USDA FOREST SERVICE : Strategic Planning and Resource Assessment

Management's Discussion and Analysis

Management Controls, Systems, and Compliance with Laws or Regulations

Management Controls

The Federal Managers’ Financial Integrity Act (FMFIA) requires agencies to provide an assurance statement that Federal programs are operated efficiently and effectively and to provide reasonable assurance that obligations and costs comply with applicable laws and regulations; Federal assets are safeguarded against fraud, waste, and mismanagement; and transactions are accounted for and properly recorded.

Within the Forest Service, the Chief; deputy chiefs; regional foresters; and directors for the research stations, Northeastern Area Office, Forest Products Lab, Job Corps, and the International Institute of Tropical Forestry are responsible for ensuring that their programs

are operating efficiently, effectively, and in compliance with relevant laws and that financial management systems conform to applicable laws, standards, principles, and related requirements.

The USDA goal is to eliminate material deficiencies by the end of FY 2004. In conjunction with the Office of Inspector General (OIG), Forest Service management is working aggressively to determine the root causes of material deficiencies and moving quickly to remedy them. The Forest Service’s management controls program ensures compliance with FMFIA, and with OMB Circulars A-123, Management Accountability and Control and A-127 Financial Management Systems, except for the weakness identified below.

In FY 2003, Forest Service reduced the number of material deficiencies. The following FMFIA material deficiencies have been fully corrected or reassessed and determined to be no longer material.

Number and Title of Material Deficiency

Year Identified

Status

FS 91-02: Adequacy of Financial Systems

1989

Downgraded

FS 92-01: Administration of Lands Special Use Permits

1992

Downgraded

FS 00-01: Performance Reporting

2000

Downgraded

FS 01-01: Timber Sale Environmental Analysis

2001

Downgraded

FS 03-02: Systems Nonconformance

2003

Reassigned to USDA

The Forest Service’s goal for FY 2004 is to eliminate the remaining deficiency, Internal Control Weakness: Overall Financial Management (FS-03-01), by year end.

Material Deficiency Description

Corrective Actions Remaining to be Taken

Year Identified

Estimated Completion Date

FS-03-1 Internal Control Weakness: Overall financial management controls not adequate.

Source: OIG Audit No. 08401-1-FM

Issue new policy requiring supervisory review of property transactions and to improve capitalization controls. Finalize the process to certify payroll.

FY 2003

FY 2004

Financial Systems

Under the Federal Financial Management Improvement Act (FFMIA), agencies are required to report whether financial management systems substantially comply with the Federal financial management systems requirements, Federal accounting standards, and the United States Government Standard General Ledger at the transaction level. If an agency is not in compliance with the FFMIA, a remediation plan is required to bring the agency’s financial management systems into substantial compliance.

The following are areas of FFMIA noncompliance in the Forest Service:

  • The Forest Service systems (PONTIUS, PRCH, EMIS, PROP, INFRA, Central, ATSA, and PAYCHECK7) are not compliant with Federal Financial Management System requirements.
  • Forest Service revenue collections from certain business processes are not recognized as revenue when earned.
  • The Forest Service used improper accounting for Budgetary Resources in special and nonrevolving trust funds.
  • The Forest Service had other accounting errors and lack of budgetary/proprietary synchronization.
Since the publication of the FY 2003 financial statements, the remediation plan is in the process of being completed; therefore, it does not appear in this report.