2002 AICPA Governmental Accounting and Auditing Update Conference

1. 2002 AICPA Governmental Accounting and Auditing Update Conference August 26 – 28, 2002 Renaissance Hotel Washington, DC

2. Tools for Maturing the Financial Statement Audit Process Thomas N. Cooley Chief Financial Officer National Science Foundation

3. A word about NSF… • Independent Agency • Supports basic research and education • Uses grant mechanism • Low overhead; highly automated • National Science Board

4. 1. Planning: coordinating a comprehensive audit plan with management, the inspector general, and the independent public accountant • Effective Planning Requires: • Consultation with OIG • Agreement with OIG on Timeline Deliverables • Agreement with OMB (RMO and OFFM) on Timeline and Deliverables • Monthly Discussion of Timetables at ACC Meeting • Joint Submission to OMB of Performance and Accountability Report (End Product)

5. 1. Continued • Case Study— • NSF/OIG Joint Memo to OMB Dated June 13, 2002 Covered: • Close NSF’s Books—October 26, 2002 • Performance Measures in MD&A to KPMG—December 9, 2002 • Final Audit Report—January 16, 2003 • Final GPRA Performance and Accountability Report—February 1, 2003

6. Communicating: working status meetings and CFO/IG direct involvement to keep the process moving • Three Part Working Group Meetings to Handle Detail Issues (OIG, KPMG, and MGMT) • OIG Submits Audit Findings as Early as Possible, Even for the Current Fiscal Year, to Provide Management Time to Address /Rectify Issues, where Appropriate • Joint Oversight Visits to Grantees

7. Financial Systems: automated, integrated, and timely centralized reporting is critical to completing audits • Updated FAS to Client Server Environment, Reporting Database • 1975: Honeywell • 1983: HP • 1985 – 1990 : PC on every desk, local area networks, email, internet access • 1993: IBM Mainframe • Updated Client Server 2001

8. 3. Continued • Set Audit Schedule Deliverables • EIS Integrated Budget and Performance Reporting • Ongoing • Revisions • Model for Integrating Budget and Performance (examples) • Dwell Time • Award and Size/Duration

9. 4. Audit Committees: NSF has one, and its role is significant • Established in Late 1997, Revised in 2000 • Monthly Meetings Throughout the Year Involving All Stakeholders • Incorporates All Effected Parties, i.e. CFO, CIO, IG, Auditors, General Counsel and etc.

10. 1997 Version NSF COTR Audit Paid by NSF CFO, OIG Participants Run Jointly by OIG and Management No FISCAM Atmosphere of Cooperation 2000 Version OIG COTR Audit Paid by NSF Low Level Participants Run by OIG FISCAM Included Information Atmosphere 4. Continued

11. 5. Future Challenges: the President’s management agenda, Getting to Green, means accelerating reporting dates • “On Demand” General Ledgers (runs overnight upon request) • Automated Financial Statement Preparation, Cross Walked from Data Warehouse Environment • Automated Closing Entries and Accruals • Interagency Funds/Advances • Human Capital for Financial Management

12. ContinuedData Warehouse Environment • Ending General Ledger Balances warehoused into an Access database outside of our main financial system. • Accrual / Adjusting entries posted in this Access database to generate Adjusted Ending Balances. • Adjusted Ending Balances closed utilizing an automated closing process (i.e., soft-close). • Financial Statements automatically generated utilizing crosswalk specifications. This process enables NSF to create interim financial statements efficiently without interfering with normal operations.

13. National Science FoundationWHERE DISCOVERIES BEGINOur Motto: “ask early, ask often…” TCooley@nsf.gov (703) 292 - 8200 www.nsf.gov