Financial Reporting

Once Congress passes a budget, Treasury ensures federal entities can spend the funding they have been allocated, and federal entities carry out the programs and activities the budget is intended for. As entities spend their budgets to execute their missions, they need to record these activities in their accounting systems and create reports of their financial activities so taxpayers, Congress, the President, agency heads, program managers, and other interested parties can see where the money is going and how it is spent. This financial reporting provides users with a view into the financial health of the government at both a point in time and the trends over time. Auditors often review and conduct tests to determine if agency financial reports are presented fairly and accurately, so they may be relied upon by users.

President Jefferson noted the need for financial reporting and transparency of government spending in a letter to Treasury Secretary Albert Gallatin in 1802, but financial reports were not required by law until the Budget and Accounting Procedures Act of 1950, which required executive agencies to provide reports and information on their financial condition to the Secretary of the Treasury. Since then, additional laws have promoted transparency, accuracy, and completeness of financial reporting: the Chief Financial Officers Act of 1990 (CFO Act), Government Management Reform Act of 1994 (GMRA), Accountability of Tax Dollars Act of 2002 (ATDA), and Government Corporations Control Act mandate the preparation of audited annual financial statements government agencies and corporations. In addition to annual financial statement requirements, federal financial reporting requirements are also within the Data Accountability and Transparency Act (DATA Act) of 2014 that links federal appropriations, receipts, and spending to specific programs, types of spending, budget functions, awards, and recipients.

"...a simplification of the form of accounts in the treasury department, and in the organisation of it’s officers, so as to bring every thing to a single center, we might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress, and every man of any mind in the Union2 should be able to comprehend them, to investigate abuses, and consequently to controul them..." Thomas Jefferson to Albert Gallatin, April 1, 1802

Types of Financial Reports

Financial reporting is the culmination of financial transactions into various products and reports, to include:

TFM Volume 1, Part 2, Chapter 3200 Foreign Currency Accounting and Reporting

TFM Volume 1, Part 2, Chapter 3200 covers the Department of the Treasury (Treasury) requirements relating to the accounting for and reporting of foreign currencies acquired by accountable officers without purchase for dollars. Generally these currencies are acquired under the provisions of foreign assistance or foreign agricultural development programs. The requirements of this chapter are applicable to all military, United States, and certain Treasury Disbursing Offices (TDOs) and Non-Treasury Disbursing Offices (NTDOs) having this type of activity.

TFM Volume 1, Part 2, Chapter 3400 Accounting for and Reporting on Cash and Investments Held Outside of the U.S. Treasury

TFM Volume 1, Part 2, Chapter 3400 provides federal departments and agencies with the Department of the Treasury (Treasury) accounting and reporting policies and procedures on cash not deposited in a Treasury General Account (TGA) and investments in non-federal securities. It also includes guidance on cash and investments held outside of the U.S. Treasury and the requirements for accountable officers who have responsibilities for funds received, certified, disbursed, and held in their custody.

TFM Volume 1, Part 2, Chapter 4200 Agency Year-end Reporting on Unexpended Balances of Appropriation Accounts

TFM Volume 1, Part 2, Chapter 4200 prescribes guidance for reporting year-end unexpended balances of appropriations to the Bureau of the Fiscal Service (Fiscal Service) through Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS). The Year-end Module, in addition to GTAS, is needed to initiate year-end cancellation and adjustment transactions. This guidance applies to all departments and agencies of the executive branch.

TFM Volume 1, Part 2, Chapter 4300 Reporting Instructions for Accounts Invested in Department of the Treasury Securities

TFM Volume 1, Part 2, Chapter 4300 provides detailed reporting instructions for disclosing principal, premium, discount, inflation compensation, and earned interest on accounts invested in the Department of the Treasury's securities.

TFM Volume 1, Part 2, Chapter 4500 Grants, Loans, Credits, and Contingent Liabilities Involving Foreigners

TFM Volume 1, Part 2, Chapter 4500 prescribes forms and procedures agencies use to prepare reports for submission to the Department of the Treasury (Treasury) relating to U.S. Government grants, loans, credits, and contingent liabilities on loans, credits, and other payment scheduling agreements involving foreigners.

TFM Volume 1, Part 2, Chapter 4600 Treasury Reporting Instructions for Credit Reform Legislation

TFM Volume 1, Part 2, Chapter 4600 prescribes the Department of the Treasury's (Treasury) reporting instructions for federal credit program agencies. These instructions apply to all direct loan and loan guarantee programs, except those specifically excluded by Sections 502 and 506 of the Federal Credit Reform Act of 1990, as amended (FCRA).

TFM Volume 1, Part 2, Chapter 4700 Federal Entity Reporting Requirements for the Financial Report of the United States Government

TFM Volume 1, Part 2, Chapter 4700 prescribes how federal entities provide data for the Financial Report of the United States Government (FR) using the Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS) along with additional details from the audited department-level financial statements. This chapter also includes a listing of the federal entities included in the FR, Intra-governmental Transactions (IGT) process, and requirements for submitting pre-closing GTAS Adjusted Trial-Balance (ATB). Please refer to Office of Management and Budget (OMB) Circular No. A-136 for the reporting requirements for federal entities' audited financial statements.

TFM Volume 1, Part 2, Chapter 4800 Responsibilities Relating to Non-Credit Reform Borrowing Accounts

TFM Volume 1, Part 2, Chapter 4800 prescribes the responsibilities, policies, and procedures that the Department of the Treasury (Treasury) has established for federal agencies that have been granted authority by law to borrow funds from Treasury, other than federal agencies that borrow from Treasury under the Federal Credit Reform Act of 1990, as amended (FCRA). This chapter does not apply to accounts that are under the FCRA.

TFM Volume 1, Part 2, Chapter 5000 Accounting and Reporting of Monetary Assets (Nonoperating Cash Items) Held by U.S. Treasury Offices

TFM Volume 1, Part 2, Chapter 5000 provides instructions to U.S. Treasury (Treasury) offices for the accounting and reporting of certain noncash assets. Examples of these assets are coins and coinage metals held by the Bureau of the U.S. Mint (Mint) offices and gold bullion, certificates, or coins held by Federal Reserve Banks (FRBs) for display or in reserve.

TFM Volume 1, Part 2, Chapter 5100 Fund Balance with Treasury Accounts

TFM Volume 1, Part 2, Chapter 5100 prescribes policies and procedures for agencies’ Fund Balance With Treasury (FBWT) accounts.

TFM Volume 1, Part 6, Chapter 3000 Payments of Unclaimed Moneys and Refund of Moneys Erroneously Received and Covered

TFM Volume 1, Part 6, Chapter 3000 prescribes procedures that apply to all departments and agencies of the federal government that handle unclaimed moneys belonging to individuals, businesses, or other entities. The unclaimed moneys provisions of this chapter do not apply to funds held in trust for individual Indians, associations of individual Indians, or for certain Indian corporations. This chapter also prescribes procedures for making refunds of collections or other receipts erroneously received and covered into the Treasury.

TFM Volume 1, Part 6, Chapter 8500 Cash Forecasting Requirements

TFM Volume 1, Part 6, Chapter 8500 prescribes special instructions that federal departments and agencies must follow to report deposit and disbursement information for cash forecasting purposes.

United States Standard General Ledger (USSGL)

The USSGL provides a uniform chart of accounts & technical guidance for standardizing federal agency accounting.

Federal Financial Management Standard Functions and Activities

Federal Business Lifecycles, functional areas, functions, and activities serve as the basis for a common understanding of what services agencies need and solutions that should be offered.

The Functions and activities that relate to Financial reporting are:

Budgetary Reporting

Financial Asset Information Reporting

Payment Reporting

Revenue Reporting

Reimbursable Reporting

Delinquent Debt Reporting

Cost Reporting

General Ledger Setup and Maintenance

General Ledger Posting

Accrual and Liability/Asset Processing

Period End Closing

Reconciliation of General Ledger and Subledgers

Reconciliation of Intragovernmental Activity

Reconciliation with Treasury Balance

Treasury Reporting

Financial Statement Preparation

Cash Forecasting and Reporting

Financial Performance and Operational Reporting

Internal Control/ Compliance Reviews

Federal Financial Management System Requirements (FFMSRs)

The Federal Financial Management Improvement Act of 1996 (FFMIA) required the establishment of uniform financial systems, standards, and reporting. Agencies should use the Federal Financial Management System Requirements in the pre-acquisition, acquisition, and implementation of new financial management solutions. These requirements can be found in TFM Volume I, Part 6, Chapter 9500.

The FFMSRs that relate to financial reporting are:

FFMSR 1.1.1 Defining GL Accounts and Attributes

FFMSR 1.1.2 Posting GL Transactions

FFMSR 1.1.3 Managing Financial Asset Information

FFMSR 1.1.4 Managing Financial Liability Information

FFMSR 1.1.5 Managing Revenues and Other Financing Sources

FFMSR 1.2.1 Determining Costs

FFMSR 1.3.1 Providing GL Information

FFMSR 1.4.1 Defining Federal Funding Attributes to Align Financial Management Information with Performance Goals

FFMSR 2.1.3 Reporting Budgetary Resources and Budget Execution

FFMSR 2.2.2 Making Payments

FFMSR 2.2.3 Reporting on Payments

FFMSR 2.2.2 Making Payments

FFMSR 2.2.6 Reporting on Debt

FFMSR 2.3.2 Verifying Traceability

FFMSR 2.3.1 Reconciling Fund Balance with Treasury

Federal Financial Management Standard Business Use Cases

Business Use Cases are a set of agency “stories” that document the key activities, inputs, outputs, and other LOB intersections to describe how the Federal government operates.

All of the business use cases relate to financial reporting:

Budget Formulation to Execution

Acquire to Dispose

Request to Procure

Procure to Pay

Bill to Collect

Agree to Reimburse

Apply to Preform

Hire to Retire

Book to Reimburse

Apply to Repay

Federal Financial Management Standard Data Elements

Standard Data Elements identify the minimum data fields required to support the inputs and outputs noted in the use cases and capabilities.

Other Resources

This page was last updated on October 09, 2020.