Federal financial reporting—defined here as the process of recording retrospective executive department-level financial and performance information—may provide both a snapshot of the government's financial health at a given moment in time, as well as an accounting of its financial performance over a given time frame. According to the Federal Accounting Standards Advisory Board (FASAB), the committee that establishes accounting standards for federal entities, "Financial reporting" may be defined as the process of recording, reporting, and interpreting, in terms of money, an entity's financial transactions and events with economic consequences for the entity. Reporting in the federal government also deals with nonfinancial information about service efforts and accomplishments of the government, i.e., the inputs of resources used by the government, the outputs of goods and services provided by the government, the outcomes and impacts of governmental programs, and the relationships among these elements. Responsible stewardship of public money is integral to governmental accountability, and federal financial reports supply information that links stewardship to accountability. According to FASAB, "Because a democratic government should be accountable for its integrity, performance, and stewardship, it follows that the government must provide information useful to assess that accountability." Reliable financial information may facilitate informed decision making, government management, and policy implementation. In addition, federal financial reports may make it easier to monitor waste, fraud, and abuse in federal programs. Several types of federal financial reports are required by law. Each report presents a distinct array of financial information intended to permit various stakeholders—Congress, the President, agency heads, program managers, and citizens—to evaluate the federal government's performance relative to the collection and disbursement of public money. Congress, in particular, may utilize the information in federal financial reports for policy formulation and planning, programmatic decision making, and exercising oversight authority ( Figure 1 ). According to FASAB's "Authoritative Source of Guidance" on generally accepted accounting principles (GAAP), there are four objectives of federal financial reporting: budgetary integrity, operating performance, stewardship, and systems and control. FASAB defines a set of concepts for federal entities' general purpose financial reporting that meet these objectives. Each statutorily mandated report addresses these objectives, albeit with varying degrees of emphasis. Budgetary integrity. A federal financial report may satisfy the budgetary integrity objective if it provides information on "how budgetary resources have been obtained and used." The Statement of Budgetary Resources, which must be included in agencies' annual financial statements, accords with the budgetary integrity objective by providing information on budgetary resources, obligations, and outlays. Operating performance. A federal financial report may meet the operating performance objective by providing information on program and activity costs and accomplishments, as well as management of the reporting entity's assets and liabilities. An example is the Statement of Net Cost required in agencies' annual financial statements. The Statement of Net Cost specifically addresses the operating performance objective through its inclusion of information on program costs and the net cost of operations for the entire reporting entity, amongst other cost-related items. Stewardship. The stewardship objective concerns the government's financial position, defined as "a point-in-time snapshot of an entity's economic resources and the claims on those resources," and financial condition, which also conveys information about current financial health, as well as future expectations. The Financial Report of the United States Government , the annual report on government-wide financial and performance information required by law, documents whether the government's financial position improved or worsened over the reporting period, indicates whether current budgetary resources are sustainable to meet future obligations, and presents other key indicators of the government's financial position and condition. In so doing, it permits the reader to evaluate whether the government has been an effective steward of the nation's resources. Systems and control. The systems and control objective states that federal financial reports should assist readers in determining whether financial management systems, internal accounting, and administrative controls are sufficient to satisfy the three previous objectives of budgetary integrity, operating performance, and stewardship. Management's assertions about the effectiveness of internal controls —for example, the "Management Assurances" statement in agencies' annual Performance and Accountability Reports (PARs)—fulfill the systems and control objective by documenting internal control over financial reporting. FASAB identifies several audiences of federal financial reports: Congress, the President, agency heads, program managers, and citizens. Federal financial reports might be useful to each of these audiences for different reasons. In addition, certain aspects of federal financial reports might vary in degree of relevance for the stakeholder in question. Congress may use financial information contained in financial reports to conduct oversight of federal government programs and policies, consider policy alternatives, make decisions on the financing and execution of programs, monitor the effect of governmental financial commitments on the economy, and address persistent, long-standing accountability problems. The President and agency heads may use financial information to evaluate program performance, make program reauthorization decisions, and provide Congress with the resources necessary to perform its oversight function. Program managers may use financial information to ensure that resources are allocated properly, detect waste and inefficiency in program operations, and provide information that enables Congress, the President, and agency heads to monitor programs and activities. Citizens may use financial information to evaluate whether their elected and appointed representatives are responsible stewards of the public purse and gauge whether "the government is functioning economically, efficiently, and effectively." The U.S. Constitution serves as the foundation for federal financial reporting. Article I, Section 9, paragraph 7 states, "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time." This clause grants Congress the "power of the purse" but also requires a regular report of the receipts and expenditures of public money. In so doing, it links appropriations to accountability. Justice Joseph Story, who served on the U.S. Supreme Court from 1811-1845, stated, "Congress is made the guardian of this treasure; and to make their responsibility complete and perfect, a regular account of the receipts and expenditures is required to be published, that the people may know, what money is expended, for what purposes, and by what authority." More recently, one Senator has observed of the appropriations-accountability link, "This is Congress's most important check on the executive branch in the Constitution's entire scheme of checks and balances. Congress cannot know that the executive branch is obeying the first part of the appropriations clause (spending) of the Constitution without confidence in the second (accountability)." Several measures subsequently established provisions for federal financial reporting that expanded on the constitutional mandate. In 1791, the U.S. House of Representatives approved a resolution on statements of receipts and expenditures. It resolved That it shall be the duty of the Secretary of the Treasury to lay before the House of Representatives, on the fourth Monday of October in each year, if Congress shall then be in session, or if not then in session, within the first week of the session next following the said fourth Monday of October, an accurate statement and account of the receipts and expenditures of all public moneys, down to the last day inclusively of the month of December immediately preceding the said fourth Monday of October, distinguishing the amount of the receipts in each State or District, and from each officer therein; in which statements shall also be distinguished the expenditures which fall under each head of appropriation, and shall be shown the sums, if any, which remain unexpended, and to be accounted for in the next statement, of each and every of such appropriation. Two pieces of legislation enacted during the Progressive Era further expanded on federal financial reporting requirements. The Dockery Act of 1894 required the Secretary of the Treasury to provide Congress with "an accurate, combined statement of the receipts and expenditures during the last preceding fiscal year of all public moneys." Appropriations legislation for FY1908 legislative, executive, and judicial expenses contained a section that required the Secretary of the Treasury to include estimates of current and future public revenue and expenditures in its annual report to Congress. Finally, the Budget and Accounting Procedures Act of 1950 (BAPA) made significant changes to federal reporting requirements, and arguably was the foundation for present-day financial reporting. BAPA authorized the Comptroller General, in consultation with OMB (formerly Bureau of the Budget) and Treasury, to "prescribe the principles, standards, and related requirements for accounting to be observed by each executive agency, including requirements for suitable integration between the accounting processes of each executive agency and the accounting of the Treasury Department." Additionally, BAPA required agency heads to "establish and maintain systems of accounting and internal control designed to provide (1) full disclosure of the financial results of the agency's activities; (2) adequate financial information needed for the agency's management purposes; (3) effective control over and accountability for all funds, property, and other assets for which the agency is responsible, including appropriate internal audit; (4) reliable accounting results to serve as the basis for preparation and support of the agency's budget requests, for controlling the execution of its budget, and for providing financial information ... ; [and] (5) suitable integration of the accounting of the agency with the accounting of the Treasury Department[.]" BAPA further required the Secretary of the Treasury to use agencies' financial information to prepare "such reports for the information of the President, the Congress, and the public as will present the results of the financial operations of the Government." During the past two decades, Congress has further developed federal financial reporting through enactment of three statutes: (1) the Chief Financial Officers Act of 1990 (CFO Act), the Government Management Reform Act of 1994 (GMRA), and (3) the Accountability of Tax Dollars Act of 2002 (ATDA).