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GAO-06-301R 1 (2005-12-19)

handle is hein.gao/gaocrptasit0001 and id is 1 raw text is: SGAO .-......----:Accountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 December 19, 2005 The Honorable Todd R. Platts Chairman, Subcommittee on Government Management, Finance, and Accountability Committee on Government Reform House of Representatives Subject: Managerial Cost Accounting Practices: Departments of Education, Transportation, and the Treasury Dear Mr. Chairman: Authoritative bodies have promulgated laws, accounting standards, information system requirements, and related guidance to emphasize the need for cost information and cost management in the federal government. For example, the Chief Financial Officers (CFO) Act of 1990,' contains several provisions related to managerial cost accounting, one of which states that an agency's CFO should develop and maintain an integrated accounting and financial management system that provides for the development and reporting of cost information. Statement of Federal Accounting Standards No. 4, Managerial Cost Accounting Concepts and Standards for the Federal Government, and the Joint Financial Management Improvement Program's (JFMIP) Framework for Federal Financial Management Systems2 established accounting standards and system requirements for managerial cost accounting (MCA) information at federal agencies. The Federal Financial Management Improvement Act of 19963 built on this foundation and required, among other things, CFO Act agencies' systems to comply substantially with federal accounting standards and federal financial management systems requirements. MCA involves the accumulation and analysis of financial and nonfinancial data, resulting in the allocation of costs to organizational pursuits such as performance goals, programs, activities, and outputs. The data analyzed depend on the operations and needs of the organization. Nonfinancial data measure the occurrences of activities and can include, for example, the number of hours worked, units produced, 'Pub. L. No. 101-576, 104 Stat. 2838 (Nov. 15, 1990). 2 In 2005, JFMIP's responsibilities for financial management and policy oversight were realigned to the Office of Management and Budget, the Office of Personnel Management, and the Chief Financial Officer's Council. 3 Pub. L. 104-208, div. A., § 101(f), title VIII, 110 Stat. 3009, 3009-389 (Sept. 30, 1996). GAO-06-301R Managerial Cost Accounting Practices

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