U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

79–010

" ! SENATE 106TH CONGRESS

2d Session

REPORT

2000

106–337

Calendar No. 672

REPORTS CONSOLIDATION ACT OF 2000

R E P O R T

OF THE

COMMITTEE ON GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

TO ACCOMPANY

S. 2712

TO AMEND CHAPTER 35 OF TITLE 31, UNITED STATES CODE, TO

AUTHORIZE THE CONSOLIDATION OF CERTAIN FINANCIAL AND

PERFORMANCE MANAGEMENT REPORTS REQUIRED OF FEDERAL

AGENCIES, AND FOR OTHER PURPOSES

JULY 11, 2000.—Ordered to be printed

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

WILLIAM V. ROTH, JR., Delaware

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

JUDD GREGG, New Hampshire

JOSEPH I. LIEBERMAN, Connecticut

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

JOHN EDWARDS, North Carolina

HANNAH S. SISTARE, Staff Director and Counsel

ROBERT J. SHEA, Counsel

HENRY R. WRAY, Counsel

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel

SUSAN E. PROPPER, Minority Counsel

DARLA D. CASSELL, Chief Clerk

Calendar No. 672

106TH CONGRESS REPORT

2d Session " ! SENATE 106–337

REPORTS CONSOLIDATION ACT OF 2000

JULY 11, 2000.—Ordered to be printed

Mr. THOMPSON, from the Committee on Governmental Affairs,

submitted the following

REPORT

[To accompany S. 2712]

The Committee on Governmental Affairs, to which was referred

the bill (S. 2712) to amend chapter 35 of title 31, United States

Code, to authorize the consolidation of certain financial and performance management reports required of Federal agencies, and

for other purposes, having considered the same, reports favorably

thereon without amendment and recommends that the bill do pass.

CONTENTS

Page

I. Purpose and Summary .................................................................................. 1

II. Background .................................................................................................... 2

III. Discussion ....................................................................................................... 2

IV. Legislative History ......................................................................................... 4

V. Section-by-Section Analysis .......................................................................... 5

VI. Estimated Cost of Legislation ....................................................................... 6

VII. Regulatory Impact ......................................................................................... 7

VIII. Changes to Existing Law .............................................................................. 7

I. PURPOSE AND SUMMARY

S. 2712, the ‘‘Reports Consolidation Act of 2000,’’ authorizes Federal agencies to consolidate into one annual report several different

financial and performance management reports now required by

law. The consolidated reports would present in one document a

comprehensive and integrated picture of each agency’s performance. As such, they would be more useful to Congress, the Executive Branch, and the public. The Office of Management and Budget

(OMB) had temporary authority to consolidate reports on a pilot

basis, but that authority expired in April of this year. S. 2712 restores the consolidation authority and makes it permanent. The bill

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also contains several enhancements designed to make the reports

more useful.

II. BACKGROUND

Government agencies currently are required to submit financial

or performance management reports under a number of laws, including the Federal Managers’ Financial Integrity Act, 31 U.S.C.

§ 3512(d)(3), the Chief Financial Officers Act (CFO Act), 31 U.S.C.

§ 902(a)(6), the Government Management Reform Act, 31 U.S.C.

§§ 3515, 3521(f), and the Government Performance and Results Act

(GPRA), 31 U.S.C. § 1116. These requirements sometimes ask for

similar information in different formats, causing duplication of effort on the part of agencies. They also provide information in a

scattershot way that is not fully useful to the agency in question,

the Congress, or the public.

Pursuant to authority provided in the Government Management

Reform Act, 31 U.S.C. § 501 note, OMB instituted a pilot project in

Fiscal Year (FY) 1995 to produce a single annual consolidated

agency report linking together information contained in separate

reports submitted under the laws listed above. These consolidated

reports typically were referred to as ‘‘Accountability Reports.’’ They

were intended to provide consolidated analyses of both financial

and performance management data in an easily understandable

and useful format. The pilot project initially involved six agencies,

but added many more agencies in subsequent years. The authority

for the pilots was originally scheduled to expire at the end of December 1999. However, it was extended through April 2000 in

order to permit agencies to submit consolidated reports covering

their activities for FY 1999.

III. DISCUSSION

As previously noted, S. 2712 provides permanent and enhanced

authority for the consolidation of financial and performance management reports. Enactment of S. 2712 this year would permit

agencies to submit consolidated reports for their FY 2000 activities. This bipartisan bill was sponsored jointly by Chairman

Thompson and the Committee’s Ranking Member, Senator

Lieberman. It has the support of OMB and the CFO Act agencies.

The principal features of the bill are described below.

The bill authorizes agencies, with the concurrence of OMB, to

consolidate a number of financial and performance management reports they now submit to the Congress, the President, or OMB

under specified provisions of law. The most significant of these reports are GPRA Annual Program Performance Reports and annual

reports on the agency’s financial statements under the CFO Act.

The bill also authorizes agencies to include other statutorily required reports on financial or performance management if the

agency head determines that their inclusion would enhance the

usefulness of the information reported and consults in advance

with relevant Congressional committees. Agencies could adjust the

due dates of the reports in order to facilitate their consolidation.

The consolidated report would be submitted annually to the President, the Director of OMB, and appropriate committees and subcommittees of the Congress.

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1Some of the agencies that reported by March 1 of this year were the Social Security Administration and the Departments of Defense, Education, Health and Human Services, and Interior.

Effective for FY 2002, the deadline for submission of the consolidated report would be 150 days after the end of the agency’s fiscal

year. This equates to March 1 for the vast majority of federal agencies, which operate on the standard October 1 through September

30 federal fiscal year cycle. However, for those entities that are

permitted by law to use the calendar year as their fiscal year, the

deadline would be June 1. The bill also amends GPRA to impose

a 150-day deadline for submission of annual Performance Reports

even if they are not included in the consolidated report. The current deadline for Performance Reports is March 31. This amendment likewise is effective for FY 2002.

The purpose of the timing changes is to make GPRA Performance Reports more useful for the budget cycle. The Committee

agreed to postpone the mandate for March 1 submission until

FY 2002 in order to ease potential transition problems. Specifically, OMB expressed concern that, in some cases, an immediate

transition to March 1 could unduly burden agencies that rely on

States and other third parties who provide performance data for

the agency reports or, alternatively, might result in less complete

reports. While the Committee appreciates these concerns, integration of the Performance Reports with annual budget decisions is a

key objective of GPRA that should be accomplished as soon as possible. Therefore, the Committee encourages agencies to submit

their FY 2000 and 2001 Performance Reports by March 1 or even

earlier unless they face specific transition problems such as those

cited by OMB. In this regard, the Committee notes that many

agencies were able to submit their FY 1999 Performance Reports

on or before March 1 of this year.1

If a consolidated report includes the agency’s GPRA Performance

Report, it must be called a ‘‘Performance and Accountability Report.’’ This is important to ensure transparency. Several agencies

incorporated their FY 1999 Performance Reports into a document

they described only as their ‘‘Accountability Report.’’ As a result,

those interested in the agency’s Performance Report had trouble

identifying and locating it.

A consolidated report that does not incorporate the agency’s

GPRA Performance Report must include a summary of the key aspects of the Performance Report. The Committee believes it is important for agencies to link financial management and program results information in order to provide an integrated and comprehensive picture of the agency’s performance. Therefore, even if an

agency chooses to consolidate only its financial reports into an Accountability Report, that report should highlight the most important results of the agency’s program performance. The better Accountability Reports already do this.

The consolidated report must include a statement by the agency’s

Inspector General (IG) that describes the agency’s most serious

management and performance challenges and assesses the agency’s

progress in addressing them. The IG must provide this statement

to the agency head at least 30 days before the due date of the consolidated report. The agency head may comment on the IG’s statement but cannot change it. In the Committee’s view, no comprehenVerDate 11-MAY-2000 07:57 Jul 14, 2000 Jkt 079010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\SR337.XXX pfrm07 PsN: SR337
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sive report on an agency’s performance would be complete without

an independent assessment by the IG.

The Committee decided that the best approach was to include

the IG statement on the agency’s most serious challenges. This, in

effect, codifies the practice of the past three years whereby IGs for

each cabinet department and major independent agency have reported to Congress on the 10 or so most serious problems facing

their agencies. These ‘‘top 10’’ reports, as they have come to be

called, are an invaluable source of information to this Committee

and others in Congress. They provide an excellent perspective on

the highest priority challenges facing each agency and serve as a

barometer on progress toward resolving them. Agencies would have

the opportunity to respond to the IG submissions with their own

assessments. Since not all of these ‘‘top 10’’ challenges may be addressed in the agency’s Performance Report, the inclusion of the IG

statement and any agency comments will provide a fuller picture

of the agency’s progress in the consolidated report.

The consolidated report must include a transmittal letter by the

agency head assessing the completeness and reliability of performance and financial data used in the report and what the agency is

doing to remedy any material data inadequacies. The bill amends

GPRA to apply the same requirement to Performance Reports if

they are not incorporated into the consolidated report. Reviews by

agency IGs and the General Accounting Office (GAO) repeatedly

show that most agencies have great difficulty producing reliable

performance data. As Senator Lieberman recently observed of the

FY 1999 GPRA Performance Reports, ‘‘a major concern is the validity of the data some agencies are relying upon in their initial reports, and we need to ensure that improvements are made.’’ The

agency head assessments are a good vehicle to find out where agencies stand on data issues, what challenges they face in obtaining

valid data, and to hold them accountable for needed improvements.

Financial information, as well as performance information, must

be reliable and consistently reported. Where information is outdated, its usefulness is limited. For instance, included in the financial statements for the Social Security Administration and the Department of Health and Human Services is information on the Social Security Trust Funds and Medicare (Part A), including dates

when expenditures were projected to exceed contributions and

dates when the funds were projected to be exhausted. Soon after

those financial reports were issued, the trustees for Social Security

and Medicare issued more current information that contained significant differences from the information and projections contained

in the Financial Report. Such inconsistent reporting is confusing to

the Congress and the public and reduces confidence in the credibility of the government’s financial report. The Committee hopes

that these agencies will work to ensure that they are using the

most current information available in their financial statements.

IV. LEGISLATIVE HISTORY

S. 2712 was introduced on June 12, 2000, by Chairman Thompson on behalf of himself and Senator Lieberman. The Committee

on Governmental Affairs considered the bill on June 14, 2000, and

ordered the bill reported by voice vote.

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V. SECTION-BY-SECTION ANALYSIS

Section 1 provides that the bill may be cited as the ‘‘Reports Consolidation Act of 2000.’’

Section 2(a) contains Congressional findings to the effect that: (1)

existing law imposes numerous financial and performance management reporting requirements on agencies; (2) these separate requirements can cause duplication of effort and result in uncoordinated reports containing information in a form that is not completely useful; and (3) pilot projects conducted by agencies under

the direction of OMB demonstrate that single consolidated reports

providing an analysis of verifiable financial and performance management information produce more useful reports with greater efficiency.

Section 2(b) states that the purposes of the bill are to: (1) authorize and encourage the consolidation of financial and performance

management reports; (2) provide financial and performance management information in a more meaningful and useful format; (3)

improve the quality of agency financial and performance management information; and (4) enhance coordination and efficiency in

the reporting of financial and performance management information.

Section 3(a) of the bill adds a new section 3516 to title 31, United

States Code, to provide permanent reports-consolidation authority.

Subsection (a)(1) of the new 3516 of title 31 provides that, with

the concurrence of OMB, the head of an executive agency may adjust the frequency and due dates of, and consolidate into an annual

report to the President, the Director of OMB, and the Congress any

statutorily required reports described in subsection 3516(a)(2). The

consolidated report shall be submitted to the President, the Director of OMB, and appropriate committees and subcommittees of the

Congress not later than 150 days after the end of the agency’s fiscal year.

Subsection 3516(a)(2) provides that the following reports could be

consolidated into the report referred to in subsection (a)(1):

(A) Any report by an agency to the Congress, OMB, or the

President under section 1116 and chapters 9, 33, 35, 37, 75,

and 91 of title 31, United States Code;

(B) The biennial financial management improvement plan by

the Secretary of Defense under 10 U.S.C. § 2222 and the annual report of the Attorney General under 28 U.S.C. § 522;

(C) Any other statutorily required report pertaining to an

agency’s financial or performance management if the head of

the agency determines that its inclusion would enhance the

usefulness of the reported information and consults in advance

with the Senate Committee on Governmental Affairs, the

House Committee on Government Reform, and any other Congressional committee of jurisdiction.

Subsection 3516(b) requires that if a consolidated report incorporates the agency’s annual GPRA Performance Report, it shall be

called the ‘‘Performance and Accountability Report.’’

Under subsection 3516(c), a consolidated report that does not incorporate the agency’s GPRA Performance Report must contain a

summary of the most significant portions of the Performance Report.

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Subsection 3516(d) requires that the consolidated report include

a summary and assessment by the agency’s IG of the most serious

management and performance challenges facing the agency and the

agency’s progress in addressing them. The IG’s statement must be

provided to the agency head at least 30 days prior to the due date

of the report. The agency head may comment on the IG’s statement, but may not change it.

Subsection 3516(e) requires that the agency head include a transmittal letter for the consolidated report that assesses the completeness and reliability of the performance and financial data used in

the report. The assessment must describe any material inadequacies in the completeness and reliability of the data and steps to resolve them.

Subsection 3(b) of the bill contains a special rule that permits

agencies to submit consolidated reports for FY 2000 and 2001 not

later than 180 days after the end of the agency’s fiscal year for

those two years.

Section 4 of the bill amends section 3515 of title 31, United

States Code, to require that annual reports on audited financial

statements under the Chief Financial Officers Act be submitted to

Congress at the same time they are submitted to OMB. This subsection also repeals several transition provisions of 31 U.S.C.

§ 3515 that have now been executed. Finally, section 4 makes conforming changes to 31 U.S.C. § 3521 to reflect the repeal of the

transition provisions.

Section 5(a) of the bill amends 31 U.S.C. § 1116(a) to require that

GPRA Performance Reports be submitted not later than 150 days

after the end of an agency’s fiscal year. This requirement would not

apply to Performance Reports for FY 2000 and 2001.

Section 5(b) rewrites 31 U.S.C. § 1116(e). It eliminates the current language authorizing agencies to include GPRA Performance

Reports in their annual financial statements under section 3515 of

title 31. This language is superfluous in view of the reports-consolidation authority provided elsewhere in the bill. Section 5(b) substitutes a new requirement that GPRA Performance Reports contain an assessment by the agency head of the completeness and reliability of the report’s performance data, which describes any material data inadequacies and what is being done to resolve them.

This requirement would not apply to Performance Reports included

in consolidated reports under 31 U.S.C. § 3516 (as added by the

bill). Instead, the parallel requirement in section 3516(e) would

apply.

VI. ESTIMATED COST OF LEGISLATION

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, June 22, 2000.

Hon. FRED THOMPSON, Chairman, Committee on Governmental Affairs,

U.S. Senate, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 2712, the Reports Consolidation Act of 2000.

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If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is John R. Righter.

Sincerely,

STEVEN LIEBERMAN

(For Dan L. Crippen, Director).

Enclosure.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 2712—Reports Consolidation Act of 2000

Subject to the approval of the Office of Management and Budget,

S. 2712 would authorize agencies to consolidate certain financial

and performance reports required by law each year into one annual

report. Reports eligible for consolidation under S. 2712 would include the audited financial statements required under the Chief Financial Officers Act and the performance reports required under

the Government Performance and Results Act. The omnibus report

would be due within 180 days of the end of the fiscal years 2000

and 2001, and within 150 days of the end of each fiscal year thereafter.

Because S. 2712 would neither eliminate nor modify any of the

analytical requirements of these reports, CBO estimates that the

savings to agencies that elect to consolidate them into a single report would be relatively minor. Because the bill would not affect direct spending or receipts, pay-as-you-go procedures would not

apply. S. 2712 contains no intergovernmental or private-sector

mandates as defined in the Unfunded Mandates Reform Act and

would not affect the budgets of state, local, or tribal governments.

The CBO staff contact is John R. Righter. This estimate was approved by Peter H. Fontaine, Deputy Assistant Director for Budget

Analysis.

VII. REGULATORY IMPACT

Pursuant to paragraph 11(b) of rule XXVI of the Standing Rules

of the Senate, the Committee has considered the regulatory impact

that would be incurred in carrying out the bill. The Committee

finds that enactment of the bill will not have significant regulatory

impact.

VIII. CHANGES TO EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing

Rules of the Senate, changes in existing law made by S. 2712 as

reported are shown as follows (existing law proposed to be omitted

is enclosed in black brackets, new matter is printed in italic, and

existing law in which no change is proposed is shown in roman):

UNITED STATES CODE

TITLE 31

CHAPTER 11—THE BUDGET

* * * * * * *

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§ 1116. Program performance reports

(a) øNo later than March 31, 2000, and no later than March 31

of each year thereafter,¿ Not later than 150 days after the end of

an agency’s fiscal year, the head of each agency shall prepare and

submit to the President and the Congress, a report on program performance for the previous fiscal year.

* * * * * * *

ø(e) An agency head may include all program performance information required annually under this section in an annual financial

statement required under section 3515 if any such statement is

submitted to the Congress no later than March 31 of the applicable

fiscal year.¿

(e)(1) Except as provided in paragraph (2), each program performance report shall contain an assessment by the agency head of the

completeness and reliability of the performance data included in the

report. The assessment shall describe any material inadequacies in

the completeness and reliability of the performance data, and the

actions the agency can take and is taking to resolve such inadequacies.

(2) If a program performance report is incorporated into a report

submitted under section 3516, the requirements of section 351(e)

shall apply in lieu of paragraph (1).

* * * * * * *

CHAPTER 35—ACCOUNTING AND COLLECTION

* * * * * * *

Subchapter II—Accounting Requirements, Systems, and

Information

* * * * * * *

3516. Reports consolidation.

* * * * * * *

§ 3515. Financial statements of agencies

(a) Not later than March 1 of 1997 and each year thereafter, the

head of each executive agency identified in section 901(b) of this

title shall prepare and submit to the Congress and the Director of

the Office of Management and Budget an audited financial statement for the preceding fiscal year, covering all accounts and associated activities of each office, bureau, and activity of the agency.

* * * * * * *

ø(e) The Director of the Office of Management and Budget may

waive the application of all or part of subsection (a) for financial

statements required for fiscal years 1996 and 1997.

ø(f) Not later than March 1 of 1995 and 1996, the head of each

executive agency identified in section 901(b) of this title and designated by the Director of the Office of Management and Budget

shall prepare and submit to the Director of the Office of Management and Budget an audited financial statement for the preceding

fiscal year, covering all accounts and associated activities of each

office, bureau, and activity of the agency.

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ø(g) Not later than March 31 of 1995 and 1996, for executive

agencies not designated by the Director of the Office of Management and Budget under subsection (f), the head of each executive

agency identified in section 901(b) of this title shall prepare and

submit to the Director of the Office of Management and Budget a

financial statement for the preceding fiscal year, covering—

ø(1) each revolving fund and trust fund of the agency; and

ø(2) to the extent practicable, the accounts of each office, bureau, and activity of the agency which performed substantial

commercial functions during the preceding fiscal year.

ø(h) For purposes of subsection (g), the term ‘‘commercial functions’’ includes buying and leasing of real estate, providing insurance, making loans and loan guarantees, and other credit programs

and any activity involving the provision of a service or thing for

which a fee, royalty, rent, or other charge is imposed by an agency

for services and things of value it provides.¿

* * * * * * *

§ 3516. Reports consolidation

(a)(1) With the concurrence of the Director of the Office of Management and Budget, the head of an executive agency may adjust

the frequency and due dates of, and consolidate into an annual report to the President, the Director of the Office of Management and

Budget, and Congress any statutorily required reports described in

paragraph (2). Such a consolidated report shall be submitted to the

President, the Director of the Office of Management and Budget,

and to appropriate committees and subcommittees of Congress not

later than 150 days after the end of the agency’s fiscal year.

(2) The following reports may be consolidated into the report referred to in paragraph (1):

(A) Any report by an agency to Congress, the Office of Management and Budget, or the President under section 1116, this

chapter, and chapters 9, 33, 37, 75, and 91.

(B) The following agency-specific reports:

(i) The biennial financial management improvement plan

by the Secretary of Defense under section 2222 of title 10.

(ii) The annual report of the Attorney General under section 522 of title 28.

(C) Any other statutorily required report pertaining to an

agency’s financial or performance management if the head of

the agency—

(i) determines that inclusion of that report will enhance

the usefulness of the reported information to decision makers; and

(ii) consults in advance of inclusion of that report with

the Committee on Governmental Affairs of the Senate, the

Committee on Government Reform of the House of Representatives, and any other committee of Congress having

jurisdiction with respect to the report proposed for inclusion.

(b) A report under subsection (a) that incorporates the agency’s

program performance report under section 1116 shall be referred to

as a performance and accountability report.

(c) A report under subsection (a) that does not incorporate the

agency’s program performance report under section 1116 shall conVerDate 11-MAY-2000 07:57 Jul 14, 2000 Jkt 079010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6603 E:\HR\OC\SR337.XXX pfrm07 PsN: SR337
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tain a summary of the most significant portions of the agency’s program performance report, including the agency’s success in achieving key performance goals for the applicable year.

(d) A report under subsection (a) shall include a statement prepared by the agency’s inspector general that summarizes what the

inspector general considers to be the most serious management and

performance challenges facing the agency and briefly assesses the

agency’s progress in addressing those challenges. The inspector general shall provide such statement to the agency head at least 30

days before the due date of the report under subsection (a). The

agency head may comment on the inspector general’s statement, but

may not modify the statement.

(e) A report under subsection (a) shall include a transmittal letter

from the agency head containing, in addition to any other content,

an assessment by the agency head of the completeness and reliability of the performance and financial data used in the report.

The assessment shall describe any material inadequacies in the

completeness and reliability of the data, and the actions the agency

can take and is taking to resolve such inadequacies.

* * * * * * *

§ 3521. Audits by agencies

* * * * * * *

(f)ø(1)¿ For each audited financial statement required under

øsubsections (a) and (f)¿ subsection (a) of section 3515 of this title,

the person who audits the statement for purposes of subsection (e)

of this section shall submit a report on the audit to the head of the

agency. A report under this subsection shall be prepared in accordance with generally accepted government auditing standards.

ø(2) Not later than June 30 following the fiscal year for which

a financial statement is submitted under subsection (g) of section

3515 of this title, the person who audits the statement for purpose

of subsection (e) of this section shall submit a report on the audit

to the head of the agency. A report under this subsection shall be

prepared in accordance with generally accepted government auditing standards.¿

* * * * * * *

Æ