ACCOUNTING AND AUDITING POLICY COMMITTEE MEETING

FINAL MINUTES

The meeting was convened at 1:30 PM in Room 2N30 of the GAO Building, 441 G St., N.W. Washington, D.C.

ADMINISTRATIVE MATTERS

Attendance

Members Payne, Dacey, David, Jordan, Kull, Lane (arrived at 2:12), Longo, Pugh, Schaeffer, and Short attended. Attending for Mr. Bloom was Ms. Louise Beck..

An announcement was made regarding Mr. Bloom's move from his current position as Department of Education Inspector General to Chief Financial Officer at the General Services Administration at the beginning of February. This move makes him ineligible to represent the PCIE on the AAPC and a new member will be sought from the PCIE community.

Minutes

Ms. Payne noted that the changes received electronically yesterday appear in the paper version at Committee members' places. The minutes were approved with no further changes.

AGENDA ITEMS

Status Report on Environmental Liability guidance

Ms. Payne reported that this guidance has approved by FASAB ("negative assurance") and will be published by OMB as soon as editorial changes from OMB are completed.

Status Report on Legal Representation Letters

Ms. Payne reported that this issue has been approved by GAO and OMB. Mr. Short and Ms. Payne will work toward more timely publication of approved.

It was noted that Department of Justice has issued a letter with the guidance appproved by the AAPC. The letter clearly indicated that OMB had not yet issued the guidance.

Ms. Jordan commented that distribution to the CFO Act agencies leaves out a number of small agencies. Methods to make small agencies aware of the guidance included (1) use of Financenet, (2) OMB's Federal Register announcement, and (3) FASAB mailing list.

Ms. Payne said that FASAB staff members have had many inquiries regarding the authoritative status of both AAPC working drafts and government-wide working group documents. A letter has been sent to Big 6 firms and an article will be published in the FASAB News to clarify the status of these documents and positions.

There was a brief discussion on what process should be used in reviewing documents. Several suggestions were made to speed the post-AAPC vote approval process. Mr. Short, Mr. Dacey and Ms. Payne recognized the need for process improvements and agreed to streamline as much as possible the post-AAPC vote process.

It was also noted that the AAPC does not follow a full due process procedure and that constituents would have to monitor AAPC products. The PCIE will be informed of the AAPC agenda at each meeting and notified of documents availability on Financenet.

Credit Reform Disucssion

Mr. Short reported that he has given Committee members the latest version to review, requesting them to e-mail any comments to him. The new version has more structure and includes headings. After discussing how to structure the review process for this issue, it was decided that the group that developed the paper would review the new document and work with the AAPC sub-committtee and others to identify issues before the next AAPC meeting. It was emphasized that there should be outreach to the community for dissenting views and that a list of issues be developed. In addition, the sub-committee should consider inviting people with differing views to address the AAPC at the next meeting.

The following AAPC members will serve on the sub-committee: Mr. Short (who will call the meeting), Ms. Beck, Messrs. Dacey, David, and Ms. Jordan. The sub-committee will meet and discuss the means to identify issues. They will recommend to AAPC what action should be taken on the Credit Reform paper. Ms. Payne will have the document posted on the AAPC home page, with Mr. Short as the contact person to whom any comments can be addressed. Concern was expressed about getting all of this done by February. Therefore, Ms. Payne suggested the possibility of waiting until the April meeting of AAPC to further discuss the Credit Reform document.

Property, Plant and Equipment Forum Report

A meeting of the task force to plan the AAPC forum on Valuation of PP&E met on December 19; minutes were provided to AAPC members. Mr. David reviewed the plans made to date. Topics for discussion include: developing and maintaining a complete inventory, techniques for determining original cost, capitalization thresholds,accountants and auditors working together, documentation and retention, and cost/benefit considerations. There are also other topics that could be discussed but they can be the basis for an additional forum that could be held some time after the April event. Opportunities for questions from the audience will be built into the April forum. (Note: the forum was ultimately scheduled for April 27th and 28th.)

The USDA will be a co-sponsor in order to offer CPE credit. Also, it was noted that some costs may be incurred for publicity and FASAB may assist in this area. Another objective is to have space to accomodate all those wishing to attend.

New Projects

Ms. Payne noted the need to identify issues since we have not received requests from agencies. It was noted that the issues are undoubtedly there but not being forwarded to AAPC. This is perhaps due to the time involved in submitting an issue.

Various suggestions were offered on how to identify issues; including:

--AAPC members may submit issues,

--seek input from IPAs,

--calls received at OMB's Office of Federal Financial Management,

--review the CFO Council's Cost Accounting Implementation Guide for potential issues, and

--wait out the audit cycle and see what issues arise from the audits.

Ms. Payne requested that Mr. Kull let the CFO Council know that spring is the appropriate time for the CFO to present issues to the AAPC. Similary, Ms. Jordan will do the same for the PCIE.

Next Meeting

Ms. Payne said that--unless new issues arise--the February 12 meeting is cancelled. Notification of the cancellation will be provided within two weeks. The next scheduled meeting will be Thursday, April 9, at 1:30 P.M.

Adjournment

The meeting was adjourned at 3:28 P.M.