicationsfromOMBconcerningnoncompliancewithordeficienciesinfinancial W reportingpractices. `ngccی ` (#` (# Ќ  4.0  Therearenomaterialtransactionsthathavenotbeenproperlyrecordedintheaccounting E recordsunderlyingthefinancialstatementsordisclosedinthenotestothefinancialstatements. (#(# 5.0  The[entity]hassatisfactorytitletoallownedassets,includingstewardshipproperty,plant,and 3| equipment;suchassetshavenoliensorencumbrances,norhaveanyassetsbeenpledged. (#(# 6.0  Wehavenoplansorintentionsthatmaymateriallyaffectthecarryingvalueorclassificationof !j assetsandliabilities. (#(# hN  hNg7  .0    Guaranteesunderwhichtheagencyiscontingentlyliablehavebeenproperlyreportedor !X disclosed.hNggی (#(# Ќ  hN  hNh8  .0    Relatedpartytransactionsandrelatedaccountsreceivableorpayable,includingassessments, #F loans,andguaranteeshavebeenproperlyrecordedanddisclosed.hNhhی (#(# Ќ  9.0  Allintraagencytransactionsandbalanceshavebeenappropriatelyidentifiedandeliminatedfor &4!" financialreportingpurposes,unlessotherwisenoted.Allintragovernmentaltransactionsandbalanceshavebeenappropriatelyrecorded,reported,anddisclosed.Also,wehavereconciledsignificantintragovernmentaltransactionsandbalanceswiththeappropriatetradingpartners,includingthefollowingtypeofactivities:InvestmentsinPublicDebtSecurities,_Borrowings_ԀfromTreasury,_Borrowings_ԀfromtheFederalFinancingBank,interest(revenue, +&' expense,receivable,payable)relatedtoinvestmentsanddebt,agencycontributionstoemployeebenefitplans(e.g.,OPMandDepartmentofLabor),andintragovernmentalrevenue. (#(# 10.0  Thereareno: (#(# 0  a.0` (#(#possibleviolationsoflawsorregulationswhoseeffectsshouldbeconsideredfor   disclosureinthefinancialstatementsorasabasisforrecordingalosscontingency; ` (#` (# 0  b.0` (#(#materialliabilitiesorgainorlosscontingenciesthatarerequiredtobeaccruedor   disclosed,thathavenotbeenaccruedordisclosed;or ` (#` (# (#(#K(#0  c.0` (#(#unassertedclaimsorassessmentsthatareprobableofassertionandthatmustbe o  disclosed,thathavenotbeendisclosed. ` (#` (# 11.0  Wehavecompliedwithallaspectsofcontractualagreementsthatwouldhaveamaterialeffect ] onthefinancialstatementsintheeventofnoncompliance. (#(# 12.0  Nomaterialeventsortransactionshaveoccurredsubsequentto[thedateoflatestaudited K financialstatements]thathavenotbeenproperlyrecordedinthePrincipalStatementsandRequiredSupplementaryStewardshipInformationordisclosedinthenotesthereto. (#(# 13.0  Therehasbeennomaterialfraud(intentionalmisstatementsoromissionsofamountsor 3| disclosuresinfinancialstatementsandmisappropriationofassetsthatcouldhaveamaterialaffectonthePrincipalStatementsorRequiredSupplementaryStewardshipInformation)oranyfraudinvolvingmanagementoremployeeswhohavesignificantrolesininternalcontrol.[Fraudmeetingforegoingcriteriashouldbedescribed.] (#(# 14.0  Weareresponsibleforestablishingandmaintaininginternalcontrol.!X(#(# 15.0  PursuanttotheFederalManagersFinancialIntegrityAct,wehaveassessedtheeffectivenessof #L [entity's]internalcontrolinachievingthefollowingobjectives: (#(# 0  &  a.0` (#(#Reliabilityoffinancialreportingtransactionsareproperlyrecorded,processed,and %: ! summarizedtopermitthepreparationofthePrincipalStatementsandRequiredSupplementaryStewardshipInformationinaccordancewithFederalaccountingstandards,andthesafeguardingofassetsagainstlossfromunauthorizedacquisition,use,ordisposition;'%u ` (#` (#  0  0` (#(#*%&` (#` (# 0  b.0` (#(#Compliancewithapplicablelawsandregulationstransactionsareexecutedin   accordancewith:(i)lawsgoverningtheuseofbudgetauthorityandotherlawsandregulationsthatcouldhaveadirectandmaterialeffectonthefinancialstatements,and(ii)anyotherlaws,regulations,andgovernmentwidepoliciesidentifiedbytheOfficeofManagementandBudget(OMB)inAppendixCofOMBBulletin99__;and ` (#` (# 0  c.0` (#(#Reliabilityofperformancereportingtransactionsandotherdatathatsupportreported   performancemeasuresareproperlyrecorded,processed,andsummarizedtopermitthepreparationofperformanceinformationinaccordancewithcriteriastatedbymanagement. ` (#` (# 0   (#(# 16.0  ThosecontrolsinplaceonSeptember30,_XXXX_Ԁ[ordateoflatestauditedfinancial u  statements]providedreasonableassurancethattheforegoingobjectivesaremet. (#(# 0  Iftherearematerialweaknessesininternalcontrol,theforgoingrepresentationshould c  bemodifiedtoread: ThosecontrolsinplaceonSeptember30,_XXXX_,providedreasonableassurancethattheforegoingobjectivesaremetexceptfortheeffectsofthematerialweaknessesdiscussedbeloworintheattachment,orastatementthat Q  internalcontrolsarenoteffectiveor donotmeettheforegoingobjectives.K(#(# 17.0  Weareresponsibleforimplementingandmaintainingfinancialmanagementsystemsthatcomply ? substantiallywithFederalfinancialmanagementsystemsrequirementscontainedinOMBCircularA127, FinancialManagementSystems,applicableFederalaccountingstandards,andtheUnitedStatesGovernmentStandardGeneralLedger(SGL)atthetransactionlevel. (#(# 18.0  Wehaveassessedthefinancialmanagementsystemstodeterminewhethertheycomply !j substantiallywiththeseFederalfinancialmanagementsystemsrequirements.OurassessmentwasbasedoncriteriaestablishedunderOMBCircularA127andguidanceissuedbyOMBandincludedinAppendixDofOMBBulletin99___. (#(# 19.0  ThefinancialmanagementsystemscompliedsubstantiallywithFederalfinancialmanagement #L systemsrequirements,applicableFederalaccountingstandards,andtheSGLatthetransactionlevelasofthe[dateoffinancialstatements]. (#(# 0  [Ifthefinancialmanagementsystemsdidnotsubstantiallycomply,thefollowing &4!" paragraphsshouldbeusedinstead: (#(# 0  Asof[dateoffinancialstatements],theentity'sfinancialmanagementsystemsdonotcomplysubstantiallywiththeFederalfinancialmanagementsystemsrequirements. (#(#  +&' 0  Identifyhereinorinanattachmentallthefactspertainingtothenoncompliance,includingthenatureandextentofthenoncomplianceandtheprimaryreasonorcauseofthenoncompliance. (#(# 0  Thisrepresentationdoesnotchangetherepresentationinparagraph2ofthisletter.](#(# 20.0  Weareresponsiblefor[entity's]compliancewithapplicablelawsandregulations. (#(# 21.0  Wehaveidentifiedanddisclosedtoyoualllawsandregulationsthathaveadirectandmaterial   effectonthedeterminationoffinancialstatementamounts. (#(# 22.0  Wehavedisclosedtoyouallknowninstancesofnoncompliancewithlawsandregulations.{ (#(# 0  [SignedbyAgencyHead] (#(# 0  [SignedbyChiefFinancialOfficer] (#(#   c     APPENDIXF      ILLUSTRATIVEAUDITORSREPORTONINTERNALCONTROL     [Addressee]   WehaveauditedthePrincipalStatements(hereinafterreferredtoas"financialstatements")of[Nameof   FederalAgency]asofandfortheyearendedSeptember30,_XXXX_,andhaveissuedourreport   thereondated_____________.Weconductedourauditinaccordancewithgenerallyacceptedauditingstandards;thestandardsapplicabletofinancialauditscontainedinGovernmentAuditing {  Standards,issuedbytheComptrollerGeneraloftheUnitedStates;and,OfficeofManagementand u  Budget(OMB)BulletinNo.99,"AuditRequirementsforFederalFinancialStatements."Inplanningandperformingouraudit,weconsidered[NameofFederalAgency]'sinternalcontrolover c  financialreportingbyobtaininganunderstandingoftheagencysinternalcontrol,determinedwhethertheseinternalcontrolshadbeenplacedinoperation,assessedcontrolrisk,andperformedtestsofcontrolsinordertodetermineourauditingproceduresforthepurposeofexpressingouropiniononthefinancialstatements.WelimitedourinternalcontroltestingtothosecontrolsnecessarytoachievetheobjectivesdescribedinOMBBulletin99__.WedidnottestallinternalcontrolsrelevanttooperatingobjectivesasbroadlydefinedbytheFederalManagersFinancialIntegrityActof1982,suchasthosecontrolsrelevanttoensuringefficientoperations.Theobjectiveofourauditwasnottoprovideassuranceoninternalcontrol.Consequently,wedonotprovideanopiniononinternalcontrol.   11       3| Ourconsiderationoftheinternalcontroloverfinancialreportingwouldnotnecessarilydiscloseallmattersintheinternalcontroloverfinancialreportingthatmightbereportableconditions.UnderstandardsissuedbytheAmericanInstituteofCertifiedPublicAccountants,reportableconditionsarematterscomingtoourattentionrelatingtosignificantdeficienciesinthedesignoroperationoftheinternalcontrolthat,inourjudgment,couldadverselyaffecttheagencysabilitytorecord,process,summarize,andreportfinancialdataconsistentwiththeassertionsbymanagementinthefinancialstatements.Materialweaknessesarereportableconditionsinwhichthedesignoroperationofoneormoreoftheinternalcontrolcomponentsdoesnotreducetoarelativelylowleveltheriskthatmisstatementsinamountsthatwouldbematerialinrelationtothefinancialstatementsbeingauditedmay $@  occurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.Becauseofinherentlimitationsininternalcontrols,misstatements,losses,ornoncompliancemayneverthelessoccurandnotbedetected.However,wenotedcertainmatters[discussedinthefollowingparagraphsoraccompanyingschedule]involvingtheinternalcontrol  anditsoperationthatweconsidertobereportableconditions[andmaterialweaknesses].      `     h      p 8  Ifnoneofthereportableconditionsisbelievedtobeamaterialweakness,the   reportshouldstatethefollowing: However,noneofthereportableconditionsisbelievedtobeamaterialweakness.    8      8  Ifnoreportableconditionswerenotedduringtheaudit,thereportshouldstate {  thefollowing: However,wenotednomattersinvolvingtheinternalcontrolanditsoperationthatweconsideredtobematerialweaknessesasdefinedabove.o    Inaddition,weconsidered[NameofFederalAgency]sinternalcontroloverRequired c  SupplementaryStewardshipInformationbyobtaininganunderstandingoftheagencysinternalcontrols,determinedwhethertheseinternalcontrolshadbeenplacedinoperation,assessedcontrolrisk,andperformedtestsofcontrolsasrequiredbyOMBBulletin99__andnottoprovideassuranceontheseinternalcontrols.Accordingly,wedonotprovideassuranceonsuchcontrols.Finally,withrespecttointernalcontrolsrelatedtoperformancemeasuresreportedin[refertosection ? offinancialstatementoraccountabilityreport],weobtainedanunderstandingofthedesignof 9 significantinternalcontrolsrelatingtotheexistenceandcompletenessassertions,asrequiredbyOMBBulletin99__.Ourprocedureswerenotdesignedtoprovideassuranceoninternalcontroloverreportedperformancemeasures,and,accordingly,wedonotprovideanopiniononsuchcontrols.0  Ifconditionscametotheauditorsattentionthatinhisorherjudgmentrepresent d significantdeficienciesinthedesignoroperationofinternalcontroloverperformancemeasures,whichcouldadverselyaffecttheagencysabilitytocollect,process,record,andsummarizeperformanceinformationandreportperformancemeasuresinaccordancewithmanagementscriteria,thefollowingsentenceshouldbeaddedtotheforegoingparagraph. However,wenotedcertainsignificantdeficienciesininternalcontroloverreportedperformancemeasures[discussedinthefollowingparagraphsoraccompanyingschedule]that,inourjudgment,couldadverselyaffecttheagencysabilitytocollect,process,record,andsummarizeperformanceinformationandreportperformancemeasuresinaccordancewithmanagementscriteria. (#(# Thisreportisintendedsolelyfortheinformationanduseofthemanagementof[NameofFederal )"$%  Agency],OMBandCongress,andisnotintendedtobeandshouldnotbeusedbyanyoneotherthan *%& thesespecifiedparties.Wecautionthatmisstatements,losses,andnoncompliancemayoccurandnotbedetectedbythetestingperformedandthatsuchtestingmaynotbesufficientforotherpurposes. [Signature]  [Date]      APPENDIXG   ա   ILLUSTRATIVEAUDITORSREPORTONCOMPLIANCEWITHLAWSAND  REGULATIONS    [Addressee]   WehaveauditedthePrincipalStatements(hereinafterreferredtoas"financialstatements")of[Nameof   FederalAgency]asofandfortheyearendedSeptember30,_XXXX_,andhaveissuedourreport   thereondated______________.Weconductedourauditinaccordancewith:generallyacceptedauditingstandards;thestandardsapplicabletofinancialauditscontainedinGovernmentAuditing u  Standards,issuedbytheComptrollerGeneraloftheUnitedStates;and,OfficeofManagementand o  Budget(OMB)BulletinNo.99,"AuditRequirementsforFederalFinancialStatements."Themanagementof[NameofFederalAgency]isresponsibleforcomplyingwithlawsandregulations ] applicabletotheagency.Aspartofobtainingreasonableassuranceaboutwhethertheagencysfinancialstatementsarefreeofmaterialmisstatement,weperformedtestsofitscompliancewithcertainprovisionsoflawsandregulations,noncompliancewithwhichcouldhaveadirectandmaterialeffectonthedeterminationoffinancialstatement,amountsandcertainotherlawsandregulationsspecifiedinOMBBulletin99__,includingtherequirementsreferredtointheFederalFinancialManagementImprovementAct(FFMIA)of1996.Welimitedourtestsofcompliancetotheseprovisionsandwedidnottestcompliancewithalllawsandregulationsapplicableto[NameofAgency]. 3| TheresultsofourtestsofcompliancewiththelawsandregulationsdescribedintheprecedingparagraphexclusiveofFFMIA   12      ׀disclosedinstancesofnoncompliancewiththefollowinglawsand !j regulationsthatarerequiredtobereportedunderGovernmentAuditingStandardsandOMBBulletin d 99__,whicharedescribedbelow.  !X 0  Describeanyinstancesofnoncompliancerequiredtobereportedandlistlawsand  regulationsforwhichnoncompliancewasdisclosedexclusiveofFFMIA[orprovidesuch  informationinanaccompanyingschedule](#(#  TheresultsofourtestsofcompliancedisclosednoinstancesofnoncompliancewithotherlawsandregulationsdiscussedintheprecedingparagraphexclusiveofFFMIAthatarerequiredtobereportedunderGovernmentAuditingStandardsorOMBBulletin99__.   UnderFFMIA,wearerequiredtoreportwhethertheagencysfinancialmanagementsystemssubstantiallycomplywiththeFederalfinancialmanagementsystemsrequirements,Federalaccountingstandards,andtheUnitedStatesGovernmentStandardGeneralLedgeratthetransactionlevel.Tomeetthisrequirement,weperformedtestsofcomplianceusingtheimplementationguidanceforFFMIAincludedinAppendixDofOMBBulletin99.Theresultsofourtestsdisclosednoinstancesinwhichtheagencysfinancialmanagementsystemsdidnotsubstantiallycomplywiththethreerequirementsdiscussedintheprecedingparagraph.[Iftheresultsoftestsdisclosedthattheagencyssystemsdidnotsubstantiallycomplywiththe Q foregoingrequirements,theprecedingsentenceshouldbereplacedwiththefollowing: K 0  Theresultsofourtestsdisclosedinstances,describedbelow(ordescribedinan ? accompanyingschedule),wheretheagencysfinancialmanagementsystemsdidnotsubstantiallycomplywiththethreerequirementsdiscussedintheprecedingparagraph.3|(#(# Inaddition,whentestsdisclosedthattheagencyssystemsdidnotsubstantiallycomplywiththe 'p foregoingrequirements,theauditorsreportoncomplianceoranaccompanyingscheduleshouldprovidethefollowinginformationasrequiredbyFFMIAandparagraph7.c.(3)(c)ofOMBBulletin99__.L Eh(`L1.0  Theentityororganizationresponsibleforthefinancialmanagementsystemsthatwere  "R foundnottocomplywiththerequirements. (#(#    ` 2.0  Allfactspertainingtothenoncompliance,including:(a)%thenatureandextentofthe $@  noncompliance,(b)theprimaryreasonorcauseofthenoncompliance,and(c)anyrelevantcommentsfromreportingentitymanagementoremployeesresponsibleforthenoncompliance. (#(# 3.0  Recommendedremedialactionsandthetimeframestoimplementsuchactions.])"$%(#(#  L Uh((L *%& Providinganopiniononcompliancewithcertainprovisionsoflawsandregulationswasnotanobjective ofourauditand,accordingly,wedonotexpresssuchanopinion.   13        Thisreportisintendedsolelyfortheinformationanduseofthemanagementof[NameofFederal  Agency],OMBandCongress,andisnotintendedtobeandshouldnotbeusedbyanyoneotherthan   thesespecifiedparties.Wecautionthatnoncompliancemayoccurandnotbedetectedbythetestsperformedandthatsuchtestingmaynotbesufficientforotherpurposes.[Signature]   [Date]  {     APPENDIXH1   p  ILLUSTRATIVELETTEROFINQUIRYFROMAGENCYMANAGEMENTTOLEGAL  COUNSELCONCERNINGCONTINGENTLIABILITIESFORLITIGATION,CLAIMS,ORASSESSMENTS    [CFOOfficeLetterhead]B.` hp x (#XBDate:   ` [NolaterthanOctober15]   To:   ` GeneralCounsel u  From:   ` ChiefFinancialOfficer i  Subject: ` [Auditors]AuditoftheFiscalYearXXX0FinancialStatements ] Pursuantto31U.S.C.3515,the[Auditorname]isconductinganauditofthefinancialstatementsofthe[Governmententity]asofandforthefiscalyearendedSeptember30,XXX0.Inperformingauditsofgovernmententities,auditorsarerequiredtofollowGovernmentAuditingStandardsissuedbythe E ComptrollerGeneraloftheUnitedStates(the YellowBook).Forfinancialstatementaudits,GovernmentAuditingStandardsincorporatethefieldworkandreportingstandardsoftheAmerican 9 InstituteofCertifiedPublicAccountants(AICPA)andtheStatementsonAuditingStandardsthatinterpretthem.ConsistentwiththeprocedurescontainedinAU337oftheAICPAsCodificationof -v StatementsonAuditingStandards,[Auditor]hasinquiredaboutlitigation,claims,andassessmentsto 'p satisfyitselfastothefinancialaccountingandreportingofsuchmatterswithrespecttothefinancialstatements.Thepurposeofthisletteristorequestyourassistanceinrespondingtothatinquiry.TheAmericanBarAssociation StatementofPolicyRegardingLawyers  ResponsestoAuditorsRequestforInformation(December1975)providesrelevantguidanceforthelawyersresponsetotheauditorsrequest.InaccordancewithStatementofFederalFinancialAccountingStandards(SFFAS)Number5, #F  AccountingforLiabilitiesoftheFederalGovernment,asamendedbySFFASNumber12,and $@  InterpretationNumber2ofSFFASNumbers4and5,[Governmententity]reportscertaininformation %: ! initsfinancialstatementsandnotesconcerningcontingentliabilitiesforlitigation,claims,andassessments.Werequestthatyouprovide[Auditor](withacopytome)withinformationinvolvingmatterswithrespecttowhichyouhavebeenengagedandtowhichyouhavedevotedsubstantiveattentiononbehalfofthe[Governmententity]intheformoflegalconsultationorrepresentation.YoushouldfurnishaninterimresponsebyDecember15,XXX0,includingmattersthatexistedasofSeptember30,XXIX,andfromthatdatethroughatleastDecember1,XXX0.Youshouldfurnishan +&' updatedresponsebyMarch1,XXX1,includingmattersthatexistedasofSeptember30,XXX0,andfromthedateoftheinterimresponsethroughnoearlierthanFebruary15,XXX1.Includeanycaseswithrespecttowhichyouhavebeenengagedandtowhichyouhavedevotedsubstantiveattentiononbehalfofthe[Governmententity]intheformoflegalconsultationorrepresentation,eventhosecaseswhereyoubelievetheJudgmentFundorsomefinancingsourceotherthan[Governmententity]sbudgetaryresourceswillpayanypotentialloss.UnderFederalaccountingstandards,suchamountsshouldbeincludedasliabilitiesordisclosureitemsonthe[Governmententity]sfinancialstatements.PendingorThreatenedLitigation(excludingunassertedclaims) {  Weand[Auditor]havedeterminedthatanymatterswheretheamountofpotentiallossexceeds$X !, o  individuallyorintheaggregate,couldbematerialtothefinancialstatements.Pleaseprovideto[Auditor]theinformationdescribedbelowaboutpendingorthreatenedlitigationwheretheamountofpotentiallossexceeds$X   14      : ]   %nW  2W%ǹ1.  Thenatureofthematter.(Includeadescriptionofthecaseandamountclaimed,ifspecified.) Q Ѐ2.  Theprogressofthecasetodate. K 0   3.  Thegovernment'sresponseorplannedresponse(forexample,tocontestthecasevigorouslyor E toseekanout-of-courtsettlement). (#(#  XK7p` hp x (#XK Ӏ4.  Anevaluationofthelikelihoodofunfavorableoutcome.(Categorizelikelihoodasprobable, 9 reasonablypossible,orremote.)  XT.` hp x (#p` XT0   5.  Anestimateoftheamountorrangeofpotentialloss,ifonecanbemade,forlossesconsidered -v tobeprobableorreasonablypossible. (#(# 0   6.  Thenameofthe[Governmententity]sattorneyhandlingthecaseandnamesofanyoutside !j legalcounsel/otherlawyersrepresentingoradvisingthegovernmentinthematter(DepartmentofJusticeoroutsidelawfirms). (#(# UnassertedClaimsandAssessments  "R Pleaseprovidethefollowinginformationforallunassertedclaimsandassessmentsthatyouconsiderto #F  beprobableofassertionandwhich,ifasserted,wouldhaveatleastareasonablepossibilityofan $@  unfavorableoutcomeinanamountover$X,involvingmatterstowhichyouhavedevotedsubstantiveattention. ̀1.  Adescriptionofthenatureofthematter.  Ѐ2.  Thegovernment'splannedresponseiftheclaimisasserted.   0   3.  Anevaluationofthelikelihoodofanunfavorableoutcome.(Categorizelikelihoodasprobable   orreasonablypossible.) (#(# Ѐ4.  Anestimateoftheamountorrangeofpotentialloss,ifonecanbemade.   Pleasespecificallyconfirmto[Auditor]thatourunderstandingofthefollowingiscorrect:whenever,inthecourseofperforminglegalservicesforus,withrespecttoamatterrecognizedtoinvolveanunassertedpossibleclaimorassessmentthatmaycallforfinancialstatementdisclosure,ifyouhaveformedaprofessionalconclusionthatweshoulddiscloseorconsiderdisclosureconcerningsuchpossibleclaimorassessment,asamatterofprofessionalresponsibilitytous,youwill:(1)adviseusofyourconclusion,and(2)consultwithusconcerningthequestionofsuchdisclosureandtheapplicablerequirementsofSFFASNo.5,asamended. ] Pleaseseparatelyidentifyanycaseswithrespecttowhichyouhavebeenengagedandtowhichyouhavedevotedsubstantiveattentiononbehalfofthe[Governmententity]intheformoflegalconsultationorrepresentationforwhichyoubelieveanothergovernmententitywillberesponsibleforanypotentialliability.Pleasespecificallyidentifythenatureofandreasonsforanylimitationsonyourresponsetothisrequest.Pleaseaddressyourreplyto[Auditor],andcontacthim/herat(phonenumber),whenyourreplyisavailableforpickup,andsendacopyofyourreplytome.Donothesitatetocontactmeor[Auditor]ifyouhaveanyquestionsregardingthisrequest.[Signedby]ChiefFinancialOfficer  %: !   APPENDIXH2  ILLUSTRATIVERESPONSEFROMLEGALCOUNSELCONCERNINGLITIGATION,CLAIMS,ANDASSESSMENTS"   15        ( [GeneralCounselLetterhead]   B.` hp x (#XBDate:   `    To:   ` InspectorGeneral/IndependentAuditor {  From:   ` GeneralCounsel o  Subject  Subject:0 ` LegalResponseinconnectionwiththeXXX0FinancialStatementAuditof[agency c  name] ]` (#` (#    AsGeneralCounselof[NameofAgency],IamwritinginresponsettheletterofinquiryfromtheAgencysChiefFinancialOfficerdated____,inconnectionwiththeauditof[NameofAgency]sfinancialstatementsasofandforthefiscalyearendedSeptember30,XXX0.  IcallyourattentiontothefactthatasGeneralCounselfortheAgency,IhavegeneralsupervisionoftheAgencyslegalaffairs.[Ifthegenerallegalsupervisoryresponsibilitiesofthepersonsigningtheletterarelimited,setforthacleardescriptionofthoselegalmattersoverwhichsuchpersonexercisesgeneralsupervision,indicatingexceptionstosuchsupervisionandsituationswhereprimaryrelianceshouldbeplacedonothersources.]Insuchcapacity,IhavereviewedlitigationandclaimsthreatenedorassertedinvolvingtheAgencyandhaveconsultedwithoutsidelegalcounselwithrespecttheretowhereIhavedeemedappropriate.  Subjecttotheforegoingandtothelastparagraphofthisletter,Iadviseyouthatsince[insertdateofbeginningoffiscalyearperiodunderaudit]neitherI,noranyofthelawyersoverwhomIexercisegenerallegalsupervision,havegivensubstantiveattentionto,orrepresentedtheAgencyinconnectionwith[material$   16      ]losscontingenciescomingwithinthescopeofclause(a)ofParagraph5of $@  theStatementofPolicyreferredtointhelastparagraphofthisletter,exceptasfollows: x   %: ! Ї[Describelitigationandclaimswhichfittheforegoingcriteriaasfollows:]L !((L PendingorThreatenedLitigation(excludingunassertedclaims )    0 x x(#x(# L Uh((!L a.0  Natureofthematter(includeadescriptionofthecaseandamountclaimed,if  specified). (#(# L 1((L 3   32  b  .3  0    Progressofthecasetodate.3݌ (#(# Ќ   3   32  c  .3  0    Currentorintendedresponse.3݌ (#(# Ќ  L  (1Ld.0  Evaluationofthelikelihoodofanunfavorableoutcome(categorizelikelihoodas   probable,reasonablypossible,orremote). (#(# e.0  Estimatedamountorrangeofpotentialloss,ifdeterminable,forlossesconsideredto   beprobableorreasonablypossible. (#(# L ( Lf.0  Nameof[Governmententity]sattorneyhandlingthecaseandnamesofanyoutside u  legalcounselrepresentingoradvisingthegovernmentinthematter. o (#(#   Withrespecttomatterswhichhavebeenspecificallyidentifiedascontemplatedbyclauses(b)or(c)ofparagraph5oftheABAStatementofPolicy,Iadviseyou,subjecttothelastparagraphofthis ] letter,asfollows:L e((L%L ((L UnassertedClaimsandAssessments(consideredtobeprobableofassertionandwhich,if K asserted,wouldhaveatleastareasonablepossibilityofanunfavorableoutcome)  E L z((L a.0  Natureofthematter.?(#(# b.0  Intendedresponseifclaimwouldbeasserted.9(#(# c.0  Evaluationofthelikelihoodofanunfavorableoutcome.(Categorizelikelihoodas 3| probableorreasonablypossible.) (#(# L E (Ld.0  Estimatedamountorrangeofpotentialloss,ifdeterminable. 'p(#(#   Theinformationsetforthhereinis[(asofthedateofthisletter)or(asof(insertdate),thedateonwhichwecommencedourinternalreviewproceduresforpurposesofpreparingthisresponse)],exceptasotherwisenoted,andIdisclaimanyundertakingtoadviseyouofchangeswhichthereaftermaybebroughttomyattentionortheattentionofourlawyersoverwhomIexercisegenerallegalsupervision.  Thisresponseislimitedby,andinaccordancewith,theABAStatementofPolicyRegarding $@  LawyersResponsestoAuditorsRequestsforInformation(December1975);withoutlimitingthe %: ! generalityoftheforegoing,thelimitationssetforthinsuchStatementonthescopeanduseofthisresponse(Paragraphs2and7)arespecificallyincorporatedhereinbyreference,andanydescriptionhereinofany losscontingenciesisqualifiedinitsentiretybyParagraph5oftheStatementandtheaccompanyingCommentary(whichisanintegralpartoftheStatement).ConsistentwiththelastsentenceofParagraph6oftheABAStatementofPolicy,thiswillconfirmascorrecttheAgencysunderstandingthatwhenever,inthecourseofperforminglegalservicesfortheAgencywithrespecttoa +&' matterrecognizedtoinvolveanunassertedpossibleclaimorassessmentthatmaycallforfinancialstatementdisclosure,IhaveformedaprofessionalconclusionthattheAgencymustdiscloseorconsiderdisclosureconcerningsuchpossibleclaimorassessment,I,asamatterofprofessionalresponsibilitytotheAgency,willsoadvisetheAgencyandwillconsultwiththeAgencyconcerningthequestionofsuchdisclosureandtheapplicablerequirementsofStatementofFederalFinancialAccountingStandards   (SFFAS)Number5, AccountingforLiabilitiesoftheFederalGovernment,asamendedbySFFAS   Number12,andInterpretationNumber2ofSFFASNumbers4and5.[Describeanyotheror   additionallimitationasindicatedbyParagraph4oftheStatement.]cc:ChiefFinancialOfficer    o  TRP$'3 Letter LandscapeX3''3 Letter Landscape3' LetterTAPPENDIXH3   ' FORMATFORSUMMARIZINGINFORMATIONCONTAINEDINLEGALRESPONSES  FORFINANCIALREPORTINGPURPOSES 3-33(3   1        *d d dd * dd * X dd X */..,dd ,dd ,dd ,dd ,dd ,dd ,dd ,dd ,Fdd +  >4    ?1?> 1 e[1 F"  ?1 ?  @2@e 2 e[1 F"  @2 @  @3@e 3 e[1 F"  @3 @  @4@e 4 i_1 F "  @4 @  @5@i 5 h^4 F "  @5 @  @6@h 6 e[1 F "  @6 @  @7@e 7 A71 F "  @7 @ A{XX  ReferenceKey 3)#f  xx 3  AmountClaimed 3)#f  xx 3%  NameofCase/RelatedCases 3)#f  xx 3  LikelihoodofLoss 3)#f  xx 3  Amountorrangeofpotentialloss %   %Q  DispositioninFinancialStatements @, #XX{# %T   %  M   M   M   M {XX  (a)#XX{#ԀP{XX     (b)#XX{#R/P{XX   #XX{#{XXS  (c)#XX{#ԀUpper   {XXAmt.Recorded   #XX{n#{XXNoteDisclosure#XX{#      ? ! $  ? "   ? #   ? $ $  ? % $  ? & $  ? ' $  ? (  ? )    Column:  c * 3L #( L33 3%   32(  38  )3  0    333(1)333%L &'( L 3   32'(  1  )3  0    3 ReferenceKey: {XXPagenumberofthelegalrepresentationletterobtainedfromGeneralCounseldiscussingthecase,orotherreferenceinformation.#XX{O#3݌] +.. Ќ   3   3U2'(  2  )3  0    AmountClaimed: {XXAmountclaimedinthelitigation,claim,orassessment(ifspecified).#XX{#3U݌W,.. Ќ   3   3 2'(  3  )3  0    NameofCase/RelatedCases 3  ݌Q-.. Ќ   3   3 2'(  4  )3  0    LikelihoodofLoss: {XXListtheGeneralCounselsevaluationofthelikelihoodofloss:#XX{D #3  ݌K... Ќ    Options:0 P:0 . .ProbableE/..   0 ` 0 ` .` .R/P:0 . .ReasonablyPossible?0..   0 ` 0 ` .` .R:0 . .Remote91..   0 ` 0 ` .` .U:0 . .LegalCounselUnabletoDetermine3|2..  3   3 2'(  5  )3  0    AmountorRangeofPotentialLoss: 3  ݌-v3.. Ќ    Options:0 5a:0 . .{XXProbable(P):Providesingleestimateorlowerendofrange,ifknown.Enter U,ifunknown.(Also,providecolumn  totals.)#XX{#..   0 ` 0 ` .` .5b:0 . .{XXReasonablyPossible(R/P):providesingleestimateorlowerendofrange,ifknown.Enter U,ifunknown.#XX{,#{XXԀ(Also,provide z column.)#XX{#t..   0 ` 0 ` .` .5c:0 . .{XXIftheestimatein5aor5bisarange,provideupperendofrange;otherwise,enter n/a.#XX{#= ..   3   3y2'(  6  )3  0    DispositioninFinancialStatements:#XXXX'#XXXXԀAmountRecorded: {XXIfapplicable,providedollaramountrecordedasaliabilityinthefinancial 1 z statements.(Also,providecolumntotals.)#XX{|#3y݌+ t.. Ќ   3   32'(  7  )3  0    DispositioninFinancialStatements#XXXXH#XXXX:NoteDisclosure: {XXIfapplicable,indicatebynotereferencenumberwhethercaseinformationis  = separatelydisclosedorincludedinamountsdisclosed#XX{#{XXinnotestothefinancialstatements.#XX{j#3݌ 7 .. Ќ     )  #XXXX\#XXXX   `     TRX3' LetterP$'3 Letter Landscape3' Letter'3 Letter LandscapeTAPPENDIXI1    AGREEDUPONPROCEDURES:RETIREMENT,HEALTHBENEFITS,ANDLIFEINSURANCEWITHHOLDINGS/CONTRIBUTIONSANDSUPPLEMENTALSEMIANNUALHEADCOUNTREPORTSUBMITTEDTOTHEOFFICEOFPERSONNELMANAGEMENT    S OBJECTIVE   B.` hp x (#XBXXXXX XXXXX XX  XXXXl  lE݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX  AssisttheOfficeofPersonnelManagement(OPM)inassessingthereasonablenessofRetirement, {  HealthBenefits,andLifeInsurancewithholdingsand/contributionsaswellasenrollmentinformationsubmittedviatheSemiannualHeadcountReport.݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX  ݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXC  C ݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX   BACKGROUND !݌ ] Ќ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX"  "m#݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX/$  TheAgreedUponProcedures(AUPs)relatingtothesubmissiontoOPMofwithholdings/contributions Q forRetirement,HealthBenefits,andLifeInsurancerelatetotheuseoftheRetirementandInsuranceTransferSystem(_RITS_)._RITS_ԀistheauthorizedmethodofsubmissionofwithholdingandcontributioninformationtoOPM.Agencypayrolloffices(APOs)thataretechnicallyunabletotransmitbenefitinformationtoOPMvia_RITS_ԀmaycontinuetosubmitwithholdingsandcontributionsviathehardcopySF2812(andSF2812A), ReportofWithholdingsandContributionsforHealthBenefits,LifeInsuranceandRetirementtoOPM..TheAUPstobeappliedtothoseAPOssubmittingwithholdingsandcontributionstoOPMviathehardcopySF2812formsaresimilartothosefor_RITS_./$%݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXs)  s)L*݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX +   ++݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX,  PROCEDURES,|-݌  ^ Ќ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX\.  \.5/݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX/   GainanunderstandingoftheAPOsproceduresforreconcilingpayrollinformationto_RITS_  "R submissions.ObtaintheAPOsmostrecentSemiannualHeadcountReportsubmittedtoOPMandasummaryof_RITS_Ԁsubmissionsforthecurrentfiscalyear.Randomlyselectthree_RITS_Ԁsubmissionsforthecurrentfiscalyear,oneofwhichcoincideswiththemostrecentSemiannualHeadcountReport.Obtainpayrollinformationfortheperiodscoveredbythe_RITS_Ԁsubmissionsselected./0݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX4  44݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX5  h h?+ ` hp x X?Notethat,asusedintheseAUPs,thetermpayrollinformationreferstoallpayroll '."# information,whetheritbeapayrollregister,payrolldatafile,orotherpayrollsupportdata. 5q6݌ )"$% Ќ! XX!XXXXXXXXXXXX   *%& B.` hp x (#XBXXXXX XXXXX XX  XXXX8  h h 1.Compare_RITS_Ԁsubmissiondatawithpayrollinformationbyperformingthefollowingprocedures:8k9݌  Ќ XXXXXXXXXXXXXX  XXXXX XXXXX XX  XXXX:  ݀:x;݌  ЌXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX\<  B.` hp x (#XB1.a.Footthepayrollinformation.Iftheauditorchoosestouseasubsetofpayrollinformation,the  subsetmustberepresentativeofallpayrollinformationandbesubjecttothesamecontrolproceduresoverpayrollinformationassociatedwiththethree_RITS_Ԁsubmissionsselected.\<5=݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX?  ?l@݌̌ XXXXXXXXXXXXXX  B.` hp x (#XB1.b.Traceemployeewithholdinginformationshownonthepayrollinformationfootedinstep1.a.   forRetirement,HealthBenefits,andLifeInsurance(asadjustedforreconcilingitems)totherelatedamountsshownonthe_RITS_Ԁsubmissionforthecorrespondingperiod. B.` hp x (#XB B.` hp x (#XB1.c.Obtainsupportfordifferencesbetweenamountsshownonthepayrollregisterorderivedfromfilesfootedinstep1.a.andamountsshownonthe_RITS_Ԁsubmissionselected.1.d.Tracereconcilingitemstosupportingdocumentationandverifyagreement.1.e.Footeach_RITS_Ԁsubmissionselected. B.` hp x (#XBReportanydifferencesorexceptionsthatareunsupportedorunsubstantiated,orrepresentanerror.2.Revieworperformareconciliationofpayrollinformation,including_RITS_Ԁdata,totheagencysgeneralledger.Forthethreepayperiodsselected,reviewtheagencw3iew3x3yx3sreconciliationofpayrolltransactionstoitsgeneralledgerexpenseandcashdisbursementaccountsor,ifsuchreconciliationdoesnotexist,performthereconciliation.Effectivein1999,agenciesshouldpostRetirement,HealthBenefits,andLifeInsurancewithholdingandcontributionstoStandardGeneralLedger(SGL)account6400!BenefitsProgramExpense;withholdingsto6400Nandcontributionsto6400G.(For1998, 'p postingtoaccount6100!OperatingExpenses/ProgramCosts!wasacceptable.)ReportwhentheAPOdidnotpreparethereconciliation.Alsoreportanyunsupportedorunsubstantiateddifferences(i.e.,grossratherthannet)inthetotalpayrollpaidfortheselectedpayperiodandtheamountrecordedinthegeneralledgerthatexceeds5percentoftotalpayroll.Reportanydifferences(i.e.,grossratherthannet)betweenthewithholdingandcontributionsreportedonthe_RITS_ԀsubmissionsandtheamountspostedtotheSGLaccountsgreaterthan1percent.Also,for_RITS_Ԁdata,reportpostingstoanySGLaccount,otherthanaccount6400.B.` hp x (#XB3.AgreeemployeesalaryandcontributionstotheSF50( NotificationofPersonnelAction),authorizedwithholding/contributions,andbenefitprogramelections.Fromthepayrollinformationcorrespondingtothethree_RITS_Ԁsubmissionsselectedfortestingabove,randomlyselectatotalof25individualswhoarecoveredbyRetirement,HealthBenefits,BasicLifeInsurance,andatleastoneLifeInsuranceOption(A,B,orC).ObtaintheOfficialPersonnelFile(OPF)foreachindividualselected,andperformthefollowingprocedures:XXXXX XXXXX XX  XXXXM  MN݌ +&' ЌXXXXXXXXXXXX  B.` hp x (#XB3.a.Verifythatthebasesalaryusedforpayrollpurposesanduponwhichwithholdingsand  contributionsgenerallyarebasedagreeswiththebasesalaryreflectedontheemployees'SF50.3.b.ForRetirement,verifythatamountswithheldandcontributedforparticipantsintheCivilServiceRetirementSystem(CSRS)andtheFederalEmployeesRetirementSystem(FERS)arecorrect,basedupontheofficialwithholdingsandcontributionratesrequiredbylaw.[SeePayrollOffice   LettersP9710andP9707.] B.` hp x (#XB B.` hp x (#XB3.c.ForHealthBenefits,verifythatemployeewithholdingsandagencycontributionsagreewiththeofficialsubscriptionratesissuedbyOPMfortheplanandoptionelectedbytheemployees,asdocumentedbyaHealthBenefitsRegistrationForm(SF2809)intheemployees'OPF.See {  PayrollOfficeLetterP9810,for1999rates. u  XXXXX XXXXX XX   XXXX tO  h h?+ ` hp x X?Ifanemployeeelectedhis/hercurrenthealthplanviaEmployeeExpress,therelikely i  willnotbedocumentationintheOPF.Inthesecircumstances,theauditormustseektoobtainenrollmentdocumentationfromEmployeeExpress,whichmaintainsahistoryofallFEHBtransactionsenteredbyemployees.RatherthanrequestingdocumentationdirectlyfromEmployeeExpress,auditorsshouldworkthrougheachagencyspersonneloffice.EmployeeExpresskeyrepresentativeshavebeenapprizedofthispotentialrequirement.tOP݌ E ЌXXXXXXXX42 42  h hE.` hp x (#XEB.` hp x (#XBXXXXX XXXXX XX  XXXXS  B.` hp x (#XB3.d.ForLifeInsurance,verifythatBasicLifeInsurancewaselectedbytheemployees,as 9 documentedbyaLifeInsuranceElectionForm(SF2817),inhis/herOPFandthatwithholdingsandcontributionsarecorrect.S{T݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXuV  B.` hp x (#XBuVNW݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXOX  B.` ` hp x (#XB P  i. ` Foremployeewithholdings:Roundtheemployeesannualbasesalarytothenearest !j thousanddollarsandadd$2,000.Forpayperiodsendingbefore4/24/99,dividethistotalby1,000andmultiplyby$0.165(forAPOswithbiweeklypayperiods)or$0.3575(forAPOswithmonthlypayperiods).Forpayperiodsbeginningonorafter4/24/99,dividethistotalby1,000andmultiplyby$0.155(forAPOswithbiweeklypayperiods)or$0.3358(forAPOswithmonthlypayperiods.OX(Y݌̌ X` XXXXXXXXXXXXX  PB.` hp x (#XBXXXXX XXXXX XX  XXXXc\  c\<]݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXX ^  B.` ` hp x (#XB P  ii. ` Foragencycontributions:Dividetheemployeewithholdingsderivedinstep3.d.i.by $@  two. ^^݌̌ X` XXXXXXXXXXXXX  PB.` hp x (#XBXXXXX XXXXX XX  XXXX`  `ua݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXBb  3.e.Also,forLifeInsurance,verifyOptionalcoveragewaselected,asdocumentedbyanSF2817in '."# theemployeesOPF,andthatwithholdingsarecorrect.ThewithholdingratesforOptionsA,B,andCarebasedupontheageoftheemployeeandtheamountofcoverageelected.[Seethe FEGLI )"$% DescriptionandCertificateHandbookforwithholdingratesapplicabletopayperiodsendingbefore4/24/99andtheappropriate FEGLIProgramBookletforpayperiodsbeginningonor +&' after4/24/99.]Reportanydifferencesorexceptionsthatareunsupportedorunsubstantiated,or  representanerror.bb;c݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXf  fg݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXKh   ?+ ` hp x X?Note:Forstep3.e.only,randomlyselectadditionalindividualsasnecessarysothat  tenindividualsareselectedforeachLifeInsuranceoption(i.e.,OptionsA,B,andC).Kh$i݌̌ XXXXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXWk  Wkk݌̌XXXXXXXXXXXX  B.` hp x (#XBXXXXX XXXXX XX  XXXXl  4.Randomlyselectatotaloftenemployees,whohavenoHealthBenefitswithholdings,fromthe   payrollinformationcorrespondingtothethree_RITS_Ԁsubmissionsselectedfortestingabove.VerifyfromareviewoftheOPFthattheemployeesdidnotelectHealthBenefitscoveragethismaybeprovenbytheabsenceofanelectionformSF2809intheOPF,iftheemployeeneverelectedcoverage.Alternatively,foranemployeewhocanceledenrollmentafterhavingbeenenrolledintheHealthBenefitsProgramlookforaSF2809withSectionEchecked,indicatingelectionofcoveragecancellation.Reportanyexceptionsthatareunsupportedorunsubstantiated,orrepresentanerror.lvm݌̌ XXXXXXXXXXXXXX  X X?+ ` hp x X?Toconcludewithfinalitythattherewasnoelectionofhealthbenefits,theauditor c  mustfirstconfirmwithEmployeeExpress,viatheagencyspersonneloffice,thatnoelectionwasmadeorcoveragecanceledbythismeans. X XB.` hp x (#XBB.` hp x (#XBXXXXX XXXXX XX  XXXXr  5.RandomlyselectatotaloftenemployeeswhohavenoLifeInsurancewithholdingsfromthepayroll K informationcorrespondingtothethree_RITS_Ԁsubmissionsselectedfortestingabove.VerifythattheemployeeseitherwaivedorcanceledLifeInsurancecoverage.ThiswillbeprovenbythepresenceintheOPFofanSF2817,bywhichanemployeewaivesorcancelsBasicLifeInsurancecoverage.Reportanyexceptions.rs݌̌ XXXXXXXXXXXXXX  C $(#C-- ,E1` hp x (#XE 2  6  .3    CalculatetheheadcountreflectedontheSemiannualHeadcountReportselectedfortestingabove, 'p asfollows.  ,H.` hp x (#,` XHӀ ,B.` hp x (#XB6.a.ObtainexistingpayrollinformationsupportingtheselectedSupplementalSemiannualHeadcountreport.Ifexistingpayrolldataisnotavailable,haveAPOpersonnelperformapayrollsystemquerythatsummarizesdetailedpayrolldatasupportingtheSupplementalSemiannualHeadcountReport,asfollows: ,C  $$C--E.44` hp x (#XE 2 3   4 BenefitCategory[seeSemiannualHeadcountReport]. $@  H.44` hp x (#44` XH2 3   4 DollarAmountofwithholdingsandcontributions. %: ! H.44` hp x (#44` XH2 3   4 NumberEnrolled(deductionsmade/nodeductions)+2.+2 &4!" H.44` hp x (#44` XH2 3   4 CentralPersonnelDataFileCode,2.,2 '."# H.44` hp x (#44` XH2 3   4 AggregateBaseSalary-2.-2 ((#$   ,H.` hp x (#44` XH   `  ItmaybethatthepayrollinformationneededtorecalculatetheselectedHeadcountReportisnolongeravailableonthepayrollsystem.Ifsuchisthecase,querythepayrollinformationcurrently +&' residingonthepayrollsystemandcompareittotheselectedHeadcountReport.Accountforanysignificantpersonnelchangesthatmayaffectwithholdings,contributions,andnumbersofemployeesenrolled. X,B+ ` hp x (#XBXXXXX XXXXX XX  XXXXY  ,XB.` hp x (#XB6.b.RecalculatetheHeadcountreflectedontheSemiannualHeadcountReport.Asuggested   methodofrecalculatingtheHeadcountisasfollows:(1)estimatethenumberofemployeesperpayrollregisterpagebycountingtheemployeeslistedonseveralpages,(2)countthenumberofpagesinthepayrollregister,and(3)multiplythenumberofemployeesperpagebythenumberofpages,orcount(usingacomputerauditroutine)thenumberofemployeesonthepayrolldatafilefortheperiod.Y@݌̌ ,,$ XX$XXXXXXXXXXXX   X,B+ ` hp x (#XBXXXXX XXXXX XX  XXXXd  ,XB.` hp x (#XBdK݌̌ ,,$ XX$XXXXXXXXXXXX   X,B+ ` hp x (#XBXXXXX XXXXX XX  XXXXn  ,XB.` hp x (#XB6.c.Comparetheresultsofpayrollinformationfromstep6.awiththecalculatedheadcountfrom u  step6.btotheinformationshownontheSemiannualHeadcountReport.nU݌̌ ,,$ XX$XXXXXXXXXXXX   X,B+ ` hp x (#XBXXXXX XXXXX XX  XXXX3  ,XB.` hp x (#XB3݌̌ ,,$ XX$XXXXXXXXXXXX  E.` hp x (#XEXXXXX XXXXX XX  XXXX=  B.` hp x (#XB6.d.Reportanydifferences(i.e.,grossratherthannet)greaterthan2percentbetweenthe c  headcountreportingontheagency'sSemiannualHeadcountReportandpayrollinformationfromstep6.aandthecalculatedHeadcountfromstep6.b.=݌̌$ XX$XXXXXXXXXXXX  ,E.` hp x (#XEC $$C ,E1` hp x (#XE 7.  CalculateemployerandemployeecontributionsforRetirement,HealthBenefits,andLifeInsurance. K   ,H.` hp x (#,` XH   ` hB.` hp x (#XB7.a.CalculateRetirementwithholdingsandcontributionsforthethreepayperiodsselected,asfollows: hB.` hp x (#XB X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX,  C  $$C-- X<(` ` hp x (#X< 2  i  .3   ` MultiplytheCSRSandFERSpayrollbasebythewithholdingandemployer -v contributionratesrequiredbylaw.,݌̌  X` ` XXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX}  XB.` hp x (#XB}a݌̌  XXXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX~  X<(` ` hp x (#X< 2  ii  .3   ` Comparethecalculatedtotalswithrelatedamountsshownonthe_RITS_Ԁsubmissions. d Reportanyvariances(i.e.,grossratherthannet)betweenthecalculatedamountsandtheamountsreportedonthe_RITS_Ԁsubmissionsgreaterthan5percent.~b݌̌  X` ` XXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX$  XB.` hp x (#XB$݌̌  XXXXXXXXXXXXXX  hB.` hp x (#XB7.b.CalculateemployeewithholdingsandemployercontributionsforHealthBenefitsforthethree #L payperiodsselected,asfollows: hB.` hp x (#XB X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX`  C  $$C-- X<(` ` hp x (#X< 2  i  .3   ` MultiplythenumberofemployeesenrolledineachHealthBenefitplanandplanoption %: ! bytheemployeewithholdingsandemployercontributionsfortheplanandoption.`D݌̌  X` ` XXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXXߠ  X<(` ` hp x (#X<ߠá݌ '."# Ќ  X` ` XXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX  X<(` ` hp x (#X<ii. ` Sumthetotalsinstep7._b.i._ԀandcomparetheresultwiththeHealthBenefitwithholding ((#$ andcontributionamountsshownonthe_RITS_Ԁsubmissions.Reportanyvariances(i.e.,grossratherthannet)betweenthecalculatedamountsandtheamountsreportedonthe_RITS_Ԁsubmissionsgreaterthan5percent.ң݌ +&' Ќ  X` ` XXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX  ݌̌ X XXXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXXl  hXB.` hp x (#XB7.c.CalculatetheBasicLifeInsuranceemployeewithholdingsandemployercontributionsforthe  threepayperiodsselectedasfollows:lP݌̌ h! XX!XXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX   XB.` hp x (#XB ݌̌  XXXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX   C  $$C-- X<(` ` hp x (#X< 2  i  .3   ` HaveAPOpersonnelperformapayrollsystemquerytodeterminethetotalnumberof   employeeswithBasicLifeInsuranceProgramcoverageandtheaggregateannualbasicpayforallemployeeswithBasicLifeInsuranceProgramcoverage.(Seethe   .2.2CSRS/FERSHandbook.2.2,Section30A1.12fordefinitionofbasicpay/2)/202.)0212.12 ݌   Ќ  X` ` XXXXXXXXXXXXX   X?+ ` hp x (#X?XXXXX XXXXX XX  XXXX  XB.` hp x (#XBt݌̌  XXXXXXXXXXXXXX  <(` ` hp x (#X< 2  ii  .3   ` Foremployeewithholdings:Addtheproductof2,000timesthenumberofemployees   withBasicLifeInsurancecoveragetotheaggregateannualbasicpayforallemployeesselected.ThisrepresentstheestimatedtotalBasicLifeInsurancecoverage.Forpayperiodsendingbefore4/24/99,dividethistotalby1,000andmultiplyby$0.165(forAPOswithbiweeklypayperiods)or$0.3575(forAPOswithmonthlypayperiods).Forpayperiodsbeginningonorafter4/24/99,dividethistotalby1,000andmultiplyby$0.155(forAPOswithbiweeklypayperiods)or$0.3358(forAPOswithmonthlypayperiods).  X?+ ` hp x (#` ` X?C  $$C X<(` ` hp x (#X< 2  iii  .3   ` Comparetheresultinstep7._c.ii_.tothewithholdingsforBasicLifeInsurancecoverage K reportedonthe_RITS_Ԁsubmission.Reportanydifference(i.e.,grossratherthannet)betweentheestimateandtheamountofwithholdingsreportedonthe_RITS_Ԁsubmissiongreaterthan5percent.  X?+ ` hp x (#` ` X? X<(` ` hp x (#X< 2  iv  .3   ` Foragencycontributions:Dividetheresultsofstep7._c.ii_.bytwothisapproximates -v agencycontributions,whichareonehalfofemployeewithholdings.Comparethisresulttotheamountreportedonthe_RITS_Ԁsubmission.andreportanydifferences(i.e.,grossratherthannet)betweentheestimateandtheamountreportedonthe_RITS_submissiongreaterthan5percent.  B.` hp x (#` ` XBB.` hp x (#XBXXXXX XXXXX XX  XXXXѼ  hB.` hp x (#XB7.d.CalculatetheOptionAandOptionCLifeInsurancecoveragewithholdingsforthethreepay  "R periodsselectedbyusingtheresultsofpayrollsystemqueriesfromstep6.aorhavetheAPOpersonnelperformapayrollsystemquerythatsummarizesthenumberofemployees,byagegroup,whoelectedOptionsAandCduringthepayperiodsselected.Ѽ݌̌ XXXXXXXXXXXXXX  hB.` hp x (#XB B.` ` hp x (#XB P  i. ` MultiplythenumberofemployeesineachagegroupbytheappropriaterateforOption &4!" AorOptionC,inaccordancewiththeratesforagegroupsprovidedintheFEGLIDescriptionandCertificateHandbookforpayperiodsendingbefore4/24/99andtheFEGLIProgramBookletforpayperiodsbeginningonorafter4/24/99.Reportanydifferences(i.e.,grossratherthannet)greaterthan2percentforOptionAand/orOptionC. +&'  P X?+ ` hp x (#` X? X<(` ` hp x (#X< ii. ` ContributionsforOptionBcannotbetestedforreasonablenessbythesemethods  becauseofthenumberofvariablesinvolvedinelectingthisoption. B.` hp x (#` ` XBXXXXX XXXXX XX  XXXX>  >݌̌ ` ` XXXXXXXXXXXXXX  B.` hp x (#` ` XBXXXXX XXXXX XX  XXXX  INQUIRIES ݌   Ќ ` ` XXXXXXXXXXXXXX  B.` hp x (#` ` XBXXXXX XXXXX XX  XXXX  QuestionsontheapplicationoftheAUPsshouldbedirectedtoOPMsFinancialPolicyStaffat(202)   6060606,orviatheInternetat4_<   5        http://www.finance@opm.gov       6:Nsth42 4242 4212 12  7_. ~݌   Ќ ` ` XXXXXXXXXX   ] APPENDIXI2ILLUSTRATIVEINDEPENDENTACCOUNTANT'SREPORTONTHE  XXXXX XXXXX XX    XXXX    APPLICATIONOFAGREED-UPONPROCEDURES OԌ  Ќ  XXXXXXXX  TotheInspectorGeneral   U.S.OfficeofPersonnelManagement:Wehaveperformedtheproceduresdescribedbelow(orintheattachment),whichwereagreedtobytheInspectorGeneral,ChiefFinancialOfficer,andtheAssociateDirectorforRetirementandInsuranceoftheU.S.OfficeofPersonnelManagement(OPM),solelytoassistwithrespecttotheemployeewithholdingsandemployercontributionsreportedontheReportofWithholdingsandContributionsforHealthBenefits,LifeInsurance,andRetirementforthepayrollperiodsended[2222statedates2222]andSemiannualHeadcountReportasof[3232statedate3232].ThisengagementtoapplyagreeduponprocedureswasperformedinaccordancewiththestandardsestablishedbytheAmericanInstituteofCertifiedPublicAccountants.ThesufficiencyoftheproceduresissolelytheresponsibilityoftheInspectorGeneral,ChiefFinancialOfficer,andtheAssociateDirectorforRetirementandInsuranceofOPM.Consequently,wemakenorepresentationregardingthesufficiencyoftheproceduresdescribedbeloweitherforthepurposeforwhichthisreporthasbeenrequestedorforanyotherpurpose.Insertthefollowingunlesstheproceduresandfindingsareinanattachment. ? Theproceduresandtheassociatedfindingsareasfollows:   `  [Insertproceduresandfindings] 'p Wewerenotengagedto,anddidnot,performanaudit,theobjectiveofwhichwouldbetheexpressionofanopiniononthewithholdingsandcontributionsforHealthBenefits,LifeInsurance,andRetirement,andtheHeadcountReportofthe[4242nameofagency4242].Accordingly,wedonotexpresssuchanopinion.Hadweperformedadditionalprocedures,othermattersmighthavecometoourattentionthatwouldhavebeenreportedtoyou.ThisreportisintendedsolelyfortheuseoftheInspectorGeneral,ChiefFinancialOfficer,andtheAssociateDirectorforRetirementandInsuranceofOPMandshouldnotbeusedbythosewhohavenotagreedtotheproceduresandtakenresponsibilityforthesufficiencyoftheproceduresfortheirpurposes.[Signature] ((#$ [Date] )"$% cc:  ChiefFinancialOfficerofOPM *%& Ѐ  AssociateDirectorofRetirementandInsuranceofOPM#XXXX#