Controllership and the Federal

GovernmentTheresa Childress

Clark CollinsJason Morgan

Theresa◦ Structure of the GAO

Jason◦ The Office of the Comptroller General Federal and

State Clark

◦ Federal Appropriations and cases

Overview

Our Mission is to support the Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people. We provide Congress with timely information that is objective, fact-based, nonpartisan, nonideological, fair, and balanced.

http://www.gao.gov/about/newcomers.vid.html

The U.S. Government Accountability Office (GAO)

◦ economists◦ social scientists◦ accountants◦ public policy analysts◦ attorneys◦ computer experts◦ specialists in fields

ranging from foreign policy to health care.

◦ http://www.gao.gov/about/newcomers.vid.html

Who works for the GAO

Matrix management ◦ Assemble teams to

look at complex cross-cutting issues

GAO Management

The Government Accountability Office Organizational Chart - Simplified

1) Acquisition and Sourcing Management 2) Applied Research and Methods 3) Defense Capabilities and Management 4) Education, Workforce, and Income Security 5) Financial Management and Assurance 6) Financial Markets and Community Investment 7) Health Care 8) Homeland Security and Justice 9) Information Technology 10) International Affairs and Trade 11) Natural Resources and Environment 12) Physical Infrastructure 13) Strategic Issues

GAO Teams 13 Teams

At the request of congressional committees or subcommittees

Mandated by public laws or committee reports.

Advise Congress and the heads of executive agencies about ways to make government more efficient, effective, ethical, equitable and responsive.

Perform research under the authority of the Comptroller General.

MAIN OBJECTIVE- Save taxpayer dollars

When does the GAO work ?

Head of the General Accountability Office (GAO) ◦ A legislative branch

agency Appointed by the

president With advice and consent

of congress 15 year term Current Gene L. Dorado

◦ Appointed when David Walker resigned in 2008

The Comptroller General

Congress Establishes a commission to recommend individuals to the president ◦ The Speaker of the House of

Representatives◦ The President Pro Tempore of the

Senate◦ The majority and minority

leaders of the House of Representatives and the Senate

◦ The Chairman and Ranking Member of the Senate Committee on Homeland Security and Governmental Affairs

◦ The Chairman and Ranking Member of the House Committee on Oversight and Government Reform

Must nominate at least three individuals to the president

President nominates one candidate

The Senate must confirm the Presidents nomination

Then appointed for a non-renewable 15 years

Comptroller General Vacancy

Only two appointed under the commission process developed in 1981

Office Created in 1921 David M. Walker was

the Seventh Comptroller General (1998- 2008)

Walker appointed Gene L. Dodaro

Comptroller General History

Audit financial statements ◦ Secretary of the

Treasury ◦ Office of Management

and Budget Testify before

congress on national issues

Reports on National and agency issues

Duties of the Comptroller General

∙ U.S. Fish and Wildlife Service (FWS) -This case involves the use of appropriate funds to

help spread awareness of two endangered species in Alaska by distributing free T-shirts and caps?

-This is a case that must be reviewed by the Comptroller General and the GAO because it is a national concern.

∙ The concern here is if the FWS will be able to use federal appropriations to distribute items that are personal gifts

Appropriation handled by the Comptroller General

This is a major concern for the Comptroller because, the general rule states that an agency can not use appropriated funds to disperse personal gifts to inform the public of that agency.

How many of you think that it will be ok to use appropriated funds to design and give out the T-shirts and caps to raise awareness of two endangered species?

Appropriation handled by the Comptroller General

Because considerable conservation efforts over several years have not halted the decline of two threatened waterfowl species, the GAO will not object to the U.S. Fish and Wildlife Service's (FWS) proposed use of appropriated funds to purchase and distribute caps and other items to residents of Alaska’s North Slope communities in furtherance of the agency's waterfowl conservation plan.

Decision by the GAO

State Comptroller Chief fiscal officer of the state

◦ accounting for and distributing state money. Collects taxes directly and provides audit

resources to ensure that others are collected.

Duties vary from protecting our coastline to helping build hospitals.

Other Comptrollers in Goverment

The State Controllers function◦ Account for and control disbursements of all state

funds.◦ Determine legality and accuracy of every claim

against the state.◦ Issue warrants in payment of the states bills, such

as lottery prize winnings.◦ Administer the uniform state payroll system◦ Responsible for auditing various state and local

government programs.

State Comptroller

◦ Inform the public of the states financial condition◦ Audit and process all personnel and payroll

transactions for state and civil service◦ Inform the public of financial transactions of the

city, county, and district government◦ Responsible for auditing various state and local

government programs◦ Administer the unclaimed property law

The State Controllers functionCont.

This case investigates free parking spaces to state employees to identify if state tax dollars are being spent correctly.◦ The state of NY was allowing 312 county

executives free public parking downtown, while other county workers, like most taxpayers, must pay to park.

◦ The state comptroller said, “ taxpayers should know how their money is being spent, not just including employee salaries and retirement expenses, but for the chosen connected few free parking also.”

Appropriation dealt with by the State Comptroller

• The comptroller of the state in this case conducted an audit of no fine ticket parking in downtown for specific government employees.

◦ These executives being audited did not cooperate with the Comptroller’s office, forcing the Comptrollers office to file reports to the DMV to identify employees’ personal vehicles, and unmarked county vehicles. This led to a delay that caused even more taxpayers dollars to identify vehicles that could have easily been provided.

Appropriation dealt with by the State Comptroller

The audit noted that there are too few internal controls or written procedures for assigning free parking besides simply receiving permission from the county Executive or Sheriff.

◦ After completion of the audit by the state comptroller and his staff, stiffer regulations were implemented on receiving parking passes, and the majority of the 312 passes were revoked from the county employees.

Appropriation dealt with by the State Comptroller

Background information◦ Both positions are head of their accounting

departments.◦ The Comptroller general reports to the President

of the United States, while the State comptroller reports to Governor. Who is the chief executive of the state.

◦ The two positions have relatively the same functions. The only difference is the Comptroller General budgets federal money, and the State Comptroller budgets state dollars.

Comptroller General vs. State Comptroller

Federal Appropriations Law at the Agency Level

How the GAO’s and the Comptroller General’s decisions impact Federal

Government Employees

Navy Support Activity- Millington, TN Army Corps of Engineers USDA (U.S. Dept. of Agriculture) Department of Veterans’ Affairs EPA (Environmental Protection Agency) SEC (Securities and Exchange Commission) IRS (Internal Revenue Service) USPS (U.S. Post Office)

Potential Future Employers

All of the above Federal Agencies are funded primarily by taxpayers’ money, thus, they are subject to the standards set by

the GAO.

FASB : U.S. GAAP :: GAO : Federal Appropriations Law

FASB : Public Accountants ::GAO : Accountants in Federal Agency

GAO’s Role to a non-GAO Government Employee

A financial officer in the Federal Government must always remember that all funds are results of the citizens’ tax dollars.

When money is misappropriated, lost, or stolen, there are 2 possible outcomes:1) Taxpayers must pay double2) Taxpayers spend money on nothing.

Responsibility of a Federal Accounting Officer

“…A special trust responsibility exists with regard to public monies, and with special trust goes personal financial responsibility.”

In other words, if you misuse taxpayers’ money, you will have to reimburse the government out of your own pocket.

Comptroller General decision B-161457

Vendor

Field Office• Request funds

to obligated to pay invoice

District Office• Accountable

Officer certifies the obligation

Finance Center A/P• Receives request

from District to pay invoice

Finance Center- Disbursing• Certifying

Officer certifies payment to be made

Invoice sent to AgencyVendor gets paid

Life Cycle of a Payment

Vendor

Field Office• Request funds

to obligated to pay invoice

District Office• Accountable

Officer certifies the obligation

Finance Center A/P• Receives request

from District to pay invoice

Finance Center- Disbursing• Certifying

Officer certifies payment to be made

Invoice sent to AgencyVendor gets paid

Who is liable for misappropriated funds?

General Comptroller decision B-271021

1) Sept 18, 1966, an EEOC official submitted a request to the District Manager for a travel advance in order to for a non-government employee to appear in court for an agency trial.

Example

General Comptroller decision B-271021

2) The official put in writing that he would accept all liability for repayment of the funds if the funds were not authorized.

3) District Manager ordered the travel advance to be paid, since the official assumed all liability in written statement.

Example

General Comptroller decision B-271021

4) Mr. Guthrie, the certifying officer, complied with the District Managers request and issued the travel advance.

5) The EEOC headquarters later ruled that the funds were unauthorized. Who is liable?

Example

General Comptroller decision B-271021

Who is liable?a) The official who requested the travel advance

and assumed liability in writing?b) The district manager who submitted the

request to Mr. Guthrie?c) Mr. Guthrie, who issued the travel advance?

Example

General Comptroller decision B-271021

Who is liable?- The official who requested the travel advance

and assumed liability in writing?- The district manager who submitted the request

to Mr. Guthrie?- Mr. Guthrie, who issued the travel advance?

- Because Mr. Guthrie is the Accountable Officer, he is the liable party by law. The written statement by his superior means nothing.

Example

Page 302 ◦ Department of the Army◦ Case No. 05-09◦ $186,529.75◦ Government purchase card misuse.

Example 1

Page 291◦ Defense Contract Management Agency◦ Case No. 03-02◦ $23,775.49◦ Bought bottled water for employees

Example 2

Case Study

http://www.gao.gov/ Principles of Federal Appropriation Law, 3rd

Edition, Volumes 1 and 2 http://www.gao.gov/special.pubs/d04261sp.pdf

Federal Appropriations Law Resource Book. FedTrain Inc, Atlanta, GA

http://www.sco.ca.gov/eo_about_resp.html http://www.erie.gov/

Resources