Independent Auditor's Report – USAID's Controls Over Treasury Symbols Need Improvement
| Summary: USAID experienced difficulty accounting for the activity under its many different Treasury symbols which provide the underlying support for its Statement of Budgetary Resources. This occurred because the processes employed by USAID to update and maintain information on appropriation Treasury symbols did not contain adequate controls to consistently ensure their accuracy. As a result, USAID’s Treasury symbol appropriation information in Phoenix required significant adjustments throughout the year and impacted USAID’s ability to accurately report to OMB on its quarterly budget activity. |
Treasury symbols are numeric codes which contain unique accounting information that identify: 1) a Federal agency, 2) a period of availability of funds, and 3) a four-digit appropriation number. Under Section 511 of the Foreign Operations Appropriation Act (P.L. 109-102 for 2006), USAID may extend the availability of its appropriations, as identified by its Treasury symbols, by four years from the original appropriation before the funds move to an expired status and become unavailable for new obligations. Phoenix does not have the ability to automatically convert existing appropriations to those with extended availability so Treasury symbol conversions are performed manually at USAID.
Like all Federal agencies, USAID must submit a Report on Budget Execution and Budgetary Resources (SF 133) to OMB each quarter for every one of its open appropriation Treasury symbols. These SF 133s are combined each quarter in developing a Federal Agency’s Statement of Budgetary Resources. As a result, the compilation of a Federal Agency’s SF 133s should generally agree with an Agency’s Statement of Budgetary Resources. At year-end, Budgetary Resources are also reported separately for certain Treasury symbols as Required Supplementary Information in accordance with OMB Circular A-136.
USAID made significant adjustments to its Treasury symbol information in Phoenix during the 4th quarter of 2006. These adjustments were necessary to correct transactions posted to valid appropriations with invalid Treasury symbols. Errors with Treasury symbol information occurred primarily because so many valid USAID appropriation numbers change during their life to accommodate the Section 511 flexibility available to USAID. This requires USAID to account for two Treasury symbols for every appropriation. This is difficult to manage within USAID, but Section 511 flexibility makes it even more difficult for other Federal agencies to stay updated on USAID’s currently valid Treasury symbols when they use the Intragovernmental Payment and Collection Process. Activity under this process appears first at Treasury, then at USAID, and requires a reconciliation between USAID and Treasury appropriation information to correct any errors.
When invalid appropriation Treasury symbols appeared in Phoenix, either internally or as a result of intragovernmental activity, USAID did not effectively review or monitor the transactions to ensure that the correct appropriations were impacted. USAID currently has no process for reviewing the output related to valid and invalid Treasury symbols and only makes corrections if errors are noted either during the process of reconciling with U.S. Treasury information, or the process of preparing quarterly financial statements.
CFO officials have expressed concerns with Section 511 authority granted to USAID that requires the management of so many appropriation Treasury symbols. The officials believe that, because Section 511 accounting conditions are not managed in other Federal agencies, there is and will be no government-wide or core accounting system approach to handling appropriations that change during their life. We therefore expect Treasury symbol reporting errors to continue, but recognize that the process is almost unmanageable from an accounting perspective without a significant financial and human resource commitment. Some progress can be made immediately, however, so we are making the following recommendation.
Recommendation No. 3: We recommend that USAID’s Office of the Chief Financial Officer develop and implement monthly payment review procedures to identify transactions that have been posted in Phoenix to invalid appropriation Treasury symbols.
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