# Presentation: 432238

## An Overview

*Financial Management*
*Matrix*
*Tuesday, May 25, 2004*
*Marcy Herringshaw*
*OCFO/Controller Operations Division/Financial Reporting Branch*

## Financial Management      Matrix

- What is it?
- Why was it created?
- When was it created?
- Who created it?

**Notes:**
Financial Management Matrix is a document that defines the financial tasks, corresponding responsibilities, and timeframes for successful completion of required accounting processes.
Financial Management Matrix was created because the agencies requested guidance on the FFIS process during the first Functional Administration (FA) Forum.  They requested a step by step guide to accomplish tasks on a daily, weekly, monthly, quarterly, and annual basis.
Financial Management Matrix was issued for FY 2002.
Financial Management Matrix was originally authored by Pauline Myrick, Darrell Kennedy, Margo Erny and their staffs with much much input from the agencies.

## Flow of Certification

**COD Certifies their tasks**
**Customer Liaison and Training Branch (CLTB) will send COD certifications to each Agency quarterly**
**3. Agency CFO reviews and signs their certification letter**

**Notes:**
1. Each Branch is in COD certifies on the completion of their particular tasks for each accounting period.  The tasks differ depending on the timeframe.  For example the quarterly months when FACTSII reporting is required .

2. The Customer Liaison and Training Branch collects all the certifications and consolidates this information and will be sending a certification message to each agencies quarterly.

3. The agency CFO then reviews the certification along with the certification of the tasks the agency is responsible for and signs the letter. 

## Monthly Certification Report of Financial Processes

**Notes:**
This is a sample of the Monthly Certification Report of Financial Process.  The Customer Liaison and Training Branch (CLTB) will send COD certification Report of Financial Processes to each agency on a quarterly basis.  This is because the CFO is required to certificate quarterly. 

## Flow of Certification

**4. Agency Head reviews and signs concurrence**
**5. Subcabinet reviews and signs concurrence**

**Notes:**
4. After the CFO certifies the the Agency Head has the opportunity to review the document and concur, agreement  in opinion.
5. After the Agency Head  concurs then the  Subcabinet or Undersecretary has the opportunity to review the document and concur, agreement in opinion.

## Then What Happens?

- Does Pat Healy, Acting Chief Financial Officer, really see the certification of the Financial Management Matrix?
- Is this really an OIG audit issue?

**Notes:**
YES and YES

## SUBJECT:  CFO Certification of 2nd Quarter FY 2004                 Unaudited Financial Statements

-                We confirm, to the best of our knowledge and belief, the following representations made during the preparation of the March 31, 2004 unaudited financial statements.
-        1.	The financial statements are fairly presented in conformity with Federal accounting standards.
-        2.      There are no material transactions including accruals that have not been properly recorded in the accounting records underlying the financial statements.
-        3.	Intra-departmental transactions and balances have been appropriately identified and eliminated for financial reporting purposes, unless otherwise noted.
-        4.         We have recorded transactions with the Department of Labor and the Office of Personnel Management consistent with amounts confirmed by the department.  We have reconciled intra-governmental transactions with the Bureau of Public Debt and  the Federal Financing Bank and balances have been appropriately reported, unless otherwise noted.
-        5.	The allowances for losses are considered sufficient to provide for losses that may be sustained on realization of the applicable receivables, credits, and guarantees.
-        6.	The amounts recorded for property reasonably estimate the value of the assets.
-        7.	We have completed the Comparison/Linking document that shows the relationships between the statements and we have reviewed the financial statements for correctness.
-       8.	We have completed the steps outlined in the Financial Statements Tasks Matrix for Accounting Period 6 – March 2004.
-       9.	We have reviewed and are on schedule for all corrective actions to address material weaknesses and nonconformances identified in compliance with FMFIA and FFMIA

-                     TO:     Patricia E. Healy
-                                  Acting Chief Financial Officer

**Notes:**
This is copy of the CFO Certification of 2nd Quarter FY 2004 Unaudited Financial Statements.  The certification states “ We confirm, to the best of our knowledge and belief, the following representations made during the preparation of the March 31, 2004 unaudited financial statements.”  There are 9 items listed.

## SUBJECT:  CFO Certification of 2nd Quarter FY 2004                 Unaudited Financial Statements

-       **8.****	****We have completed the steps outlined in the Financial Statements Tasks Matrix for Accounting Period 6 – March 2004.**

-    TO:	       Patricia E. Healy
-                   Acting Chief Financial Officer

**Notes:**

Item # 8. Refers to the Financial Management Matrix.

## SUBJECT:   CFO Certification of 2nd Quarter FY 2004     Unaudited Financial Statements

-  **CFO Certification**
- I certify that the information provided as of and for the period ending March 31, 2004, from the Foundation
- Financial Information System (FFIS), FFIS data entry tool, or both for the principal statements is consistent with
- the Agency’s accounting records; and that like amounts are reported consistently throughout the financial
- statements.
- CFO Signature                                                                                              Date
**Agency Head Concurrence**
- Agency Head Signature                                                                                 Date
**Subcabinet Concurrence**
- Undersecretary Signature                                                                              Date
**FAX CFO Certification to (202) 720-5741.**
**Exceptions/Explanations/Comments:**

- TO:              Patricia E. Healy
-                 Acting Chief Financial Officer

**Notes:**
This is the page for the CFO signature, the Agency Head signature, and the Undersecretary signature. This signed document is then faxed to the Office of the Chief Financial Officer (OCFO).  The certification reads, “I certify that the information provided as of and for the period ending March 31, 2004, from the Foundation Financial Information System (FFIS), FFIS data entry tool, or both for the principal statements is consistent with the Agency’s accounting records; and that like amounts are reported consistently throughout the financial statements.”

## Audit Report

**Audit Report**

**Finding 2**
**Quality Control Review Process Needs Improvement**
- “Given the accelerated timeframes imposed by the Office of Management and Budget (OMB), there will not be an opportunity in future years for the auditors to detect these material errors and provide the agency with time to make the necessary corrections.  As a results, unless the Department-wide quality control process is improved, there is a high-risk that the Department’s opinion on its financial statements could deteriorate.”

**USDA/OIG-A/50401-51-FM**

**Notes:**
This is quote from the OIG Audit report, finding #2  “Quality Control Review Process Needs Improvement”  The Financial Management Matrix is a tool to help USDA improve the quality of our data.  This tool should help USDA avoid and SURPRISES!

## Financial Management Matrix 

- TASK:
- Review Documents Suspense Table (SUSF)
- Responsible Party:		Agency
- Frequency: 			Daily

**Notes:**
SUSF should be reviewed for rejected and held transactions.  The STAT column of this table displays the current status of all documents.  All rejected and held documents should be corrected and processed.  If the necessary action is not taken to correct the documents, the documents will remain on SUSF indefinitely.  A daily review and correction of rejected and held documents will reduce both the month end and subsequent year end reconciliation and reprocessing.  While it is important to review all rejected transactions, a recommendation is to prioritize the review based on age and dollar amount of the transactions. The SUSF Archive and Aging Reports can be used to assist with the identification of transactions that should be processed.  Baseline Foundation Financial Information System (FFIS) reports or Financial Data Warehouse (FDW) generated reports should be used to facilitate the review.  
The following tasks, but not necessarily limited to, should be performed to ensure that all FFIS obligation, expenditure, and receivable transactions are recorded:
Inspect and analyze all held or rejected transactions to determine if they should be corrected and processed in FFIS prior to closing the accounting period or fiscal year;
Correct and process all held or rejected transactions, including FFIS interface transactions; and 
Delete all held or rejected transactions that are determined to be inappropriate.

## Financial Management Matrix 

- TASK:
-  Execute Nightly Cycle
- 	Responsible Party:  Accounting Processing  				     	 Branch (ACPRB)
- 	Frequency: 	     	 Daily

**Notes:**
The nightly cycle is a collection of jobs (statements that direct FFIS on the processing to be done) that process the day-to-day business of individual agencies.  An agency’s nightly cycle will vary depending on its business practices.  The nightly cycle begins once the agency application is closed for business each day and taken off-line.  The nightly cycle must complete prior to the application being brought on-line and available to users for the next business day.
The FFIS nightly cycle has a wide range of purposes from data backups to system assurance to the processing of documents.  The processing components of the nightly cycle are:
Maintenance; Documents Processing; Automated Disbursements; General Ledger and Journal Update; External Reporting; and System Assurance					

## Financial Management Matrix 

- TASK:
- Review System Assurance Reports
- Responsible Party:  Accounting Processing
- 			   	          Branch (ACPRB) FA 				          Agency FA
- 	Frequency: 	          Daily

**Notes:**
The primary goal of the system assurance process is to ensure that data contained in FFIS is accurate and reliable.  The systems assurance process verifies that FFIS is processing data correctly by checking that the data entered on a document is correct, daily transactions are posted correctly and monthly records are stored properly.  The process also checks for posting consistencies between specific FFIS Journals and Tables.
Any discrepancies identified during the process are displayed on an error report. Errors should be identified and resolved, as they occur.  This will help prevent inconsistencies and discrepancies in the specific FFIS Journals and Tables that will be reconciled when the annual close process is executed.
Example:
PXXNSABC-Budget Interlevel System Assurance Report.  This jobs reads the Budget Execution Tables and compares the amounts between budget levels and produces the above report.

## Financial Management Matrix 

- TASK:
- Cash Reconciliation
- 	Responsible Party:  Agency
-                                      Cash Reconciliation
-                                      Branch  (CRB)
- 	Frequency: 	   Weekly

**Notes:**
Agencies have the responsibility of performing timely and accurate reconciliations and the reporting of needed adjustments.
Cash reconciliation falls into one of two categories:  
1) Fund Balance with Treasury reconciliation; or 2) FMS 6652, Statement of Differences reconciliation.   
The Fund Balance with Treasury reconciliation resolves differences between an agency's general ledger balances and the Financial Management Service's (FMS) centrally recorded balances by fund symbol. The FMS balances are reported to the agency via the FMS 6653/6654, Undisbursed Appropriation reports or the FMS 6655, Receipt Account reports.
 For the FMS 6652, Statement of Differences reconciliation, an agency may have reported total monthly deposits or disbursements to FMS that are different from another agency’s reporting. For deposits, the agency-reported totals are compared with the banks' reporting by month and any difference creates a Statement of Differences for Deposits. Agency-reported totals of disbursements are compared against the Treasury Financial Centers' and the Intra-Governmental Payment and Collection (IPAC) System's, (formerly the On-Line Payment and Collection [OPAC] System), reporting for the month, with differences creating a Statement of Differences for Disbursements.  
The Automated Cash Reconciliation Worksheet System (ACRWS) is a cash reconciliation research tool used to aid agencies in performing cash reconciliation tasks.  ACRWS:
Imports daily detailed source data files from the Government On-Line Accounting Link System (GOALS), CA$HLINK, and Source Systems required to perform matching;
Imports Treasury GOALS data required for Monthly System Assurance Check;
 Automates complete and partial matching of schedules between FFIS and Treasury data; Creates manual complete and partial matches for transactions not linked by the automated matching process; Performs Several Monthly System Assurance Checks through reports to Ensure Data Integrity; and Generates Reports to aid Cash Reconciliation staff with research and analysis For either type of reconciliation, corrections must be carefully investigated and documented 			

## TASK:	
Review /Analysis of Trial Balance

Responsible Party:	 Agency
                                     Financial Reporting 
                                     Branch (FRB)
Frequency: 	           Monthly

- Review /Analysis of Trial Balance
- Responsible Party:	 Agency
-                                      Financial Reporting
-                                      Branch (FRB)
- Frequency: 	           Monthly

- Financial Management Matrix

**Notes:**
Failure to review the trial balance will jeopardize the execution of the annual close process.  In analyzing the trial balance, there are several recommended “checks” that should be performed.  Recommended reviews and edit checks are as follows:
Run the Abnormal Balance Report on the FSDW Reporting Center.  Review the report for abnormal balances that exceed the established threshold. Perform corrective action.
Budgetary General Ledger (GL) accounts (4000 series) should all be self balancing
Proprietary GL accounts (all non 4000 series) should all be self balancing
All GL accounts summed together should net zero
For proprietary accounts, the cash plus accounts receivables balances should be enough to cover funded payables.
Assets = Liabilities + Equity Look at relationships between budgetary and proprietary accounts:
Accounts Payable (2110) and others should = 4901
Proprietary net disbursements should equal Budgetary net disbursements.
The presence of specific GL accounts can indicate the type of fund; for example:          The presence of GL account 4650 (Allotments – Expired Authority) would indicate a single or multi year, expired fund.
It is important to recognize trends while conducting the analysis, for example:
Expenses will increase throughout the year
Available appropriations will be reduced throughout the year
Undelivered orders should decrease throughout the year for expired funds.
Note: This list of recommended reviews and edit checks is not all inclusive.
If an abnormal balance or an imbalance in one of the relationships is overlooked, it may cause the final annual close job to fail.  These check points are relevant to the FSDW trial balance, the Fund Summary Group Definition Table (FSUM) generated trial balance (if FSUM has been properly configured).
Refer to the Annual Close Guide or  for additional guidance on analyzing the trial balance.   
Refer to the Annual Close Guide or  for additional guidance on analyzing the trial balance.   	

## Financial Management Matrix 

- TASK:
- Verify that the directly entered monthly accruals
- reversed
- 	Responsible Party:		Agency
- 	Frequency: 			Monthly

**Notes:**
Review SUSF to ensure the accrual reversals are in ‘Accept’ status. The following transaction codes should be checked:

SV – Standard Voucher
YE – Period End Estimate	Manual				

## Financial Management Matrix

- TASK:
- Run FACTS II Jobs
- Responsible Party:	 Accounting Processing    				 Branch (ACPRB)
- 					 Financial Reporting 					 Branch (FRB) 					           Agency
- 	Frequency: 		Monthly

**Notes:**
The Federal Agencies’ Centralized Trial Balance System (FACTS II), an SGL-based system, allows agencies to submit one set of financial data for the SF-133, Report on Budget Execution, FMS 2108, Year-End Closing Statement, and the prior year column of the Program and Financing Statement. FACTS II captures budgetary and select proprietary accounts.
Refer to the Guide to Generating the FACTS II Interface File for details on producing the FACTS II bulk file transmission and FACTS II edits.
Review FACTS II  Trial Balance (AGCSF2).		

## Questions