Controllership and the Federal Government

1. Controllership and the Federal Government Theresa Childress Clark Collins Jason Morgan

2. Overview • Theresa • Structure of the GAO • Jason • The Office of the Comptroller General Federal and State • Clark • Federal Appropriations and cases

3. The U.S. Government Accountability Office (GAO) • 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

4. Who works for the 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

5. GAO Management • Matrix management • Assemble teams to look at complex cross-cutting issues

6. The Government Accountability Office Organizational Chart - Simplified

7. GAO Teams 13 Teams • Acquisition and Sourcing Management • Applied Research and Methods • Defense Capabilities and Management • Education, Workforce, and Income Security • Financial Management and Assurance • Financial Markets and Community Investment • Health Care • Homeland Security and Justice • Information Technology • International Affairs and Trade • Natural Resources and Environment • Physical Infrastructure • Strategic Issues

8. When does the GAO work ? • 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

9. The Comptroller General • 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

10. Comptroller General Vacancy • 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 • 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

11. Comptroller General History • 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

12. Duties of the Comptroller General • Audit financial statements • Secretary of the Treasury • Office of Management and Budget • Testify before congress on national issues • Reports on National and agency issues

13. Appropriation handled by 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

14. 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?

15. Decision by the GAO • 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.

16. Other Comptrollers in Goverment 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.

17. State Comptroller • 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.

18. The State Controllers functionCont. • 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

19. Appropriation dealt with by the State Comptroller • 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.”

20. 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.

21. 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.

22. Comptroller General vs. 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.

23. Federal Appropriations Law at the Agency Level How the GAO’s and the Comptroller General’s decisions impact Federal Government Employees

24. Potential Future Employers • 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) All of the above Federal Agencies are funded primarily by taxpayers’ money, thus, they are subject to the standards set by the GAO.

25. GAO’s Role to a non-GAO Government Employee • FASB : U.S. GAAP :: GAO : Federal Appropriations Law • FASB : Public Accountants :: GAO : Accountants in Federal Agency

26. Responsibility of a Federal Accounting Officer • 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 double 2) Taxpayers spend money on nothing.

27. Comptroller General decision B-161457 “…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.

28. Life Cycle of a Payment Vendor gets paid Invoice sent to Agency

29. Who is liable for misappropriated funds? Vendor gets paid Invoice sent to Agency

30. Example • General Comptroller decision B-271021 • 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.

31. Example • General Comptroller decision B-271021 • The official put in writing that he would accept all liability for repayment of the funds if the funds were not authorized. • District Manager ordered the travel advance to be paid, since the official assumed all liability in written statement.

32. Example • General Comptroller decision B-271021 • Mr. Guthrie, the certifying officer, complied with the District Managers request and issued the travel advance. • The EEOC headquarters later ruled that the funds were unauthorized. Who is liable?

33. 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?

34. 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.

35. Example 1 • Page 302 • Department of the Army • Case No. 05-09 • $186,529.75 • Government purchase card misuse.

36. Example 2 • Page 291 • Defense Contract Management Agency • Case No. 03-02 • $23,775.49 • Bought bottled water for employees

37. Case Study

38. Resources • 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/