GAO

United States General Accounting Office

Financial Management Series

February 2000 CORE FINANCIAL 

SYSTEM 

REQUIREMENTS

Checklist for 

Reviewing Systems 

Under the Federal 

Financial Management 

Improvement Act 

GAO/AIMD-00-21.2.2
GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

______________________________________________________________________________

PREFACE

______________________________________________________________________________

B-284426

The Federal Financial Management Improvement Act (FFMIA) of 1996 requires, among

other things, that agencies implement and maintain financial management systems that

substantially comply with federal financial management systems requirements. These

requirements are detailed in the Financial Management Systems Requirements series

issued by the Joint Financial Management Improvement Program (JFMIP) and in Office

of Management and Budget (OMB) Circular A-127, Financial Management Systems, and

OMB’s Implementation Guidance for the Federal Financial Management Improvement

Act (FFMIA) of 1996, issued September 9, 1997. JFMIP intends for the requirements to

promote understanding of key financial management systems concepts and requirements,

to provide a framework for establishing integrated financial management systems to

support program and financial managers, and to describe specific requirements of

individual types of financial management systems.

We are issuing this checklist that reflects JFMIP’s revised Core Financial System

Requirements (February 1999) to assist (1) agencies in implementing and monitoring

their core systems and (2) management and auditors in reviewing agency core systems to

determine if they substantially comply with FFMIA. This checklist is not required to be

used in assessing the core system. It is provided as a tool for use by experienced staff.

This checklist, the JFMIP source document, and the two previously mentioned OMB

documents should be used concurrently. Experienced judgment must be applied in the

interpretation and application of this tool to enable a user to consider the impact of the

completed checklist on an entire core system and whether the system, as a whole,

substantially complies with requirements.

Additional copies of this checklist can be obtained from Room 1100, 700 4th St. NW, U.S.

General Accounting Office, Washington, D.C. 20548, or by calling (202) 512-6000, or TDD

(202) 512-2537. This checklist replaces GAO’s previously issued Core Financial System

Checklist (May 1998) and is available on the Internet on GAO’s Home Page

(www.gao.gov) under “Special Publications.”

[signed]

Jeffrey C. Steinhoff

Acting Assistant Comptroller General

Accounting and Information Management Division
Page 2 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

(BLANK)
Page 3 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

______________________________________________________________________________

CONTENTS

______________________________________________________________________________

Preface 1

Overview 5

Authoritative Guidance 6

How to Use This Checklist 7

Systems Requirements 9

Core Financial System Management Function 11

General Ledger Management Function 24

Funds Management Function 27

Payment Management Function 38

Receipt Management Function 49

Cost Management Function 56

Reporting Function 61

Figure

Figure 1: Agency Systems Architecture 5

Abbreviations

ABA American Banking Association

ACH automated clearing house

BPA blanket purchase agreement

CFO Chief Financial Officers

DUNS data universal numbering system

EFT electronic funds transfer

EIN employer identification number

FASAB Federal Accounting Standards Advisory Board

FAST federal account symbols and titles

FFMIA Federal Financial Management Improvement Act

FMFIA Federal Managers’ Financial Integrity Act

FMSS Financial Management Systems Software

GPO Government Printing Office

GSA General Services Administration

ID identification number

IRS Internal Revenue Service

JFMIP Joint Financial Management Improvement Program

NARA National Archives and Records Administration

OMB Office of Management and Budget

PMO Program Management Office

SGL U.S. Government Standard General Ledger

SSN social security number

TFM Treasury Financial Manual

TIN taxpayer identification number
Page 4 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

(BLANK)
Page 5 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

______________________________________________________________________________

OVERVIEW

______________________________________________________________________________

The Federal Financial Management Improvement Act (FFMIA) of 1996 requires, among

other things, that agencies implement and maintain financial management systems that

substantially comply with federal financial management systems requirements. These

system requirements are detailed in the Financial Management Systems Requirements

series issued by the Joint Financial Management Improvement Program (JFMIP)1

and

Office of Management and Budget (OMB) Circular A-127, Financial Management Systems.

JFMIP requirements documents identify (1) a framework for financial management

systems, (2) core financial systems requirements, and (3) 16 other financial and mixed

systems supporting agency operations, not all of which are applicable to all agencies.

Figure 1 is the JFMIP model that illustrates how these systems interrelate in an agency's

overall systems architecture.

Figure 1: Agency Systems Architecture

Source: JFMIP Core Financial System Requirements document.

1

JFMIP is a joint cooperative undertaking of the Office of Management and Budget, the

General Accounting Office, the Department of Treasury, and the Office of Personnel

Management, working in cooperation with each other and with operating agencies to

improve financial management practices throughout the government. The program was

initiated in 1948 by the Secretary of the Treasury, the Director of the Bureau of the

Budget (now OMB), and the Comptroller General and was given statutory authorization

in the Budget and Accounting Procedures Act of 1950. The Civil Service Commission,

now the Office of Personnel Management (OPM), joined JFMIP in 1966.
Page 6 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

To date, JFMIP has issued the framework document and systems requirements for the

core financial system and 7 of the 16 systems identified in the architecture. (See figure

1.)2

We are issuing this checklist that reflects JFMIP’s revised Core Financial System

Requirements (February 1999) to assist (1) agencies in implementing and monitoring

their core systems and (2) management and auditors in reviewing agency core systems to

determine if they substantially comply with FFMIA. This checklist is not required to be

used in assessing the core system. It is provided as a tool for use by experienced staff.

This checklist, the JFMIP source document, OMB Circular A-127, and OMB’s

Implementation Guidance for the Federal Financial Management Improvement Act

(FFMIA) of 1996, issued September 9, 1997 should be used concurrently. Experienced

judgment must be applied in the interpretation and application of this tool to enable a

user to consider the impact of the completed checklist on the entire core system and

whether the system, as a whole, substantially complies with requirements.

Authoritative Guidance

OMB Circular A-127 and OMB’s implementation guidance provide the basis for assessing

compliance with the FFMIA requirements for agencies to implement and maintain

financial management systems that comply substantially with federal requirements. The

implementation guidance identifies various criteria that an agency must meet to

substantially comply with these requirements. One of the criteria listed in the OMB

guidance is the JFMIP systems requirements series.

The source of all the questions in this checklist is the JFMIP Core Financial System

Requirements (JFMIP-SR-99-4, February 1999). This JFMIP document represents the

third update to the core document, first issued in January 1988. This most recent update

clarifies some of the existing requirements, reflects changes in laws and regulations, such

as the Debt Collection Improvement Act, and adds requirements for budget execution and

revolving fund functions. The JFMIP requirements remain the basis for the federal

government to test compliance of commercially based, core financial software. During

fiscal year 1999, JFMIP’s new Program Management Office (PMO) developed a new

testing and qualification process, directly linking tests back to these requirements. The

checklist is based on existing published JFMIP standards, and that changes in laws,

regulations, and standards and practices since the standards were issued are not included

in the checklist.

2

Thus far, the series includes the (1) Framework for Federal Financial Management

Systems, (2) Core Financial System Requirements, (3) Inventory System Requirements,

(4) Seized/Forfeited Asset System Requirements, (5) Direct Loan System Requirements,

(6) Guaranteed Loan System Requirements, (7) Travel System Requirements, (8) Human

Resources & Payroll System Requirements, and (9) System Requirements for Managerial

Cost Accounting. In early 1998, JFMIP decided to initiate projects to update system

requirements documents that were not current with regulations and legislation. JFMIP

also planned to initiate projects to complete the remaining systems requirements.
Page 7 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

How to Use This Checklist

OMB’s 1997 implementation guidance provides chief financial officers and inspectors

general with a means for determining whether their agencies’ financial management

systems substantially comply with federal financial management systems requirements.

The annual reporting required pursuant to section 4 of the Federal Managers’ Financial

Integrity Act (FMFIA) is one of the means to assist agencies in the determination of

substantial compliance. Agencies can also use this checklist and JFMIP’s core test as

tools to help determine annual compliance with section 4 of this act.3

Filling out this checklist will allow agencies to systematically determine whether specific

system requirements are being met. In determining substantial compliance, agencies

should assess the results of the completed checklist on the core system requirements

taken as a whole.

The checklist contains three columns with the first citing the question to be answered.

Use the second column to answer each question “yes,” “no,” or “na.” Use the third

column to explain your answer. A “yes” answer should indicate that the agency’s core

system provides for the capability described in the question. For each “yes” answer, the

third column should contain a brief description of how the core system contains the

capability and should also refer to a source that explains or shows the capability.

A “no” answer indicates that the capability does not exist. For a “no” answer, the third

column should provide an explanation and, where applicable, a reference to any related

supporting documentation (e.g., the agency is working on modifying or implementing its

core system to have the capability available in subsequent years; management believes

the capability is not cost-effective and will not enhance the core system’s ability to

manage operations). Cost-benefit studies, or other reasoning, that supports a “no”

answer should be identified in the explanation column. If there are no cost-benefit

studies or other support, a full explanation should be provided.

“No” answers should not be viewed individually or taken out of context. Rather, “no”

answers should be assessed as to the impact on the overall core system and the extent to

which reasons for the “no” answers preclude the entire core system from being

substantially compliant.

Certain questions within the checklist may not be applicable to every agency. Answer

such question(s) with “na” and explain why in the third column.

3

In addition, the Chief Financial Officers (CFO) Council has charged the Financial

Systems Committee with developing implementation guidance for performing FFMIA

compliance reviews. The CFO Council and JFMIP plan to jointly issue the guidance.
Page 8 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

(BLANK)
Page 9 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

______________________________________________________________________________

CORE FINANCIAL SYSTEM REQUIREMENTS

______________________________________________________________________________

JFMIP’s Core Financial System Requirements helps agencies meet government

requirements by establishing standard requirements to support an agency’s integrated

financial management system. It provides common processing routines, supports

common data for critical financial management functions affecting the entire agency, and

maintains the required financial data integrity control over financial transactions,

resource balances, and other financial management systems.

The seven functions of the core financial system are discussed below.

1. Core financial management consists of the processes necessary to maintain systemprocessing rules consistent with established financial management policy. This

function sets the framework in which all other core financial system functions

operate. (The checklist questions for this area are drawn from pp. 16-21 of the JFMIP

source document.)

2. General ledger management is the central function of the core financial system. The

general ledger is the highest level of summarization and must maintain account

balances by the fund structure and individual general ledger accounts established in

the core financial system management function. (The checklist questions for this

area are drawn from pp. 22-23 of the JFMIP source document.)

3. Funds management is a system for ensuring that the agency does not obligate or

disburse funds in excess of those appropriated and/or authorized. (The checklist

questions for this area are drawn from pp. 24-28 of the JFMIP source document.)

4. Payment management is a function that provides appropriate control over all

payments made by or on behalf of an agency. (The checklist questions for this area

are drawn from pp. 29-33 of the JFMIP source document.)

5. Receipt management is the function that supports activities associated with recording

agency cash receipts, including servicing and collecting receivables. (The checklist

questions for this area are drawn from pp. 34-37 of the JFMIP source document.)

6. Cost management attempts to measure the full cost of federal programs, their

activities, and outputs. (The checklist questions for this area are drawn from pp. 38-

40 of the JFMIP source document.)

7. Reporting is the function that provides useful financial information on time to

(1) support management’s fiduciary role, (2) support budget formulation and

execution functions, (3) support fiscal management of program delivery and program

decision- making, (4) support internal and external reporting requirements, including,

as necessary, the requirements for financial statements prepared in accordance with

the form and content prescribed by OMB, reporting requirements prescribed by

Treasury, and legal, regulatory, and other special management requirements of the

agency; and (5) monitor the financial management system. (The checklist questions

for this area are drawn from pp. 41-43 of the JFMIP source document.)
Page 10 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core Financial System Requirements

The checklist questions follow the JFMIP source document. It should be noted that not

all questions will apply in all situations and, as with the use of any checklist, professional

judgment should be exercised. Using the JFMIP source document, and appendix b of the

source document which defines terms used, along with the two previously mentioned

OMB documents, will help ensure that the user is cognizant of the background

information necessary to fully understand the questions.

Also, the checklist should also be used in conjunction with JFMIP’s WEB-based

electronic repository, called the Knowledgebase, which can be reached through the

JFMIP/PMO homepage http://www.financenet.gov/fed/jfmip/pmo.htm. The core

requirements will form the major portion of the Knowledgebase. In addition, technical

and vendor support requirements are included in the Knowledgebase and are comprised

of internal controls, security, year 2000, training, documentation and other requirements.

The Knowledgebase will feature ongoing comment capability, for both agencies and

vendors, including the ability to comment on proposed requirements prior to their

establishment.
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 11 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

Accounting classification

structure management process

1. Does the system provide the

capability to classify accounting

transactions by the following

structures: fund, program,

organization, project, activity,

cost center, object class, and

any other data elements needed

to meet the data classification

and/or reporting needs of the

agency? This will include

relating Federal Account

Symbols and Titles (FAST)

structures established by

Treasury in the system’s fund

structure for reporting

purposes.

2. Does the system achieve

consistency in budget and

accounting classifications and

synchronization between those

classifications and the

organizational structure?

Consistency will include

maintaining data relationships

between budget formulation

account code classifications

(budget accounts published in

the President’s budget), budget

execution and accounting

classifications (appropriation

fund symbols published in the

Treasury annual report

appendix and other Treasury

publications), and the agency’s

organizational structure (the

groups and/or individuals who

have responsibility for the

account coding classifications).

3. Does the system provide a fund

structure that defines each

entity for which separate
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 12 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

accounting and reporting are

needed to meet legal and

assigned responsibilities and

reporting requirements? This

structure should provide for

identification of appropriation

or fund accounts established by

OMB and Treasury through the

budget process, receipt

accounts, credit program and

financing accounts, deposit

funds, clearing accounts, and

other accounts as may be

deemed necessary. The fund

structure must provide for

additional detail below the

appropriation level to support

fiscal year accounting,

appropriation sub-accounts

used for reporting to Treasury,

and financial statement

preparation.

4. Does the system differentiate

between the type of budgeting,

accounting, and reporting

treatments to be used for each

fund (e.g., annual appropriation,

multiyear appropriation, no-year

appropriation, revolving fund,

trust fund, receipt account)?

The account classification

structure will provide additional

fund structure information that

supports the detailed

accounting and reporting

needed to fulfill legal

requirements, reporting

requirements, and assigned

responsibilities. At a minimum,

these characteristics must be

supported: fund type, e.g.,

general fund, deposit fund, trust

fund revolving fund; borrowing

source, and OMB function

designations; budget status, e.g.,
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 13 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

on budget, off budget, or

financing account; and the fiscal

year designation, e.g., annual,

multiyear, or no-year obligation

authority.

5. Does the system provide a

program structure with

sufficient levels of detail to

allow reporting for all

categories on which budgetary

decisions are made, whether

legally binding, as in

appropriation limitations, or in

the nature of policy guidance, as

in Presidential pass-backs,

congressional markup tables, or

internal agency decisions? The

account classification structure

must also support additional

detail needed to meet external

reporting requirements to OMB

and Treasury and be flexible

enough to meet agency-specific

requirements.

6. Does the system provide the

capability to establish an

organization structure based on

responsibility segments, such as

offices, divisions, and branches?

7. Does the system provide for the

ability to tie responsible

organizational units to programs

and projects?

8. Does the system identify agency

location codes and

appropriation fund symbols for

all transactions and reports

involving Treasury disbursing

centers, such as SF-224

“Statement of Cash

Transactions,” SF-215 “Deposit
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 14 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

Ticket,” and SF-5515 “Debit

Voucher?”

9. Does the system provide a

project structure that is

independent of the other

classification structures to

allow multiple organizations,

programs, and funding sources

to be associated with a project?

10. Does the system provide an

object class structure consistent

with the standard object class

codes contained in OMB

Circular A-11, Preparation and

Submission of Budget

Estimates? This structure must

also accommodate additional

levels (higher and/or lower)

needed to support agency

management reporting and

control needs.

11. Does the system provide a

revenue source code structure

to identify and classify types of

revenue and receipts received

by an agency so that they are

represented properly on the

agency’s financial statements?

12. Does the system provide the

capability to classify accounting

transactions by other data

elements needed to meet the

data classification and/or

reporting needs of the agency?

13. Does the system provide the

capability to define additional

data elements for use in data

classification for internal

reporting and/or control needs

for agency-specific purposes?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 15 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

14. Does the system derive the

expanded accounting

classification structure from

abbreviated user input so that

user input is minimized, data

entry is made easier, and errors

are controlled and reduced?

Examples of methods include

entering “shorthand codes”

using a keyboard function to

look up additional elements,

“clicking” on entries in a

“lookup table” or “pop-up

menu,” and using a scanning bar

code.

15. Does the system provide

flexibility to process additions,

deletions, and changes to

accounting classification

structure codes without

extensive program or system

changes? Table-driven systems,

where frequently changed

information is kept in tables

separate from program logic

and under a system

administrator’s control, and

database management systems,

are two examples of ways to

provide such flexibility.

16. Does the system provide the

ability to account for budgetary

resources at a lower level in the

accounting classification

structure than they are

budgeted and controlled?

The U. S. Government Standard

General Ledger (SGL) process –

account definition

17. Does the system use a chart of

accounts consistent with the
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 16 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

basic numbering structure

provided in the SGL? Any

expansion to the numbering

system must roll up to the

posting accounts provided in

the SGL.

18. Does the system incorporate

both proprietary and budgetary

accounts in the system, and

maintain the relationships

between accounts as described

in the SGL?

19. Does the system use account

titles consistent with the

account titles provided in the

SGL?

20. Does the system provide

subsidiary ledger support for

SGL accounts? Support may be

as detailed as the agency deems

appropriate for asset protection,

management information, and

fund accounting. The system

must also support reconciliation

of SGL control accounts to their

respective subsidiary records by

accounting period.

21. Does the system support an SGL

account structure for multiple

appropriations (including

receipt accounts) or funds and

multiple fiscal years within the

appropriations, including

annual, multiyear, and no-year

appropriations?

22. Does the system support the use

of processing of information

consistent with the standard

transaction identification

process rules from SGL?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 17 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

23. Does the system provide the

capability to create additional

sub-accounts to the SGL for

agency specific tracking and

control? These sub-accounts

will summarize and track back

to the SGL accounts.

The standard general ledger

process - transaction definition

24. Does the system use

standardized transactions

identified by reference codes to

control transaction editing,

posting to the appropriate SGL

accounts, and updating of other

information maintained in the

system, such as document

balances and available funding?

25. Does the system allow

standardized transactions,

including system-generated

transactions, to be established,

modified, or deleted by

authorized personnel?

26. Does the system provide for

traceability of changes?

27. Does the system update both

budgetary and proprietary

accounts based on a single input

transaction?

28. Does the system generate and

post compound SGL debit and

credit entries (at least four

pairs) to the SGL as a result of a

single transaction?

29. Does the system process

system-generated transactions,
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 18 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

such as automated accruals,

closing entries, cost assignment

transactions, recurring

payments, and transactions that

generate other transactions in

those cases where a single

transaction is not sufficient?

30. Does the system automatically

liquidate, partially or in full,

document balances through

designated transaction codes?

This capability will be used in

the liquidation of commitments,

undelivered orders, payables,

receivables, or other items, as

appropriate.

31. Does the system provide the

capability to add, modify, and

maintain editing and posting

rules through systems tables

controlled by authorized

personnel?

32. Does the system perform

integrity checks on batches

received via interfaces? Checks

should include a batch number

to detect duplicate or skipped

batches, and validity of header

and trailer records to ensure

that counts and amount in the

trailer agree with records in the

batch.
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 19 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

Transaction control process –

audit trails

33. Does the system provide audit

trails to trace transactions from

source documents, original

input, other systems, systemgenerated transactions, and

internal assignment transactions

through the system?

34. Does the system provide

transaction details to support

account balances?

35. Does the system provide audit

trails to trace source documents

and transactions through

successive levels of

summarization to the financial

statements and the reverse?

36. Does the system provide audit

trails to identify changes made

to system parameters and tables

that would affect the processing

or reprocessing of any financial

transactions?

37. Does the system select items for

review based on user-defined

criteria by type of transaction?

Examples of reasons to select

items are payment certification

and financial statement audits.

38. Does the system provide audit

trails that identify document

input, change, approval, and

deletions by originator?

Transaction control process –

transaction processing

39. Does the system post to the
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 20 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

current and prior months

concurrently until month-end

closing, and maintain and

provide on-line queries and

reports on balances separately

for the current and prior

months? At a minimum,

balances must be maintained

on-line for both the current and

prior months until prior month

closing.

40. Does the system, at year’s end,

post to the current year by

month, as well as to the prior

year, regardless of when yearend closing occurs? For

example, a user should be able

to post to the previous fiscal

year while also posting

transactions to the current year.

Balances must be maintained

and accessible through on-line

queries for both the current and

prior fiscal years until year-end

closing.

41. Does the system provide control

over the correction and

reprocessing of all erroneous

transactions through the use of

error file(s) and/or suspense

accounts? Erroneous

transactions must be

maintained and tracked until

either corrected and posted or

deleted at the specific request of

an authorized user.

42. Does the system provide

standard record format(s) for

interface of transactions from

other systems to the core

financial system and subject all

transactions from interfacing

systems to the core financial
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 21 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

system edits, validations, and

error correction procedures?

Erroneous transactions must be

maintained and tracked until

either corrected and posted or

deleted by an authorized user.

43. Does the system support both

batch and real-time on-line data

entry and use the same edit and

update rules as appropriate for

each mode?

44. Does the system support

simultaneous data entry/access

by multiple users in a variety of

access modes?

45. Does the system support

management controls to ensure

that transactions are processed

in accordance with government

and agency-prescribed

standards and procedures, the

integrity of data in the system is

maintained, and access is

restricted to authorized users?

46. Does the system provide

transaction edits that control, at

a minimum, fund availability,

account structure, and tolerance

levels between related

transactions, such as between

an obligation and its related

accrual?

47. Does the system provide

controls to prevent the creation

of duplicate transactions?

48. Do the system’s user entry and

query screens support

validation of codes entered on

the screen and assist users in
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 22 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

determining correct codes if an

invalid code is entered?

49. Does the system provide for

inquiry by the user to verify

valid codes during the data

entry process?

50. Does the system provide the

capability to enter and store for

future processing any

transactions in the current

month for processing the

subsequent month?

51. Does the system provide the

ability to process intragovernmental transactions and

track intragovernmental

balances related to other federal

agencies?

Archiving and purging process

52. Does the system archive

transactions and related

information needed for audit

trails in a format accessible by

audit software?

53. Does the system allow closed

documents to be reopened at

the document control level with

all associated transaction

history? Prior month’s control

totals and balances will not be

affected by a reopened

document.

54. Does the system provide the

authorized system administrator

the flexibility to determine

whether records are to be

archived or purged? For those

documents that meet the
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 23 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Core financial system

management function

Yes/no/

na Explanation

criteria, the system must allow

selective action. The system

must include the capability to

establish and maintain userdefined archival criteria.

55. Does the system retain system

records in accordance with

federal regulations established

by the National Archives and

Records Administration

(NARA), GAO, and others?

56. Does the system prevent the

purging of transactions prior to

the proper period?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 24 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

General ledger management

function

Yes/no/

na Explanation

General ledger posting process

1. Does the system post

transactions to SGL in

accordance with the transaction

definitions established by the

core financial system

management function?

2. Does the system maintain

historical data to produce

comparative financial reports

for management use?

Accruals, closing, and

consolidation process

3. Does the system provide for

automated month-and year-end

closing of SGL accounts and

rollover of SGL account

balances (note that this includes

sub-accounts)?

4. Does the system allow selected

transactions (i.e., adjustments)

to be processed?

5. Does the system provide the

capability for multiple

preliminary year-end closings

before final year-end closing

while maintaining the capability

to post current period data?

Posting of current period data

will not be affected by this

process.

6. Does the system automatically

generate selected recurring

accrual entries and reversals in

the next fiscal period?

7. Does the system allow for
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 25 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

General ledger management

function

Yes/no/

na Explanation

accruals of contracts or other

items that cross fiscal years?

8. Does the system selectively

generate required transactions

as needed by the year-end

closing procedures?

9. Does the system separately

identify amounts that would be

eliminated when preparing

intra-agency and interagency

consolidations?

10. Does the system prepare trial

balances and other supporting

information needed for external

reports and financial

statements, including

consolidated statements?

11. Does the system support

multiple pre-final closings to

accommodate incremental

adjustments and closing?

12. Does the system provide for a

year-end rollover of appropriate

system tables into the new fiscal

year, under the control of an

authorized system

administrator?

13. Does the system provide the

capability to process, track, and

control prior fiscal year

adjustment transactions?

General ledger analysis and

reconciliation process

14. Does the system report a

comparison between amounts

in other components of the core

financial system and the related
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 26 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

General ledger management

function

Yes/no/

na Explanation

control accounts in the SGL and

annotate out-of-balance

accounts on the report?

15. Does the system provide control

accounts in the general ledger

to balance between the general

ledger and other systems, such

as property and travel

management?

16. Does the system provide the

capability for authorized users

to correct out-of-balance

conditions discovered during

the reconciliation process?

17. Does the system maintain an

audit trail of any such

corrections?

18. Does the system provide for

reconciliation of all open

accounting period (prior month,

current month, prior fiscal year,

and current fiscal year)

balances to their respective

subsidiaries through on-line

queries and reports?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 27 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

Budget execution process

1. Does the system provide the

ability to track changes to

budget authority at multiple

levels of distribution?

2. Does the system provide the

capability to track actual

amounts (e.g., commitments

and obligations) against the

original and revised budgeted

amounts consistent with each

financial planning level?

3. Does the system provide

flexibility in establishing and

modifying funding distribution

and spending levels at multiple

organizational levels?

4. Does the system allow

authorized personnel to

reallocate funds at designated

levels?

5. Does the system provide the

ability to manage and control

prior year funds in the current

year, including the capability to

identify prior year and current

year de-obligations separately?

6. Does the system support

tolerance levels that are userdefined and established and

maintained in tables controlled

by authorized personnel? The

tolerance levels should be

maintained in terms of

percentages of the total with a

not-to-exceed dollar threshold.
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 28 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

Funds allocation process

7. Does the system record funding

and related budget execution

documents?

8. Does the system record

limitations and control the use

of funds against them consistent

with appropriation and

authorization language, and

administrative limitations

established by agency

management?

9. Does the system distribute,

track, control, and report funds

authorized at various funding

levels based on SGL, accounting

classification structure, and

project structure?

10. Does the system allow

modification of limitations in

accordance with apportionment

actions, reprogramming,

rescissions, and other

adjustments?

11. Does the system record and

control funds that receive other

budget authority in addition to

appropriations and identify the

type of authority?

12. Does the system record the

expiration and cancellation of

the appropriation in accordance

with laws and regulations,

including OMB Circular A-34

and the SGL?

13. Does the system maintain

operating plans at or below the
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 29 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

funds control level of the

classification structure?

14. Does the system allow

authorized personnel to

reallocate funds at designated

levels?

15. Does the system account for

budgetary resources at a lower

level in the accounting

classification structure than

they are budgeted?

Funds control process – funds

availability editing

16. Does the system provide for online notification of funds

availability prior to the

distribution of lower level

funding and the processing of

commitment, obligation, or

expenditure transactions?

17. Does the system support the

timely recording of

transactions?

18. Does the system check

commitment transactions

against available funds?

19. Does the system include

adequate controls to prevent the

recording of commitments that

exceed available balances?

20. Does the system support

recording obligations or

expenditures that exceed

available balances and produce

a report or otherwise provide a

method that allows

management to review the
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 30 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

cause of this overobligation

condition?

21. Does the system provide for

designated authorities to

establish and modify the level of

fund control using elements of

the classification structure,

including object class, program,

organization, project, and fund?

22. Does the system provide for

designated authorities to

establish and modify the

system’s response (either reject

transaction or provide warning)

to the failure of a fundsavailability edit for each

transaction type?

23. Does the system provide the

capabilities and controls for

authorized users to override

funds-availability edits?

24. Does the system record the

financial impact of all

transactions that affect the

availability of funds, such as

commitments, liquidations,

obligations, and expenditures?

25. Does the system provide

automatic real-time notification

to users of transactions failing

the funds-availability edit and

place the rejected transactions

in an error file and/or suspense

account for corrective action?

In cases where the actual event

has already occurred (such as

labor hours worked or a

contract already signed), the

transaction should be recorded

and a warning or report issued
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 31 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

to alert the user to the need for

follow-up action.

26. Does the system update all

appropriate accounts to ensure

that the system always

maintains and reports the

current status of funds for all

open accounting periods?

27. Does the system determine

funds availability on

adjustments to obligations or

expenditures based on whether

the funds cited are current,

expired, or cancelled?

28. Does the system check available

funds for obligating documents

(including amendments to

obligating documents resulting

in a change to dollar amounts or

to the classification structure)?

29. Does the system check available

funds when the expenditure

exceeds the obligating

document due to quantity or

price variances within

tolerances, additional shipping

charges, etc.?

30. Does the system adjust available

fund balances as reimbursable

orders are accepted? In the

case of reimbursable orders

from the public, an advance

must also be received before

additional funding authority is

recorded.

31. Does the system check available

funds for commitments and

obligations incurred in support

of reimbursable agreements?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 32 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

Funds control process –

commitments

32. Does the system allow

commitment documents to be

entered into the core financial

system on-line and from

multiple locations, as well as

through interfaces with other

systems?

33. Does the system maintain

information related to each

commitment document,

including amendments? At a

minimum, the system must

capture requisition number,

accounting classification

structures, and estimated

amounts.

34. Does the system provide for

modifications to commitment

documents, including ones that

change the dollar amount or the

accounting classification

structure cited?

35. Does the system invoke funds

availability editing for the

changed amounts?

36. Does the system allow for

commitment documents to be

future dated, stored, and posted

at the appropriate date?

37. Does the system subject these

documents to edit and

validation procedures prior to

posting?

38. Does the system close

commitment documents under

the following circumstances:
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 33 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

(1) by the system upon issuance

of an obligating document, (2)

by an authorized user, and (3)

as part of the year-end closing if

the commitment is in an annual

appropriation or in the last year

of a multiyear appropriation?

39. Does the system provide the

capability to support

commitment accounting based

on agency needs?

Funds control process –

obligations

40. Does the system record

obligations based on obligating

documents and liquidate, at the

user’s request, the related

commitments, either partially or

fully?

41. Does the system record

obligations for which there is no

related commitment?

42. Does the system maintain

information related to each

obligation document, including

amendments? At a minimum,

the core financial system must

capture obligating document

number and type; vendor

number and other identification,

including vendor identification

number (ID), social security

number (SSN), taxpayer

identification number (TIN),

employer identification (EIN),

and data universal numbering

system (DUNS); accounting

classification structures;

referenced commitment (if

applicable); and dollar amounts.
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 34 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

43. Does the system allow

obligation documents to be

entered into the core financial

system on-line and from

multiple locations, as well as

through an interface with other

systems?

44. Does the system allow

transactions creating

anticipated obligation

documents to be entered early,

stored, and posted at the

appropriate date?

45. Does the system subject these

documents to edit and

validation procedures prior to

posting?

46. Does the system permit the user

to delete the transaction

without posting it if the

anticipated obligation does not

occur?

47. Does the system allow multiple

commitments to be combined

into one obligating document

and one commitment document

to be split between multiple

obligating documents?

48. Does the system allow

authorized modifications and

cancellations of posted

obligating documents?

49. Does the system provide on-line

access to all obligations by

selection criteria, e.g.,

document number?

50. Does the system maintain an online history file of closed-out
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 35 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

documents for a user-defined

period of time?

51. Does the system retain (for

audit purposes) all system

record files along with all

amendments?

52. Does the system close

obligating documents either

(1) automatically upon

complete performance/delivery

or (2) through an authorized

user?

53. Does the system record various

intragovernmental acquisition

transactions, such as General

Services Administration (GSA)

Personal Property Center,

reimbursable orders, and

printing from the Government

Printing Office (GPO)?

54. Does the system record and

maintain contracts and grants

so that fiscal year-to-date and

inception-to-date information

can be presented?

55. Does the system record blanket

purchase agreements (BPA) and

track, control, and monitor

records of call?

56. Does the system track, control,

and monitor delivery orders

against a contract limitation?

57. Does the system record

expenditures related to

payments made through use of

imprest funds, third-party

drafts, and government credit

cards?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 36 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

58. Does the system record

expenditures claimed against

advance payments made, such

as travel advances, contract

advances, and grants?

Funds control process – analysis

59. Does the system maintain

current information on

commitments and obligations

according to the classification

structure on a fund by fund

basis?

60. Does the system track the use of

funds against operating or

financial plans?

61. Does the system report plan

compared to actual data at the

level of the operating plans?

62. Does the system summarize,

compare, and report the

operating plans to the

appropriate level of funds

control?

63. Does the system produce

detailed lists and summary

reports by the defined level of

funds control for those

documents that represent

commitments, undelivered

orders, and expenditures?

64. Does the system provide control

features that ensure that the

amounts reflected in the fund

control structure agree with the

SGL account balances at the

end of each update cycle?

65. Does the system maintain
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 37 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Funds management function

Yes/no

na Explanation

historical data on all

commitment, undelivered order,

payable, and payment

transactions?

66. Does the system maintain open

documents to show the status of

commitments, undelivered

orders, accruals, and

disbursements by document line

item?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 38 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

Payee information maintenance

process

1. Does the system maintain payee

information that includes data

to support obligation, accounts

payable, and disbursement

processes?

2. Does the system support

payments made to third parties

that act as agents for the payee?

3. Does the system maintain

information needed to support

Internal Revenue Service (IRS)

1099 and W-2 reporting,

including TIN and payee type

(e.g., sole proprietorship,

partnership, and corporation)?

4. Does the system maintain 1099

information for the principal

party rather than the agent in

cases where a third party acting

as agent receives the payment?

5. Does the system provide the

capability to identify payees

who receive 1099s, including

1099Cs?

6. Does the system allow multiple

payment addresses and/or bank

information for a single payee?

7. Does the system provide a

search capability for payee

information?

8. Does the system produce payee

lists based on agency-defined

criteria, e.g., payee name and

number?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 39 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

Payment warehousing process

9. Does the system warehouse and

schedule payments in

accordance with applicable

regulations, for example, OMB

Circular A-125?

10. Does the system provide the

capability to capture, store, and

process appropriate invoice

information, including: invoice

number, invoice amount,

obligating document references,

vendor number, payee name

and address, discount terms,

invoice amount, invoice date,

and invoice receipt date in

accordance with Treasury

standards and as necessary to

satisfy requirements of the

Prompt Payment Act?

11. Does the system record an

accrued liability upon receipt

and acceptance of goods and

services and properly identify

them as capital asset, expense,

prepaid expense, or

construction?

12. Record invoices through

keyboard entry by a user and

through an electronic interface

with vendors in an electronic

commerce arrangement?

13. Does the system access

previously entered information

and/or record additional

information necessary to

automatically determine the due

date and amount of vendor

payments in accordance with

OMB Circular A-125, based on
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 40 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

invoices, receiving reports, and

contracts or purchase orders?

Due date determination should

take into account special

situations, such as contract

provisions specifying

nonstandard acceptance

periods; laws specifying

payment terms for certain

commodities, such as meat or

dairy products; failure to return

a defective invoice promptly;

and others specified in OMB

Circular A-125.

14. Does the system provide the

capability of splitting an invoice

into multiple payments on the

appropriate due dates when

items on the invoice have

different due dates?

15. Does the system record

discount terms and

automatically determine

whether taking the discount is

economically justified as

defined in the Treasury

Financial Manual, Volume I,

section 6-8040?

16. Does the system record

additional shipping and other

charges to adjust the payment

amount, if they are authorized?

17. Does the system adjust the asset

or expense recorded with the

liability if the authorized

payment (based on the invoice)

is different from the amount

accrued (based upon receipt

and acceptance) using contract

information and any increase is

within agency tolerances?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 41 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

18. Does the system also

automatically adjust the

obligation amount and edit for

funds availability to cover

increases?

19. Does the system automatically

update the funds control and

budget execution balances to

reflect changes in the status of

undelivered orders and

expended appropriations, as

well as changes in amounts?

20. Does the system establish

payables and make payments on

behalf of another agency, citing

the other agency’s funding

information?

21. Does the system allow

obligating documents to be

reopened by authorized staff

after final payment has been

made?

22. Does the system allow changes

to payment schedules by

authorized staff prior to

submission to the disbursing

office?

23. Does the system process credit

memoranda for returned goods

or other adjustments?

24. Does the system apply the

credit to the specific obligation

that resulted in the credit,

reducing the expense attributed

to that obligation?

25. Does the system maintain the

balance of the credit for

application against a future
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 42 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

payment if a credit is not fully

liquidated by one payment?

26. Does the system create the

appropriate notice to the vendor

that a credit has been applied to

the affected payment?

27. Does the system reestablish

payables for voided checks or

checks or Electronic Funds

Transfers (EFT) that have been

returned but have not been

negotiated, and allow for

reversing the accounting

transaction leading to the

disbursement and reestablishing

a payable, as appropriate?

28. Does the system record

obligations, expenses, assets,

etc., associated with payments

made through use of imprest

funds, third party drafts, and

government credit cards?

29. Does the system establish

payables to replenish the

imprest fund or pay the

financial institution handling the

third party drafts and credit

cards?

30. Does the system schedule

payments of advances, prepaid

expenses, loans, grants, etc.,

with the appropriate accounting

entries for each?

31. Does the system record

expenses, assets, etc., based

upon performance funded by

advances, prepaid expenses,

and grants and make the

appropriate liquidations?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 43 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

32. Does the system automatically

update funds control balances

to reflect obligation changes?

33. Does the system provide the

capability to support capture,

storage, and processing of

invoices received in electronic

format through an electronic

commerce arrangement or from

another system?

34. Does the system allow for

compliance at the data level,

with existing Treasury

standards dictating format and

length for certain invoice fields?

35. Does the system adjust the

obligation based on final

invoice/payment tolerance

percentage and amount

authorized, provided the

amount is within the funds

limitations and checks?

Payment execution process

36. Does the system automatically

identify and select payments to

be disbursed in a particular

payment cycle based on their

due dates?

37. Does the system provide a

function for review and

certification by an authorized

certifying officer?

38. Does the system allow specific

payments selected for

disbursement to be excluded

from the payment cycle and

held for later payment?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 44 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

39. Does the system automatically

compute amounts to be

disbursed, including discounts,

withholdings, interest, or

penalties, in accordance with

applicable regulations?

40. Does the system generate the

appropriate transactions to

reflect the above deductions

and additions?

41. Does the system automatically

include on each payment

relevant identification

information (e.g., invoice

number, obligating document

number, and interest penalty

amount and calculations)?

42. Does the system collect

information on discounts taken,

discounts lost, and interest

penalties to comply with current

applicable prompt payment

information tracking

requirements?

43. Does the system calculate totals

by appropriation symbol for

inclusion on the payment

schedule, except unidentified

appropriations?

44. Does the system provide for

various forms of payment to be

used, i.e., check or electronic

funds transfer (e.g., Automated

Clearing House (ACH), wire)?

45. Does the system provide the

capability to capture, store, and

process information related to

supporting the creation/

generation of EFT payments
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 45 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

(ACH or wire) in accordance

with Treasury standards,

including American Banking

Association (ABA) routing

number, recipient bank account

number, and account type?

46. Does the system support

Treasury-specific standards for

format of check and EFT

payment requests?

47. Does the system allow for

consolidation of multiple

payments to a single payee, up

to the Treasury Financial

Manual (TFM)-prescribed

limitation in order for the

disbursing office to produce one

check or EFT and itemize all

payments covered by the one

check or EFT?

48. Does the system allow for

separate checks to a payee in

specific instances where

needed?

49. Does the system allow a

payment request to be removed

from the automated scheduling

stream and to be scheduled as a

manual payment by an

authorized official?

50. Does the system provide the

capability to schedule and make

payments in various forms (e.g.,

ACH, SF-1166) as required by an

agency’s disbursing offices,

including physical media (e.g.,

tape, electronic transfer)?

51. Does the system prepare reports

to Treasury on disbursements
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 46 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

made by an agency with its own

disbursing authority?

52. Does the system process

transactions resulting from

payments made using other

systems, such as payroll?

53. Does the system record

disbursements, assets,

expenses, obligations, or other

accounts as appropriate, but

does not schedule a payment

through the core financial

system if the payment has

already been made by the other

system?

54. Does the system support the

receipt of bills from other

federal agencies, and their

payment through central

electronic systems?

55. Does the system record

payments made by another

entity, such as a finance center,

on behalf of the agency using

agency funds?

56. Does the system allow for

cancellation of an entire

payment schedule or a single

payment within a payment

schedule after payments are

scheduled and prior to actual

disbursement by Treasury?

57. Does the system flag payment

transactions that will disburse a

fund into a negative cash

position? Reimbursable work

can result in this type of

transaction with appropriate

authority.
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 47 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

Payment confirmation and

follow-up process

58. Does the system provide

information about each

payment to reflect the stage of

the scheduling process that the

payment has reached and the

date each step was reached for

the following processing steps:

• payment scheduled

• schedule sent to appropriate

disbursing office

• payment issued by

appropriate disbursing

office?

59. Does the system provide for the

comparison of the agency’s

payment schedule and

disbursing office’s

accomplished payment

schedule?

60. Does the system update

payment information when

confirmation is received from

the disbursing office, including

the paid schedule number,

check numbers or trace

numbers, and date, amount of

payment, and payment method

(check or EFT)?

61. Does the system maintain a

history of every payment by the

core financial system, including

authorizing document number,

payment schedule number,

payment date, invoice number,

vendor number, vendor name,

payment address, appropriation

charged, and prompt payment

information?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 48 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Payment management function

Yes/no/

na Explanation

62. Does the system provide on-line

access to vendor and payment

information?

63. Does the system provide on-line

access to open documents

based on agency selection

criteria, e.g., document number?

64. Does the system produce IRS

1099s in IRS acceptable form

(hard copy or magnetic tape)?

65. Does the system produce the

SF-224, Statement of

Transactions?

66. Does the system produce

supporting information needed

to prepare the prompt payment

report in accordance with

requirements in OMB Circular

A-125?

67. Does the system automatically

liquidate the related liability or

the in-transit amount when

payment confirmation updates

the system?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 49 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Receipt management function

Yes/no/

na Explanation

Receivable establishment

process

1. Does the system support the

calculation, generation, and

posting of customer bills based

upon billing source, event

and/or time period, and type of

claim in accordance with

agency program requirements?

Bases used for billing may

include:

• percentage of reimbursable

obligations, accrued

expenditures, or costs, using

data recorded by the cost

accumulation function;

• fee schedules for goods or

services provided;

• duplicate payments;

• erroneous payments; and

• payment schedules or other

agreements with other

entities.

2. Does the system record the

establishment of receivables

along with the corresponding

revenues, expenditure

reductions, or other offsets?

3. Does the system support the

establishment and tracking of

receivables to be paid under

installment plans, including

plans for which payments have

been rescheduled?

4. Does the system print bills,

accommodating the generation

of standard forms, such as SF1080s or SF-1081s, and

turnaround documents to be
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 50 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Receipt management function

Yes/no/

na Explanation

used as a remittance advice?

5. Does the system allow

customized text in generated

billing documents?

6. Does the system support bills

and collections between federal

agencies through the use of an

electronic system, including

recording collections and

payments between agencies

with supporting documentation?

7. Does the system allow

transactions related to manually

prepared bills to be entered by

authorized personnel?

8. Does the system record

adjustments to bills and post

them to customer accounts?

9. Does the system date the bills

with the system-generated date

or with the date supplied by an

authorized user?

10. Does the system print

statements as well as bills?

11. Does the system accept

transactions that generate

receivables from other systems

in a standard format for entry

into the core financial system?

Receivable management process

12. Does the system maintain

detailed information by account

(e.g., individual, employee,

private sector organization,

state or local government, or

other federal agency) sufficient
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 51 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Receipt management function

Yes/no/

na Explanation

to provide audit trails and to

support billing and research

activities?

13. Does the system maintain

accounts for reimbursable

orders and identify government

and nongovernment accounts?

14. Does the system update each

account when billing documents

are generated and collections

are received?

15. Does the system allow

authorized personnel to add,

modify, or delete nonfinancial

account data?

16. Does the system maintain data

on individual receivables and

referenced transactions

supporting the receivables?

17. Does the system provide on-line

query capability to receivable

and account information?

18. Does the system provide

information, on a summary

basis and on individual

receivables, on the age of

receivables to allow for

management and prioritization

of collection activities?

19. Does the system provide

automatic calculation and

assessment of interest,

administrative charges, and

penalty charges on overdue

receivables?

20. Does the system allow for the

waiver of the above charges
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 52 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Receipt management function

Yes/no/

na Explanation

with appropriate authority?

21. Does the system identify and

report receivables that meet

predetermined criteria for bad

debt provisions or write-off?

22. Does the system maintain data

for receivables referred to other

federal agencies and/or outside

organizations for collections?

23. Does the system record the

write-off of delinquent or

uncollectible receivables

(including interest, penalties

and administrative charges) and

maintain data to monitor closed

accounts?

24. Does the system produce

dunning (collection) letters for

overdue receivables in

accordance with Treasury

requirements and existing

legislation?

25. Does the system provide

authorized users with the ability

to customize the dunning

process parameters and

dunning letter text?

26. Does the system provide

information to allow either

manual or automated reporting

of delinquent accounts to

commercial credit bureaus and

referral to collection agencies or

other appropriate governmental

organizations?

27. Does the system maintain

information needed to support

IRS 1099Cs in the amounts of
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 53 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Receipt management function

Yes/no/

na Explanation

debts forgiven?

28. Does the system maintain a

history of billings and receipts

for each receivable and account

in accordance with agency

requirements?

29. Does the system match receipts

to the appropriate receivables

and update system balances?

30. Does the system provide the

ability to apply receipts to more

than one receivable?

31. Does the system update

receivable balances document

by document, classifying and

posting against principal,

interest, fees, etc., as required

by OMB Circular A-129,

Managing Federal Credit

Program?

32. Does the system identify

receivables that have been

reduced by some means other

than cash collections, such as

waivers or write-offs?

33. Does the system provide for

reestablishment of a receivable

for checks returned due to

insufficient funds?

34. Does the system provide the

ability to uniquely record,

classify, and report the status of

reimbursable funds received

and used by customers and, in

addition, does this information

agree with the standard account

structure?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 54 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Receipt management function

Yes/no/

na Explanation

Collection process

35. Does the system record

complete and partial receipts?

36. Does the system record

revenues, expenditure

reductions, or other appropriate

offsets associated with

collections for which no

receivable was previously

established?

37. Does the system record deposits

and related debit vouchers for

reconciliation to deposit

confirmation information

provided by Treasury or the

banking system?

38. Does the system provide for the

processing of cash or credit

card receipts against

outstanding receivables?

39. Does the system allow for offset

of funds due to delinquent

indebtedness through

administrative offset, federal

employee salary offset, and

income tax refund offset?

Offsets

40. Does the system provide the

ability to capture TIN data for

the debtor and report overdue

receivables with associated TIN

data to Treasury for possible

offset?

41. Does the system comply with

requirements of the Internal

Revenue Service Tax Refund
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 55 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Receipt management function

Yes/no/

na Explanation

Offset Program and Treasury

Offset Program requirements?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 56 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Cost management function

Yes/no/

na Explanation

Cost recognition process

1. Does the system provide the

ability to post accruals to

recognize costs? The cost of

goods and services used,

consumed, given away, lost, or

destroyed must be recognized

within the period of time the

event occurred, regardless of

when ordered, received, or paid

for. Similarly, revenues must be

recognized when earned.

2. Does the system reduce asset

balances, such as inventories

and prepaid expenses, as the

assets are used and expended?

3. Does the system use the

agency’s accounting

classification structure to

identify information, such as

fund, program, organization,

project, activity, and cost center

to support the cost

accumulation and assignment

processes?

4. Does the system support

managerial cost accounting by

providing the capability to

measure and report the costs of

each segment’s outputs?

Cost accumulation process

5. Does the system capture fees,

royalties, rents, and other

charges imposed by the agency

for services and things of value

it provides? These costs should

be captured at the lowest level

to reflect related actual costs
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 57 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Cost management function

Yes/no/

na Explanation

incurred by the agency in

providing goods and services.

6. Does the system identify all

costs incurred by the agency in

support of activities of revolving

funds, trust funds, or

commercial functions, including

the applicable portions of the

related salaries and expense

accounts identified with those

activities?

7. Does the system provide for a

variety of information to

support the managerial cost

accounting decision-making

process, the management of the

agency, and external reporting?

This will include

• cost reports to be used in

the analysis of

programmatic activities,

• schedules and operating

statements in support of

financial statement

preparation and audit,

• meaningful cost information

needed to support

performance measures,

• ability to transfer cost

information directly to and

from other systems,

• cost information for

comparison to other

program data to determine

compliance with planned

budgeted activities, and

• support of the billing

process by providing cost

information to the

receivable function for

producing bills.
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 58 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Cost management function

Yes/no/

na Explanation

Cost distribution process

8. Does the system provide for

identifying costs based on the

accounting classification

structure?

9. Does the system identify and

record direct costs incurred,

including input on costs from

feeder systems, such as

inventory, travel, or payroll?

10. Does the system assign indirect

costs to interim and final cost

objects using a method

consistent with agency cost

accounting standards? Indirect

costs will be assigned on a basis

that best provides for a causal/

beneficial relationship between

the costs being distributed and

the cost object receiving the

cost. Indirect cost assignment

may be based on total cost

incurred, direct labor hours

used, square footage, metered

usage, or any other reasonable

basis.

11. Does the system allow for

multilevel assignment and

reassignment?

12. Does the system support the use

of historical data to conduct

variance analysis, adjustment of

rates, and disposition of

variance by performing periodic

assignments to adjust cost

based on estimated rates to the

actual costs incurred for the

period?

13. Does the system assign costs to
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 59 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Cost management function

Yes/no/

na Explanation

entities or cost centers

regardless of how they have

originally been posted to the

system (e.g., for financial

statement presentation)?

14. Does the system provide an

audit trail that traces the

transaction from the original

cost pool to the final cost

object?

Revolving fund process

15. Does the system provide the

capability to support the use of

revolving funds for working

capital programs?

16. Does the system provide the

capability to create and track

service-level agreements for

customer projects, including the

project or reimbursable

agreement number, the client

organization, and funding

citation?

17. Does the system provide the

ability to link orders and

expenses directly to a service -

level agreement if appropriate?

18. Does the system provide the

capability to verify fund

availability for service orders

directly attributable to a

particular customer of the

revolving fund operation?

19. Does the system provide the

capability to support funding to

the revolving fund through the

use of advances or through

reimbursement?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 60 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Cost management function

Yes/no/

na Explanation

20. Does the system support

assignment of costs incurred by

the revolving fund through one

of the following methods: direct

assignment or indirect

assignment?

21. Does the system provide the

capability to establish/use

multiple assignment methods,

such as fixed fee, square

footage, full-time equivalent

(FTE)?

22. Does the system provide the

capability to generate summary

statements by revolving fund

customer and/or project?

23. Does the system provide the

ability to bill customers based

on appropriate fee structures?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 61 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Reporting function

Yes/no/

na Explanation

Access to information process

1. Does the system allow for the

information contained in the

system to be queried to present

specific detailed data as

requested? This will include

user-defined criteria to access

data for open or closed

accounting periods.

2. Does the system present

information resulting from

system queries formatted to

facilitate the understanding of

the information by nontechnical users, and

unformatted for more

technically proficient users?

3. Does the system provide for the

production of formatted

reports? The system must allow

for the reformatting of reports

to present different sorts of the

information, the presentation of

only specific information in the

format selected, the

summarization of data, and the

modification of report formats

to tailor the reports to the

specific requirements of the

user.

4. Does the system allow users to

design reports and extract files

for their specific requirements

and to perform table look-ups

and expansion of codes when

needed to clarify the

information contained within

the reports?

5. Does the system facilitate the
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 62 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Reporting function

Yes/no/

na Explanation

analysis of information

contained in the system by

allowing analysts to obtain

report information and the

results of system queries in data

files that can be transferred to

other applications or analytical

tools?

6. Does the system provide for

easy access to historical files for

comparative, analytical, and

trend information?

7. Does the system have available

the capability to perform a

“Print Screen” on all user

screens?

Financial reporting process

8. Does the system use financial

data that can be traced directly

to SGL accounts to produce

reports providing financial

information, whether used

internally or externally?

9. Does the system maintain

accounting data to permit

reporting in accordance with

federal financial accounting

standards issued by the

Comptroller General and the

Director of OMB, and with

reporting requirements issued

by the Director of OMB and the

Secretary of the Treasury

(Appendix C)?

10. Does the system provide

summarized data electronically

to systems used by the agency

for decision support and

provide for the preparation of
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 63 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Reporting function

Yes/no/

na Explanation

financial statements from the

SGL and by “line of business?”

11. Does the system provide data in

the format required, including

electronic formats, to central

agency systems used for

summary financial reporting

(e.g., FACTS, SF224, SF1219, SF

1220, SF133)?

12. Does the system report events

and transactions according to

the accounting classification

structure and within a given

accounting period?

13. Does the system maintain the

financial information required

for program performance,

financial performance, and

financial management

performance measures needed

for budgeting, program

management, and financial

statement presentation?

14. Does the system produce,

distribute, and provide access to

formatted reports defined by

agency management for the

specific requirements of the

agency?

15. Does the system use the SGL

mandated chart of accounts as

the basis for preparing external

reports or data transmissions to

OMB and Treasury?

16. Does the system provide the

capability to electronically

transmit the following reports to

Treasury: SF133, credit reports,

year-end closing statements,
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 64 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Reporting function

Yes/no/

na Explanation

and quarterly and annual

FACTSI and FACTSII reports?

17. Does the system provide the

ability to produce an on-line

current status of funds report

down to the lowest level of the

organizational structure,

including

• annual budget (including

revisions),

• open commitments,

• open obligations,

• net payments/liquidated

obligations, and

• balance available?

System monitoring process

18. Is the overall operation of the

system monitored to determine

if operations are on schedule

and all necessary operating

steps have been completed

successfully, and can it alert the

system manager to malfunctions

on a timely basis?

19. Does the system provide system

managers with system statistics

to determine the functions and

operations performed by

specific users and reports

generated or accessed?

20. Does the system perform and

report the result of data

integrity verifications, such as

reconciliation between reports

produced and data sets within

the system, and the results of

validity, combination, and

balancing edits?
---------------------------------------------------------------------------------------------------------------------------------------------

Core Financial System Requirements

---------------------------------------------------------------------------------------------------------------------------------------------

Page 65 GAO/AIMD-00-21.2.2 – Core Financial Systems Requirements Checklist (2/00)

Reporting function

Yes/no/

na Explanation

21. Does the system provide for

sufficient audit trails to trace

data errors and the result of

various operations of the

system?

(922281)