**FOCUSED ASSESSMENT PROGRAM**

SUMMARY OF SIGNIFICANT CHANGES

**October 2002**

The following is a summary of significant changes to the FA program
documents.

# [New Exhibits]{.underline}

Exhibit 4A Example of Internal Control Manual

Exhibit 5C Computed Value -- Pre-Assessment Survey Internal control
Technical Guide

Exhibit 5F HTSUS 9802.00.40 and 9802.00.50 -- Articles Exported for
Repairs or Alterations -- Pre-Assessment Survey Technical Internal
Control Guide

Exhibit 5G HTSUS 9802.00.60 -- Metals Articles Previously Exported for
Processing -- Pre-Assessment Survey Technical Internal Control Guide

Exhibit 5K-1 Foreign Trade Zones -- Manufacturing -- Pre-Assessment
Survey Technical Guide

Exhibit 5K-2 Foreign Trade Zones -- Petroleum -- Pre-Assessment Survey
Technical Guide

## Exhibit 5L Transshipment -- Pre-Assessment Survey Technical Guide

Exhibit 5N Caribbean Basin Economic Recovery Act and Caribbean Basin
Trade Partnership Act -- Pre-Assessment Survey Internal Control
Technical Guide

Exhibit 5O Andean Trade Preference Act -- Pre-Assessment Survey Internal
Control Technical Guide

Exhibit 5P Products of Insular Possessions -- Pre-Assessment Survey
Internal Control Technical Guide

Exhibit 5Q Israel Free Trade Area -- Pre-Assessment Internal Control
Technical Guide

Exhibit 5R African Growth and Opportunity Act -- Pre-Assessment Survey
Internal Control Technical Guide

Exhibit 5S Quantity -- Pre-Assessment Survey Internal Control Technical
Guide

Exhibit 5T Reconciliation -- Pre-Assessment Survey Internal Control
Technical Guide

Exhibit 5U Intellectual Property Rights -- Pre-Assessment Survey
Internal Control Technical Guide

# [Summary of Significant Changes to Existing FA Documents]{.underline}

# 

# Exhibit 1 Introduction

The Table of Contents was modified to include new technical guides
listed above.

# Exhibit 2A Internal Control Questionnaire for Focused Assessments

Wording was changed in IV. B. 3. from "Price Paid or Payable" to "Price
Actually Paid or Payable".

# Exhibit 2C Pre-Assessment Survey (PAS) Audit Program

Revised wording in paragraph 2.2A to show that the computer audit
specialist (CAS) will develop the profile.

An additional audit step was added to paragraph 2.2B to review prior
audits and follow-ups to comply with Generally Accepted Government
Auditing Standard requirements.

Removed the note below paragraph 2.2B that allowed variations of
procedures for submitting the questionnaire to the company.

Removed the reference in paragraph 2.2E to the Importer Compliance
Monitoring Program. This program has been terminated.

Added audit step 2.6B -- "select the test samples" to set up an audit
step to reference the documentation for sample selection.

Added a note below audit step 2.8E (2) for the Trade Act of 2002, which
requires Regulatory Audit to offset duty overpayments with duty
underpayments on liquidated entries during audits.

# Exhibit 2D Assessment Compliance Testing Audit Program

Revised wording in paragraph 4.3B (1) dealing with Transaction Value to
use the term "price actually paid or payable".

Revised wording in paragraph 4.3E Computed Value to replace the
statement that audit steps are being developed with a statement that the
auditor will determine audit steps.

Revised wording in paragraph 4.3S to change Caribbean Basin Initiative
to Caribbean Basin Economic Recovery Act and Caribbean Basin Trade
Partnership Act. Simplified audit step (1) to allow the auditor to
address either program.

Below each audit step for the calculation of revenue loss, added a note
referring to the Trade Act of 2002 which requires Regulatory Audit to
offset duty overpayments with duty underpayments on liquidated entries
during audits.

# Exhibit 2E Focused Assessment Follow-up Audit Program

Removed notes below the fourth bullet below B and H. Exhibit 3F Risk
Opinion Under Focused Assessments contains procedures to use if a
company does not implement corrective action.

Exhibit 4J Treatment of Ultimate Consignee Transactions in a Focused
Assessment

This exhibit was modified to clarify RAD policy on consignee
transactions.

# Exhibit 4C Prior Disclosure during a Focused Assessment

Corrected a typographical error.

# Exhibit 4E Compliance Improvement Plan Framework

Revised wording in the "Time Frames" paragraph to eliminate references
to risk categories.

Revised wording in the "Follow-up Review" paragraph to eliminate
references to risk categories.

# Exhibit 5B Transaction Value PAS Internal Control Technical Guide

Changed wording in Worksheet for Evaluating Internal Controls over
Transaction Value from "price paid or payable" to "price actually paid
or payable" and removed specific paragraph reference to Generally
Accepted Government Auditing Standards in the Background.

Minor grammatical changes for consistency between technical guides and
for clarity.

# Exhibits 5D, 5E, 5H, 5I, 5J, 5M

Removed specific paragraph reference for Generally Accepted Government
Auditing Standards in the Background

Minor grammatical changes for consistency between technical guides and
for clarity.

Exhibit 5M Generalized System of Preference Internal Control Technical
Guide

Corrected a typographical error.

Minor grammatical changes for consistency between technical guides and
for clarity.

# Other Exhibits

Minor changes were made to formatting of other exhibits for consistency.