USDA FOREST SERVICE : Strategic Planning and Resource Assessment

Title Page and Introductory Sections

Message from the Chief Financial Officer

I am pleased to present the consolidated financial statements of the U.S. Department of Agriculture Forest Service for FY 2003 and 2002. For the second consecutive year, the Forest Service has received an unqualified, “clean,” audit opinion on its statements.

I want to extend my sincere appreciation to all individuals and organizations whose dedication and resolve made the FY 2003 unqualified opinion possible. Receiving an unqualified opinion verifies that the Forest Service’s financial statements are fairly presented and demonstrates accountability in the execution of our responsibilities.

During FY 2003, the Forest Service continued agencywide improvement efforts to effectively and efficiently manage public funds and property through “Sustainable Financial Management” activities. Accomplishments during the year included the development of a Budget and Finance Strategic Plan to provide a “road map” for sustainable financial management within the Forest Service. Strategic goals for financial management focused on creating an effective, efficient, and economic financial management organization; establishing financial management performance accountability; sustaining financial management improvements; and integrating financial processes and systems.

During FY 2003, the Forest Service also continued to aggressively address the material weaknesses reported by the Office of Inspector General to determine the root causes of our material deficiencies and to move quickly to remedy them. During FY 2003, the following material deficiencies have been fully corrected or reassessed and determined to be no longer material—adequacy of financial statements, performance reporting, administration of lands special use permits, and timber sale environmental analysis.

The Forest Service has also made progress in resolving issues from the FY 2002 financial statement audit regarding the reconciliation of funds balance with Treasury; accurate reporting of plant, property and equipment; and accurate recording of accruals.

For FY 2004, our goals will center on maintaining an unqualified audit opinion; eliminating the new and remaining reportable conditions and compliance issues; and improving our ability to provide timely, accurate, and useful financial information.

The Forest Service will aggressively pursue business process reforms and organizational realignment in order to assure that the financial position of the agency remains solid over the long term.

HANK KASHDAN

Chief Financial Officer, Acting