User Fee Reporting Needs Improvement

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User Fee Reporting Needs Improvement

• Presented byJANE A. BANNON

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CRITERIA

• OMB Circular No. A-25, User Charges, requires,
  in part, that user charges be assessed to each
  identifiable recipient for special benefits
  derived from Federal activities beyond those
  received by the general public and that user
  charges be sufficient to recover the full cost of
  providing the special benefits incurred by the
  Federal Government.
• The CFO Act of 1990 (Public Law 101-576, Section
  205) requires, in part, that the Chief Financial
  Officer review, on a biennial basis, the fees,
  royalties, rents and other charges imposed by the
  agency for services and things of value it
  provides, and make recommendations on revising
  those charges to reflect costs incurred by it in
  providing those services and things of value.
• Department Regulation (DR) 2100-3 requires that
  the agencies analyze their financial activity and
  perform reviews to include, in part, an analysis
  of current charges for things of value. The DR
  also states that OCFO will review and
  consolidate the responses from the agency CFOs,
  and OCFO may conduct examinations of the
  agencies reviews on a sample basis.

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CRITERIA

• OMB Circular No. A-129, Managing Federal Credit
  Programs, requires that reviews of credit
  program fees be performed annually.
• Statement of Federal Financial Accounting
  Standards No. 2 states, the present value of
  fees and other collections is recognized as a
  deduction from subsidy costs.
• The Federal Credit Reform Act of 1990 defines
  cost as the estimated long-term cost to the
  Government of a direct loan or loan guarantee,
  calculated on a net present value basis,
  excluding administrative costs.

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CONDITION

• The methodology to be employed in OCFOs reviews
  was not documented.
• We could not independently assess the adequacy of
  the control measures intended.
• Our review of the agencies submissions
  identified issues which questioned the utility of
  the reports and the level of assurance that could
  be garnered that the requirements of OMB Circular
  A-25 had been met.
• Credit reform fees charged were insufficient to
  cover the subsidy costs of the programs
  (unrecouped subsidies).

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Condition
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EFFECT

• No assurance that full costs had been recouped,
  as required.
• Users in prior years were overcharged and current
  years users have been provided an unwarranted
  subsidy.

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CAUSE

• No assurance that full costs had been recouped,
  as required because the obligation data had been
  estimated to agree with actual revenues (i.e.,
  controls were not in place to assure the accuracy
  of the financial data reported).
• Users in prior years were overcharged and current
  years users have been provided an unwarranted
  subsidy because of the inadequate ratesetting
  processes.
• Frequently the fees charged were insufficient to
  cover the subsidy costs of the programs because
  agency officials did not have documentation or
  analysis to support the justifications for not
  covering the full cost of the direct and
  guaranteed loan programs.
• OCFOs biennial review process needed
  strengthening.

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Recommendations(to OCFO)

• Prescribe a documented methodology for reviewing
  the reasonableness of agency fee submissions and
  formalize a review schedule.

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Recommendations

• Require Rural Development and FSA to document
  their justifications for not recouping the full
  costs of their programs.

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Management Decision

• OCFO will develop a review methodology to detect
  report deficiencies and review the support for
  the agencies submissions on a sample basis.

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Management Decision

• OCFO has met with credit agencies to develop a
  review methodology and issued more prescriptive
  guidance on how credit programs should document
  their justifications for not recouping (if
  applicable) the full costs of their programs.

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THANK YOU

• REPORT INFORMATION
• USDA CONSOLIDATED FINANCIAL STATEMENT AUDIT
• Fiscal Years 2004 and 2003
• 50401-53-FM