Budgetary Controls and Linking Budgetary and Proprietary Control Testing

1. Budgetary Controls andLinking Budgetary and Proprietary Control Testing

2. Overview Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Background • Risks And Control Objectives • Testing 1

3. Background Budgetary Controls andLinking Budgetary and Proprietary Control Testing • The Statement of Budgetary Resources • Objectives • NASA Error 2

4. Risks Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Risk • Assertions • Example – Budget Authority • Budget authority could be misstated or recorded in the wrong accounts, resulting in obligations in excess of resources, or obligations are less than what is available • Existence – Budget authority is available and recorded in the right account • Completeness – ALL budget authority was recorded properly 3

5. Risks Budgetary Controls andLinking Budgetary and Proprietary Control Testing Now For The Rest of The Statement 4

6. Risks - Resources Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Budget Authority • Unobligated Balances, Beginning of Period • Spending Authority From Offsetting Collections • Recoveries • Not Available 5

7. Risks – Status of Resources Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Obligations Incurred • Unobligated Balances 6

8. Risks - Outlays Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Obligated Balances, Net EFY • Offsetting Receipts 7

9. Testing Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Document The Process • Flowchart • Identify Key Controls • Test The Controls 8

10. Linking Budgetary Controls andLinking Budgetary and Proprietary Control Testing Now, The Part You Have all Been Waiting For!!! 9

11. Linking Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Eric Eisenstein 10

12. Linking Budgetary Controls andLinking Budgetary and Proprietary Control Testing • To maximize effectiveness and efficiency, tests of budgetary and proprietary accounts should be combined when interrelationships exist. 11

13. Linking Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Must Understand Interrelationships • Must Document the Relationship • Must Document How the Proprietary Test Provides Assurance About the Budgetary Line 12

14. Examples Budgetary Controls andLinking Budgetary and Proprietary Control Testing • Controls Over Outlays May Linked With Disbursement Controls • Accounts Payable And Disbursement Controls May Be Linked To Controls Over UDO’s • Controls over the Spending Authority From Offsetting Collections May be Linked To Revenue Testing 13