Chapter 17, Problem 1Q

To determine

Describe the role of the Government Accountability Office (GAO), the Department of Treasury, and the Office of the Management and the Budget (OMB) in the financial accounting and reporting of the federal government.

Explanation of Solution

GAO (Government Accountability Office): This is an authorized body that governs, approves, administrates, and issues GAGAS.

Department of the Treasury: This is a part of the executive branch of the federal government which receives, keeps, distributes, and accounts for the monies of Country U.

Office of the Management and the Budget (OMB): This is the office which is part of the Executive Office of the President that produces the President’s budget, evaluates the Congressional requirements in conformity with the President’s policies and programs, and coordinates the inter-office policies.

Role of GAO, Department of Treasury, and OMB:

• GAO is the independent audit agency which is responsible for the audit of the federal government, prepare audit reports which indicate that the federal agencies are in conformity with the legal and GAAP (generally accepted accounting principles) requirements.
• The main function of Department of Treasury is to collect revenue and disburse cash. The department manages and is responsible for the accounts of the federal agencies.
• OMB prepares the financial budget for the federal government. OMB issues circulars on guidance to agencies about accounting and financial reporting. OMB approves the standard general ledger. OMB issues circulars on the appropriate use of the disbursed funds by sub recipients.