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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($ 3Q3E3333V333 {3vP&z @U  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    _XSXXXԀAnillustrativeauditor'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$0  0` (#(#0 ` (#` (#0 (# (#0h(#(#2#(   )3  0h(#h(#<:Default Para q [$Ӏ  1    _XSXXXԀThislist was is includedinOMBBulletin9701 .AtthetimeofissuanceofthisBulletin,OMBis  consideringmodifyingthelistofstatementsthatcomprisethePrincipalStatements.Auditorsshallrefertothemostcurrentversionof ( OMB'sFormandContentBulletin Ԁtodetermine ), which statementsshall  betreatedas prescribesthe PrincipalStatements for th efiscalyearforwhichthefinancialstatements  were atshallbe prepared.(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  % [$Ӏ  2    _ ThefollowingXSXXX Federalfinancialmanagementsystemsrequirements tobetesteddonotincludethose  containedintheFrameworkforFederalFinancialManagementSystemsandTravelSystem  Requirements.Thesesystemsrequirementsdonotaffectanagencys donotrequiretestingastheydo  notaffectthereportingentitys abilitytopreparefinancialstatementsinaccordancewithFederal  accountingstandards :  L 8` L 3   3 283  0    requirementscontainedintheFrameworkforFederalFinancialManagementSystems;and3 8݌ (#(# Ќ   3   3283  0    requirementsforsystemsthatproduceinformationwhichisnotmaterialtothefinancial   statements,e . g.,travelsystems. (hH  Z 6Times New Roman Regulari., ii., iii.,Level 1Level 2Level 3Level 4Level 56#in4Quick i.   .0 ((3/g$ !   d  + [$Ӏ  4    _XSXXXԀAnillustrativeauditorsreportoninternalcontrolisprovidedinAppendixF.Useofthisguidance  isoptional.#XSXXXS^#(  Z6Times New Roman Regular  [$Ӏ  8    _XSXXXԀInverylimitedcircumstances,reportableconditionsthatsignificantlyimpairanentitysabilityto  meetFederalfinancialmanagementsystemsrequirements(suchasreportableconditionsrelatedtocomputersecurityoverfinancialinformationcoveredbyOMBCircularA130,Appendix3)mayrepresentconditionsreportableunderFFMIA.#XSXXXS^##y  <<= 8C J [$Ӏ  9    _XSXXX#XSXXXS^#XSXXXSԀInverylimitedcircumstances,reportableconditionsthatsignificantlyimpairanentitysabilityto  meetFederalfinancialmanagementsystemsrequirements(suchasreportableconditionsrelatedtocomputersecurityoverfinancialinformationcoveredbyOMBCircularA130,Appendix3)mayrepresentconditionsreportableunderFFMIA.#XSXXXS# L !  _    10  ڀXSXXXThisillustrativemanagementrepresentationlettermustbecustomizedtothesituationofthe  auditedentity.Representationsnumber113relatetotheopiniononthefinancialstatements;numbers1416relatetomanagement'sassertionabouttheeffectivenessofinternalcontrol;numbers1719relatetomanagement'sassertionaboutthefinancialmanagementsystems'substantialcompliancewithFederalfinancialmanagementsystemrequirements;andnumbers2022relatetocompliancewithlawsandregulations.AUSection333,"ManagementRepresentations,"CodificationofStatementson   AuditingStandards,providesexamplesofadditionalrepresentationsthatmaybeappropriate.q&c P [$Ӏ  11    _ԀXSXXXIftheobjectiveistoexpressanopinionontheagencysinternalcontrol s overfinancialreporting,  theauditorshouldfollow  StatementonStandardsforAttestationEngagementsNo.2  , Reportingonan  EntitysInternalControlOverFinancialReporting,issuedbytheAmericanInstituteofCertifiedPublicAccountants.#XSXXXS`#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    _ԀXSXXXIftheobjectiveistoexpressanopinionontheagencyscompliancewithlawsandregulations,the  auditorshouldfollow  StatementonStandardsforAttestationEngagementsNo.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  H [$Ӏ  12    _ԀXSXXXFFMIAdoesnotimposeanycompliancerequirements;rather,itrequiresreportingonwhetheran  agency'sfinancialmanagementsystemssubstantiallycomplywiththefinancialmanagementsystemsrequirementscontainedingovernmentwidepolicies,e.g.,OMBCircularA127,"FinancialManagementSystems;"  StatementsofFederalFinancialAccountingStandards  ;andtheUnitedStates  GovernmentStandardGeneralLedgerpublishedbytheDepartmentoftheTreasury.FFMIAimposesadditionalreportingrequirementswhentestsdiscloseinstancesinwhichagencysystemsdonotsubstantiallycomplywiththeforegoingrequirements.#XSXXXS`# d(5EGMSY_ekqAutoList221.1.1.1.1.1.1.1.&$ 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.  [$Ӏ  14    _XSXXXManagementandtheauditorshouldagreeonamaterialityleveltouseintheletterofinquiry.A  guidelineforsettingthematerialitylevelforthelegalletteris0.5percentofplanningmateriality,asdefinedinthePCIEPolicyManual:FederalFinancialStatementAuditManualandGAOsFinancial  AuditManual.#XSXXXS_#(EGMSY_ekqAutoList331.1.1.1.1.1.1.1.  '  _?(XX  OMBBulletin99__0 @` AuditsofAgencyFinancialStatements󀀀 DRAFT07/22/99#XSX?(.#   [$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.<6X9`(Courier    L [$Ӏ  1    _Asrequiredbyparagraph8.b.ofOMBBulletinNo.99__,theCFOshallprepareandtheauditorshallreviewasummaryofthe  informationcontainedinthelegalcounselsresponseusingthisformat.AnelectronicversionofthisformisavailableinMircosoftExcelatOMBs_website_ԀontheInternetathttp://www.whitehouse.gov/3WH/EOP/33omb33OMB/(under333biu333Bulletins)3. TABLE B(EGMSY_ekqAutoList41a.a.a.a.a.a.a.a. !  _WXSXXX    o[Xr` hp x (#%'0*,.8135@8:<H?AXo8+ +XXdd8TRX3'X3' Letter3' Letter3'T,P.+ (#(#K(# [OMBletterhead]   OMBBULLETIN NO.9808 99__    TOTHEHEADSANDINSPECTORSGENERALOFEXECUTIVEDEPARTMENTSANDESTABLISHMENTSSUBJECT:AuditRequirementsforFederalFinancialStatements1.Purpose.ThisBulletin,whichincludesanAttachmentandAppendicesAthrough H I ,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 yearsendingonorafterSeptember30,199 8 9 .Auditreportsshallbesubmittedtotheagencyheadin d sufficienttimetoenabletheagencyheadtomeettheduedateforsubmittingtheauditedfinancialstatementunderGMRA,nolaterthanMarch1followingtheendofthefiscalyearforwhichthefinancialstatements were are prepared.  "R 4.Inquiries.FurtherinformationconcerningthisBulletinmaybeobtainedbycontactingtheOfficeof #F ManagementandBudget(OMB),OfficeofFederalFinancialManagement,Washington,DC20503,telephone(202)395-3993.5.Copies.IndividualcopiesofthisBulletinmaybeobtainedfromthe ExecutiveOfficeofthe '."# President,PublicationsOfficeat(202)3957332,andfromthe OMBhomepageontheInternetat ((#$ _  http://www.whitehouse.gov/WH/EOP/omb  . 33 _     p      x  )"$%  JacobJ.Lew  r  `     h      p  Director  ,'(  Attachment#XSXXXSN#  - () ,P ,  ,  **/ddd Xdd Xdd X(#(#, dd ,* dd ,X dd +    XSXXXS  L7XXS SignificantRevisionstoOMBBulletinNo.98-08, d Q4Xr` hp x (#Xr` XQ"AuditRequirementsforFederalFinancialStatements,asamended #XSXL7e##XSXXXS:# * ;  *Y  OMB9808,asamended 8 LocationReference ' 2  '  OMB99__ 8 TechnicalChange ' 2  'd  PurposeofChange  2"  XXSParagraph6.a.(1)(c)  w   Deletedsection.  w   StatementofFederalFinancial w   AccountingStandards(SFFAS)No.14, AmendmentstoDeferred  R  MaintenanceReporting,whichiseffectiveforperiodsbeginningafterSeptember30,1998,changedthelocationofdeferredmaintenanceinformationfromanotetotheprincipalstatementstorequiredsupplementalinformation.    Paragraph6.a.(2)  . NochangeforFY1999audits.Addedsentencestodescribefuturerequirements. w ForFY2000andbeyond,OMBwillrequireexaminationlevelassuranceforstewardshipPP&EusingtheAICPAsattestationstandards.ThisrequirementiscontingentonmodificationstotheaccountingstandardsrelatingtoreportingtheconditionofstewardshipPP&E.<Z Xx:xj(XXr` X<  ?" Paragraph6.a.(3)  S# NochangeforFY1999audits.Addedsentenceto_descibe_Ԁfuturerequirements.  .& ForFY2000andbeyond,willrequireexaminationlevelassuranceforstewardshipinvestmentsusingtheAICPAsattestationstandards..  * Paragraph6.a.(5)   T+ NochangeforFY1999audits.Addedsentencetodescribefuturerequirements.  !. ToadviseauditorsofOMBsintenttorevisetheauditrequirementsforL 8`3Lsocialinsuranceinformationforsubsequentperiodsinwhichtheapplicableaccountingstandardsbecomeeffective.@Xr` XZ Xx:xj(X@ #A4 Paragraph6.e.  U%5 UpdatedlistofJFMIPfunctionalrequirementsforFederalfinancialsystems.  &0!8 Updatedforfunctionalrequirementsreissuedin1999.ClarifiedwhenauditorsshouldtestforcompliancewithJFMIPrequirementsissuedduringthecurrentyear.  y("= Paragraph6._i._  )$> RelocateddiscussionoflegalletterstoParagraph8.  *$@ Providesadditionalguidanceonthepreparationoflegalletters.  *$B AppendixC  +E&C Addedspecificprovisionsofgenerallawstobetested.  ,'E ToclarifythatallprovisionsofthegenerallawslistedinAppendixCneednotbetested.  -'H .+ . .  AppendixF&G  d RevisedillustrativeauditorsreportstoreflectrequirementsofStatementsonAuditingStandards(SAS)#87, RestrictingtheUseofanAuditors_Report._  ?  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% XSX   OMBBulletinNo. 9808 99__  h    0    (#(#   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 302h  b  .3  0` r(#r(#  CodificationofStatementsonAuditingStandardsisacodificationofStatementson   AuditingStandardsissuedbytheAmericanInstituteofCertifiedPublicAccountants(AICPA).TheAICPA'sstandardsoffieldworkandreportingareincorporatedintheirentiretyinGovernmentAuditingStandardsbyreference.300݌{ ` (#` (# Ќ  L h((L 3    r 332h  c  .3  0 `   "Federalaccountingstandards"arethosestandardsincludedinthehierarchyofFederal o  accountingstandardsdescribedinparagraph5ofthisBulletin.3393݌ ` (#` (# Ќ  L Uh((L 3    r 342Uh  d  .3  0 `   "Federalfinancialmanagementsystemsrequirements"arethoserequirementsdescribed ] inOMBCircularA127, FinancialManagementSystems.344݌ ` (#` (# Ќ   r &  e.0 ` GovernmentAuditingStandardsarethosestandardsissuedbytheComptrollerGeneral K oftheUnitedStates.'KB6 ` (#` (# 0 r f.0` r(#r(#"Independentauditor"meansanauditorwhomeetstheindependencestandards 9 specifiedintheGovernmentAuditingStandards.3|` (#` (# 0 r g.0` r(#r(#"Internalcontrol,"asitrelatestothePrincipalStatementsandRequiredSupplementary 'p 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@ $ $!X (# (# 0 r 0` r(#r(#&  (1)0 ` (#` (#Reliabilityoffinancialreportingtransactionsareproperlyrecorded,  "R processed,andsummarizedtopermitthepreparationofthePrincipalStatementsandRequiredSupplementaryStewardshipInformationinaccordancewithFederalaccountingstandards,andthesafeguardingofassetsagainstlossfromunauthorizedacquisition,use,ordisposition;' "r:  (# (# 0 r 0` r(#r(# ` (#` (# 0 r 0` r(#r(#(2)0 ` (#` (#Compliancewithapplicablelawsandregulationstransactionsareexecutedin '."# accordancewith:(a)lawsgoverningtheuseofbudgetauthorityandotherlawsandregulationsthatcouldhaveadirectandmaterialeffectonthePrincipal StatementsorRequiredSupplementaryStewardshipInformation,and(b)any *%& otherlaws,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 u  Standards.o ` (#` (# in  0 r inAi  .0` r(#r(#  "Materialweaknessesininternalcontrol"arereportableconditionsinwhichthedesign c  oroperationoftheinternalcontroldoesnotreducetoarelativelylowleveltheriskthaterrors,fraudornoncomplianceinamountsthatwouldbematerialinrelationtothePrincipalStatementsorRequiredSupplementaryStewardshipInformationbeingauditedormaterialtoaperformancemeasureoraggregationofrelatedperformancemeasuresmayoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.Theauditorshallusethisdefinitionofmaterialweaknessestoreportonanentity'sinternalcontrolinaccordancewiththerequirementsofGovernmentAuditingStandardsandthisBulletinratherthan 3| thedefinitionofmaterialweaknessesusedbymanagementtoprepareanagency'sFederalManagers'FinancialIntegrityAct(FMFIA)of1982report.inAAی ` (#` (# Ќ  ݀0 r j.0` r(#r(#"OverviewoftheReportingEntity"meansabriefnarrativeoverview,preparedby d management,alsocalledManagement'sDiscussionandAnalysis(MD&A),whichdescribesthereportingentityanditsmission,activities,programandfinancialresults,andfinancialcondition.OMBsFormandContentBulletinfurtherdefinesthe"OverviewoftheReportingEntity." ` (#` (#  `n  0 r `n,Hk  .0` r(#r(#  "Reportableconditions"arematterscomingtotheauditor'sattentionthat,inthe $@  auditor'sjudgment,shouldbecommunicatedbecausetheyrepresentsignificantdeficienciesinthedesignoroperationofinternalcontrol,thatcouldadverselyaffecttheorganization'sabilitytomeettheobjectivesinparagraph2.g.ofthisBulletin.`n,HSH ی ` (#` (# Ќ  0 r l.0` r(#r(#"ReportingEntity"meansoneoftheexecutivedepartmentsandagenciesand )"$% componentsofsuchdepartmentsandagencieslistedinAppendicesAandB,oranagency,bureau,orotherorganizationthatrepresentsameaningfulunitforprogram +&' management,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 i  departmentsandagencieslistedinAppendicesAandB,theauditsoffinancialstatementsshallbeperformedbythe IG InspectorGeneral(IG) oftheexecutive ] departmentoragencyorbyanindependentauditorasdeterminedbytheIG. ` (#` (# 0 r b.0` r(#r(#GMRAprovidesthat,inlieuofanauditotherwiserequired,theComptrollerGeneralof K theUnitedStatesmay,athisorherdiscretionandfollowingconsultationwiththeIG,performtheaudit. ` (#` (# 5.ACCOUNTINGPRINCIPLESANDSTANDARDS.TheFederalAccountingStandardsAdvisoryBoard(FASAB)wasestablishedbytheSecretaryoftheTreasury,theDirectorofOMB,andtheComptrollerGeneral(thePrincipals)torecommendFederalaccountingstandardstothePrincipals.SpecificstandardsagreeduponbythePrincipalsareissuedbytheDirectorofOMBandtheComptrollerGeneralasStatementsofFederalFinancialAccountingStandards(SFFASs).FederalagenciesarerequiredtofollowthesestandardsinthepreparationoffinancialstatementspursuanttoGMRA.RecognizingthattheSFFASsmaynotexplicitlyaddressalltransactionsofdepartmentsandagencies,thePrincipalsadoptedthefollowinghierarchyofFederalaccountingstandards ,which  "R constitutesgenerallyacceptedaccountingprinciplesfortheFederalGovernment : #L 0 r a.0` r(#r(#Individualstandards(SFFASs)agreedtobytheDirectorofOMB,theComptroller $@  General,andtheSecretaryoftheTreasuryandpublishedbyOMBandtheGeneralAccountingOffice. ` (#` (# 0 r b.0` r(#r(#InterpretationsrelatedtotheSFFASsissuedbyOMBinaccordancewiththe ((#$ 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 u  Information,theauditorshall: ` (#` (# 0 r 0` r(#r(#(1)0 ` (#` (#'uZDeterminewhetherthePrincipalStatementspresentfairly,inallmaterial ^  respects,inconformitywithFederalaccountingstandards,theassets,liabilities,andnetposition;netcosts;changesinnetposition;budgetaryresources;reconciliationofnetcoststobudgetaryobligations;and,ifapplicable,custodialactivity.  (# (#  0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#Ifconsolidatingstatementsarepresented,theauditorshallconsiderthe U consolidatingstatementssupplementalinformation&  andreportinaccordancewithparagraph7.c.(1)(a)ofthisBulletin,unlesstheauditor'sobjectiveistoexpressanopinionontheconsolidatingstatements.'5^ (#(# 0 r 0` r(#r(#0 ` (#` (#(b)0 (# (#IftheauditorisunabletodeterminewhetherthePrincipalStatements  arefairlypresentedbecause,forexample,oftheauditor'sinabilitytoobtainsufficientcompetentevidentialmatterduetoinadequateaccountingrecords,theauditorshall,totheextentpracticable,obtainsufficientevidenceaboutclosingbalancestoenabletheauditortoopineonthesubsequentyear'sfinancialstatements. (#(#  0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#Whendeferredmaintenanceinformationispresentedinthenotestothe #! PrincipalStatements,theauditorisnotexpectedtoauditsuchinformationand,inthiscircumstance,thedisclosuresmaybeidentifiedas"unaudited"or"notcoveredbytheauditor'sreport."Theauditorshouldreadthedeferredmaintenanceinformationandconsiderwhethersuchinformation,orthemannerofitspresentation,ismateriallyinconsistentwithinformation,orthemannerofitspresentation,appearinginthePrincipalStatements. (#(#   *$)  0 r 0` r(#r(#(2)0 ` (#` (#Considerstewardshipproperty,plant,andequipment(PP&E)required   supplementaryinformationandperformtheproceduresdescribedinAUSection558,"RequiredSupplementaryInformation,"oftheCodificationof w StatementsonAuditingStandards. 򀀀Pendingmodificationsoftheapplicable W accountingstandardsthatrequirereportingontheconditionofstewardshipPP&E,forfiscalyear2000andbeyond,OMBwillrequireexaminationlevelassuranceforstewardshipPP&EusingtheAICPAsAttestationStandards.  @ (# (# 0 r 0` r(#r(#(3)0 ` (#` (#Considerstewardshipinvestments(includingnonFederalphysicalproperty   (suchashighways),humancapital(expendituresfortrainingandeducation),andresearchanddevelopment)requiredsupplementaryinformationandperformtheproceduresdescribedinAUSection558,"RequiredSupplementaryInformation,"oftheCodificationofStatementsonAuditing 7  Standards. Forfiscalyear2000andbeyond,OMBwillrequireexamination `  levelassuranceforstewardshipinvestmentsusingtheAICPAsAttestationStandards.   (# (# L   L 3   0 r 0` r(#r(#3pi2(  4  )3  0 ` (#` (#  Determinewhetherriskassumedinformation(includingprojectionsofpension,  deposit,andotherinsuranceprogramsrequiredbySFFASNo.5,"AccountingforLiabilitiesoftheFederalGovernment")ispresentedfairlyinallmaterialrespects,inaccordancewiththerequirementsofSFFASNo.5,andanysubsequentrevisions.Inassessingthereasonablenessofriskassumedinformation,theauditorshallconsidertheneedtofollowtheguidanceinAuditing(AU)Section336, UsingtheWorkofaSpecialist,oftheCodificationofStatementsonAuditingStandards.3pii݌ (# (# Ќ  0 r 0` r(#r(#_ 33 _ ` (#` (# fZ    um0 r 0` r(#r(#2(  5  )3  0 ` (#` (#  Considersocialinsuranceinformation,whenpresented,otheraccompanying w information.SeeAUSection551,CodificationofStatementsonAuditing q Standards. Ԁ Forfutureperiods,OMBwillmodifytheauditrequirementsfor k socialinsuranceinformationwhentheapplicableaccountingstandardsbecomeeffective. umm݌_  (# (# Ќ   r L M/  L 3   0 r 3p2M/  b  .3  0` r(#r(#  Withrespecttotheinternalcontrolobjectivesdescribedinparagraphs2.g.(1)and(2) S"  ofthisBulletinrelatingtothePrincipalStatementsandRequiredSupplementaryStewardshipInformation,theauditorshallobtainanunderstandingofthecomponentsofinternalcontrol(seeAUSection319.07,CodificationofStatementsonAuditing A%# Standards)andassessthelevelofcontrolriskrelevanttotheassertionsembodiedin ;& $ theclassesoftransactions,accountbalances,anddisclosurecomponentsofthefinancialstatements.SuchcontrolsincluderelevantEDPgeneralandapplicationcontrols andcontrolsrelatingtointraagencyandintragovernmentaltransactionsand ))r#' balances .Forthoseinternalcontrolsthathavebeenproperlydesignedandplacedin #*l$( operation,theauditorshallperformsufficientteststosupportalowassessedlevelofcontrolrisk.SeeAUSection319.45.63oftheCodificationofStatementsonAuditing ,`&* Standards.Thoseinternalcontrolsthathavenotbeenproperlydesignedorplacedin  operationandthoseinternalcontrolsthatarefoundtobeineffectiveshallbereportedinaccordancewithparagraph7ofthisBulletin.3pp݌ ` (#` (# Ќ      |v0 r 0` r(#r(#2M/(  1  )3  0 ` (#` (#  Inobtaininganunderstandingofthecomponentsofinternalcontrol,particularly   theriskassessmentcomponent,andassessingcontrolrisk,theauditorshallobtainanunderstandingoftheprocessbywhichtheagencyidentifiesandevaluatesweaknessesrequiredtobereportedunderFMFIAandrelatedagencyimplementingprocedures.|vv݌  (# (# Ќ      x0 r 0` r(#r(#2M/(  2  )3  0 ` (#` (#  Theauditorshallcomparematerialweaknessesdisclosedduringtheauditwith {  thosematerialweaknessesreportedintheagency'sFMFIAreportthatrelatetothefinancialstatementsoftheentityunderauditanddocumentmaterialweaknessesdisclosedbyauditthatwerenotreportedintheagencysFMFIAreport.Theauditorshouldconsiderwhetherthefailuretodetectandreportmaterialweaknessesconstitutesareportableconditionormaterialweaknessintheentitysinternalcontrol.xx݌  (# (# Ќ  0 r c.0` r(#r(#Withrespecttotheinternalcontrolobjectivedescribedinparagraph2.g.(3)ofthis K Bulletinrelatingtoperformancemeasures,theauditorshallobtainanunderstandingofthecomponentsofinternalcontrolrelatingtotheexistenceandcompletenessassertionsrelevanttotheperformancemeasuresincludedintheOverviewoftheReportingEntity.Thoseinternalcontrolsthathavenotbeenproperlydesignedandplacedinoperationshallbereportedinaccordancewithparagraph7ofthisBulletin.Theobjectiveofgaininganunderstandingofinternalcontrolinthissubparagraphistoreportdeficienciesinthedesignofinternalcontrol,ratherthantoplanthefinancialstatementaudit. For !j futureperiods,OMBisconsideringexpandingauditcoveragetoincludegaininganunderstandingofcomponentsofinternalcontrolrelatingtoeachofthefiveassertions(existenceoroccurrence;completeness;rightsandobligations;valuationorallocation;andpresentationanddisclosure)relevanttotheperformancemeasuresincludedintheOverviewoftheReportingEntity. #L` (#` (# 0 r d.0` r(#r(#Withrespecttocompliancewithapplicablelawsandregulations,theauditorshall $@  performtestsofcompliancewithlawsandregulationsthatcouldhaveadirectandmaterialeffectonthePrincipalStatementsandRequiredSupplementaryStewardshipInformation,andanyotherlaws,regulations,andgovernmentwidepoliciesidentifiedbyOMBinAppendixCofthisBulletin. ` (#` (# L P  L0 r e.0` r(#r(#WithrespecttocompliancewithgovernmentwidepoliciescontainedinOMBCircular *%& A127,usingtheguidanceinAppendixD,theauditorshallperformtestsofcompliance +&' withFederalfinancialmanagementsystemsrequirements   2      ,applicableFederal  accountingstandards,andtheSGLatthetransactionlevel.ThisprovisiononlyappliestoauditsofentitieslistedinAppendicesAandB.CircularA127requirestheagencytoestablishandmaintainasingle,integratedfinancialmanagementsystemthatcomplieswithcharacteristicsstatedtherein,thatincludemaintainingaccountingdatatopermitreportinginaccordancewithFederalaccountingstandards,applicationoftheSGLatthetransactionlevel,andincorporationofthefunctionalrequirementsissuedbytheJointFinancialManagementImprovementProgram(JFMIP)initsseriesFederalFinancial   ManagementSystemsRequirements(FFMSR).AsofthedateofthisBulletin,the   issuancesinthisseriesare: ` (#` (#   r  `      0 r 0` r(#r(#0 ` (#` (#FrameworkforFederalFinancialManagementSystems,FFMSR0,January u  1995,o  (# (# 0 r 0` r(#r(#0 ` (#` (#CoreFinancialSystemRequirements, FFMSR1 JFMIPSR994 , i   September February 199 5 9 , * c  (# (# 0 r 0` r(#r(#0 ` (#` (# HumanResourcesand PersonnelPayrollSystemRequirements, FFMSR ] 2 JFMIPSR995 , May April 199 0 9 , * W (# (# 0 r 0` r(#r(#0 ` (#` (#TravelSystemRequirements,FFMSR3,January1991,Q (# (# 0 r 0` r(#r(#0 ` (#` (#Seized/ForfeitedAssetSystemRequirements,FFMSR4,March1993,K (# (# 0 r 0` r(#r(#0 ` (#` (#DirectLoanSystemRequirements, FFMSR5 JFMIPSR998 , E  December June 199 3, 9* ? (# (# 0 r 0` r(#r(#0 ` (#` (#GuaranteedLoanSystemRequirements,FFMSR6,December1993,9 (# (# 0 r 0` r(#r(#0 ` (#` (#InventorySystemRequirements,FFMSR7,June1995,and3| (# (# 0 r 0` r(#r(#0 ` (#` (#ManagerialCostAccounting,FFMSR8,February1998.-v (# (# L %Ͷh L  r  ` *denotesrequirementsthathavebeenupdatedandreissuedduringFY1999'`    3       !j Ї 0 r f.0` r(#r(#WithrespecttoinformationaccompanyingthePrincipalStatements,theauditorshall  assesswhethertheinformationandmannerofitspresentationintheOverviewoftheReportingEntity(orMD&A)andanyotheraccompanyinginformationismateriallyinconsistentwiththeinformationinthePrincipalStatements. ` (#` (#   r 0 r g.0` r(#r(#Withrespecttorequiredsupplementaryinformationreferredtoinparagraph2.a.(4)of   thisBulletin,theauditorshallperformtheproceduresdescribedinAUSection558,CodificationofStatementsonAuditingStandards. ` (#` (# 0 r h.0` r(#r(#Theauditorshallobtainwrittenrepresentationfrommanagementaspartofanaudit   conductedinaccordancewiththisBulletin.SeeAUSection333,"ManagementRepresentations,"oftheCodificationofStatementsonAuditingStandards.An u  illustrativemanagementrepresentationletterisprovidedinAppendixE. ` (#` (#  0 r i.0` r(#r(#Theauditorshallrequestentitymanagementtosendaletterofinquirytothoselawyers c  withwhommanagementconsultedconcerninglitigation,claims,andassessments.SeeAUSection337,"InquiryofaClient'sLawyerConcerningLitigation,Claims,andAssessments,"oftheCodificationofStatementsonAuditingStandards.Q` (#` (# 0 r 0` r(#r(#(1)0 ` (#` (#TheletterofinquiryshallbesenttolegalcounselnolaterthanOctober15and E shallincludearequestforaninterimresponsetobeeffectivenoearlierthanDecember1,exceptasnotedinparagraph6.i.(3),andsubmittedtotheauditorbyDecember15followingtheendofthefiscalyearforwhichthefinancialstatementsareprepared.Inaddition,theletterofinquiryshallincludearequestforanupdatedresponsetobeeffectivenoearlierthanFebruary15andsubmittedtotheauditorbyMarch1followingtheendofthefiscalyearforwhichthefinancialstatementsareprepared.  (# (# 0 r 0` r(#r(#(2)0 ` (#` (#TheInspectorGeneralshallsubmittoOMB(DeputyController,Officeof !X FederalFinancialManagement),DepartmentoftheTreasury(Commissioner,FinancialManagementService),andtheGeneralAccountingOffice(AssistantComptrollerGeneral,AccountingandInformationManagementDivision)copiesoftheinterimandupdatedlegalresponsesdescribedinparagraph6.i.(1)byDecember31andMarch10,respectively.  (# (# 0 r 0` r(#r(#(3)0 ` (#` (#IftheauditiscompletedpriortoDecember1,thelegalresponseprovidedin '."# connectionwiththeauditmaybeusedinplaceoftheinterimresponsedescribedinparagraph6.i.(1).Inaddition,anupdatedlegalresponsetobeeffectivenoearlierthanFebruary15shallbeprovided.Theselegalresponsesshallbesubmittedinaccordancewithparagraph6.i.(2).+&' (# (# Ї 7.AUDITREPORT.  0 r a.0` r(#r(#Anauditreport,orseparateauditreports,onthePrincipalStatements,internalcontrol,  andcomplianceshallbepreparedatthecompletionoftheaudit.Theauditreport(s)shallbesubmittedtotheagencyheadinsufficienttimetoenabletheagencyheadtomeettheduedateforsubmittingtheauditedfinancialstatementunderGMRA,nolaterthanMarch1followingtheendofthefiscalyearforwhichthefinancialstatementswereprepared.Theauditresultsshallbediscussedwithmanagementassoonaspracticablebut,inanycase,priortoissuanceoftheauditreport. ԀIGsareencouragedtoworkwith   CFOstoacceleratethepreparationoffinancialstatements,andtoacceleratethecompletionofaudits. { ` (#` (# 0 r b.0` r(#r(#Theauditreport(s)shallstatethattheauditwasmadeinaccordancewithGovernment o  AuditingStandardsandtheprovisionsofthisBulletin.i ` (#` (# 0 r c.0` r(#r(#Theauditreport(s)shallinclude:]` (#` (# 0 r 0` r(#r(#(1)0 ` (#` (#Anopinionastowhetherthereportingentity'sPrincipalStatementsarefairly Q presentedinallmaterialrespectsinconformitywithFederalaccountingstandards.SeeAUSection623.05oftheCodificationofStatementson E AuditingStandards.? (# (# 0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#Withrespecttoreportingonotheraccompanyinginformation,which 3| includestheinformationreferredtoinparagraphs2.a.(1),2.a.(5),and6.a.(5)ofthisBulletin,theauditorshallfollowAUSection551,CodificationofStatementsonAuditingStandards.!j(#(# 0 r 0` r(#r(#0 ` (#` (#(b)0 (# (#WhenstewardshipPP&Eandstewardshipinvestmentsreferredtoin  ^ paragraphs6.a.(2)and(3),respectively,andrequiredsupplementaryinformationreferredtoinparagraph2.a.(4)ofthisBulletinarepresented,theauditorshallfollowAUSection551.15,Codificationof #L StatementsonAuditingStandards.#F(#(# 0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#IfthePrincipalStatementsarenotpreparedinaccordancewithFederal %: ! accountingstandards,theauditorshallreportthedeparture(s)fromthosestandardsand,ifpracticable,theeffectsofthedeparture(s)onassets,liabilities,andnetposition;netcosts;changesinnetposition;budgetaryresources;reconciliationofnetcoststobudgetaryobligations;and,ifapplicable,custodialactivityeitherdirectlyintheauditor'sreportonthePrincipalStatementsorbyreferenceinthe +&' auditor'sreporttoanexplanatorynoteintheNotestoPrincipalStatementspreparedbymanagement. (#(# 0 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 o  tocomplywithSFFASs,theauditorsreportonthePrincipalStatementsshallincludeanexplanatoryparagraphidentifyingthenatureofthechangeandreferringthereadertothenotetothePrincipalStatementsthatdiscussesthechangeindetail. (#(# 0 r 0` r(#r(#(2)0 ` (#` (#Areportoninternalcontrol   4      ,whichshallataminimum:K (# (# 0 r 0` r(#r(#0 ` (#` (#(a)0 (# (#Statethat,withrespecttointernalcontroloverfinancialreportingas ? describedinparagraphs2.g.(1)and(2)ofthisBulletin,theauditorobtainedanunderstandingofthedesignofinternalcontrols,determinedwhethertheyhavebeenplacedinoperation,assessedcontrolrisk,and&  performedtestsofthereportingentity'sinternalcontrols.'  (#(#  0 r 0` r(#r(#0 ` (#` (#(b)0 (# (#Statethat,withrespecttotheinternalcontrolobjectivedescribedin d paragraph2.g.(3)ofthisBulletin,andrelatingtotheperformancemeasuresincludedintheOverviewoftheReportingEntity,theauditorobtainedanunderstandingofthedesignofinternalcontrolsrelatingtotheexistenceandcompletenessassertionsanddeterminedwhethertheyhavebeenplacedinoperation. (#(# 0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#Statewhetherornotthetestsperformedprovidedsufficientevidenceto %: ! supportanopiniononinternalcontrols. (#(#  '."# 0 r 0` r(#r(#0 ` (#` (#(d)0 (# (#Describereportableconditionsandmaterialweaknessesidentified  duringtheaudit. (#(# 0 r 0` r(#r(#0 ` (#` (#(e)0 (# (#Identifythosematerialweaknessesdisclosedbyauditthatwerenot  reportedinthereportingentitysFMFIAreport. (#(# _ 33 _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 ` (#` (#32E(  c  )3  0 (# (#  Withrespecttolawsandregulationstestedforwhichtheaudit ] disclosednoreportableinstancesonnoncompliance,thereportshallstatethattheauditdisclosednoreportableinstancesofnoncompliancewiththeselawsandregulations.Alistingoftheselawsandregulationsisnotrequired.3X݌ (#(# Ќ  0 r 0` r(#r(#0 ` (#` (#(c)0 (# (#Forcompliancewithgovernmentwidepolicyrequirementscontainedin 9 OMBCircularA127andreferredtoinFFMIA,theauditorshallreportwhetherthereportingentitysfinancialmanagementsystemssubstantiallycomplywithFederalfinancialmanagementsystemsrequirements,Federalaccountingstandards,andtheSGLatthetransactionlevel.Tomeetthisrequirement,theauditorsreportshallstatetheauditorsreportingrequirementandthattheauditorperformedtestsofcomplianceinaccordancewiththerequirementsofthisBulletin(seeAppendixD).TheauditreportshallreflectinstancesinwhichthereportingentityssystemsdidnotsubstantiallycomplywiththethreeFederalfinancialmanagementsystemsrequirements,orstatethattheauditdisclosednoinstancesinwhichthereportingentityssystemsdidnotsubstantiallycomplywiththethreerequirements.Inaddition,as requiredbyFFMIA,wheretestsdisclosedthatthereportingentitys &4!" systemsdidnotsubstantiallycomplywiththethreerequirements,theauditorsreportoncomplianceshall: (#(#      80 r 0` r(#r(#0 ` (#` (#0 (# (#2E(  i  )3  0h(#(#  Identifytheentityororganizationresponsibleforthefinancial  managementsystemsthatwerefoundnottocomplywiththerequirements.8c݌ h(#h(# Ќ      0 r 0` r(#r(#0 ` (#` (#0 (# (#2E(  ii  )3  0h(#(#  Includeallfactspertainingtothenoncompliance,includingthe   natureandextentofthenoncompliance,theprimaryreasonorcauseofthenoncompliance,andanyrelevantcommentsfromreportingentitymanagementoremployeesresponsibleforthenoncompliance.݌ h(#h(# Ќ  0 r 0` r(#r(#0 ` (#` (#0 (# (#(iii)0h(#(#Providerecommendedremedialactionsandthetimeframesto i  implementsuchactions. h(#h(# L E( L 3   0 r 0` r(#r(#0 ` (#` (#3]2E(  d  )3  0 (# (#  Withrespecttotheobjectivesoftestsofcompliancegenerally,the W auditorsreportoncomplianceshallstatewhetherornotprovidinganopiniononcompliancewasanobjectiveoftheauditandwhetherornotthetestsperformedprovidedsufficientevidencetosupportanopinion.3]݌ (#(# Ќ  0 r d.0` r(#r(#Inpreparingthereportsinparagraph7.c.,theauditorshallreportthestatusofknown 9 butuncorrectedmaterialfindingsandrecommendationsfrompriorauditsthataffectthecurrentauditobjectives.SeeChapter4,paragraphs4.7,4.10, and 4.11of -v GovernmentAuditingStandards.'p` (#` (# 0 r e.0` r(#r(#Thereportingentityshallprovidecommentsontheauditor'sfindingsand d recommendationsincludedintheauditreport,includingcorrectiveactionstakenorplannedandcommentsonthestatusofcorrectiveactionstakenonpriorfindings.Totheextentpractical,thesecommentsshallbeincludedintheauditreportsoninternalcontrolorreportoncompliance.Ifcorrectiveactionsarenotnecessary,anexplanatorystatementshallbeincludedintheapplicableauditreport. ` (#` (# 0 r f.0` r(#r(#Copiesoftheauditreportshallbedistributedtotheheadoftheexecutivedepartment %: ! oragencyandsubsequentlyincludedintheCFOsannualreportortheagencysAccountabilityReport. ` (#` (#   r 8.LEGALLETTERS.Theauditorshallrequestentitymanagementtosendaletterofinquirytothose lawyerswithwhommanagementconsultedconcerninglitigation,claims,andassessments.SeeAU *%& Section337,"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 i  containedinthelegalcounselsresponse.(SeeAppendixH3forformattobeusedtocompilelegalrepresentationletterdataforfinancialreportingpurposes.) ` (#` (# 0 r c.0` r(#r(#TheIGshallsubmittoOMB(DeputyController,OfficeofFederalFinancial Q Management),DepartmentoftheTreasury(Commissioner,FinancialManagementService),andtheGeneralAccountingOffice(AssistantComptrollerGeneral,AccountingandInformationManagementDivision)copiesoftheinterimandupdatedlegalresponsesdescribedinparagraph8.a.,andacopyoftheCFOssummarydescribedinparagraph8.b.byDecember31andMarch10,respectively. ` (#` (# L դ((L0 r  3   3.2դ  d  .3  0` r(#r(#  IftheauditiscompletedpriortoDecember1,thelegalresponseprovidedin 'p connectionwiththeauditmaybeusedinplaceoftheinterimresponsedescribedinparagraph8.a.Inaddition,anupdatedlegalresponsetobeeffectivenoearlierthanFebruary15shallbeprovided.TheselegalresponsesandcopiesoftheCFOssummariesdescribedinparagraph8.b.shallbesubmittedinaccordancewithparagraph8.c. 3.Y݌ "R` (#` (# Ќ  8 9 .MANAGEMENTLETTER.Conditionsthatarenotrequiredtobeincludedintheauditreport, #F butthattheauditorconsidersnecessarytocommunicate,shouldbeseparatelycommunicatedtomanagementofthereportingentityinamanagementletter.Ifamanagementletterisissued,theauditorshallrefertothatmanagementletterintheauditor'sreportoninternalcontrol(seeparagraph5.28ofGovernmentAuditingStandards). '."#   9 10 . Ԁ XSXXXSAGREEDUPONPROCEDURES:RETIREMENT,HEALTH BENEFITS ,ANDLIFE )"$% INSURANCEWITHHOLDINGS/CONTRIBUTIONSANDSUPPLEMENTALSEMIANNUALHEADCOUNTREPORTSUBMITTEDTOTHEOFFICEOFPERSONNELMANAGEMENT +&' (OPM). The agreeduponp AgreedUponP rocedures listed (AUPs)enumerated inAppendix H I1   shallbe appliedseparatelyforeachAgencyPayrollOffice(APO)thatservices30,000ormore  employeesperyearfortheagencies performedannuallyforeachentity listedinAppendixA Ԁduringthe  courseofconductingauditsinaccordancewiththisBulletin.Additionally,theagreeduponproceduresshallbeappliedeachyeartoatleastoneAPOperCFOsActagency(listedinAppendixA).Theperiodsubjecttotheagreeduponproceduresshallbeforthe12monthsendedSeptember30ofeachyear.Reportsontheapplicationoftheseproceduresshallbeaddressedand_submitted_ԀtotheInspectorGeneralofOPM.ReportcopiesshallbeprovidedtoOPM'sCFOandAssociateDirectorforRetirementandInsurance.ThesereportsshallbesubmittednolaterthanDecember15followingtheendofthefiscalyearforwhichthefinancialstatementsareprepared.Theprovisionsofthisparagrapharesubjectto .#XSXXXS7#See AUSection622,"EngagementstoApplyAgreedUponProcedurestoSpecified {  Elements,Accounts,orItemsofaFinancialStatement , " ofthe CodificationofStatementsonAuditing u  Standards.XSXXXS  o  10 TheAUPsaredesignedtoassistOPMinassessingthereasonablenessoftheRetirement,Health c  Benefits,andLifeInsurancewithholdings/contributionsaswellassemiannualHeadcountinformationsubmittedbyagencies.TheAUPsshallbeappliedtothe12monthsendedSeptember30ofeachyear.#XSXXXS# Q L (( L 3   XSXXXS r 32  a  .3  0 `   TheAUPsshallbeappliedseparately,andtheresultsreportedseparately,foreach E AgencyPayrollOffice(APO)thatservices30,000ormoreemployees.3M݌ ` (#` (# Ќ   r L  (L    0 r 0` r(#r(#2(  1  )3  0 ` (#` (#  IfanagencydoesnothaveanAPOthatservices30,000ormoreemployees,it 3| shallperformtheAUPsonitslargestAPO.݌  (# (# Ќ   X XE( ` hp x Xr` XEXSXXXSXE XXXSXSX XXE  #XSXXXS"#XSXXXSc  c݌̌ X X'Xr` XX'XSXXXSXSXXXS   r  ` (2)0 Ifanagencyperformspayrollcrossservicingfunctionsforotheragencies !j (referredtoasclientagencies),theauditorofthecrossservicingagencywillbetheprincipalauditorforthepurposeofapplyingtheseAUPs.Accordingly,theauditorforanagencyperformingpayrollcrossservicingfunctionsshallapplytheAUPsandreporttheresultsseparatelyforeachAPOthatservices30,000ormoreemployees.#XSXXXSb#XSXXXSԀTheextentofparticipationbytheauditorsfortheclient #L APOsshouldbedeterminedinconjunctionwiththeprincipalauditor.#XSXXXSG##F (# (# L e( L 3    r 32e  b  .3  0 `   Thereportontheapplicationoftheseproceduresshallbesubmittednolaterthanthe %: ! December15followingtheendofthefiscalyearforwhichthefinancialstatementsare &4!" prepared.Totheextentpractical,managementscommentsontheauditorsfindingsshallbeincludedinthereport.AgenciesshallnotifyOPMbyNovember15ofeach ((#$ yearofanyanticipateddelaysordifficultiesincompletingtheAUPsandsubmittingtherequiredreportbytheDecember15deadline.3݌*%&` (#` (# Ќ   +&'  r c.0 ` Agenciesshallsubmitthreecopiesofthereportontheapplicationoftheseprocedures  totheInspectorGeneralofOPMatthefollowingaddress: ` (#` (#  K.` hp x (#Xr` XK0   `  U.S.OfficeofPersonnelManagement (#(#    `  OfficeofInspectorGeneralXSXXXSE.` hp x (#XE   0   `  Room6400 (#(# 0   `  1900EStreet,_N.W._ (#(# 0   `  Washington,DC20415 (#(#  E.` hp x (#XE#XSXXXS#&  XSXXXS11 .INSPECTORGENERALOVERSIGHT.   L h (L ;   ;10  2h  a  .3  0` (#(#  IGsshall:;1\݌u ` (#` (# Ќ  0  0` (#(#(1)0 ` (#` (#Ensurethatauditsareperformedandauditreportscompletedinatimely i  mannerandinaccordancewiththerequirements'ԀofthisBulletin.ThisresponsibilitypertainstoauditsconducteddirectlybyIGstaffandauditsconductedbyindependentauditorsundercontract.  (# (# 0  0` (#(#(2)0 ` (#` (#Providetechnicaladviceandliaisontoagencyofficialsandindependent K externalauditors.  (# (# 0  0` (#(#(3)0 ` (#` (#Obtainormakequalitycontrolreviewsofauditsmadebyindependentexternal 9 auditorsandprovidetheresults,whenappropriate,tootherinterestedorganizations.  (# (# 0  0` (#(#(4)0 ` (#` (#Monitorandreportonmanagement'sprogressinresolvingauditfindingsrelated !j toauditsmadepursuanttothisBulletin,inaccordancewiththeInspectorGeneralActof1978,asamended,theprovisionsofOMBCircularA-50,"AuditFollowup,"andFFMIA.  (# (# L ( L    3   382  b  .3  0 `   IGsareencouragedtoworkwithCFOstoacceleratethepreparationoffinancial #L statements,andtoacceleratethecompletionofaudits.38c݌ ` (#` (# Ќ   %: !         TableofAppendices   AppendixA:0 ` ExecutiveDepartmentsandAgenciesRequiredtoPrepareFinancialStatements` (#` (# AppendixB:0 ` ComponentsofExecutiveDepartmentsandAgenciesRequiredtoPrepareFinancial   Statements ` (#` (# AppendixC:0 ` GeneralLaws ` (#` (# AppendixD:0 ` TheFederalFinancialManagementImprovementActof 1996OMB 1996!OMB    ImplementationGuidanceforCFOsandIGs ` (#` (# AppendixE:0 ` IllustrativeManagementRepresentationLettero ` (#` (# AppendixF:0 ` IllustrativeAuditorsReportonInternalControlc ` (#` (# AppendixG:0 ` IllustrativeAuditorsReportonCompliancewithLawsandRegulationsW` (#` (#  AppendixH:0 ` GuidanceRegardingLegalLetters#XSXXXS#XSXXXSK` (#` (#  Appendix H I :0 ` AgreedUponProcedures:Retirement,Health Benefits ,andLifeInsurance ? Withholdings/ContributionsandSupplementalSemiannualHeadcountReportSubmittedtotheOfficeofPersonnelManagement#XSXXXS#XSXXXS3|` (#` (#   '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  DefenseFinanceandAccountingServiceWorkingCapitalFund?(#(# 0  DefenseLogisticsAgencyWorkingCapitalFund (#(#  DepartmentofHealthandHumanServices -v 0  HealthCareFinancingAdministration (#(# &  DepartmentofLabor d 0  UnemploymentTrustFund (#(# '#v DepartmentofTransportation  "R 0  FederalAviationAdministration (#(# 0  HighwayTrustFund (#(#   $@  &   DepartmentoftheTreasury  0  BureauofAlcohol,Tobacco , andFirearms0(#(#(#(# 0  InternalRevenueService (#(# 0  UnitedStatesCustomsService (#(# OfficeofPersonnelManagement   0  CivilServiceRetirementandDisabilityFund (#(# 0  FederalEmployeesHealthBenefitsProgram (#(# 0  FederalEmployeesLifeInsuranceProgram'   (#(#   APPENDIXC  V  GENERALLAWS       7        @* Anti-DeficiencyAct(codifiedasamendedin31U.S.C.1341,1342,1351,1517) 5 ~ L 8`(L  3     3.283  0 `   31U.S.C.1341(a)(1)(A)and(C)3.e݌/ x` (#` (# Ќ   3     3 283  0 `   31U.S.C.1517(a)3 D݌) r` (#` (# 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.)#XSXXXS#XSXXXS    3   3283  0 `   21U.S.C.371121#XSXXXSn#XSXXXS3݌N ` (#` (# Ќ     3   3283  0 `   21U.S.C.3717(a),(b),(c),(e)and(f)#XSXXXSA#XSXXXS3݌H ` (#` (# Ќ     3   3283  0 `   21U.S.C.3719#XSXXXSl#XSXXXS 3