ACCOUNTING AND AUDITING POLICY COMMITTEE MEETING

FINAL MINUTES

The meeting was convened at 1:30 PM in Room 4N30 of the GAO Building, 441 G Street, N.W. Washington, D.C.

ADMINISTRATIVE MATTERS

Attendance:
Members Payne, Jordan, Dacey, David, Longo, Pugh, Schaeffer, and Short attended. Mr. Gregory Friedman, Acting Inspector General of the Department of Energy, attended for the first time and was welcomed by the Committee members.

Ms. Payne noted that this would be Ron Longo's last meeting before retiring from Treasury. A new Treasury member has not yet been named.

AGENDA ITEMS

PP&E Conference Ted David expressed satisfaction with the forum. He estimated that about 450 people attended the forum and most stayed until the end. 250 prepared evaluations and the average grade given the conference was a B with many positive comments. Lessons learned centered around managing such a large group.

Credit Reform Discussion
Chairman of the Task Force, James Short, summarized the issues in the specific area of re-estimation being addressed to the board. OMB prepared a paper on interest rate re-estimation for loan subsidy cost which was distributed for comment. The USDA IG responded with a paper on its concerns. Issues include complying with requirements of SFFAS No. 2, waiting until 90% of a cohort is disbursed before doing a re-estimation, and the burden on preparers and auditors to determine materiality. OMB, USDA IG and GAO representatives, and the USDA Rural Development Mission Area CFO discussed the issues. A general discussion followed on the issues and the need to provide timely resolution without compromising accountability.

Ms. Payne noted FASAB also has a number of Credit Reform issues before it and that the VA, SBA and DOE will address these issues before the Board at the next FASAB meeting. She requested OMB representatives to provide examples comparing re-estimations done yearly using the actual interest rate versus using a weighted average after 90% of the cohort is disbursed. She also requested that Committee members give James Short their input on the Credit Reform paper prepared by the task force (a revised copy was provided to members at the April meeting with changes marked in boldface). At the June meeting the committee members should be prepared to discuss any concerns they may have with the content of the Credit Reform document. In addition, FASAB staff will be prepared to comment on any areas that may conflict with SFFAS 2.

Inter-entity Costs
This item was not addressed.

Agenda Committee
James Short identified two issues in the pipeline for the AAPC. HUD is having problems with its credit program concerning coverage by budgetary resources. HUD will provide a paper with definitive examples of their concerns and Tom Luter will provide a paper for general discussion. Mr. Short also noted that EPA was developing an issue for the Committee and would submit it before the next meeting.

William Pugh stated that Justice and Treasury had questions concerning the financial statement disclosure requirements of SFFAS Number 3 with respect to non-valued seized property. Marla Friedman on his staff is leading a Justice/Treasury task force to identify issues which may be brought to the AAPC.

A meeting is scheduled on the 27th of May to address concerns with the Statement of Financing. Ms. Payne noted that FASAB's intent in addressing it was to identify problems and compile guidance.

Next Meeting
The next scheduled meeting will be Thursday, June 11 at 1:30 PM in Room 4N30.

Adjournment
The meeting was adjourned at 3:40 PM.