Accountability of Tax Dollars Act of 2002

March 20, 2003

To:	Heads of Executive Agencies Subject to Provisions of the Accountability of Tax Dollars Act of 2002
From:	Mark W. Everson
Subject:	Accountability of Tax Dollars Act of 2002 -- Implementation Guidance and Executive Forum March 31

We have received several inquiries about the requirements of the Accountability of Tax Dollars Act of 2002, outlined in a memorandum from the Director of the Office of Management and Budget (OMB) to the Heads of Executive Agencies, dated December 6, 2002 (http://www.whitehouse.gov/omb/financial/accountablity_of_tax_dollars.pdf). That memorandum noted that OMB Bulletin No. 01-09, “Form and Content of Agency Financial Statements,” applies to agencies covered by the Accountability of Tax Dollars Act of 2002. It is our intent to establish in the near future consistent reporting requirements across Federal agencies to enhance comparability and accountability.

Improved financial performance is one of five government-wide initiatives included in the President’s Management Agenda, and it is the goal of the Accountability of Tax Dollars Act of 2002. We recognize, however, that certain agencies are only now beginning the process of preparing financial statements for the first time and may need additional time to establish the framework for producing and auditing them. For this reason, we are modifying two requirements of OMB Bulletin No. 01-09 for agencies covered by this Act discussed below.

Unaudited Quarterly Financial Statements

Among other things, OMB Bulletin 01-09 requires agencies to produce and submit to OMB unaudited quarterly financial statements. For FY 2003, those quarterly statements are due 45 days after the end of the quarter. We are encouraged that many agencies covered by the Accountability of Tax Dollars Act of 2002 met this requirement for the first quarter of FY 2003.

We recognize that other agencies are experiencing difficulty producing interim statements during this first year. Therefore, for agencies covered by the Accountability of Tax Dollars Act, OMB is waiving the requirement for unaudited quarterly financial statements for FY 2003. However, agencies are encouraged to begin or continue producing unaudited quarterly financial statements during FY 2003.

As a reminder, audited annual financial statements for FY 2003 are due January 30, 2004, unless the Director of OMB grants the agency a waiver to that specific requirement. Any requests for waivers from the FY 2003 annual audit requirement must include a plan for meeting the agency’s financial reporting requirements for FY 2004. Waiver requests for FY 2003, if any, should be submitted to OMB no later than May 30, 2003.

Performance and Accountability Reports

OMB Bulletin No. 01-09 also requires agencies, beginning with the FY 2002 reporting cycle, to produce integrated Performance and Accountability Reports (PARs). The requirement for your agency to prepare a PAR is optional for FY 2003. Your agency must, however, continue to submit all other statutorily-required reports as stand-alone documents on the specified due dates. The audited financial statements, whether stand-alone or part of a PAR, will be due on January 30, 2004.

Executive Forum

On March 31, 2003, from 2:00 p.m. to 3:00 p.m., OMB will host a forum for agency senior executives responsible for implementing the Accountability of Tax Dollars Act of 2002. The forum is intended to provide a brief overview for senior executives of the Act’s requirements and guidance for implementing the Act. It will be presented in the Truman Room, White House Conference Center, 726 Jackson Place, NW. Space is limited. Please send an e-mail to kshaffer@omb.eop.gov by March 25, to register for the forum. If there are questions or issues you would like us to address, please send them to the same e-mail address, or call Joe Kull, Deputy Controller, at 202-395-3993.