31 U.S.C. § 3512 — Executive agency accounting and other fi-

Page 270 TITLE 31—MONEY AND FINANCE § 3512 1 So in original. Probably should not be capitalized. 2 So in original. Probably should be followed by ‘‘of’’. See Ref- erences in Text note below. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 959; Pub. L. 107–217, § 3(h)(5), Aug. 21, 2002, 116 Stat. 1299.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3511(a) ..... 31:66(a)(1st sentence words before last comma). Sept. 12, 1950, ch. 946, §§ 111(f), 112(a), 64 Stat. 835; Reorg. Plan No. 2 of 1970, eff. July 1, 1970, § 102(a), 84 Stat. 2085. 3511(b) ..... 31:66(a)(1st sentence words after last comma, 2d sen- tence). 3511(c) ..... 31:49 June 10, 1921, ch. 18, § 309, 42 Stat. 25. 31:66(a)(3d, last sen- tences). 3511(d) ..... 31:65(f). In the section, the words ‘‘the head of’’ are added for consistency in the revised title and with other titles of the United States Code. In subsection (a), the words ‘‘of the United States’’ are omitted as surplus. The word ‘‘President’’ is sub- stituted for ‘‘Director of the Office of Management and Budget’’ because sections 101 and 102(a) of Reorganiza- tion Plan No. 2 of 1970 (eff. July 1, 1970, 84 Stat. 2085) re- designated the Bureau of the Budget as the Office of Management and Budget and transferred all functions of the Bureau to the President. In subsection (b)(3), the words ‘‘as a whole’’ and ‘‘re- spective’’ are omitted as surplus. Subsection (c)(2) is substituted for 31:49 and the words ‘‘and, to the extent he deems necessary, the authority vested in him by section 49 of this title’’ in 31:66(a) for clarity and consistency. H. Rept. 2556, 81st Cong. (1950), states that the Comptroller General will be able to pre- scribe appropriation and fund accounting systems under 31:49 ‘‘in terms of principles, standards and re- lated requirements rather than in terms of detailed forms and procedures’’. The reference to the judicial branch covers authority that the Comptroller General was given under 31:49 that applies to departments and establishments except the Supreme Court that was not superseded by the source provisions restated in sub- section (a) of this section. Editorial Notes AMENDMENTS 2002—Subsec. (c)(1). Pub. L. 107–217 substituted ‘‘sec- tion 121(b) of title 40’’ for ‘‘section 205(b) of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 486(b))’’. Statutory Notes and Related Subsidiaries ADOPTION OF CAPITAL ACCOUNTING STANDARDS Pub. L. 101–576, title III, § 307, Nov. 15, 1990, 104 Stat. 2855, provided that: ‘‘No capital accounting standard or principle, including any human capital standard or principle, shall be adopted for use in an executive de- partment or agency until such standard has been re- ported to the Congress and a period of 45 days of con- tinuous session of the Congress has expired.’’ § 3512. Executive agency accounting and other fi- nancial management reports and plans (a)(1) The Director of the Office of Manage- ment and Budget shall prepare and submit to the appropriate committees of the Congress and make available on a website described in section 1122 a financial management status report and a governmentwide 5-year financial management plan. (2) A financial management status report under this subsection shall include— (A) a description and analysis of the status of financial management in the executive branch; (B) a summary of the most recently com- pleted financial statements— (i) of Federal agencies under section 3515 of this title; and (ii) of Government corporations; (C) a summary of the most recently com- pleted financial statement audits and re- ports— (i) of Federal agencies under section 3521(e) and (f) of this title; and (ii) of Government corporations; (D) a summary of reports on internal ac- counting and administrative control systems submitted to the President and the Congress under the amendments made by the Federal Managers’ Financial Integrity Act of 1982 (Public Law 97–255); (E) a listing of agencies whose financial management systems do not comply substan- tially with the requirements of Section 1 3(a) 2 the Federal Financial Management Improve- ment Act of 1996, and a summary statement of the efforts underway to remedy the non- compliance; and (F) any other information the Director con- siders appropriate to fully inform the Congress regarding the financial management of the Federal Government. (3)(A) A governmentwide 5-year financial man- agement plan under this subsection shall de- scribe the activities the Director, the Deputy Director for Management, the Controller of the Office of Federal Financial Management, and agency Chief Financial Officers shall conduct over the next 5 fiscal years to improve the finan- cial management of the Federal Government. (B) Each governmentwide 5-year financial management plan prepared under this sub- section shall— (i) describe the existing financial manage- ment structure and any changes needed to es- tablish an integrated financial management system; (ii) be consistent with applicable accounting principles, standards, and requirements; (iii) provide a strategy for developing and in- tegrating individual agency accounting, finan- cial information, and other financial manage- ment systems to ensure adequacy, consist- ency, and timeliness of financial information; (iv) identify and make proposals to elimi- nate duplicative and unnecessary systems, in- cluding encouraging agencies to share systems which have sufficient capacity to perform the functions needed; (v) identify projects to bring existing sys- tems into compliance with the applicable standards and requirements; (vi) contain milestones for equipment acqui- sitions and other actions necessary to imple- ment the 5-year plan consistent with the re- quirements of this section; (vii) identify financial management per- sonnel needs and actions to ensure those needs are met; (viii) include a plan for ensuring the annual audit of financial statements of executive Page 271 TITLE 31—MONEY AND FINANCE § 3512 agencies pursuant to section 3521(h) of this title; and (ix) estimate the costs of implementing the governmentwide 5-year plan. (4)(A) Not later than 15 months after the date of the enactment of this subsection, the Direc- tor of the Office of Management and Budget shall submit the first financial management sta- tus report and governmentwide 5-year financial management plan under this subsection to the appropriate committees of the Congress. (B)(i) Not later than January 31 of each year thereafter, the Director of the Office of Manage- ment and Budget shall submit to the appro- priate committees of the Congress a financial management status report and a revised govern- mentwide 5-year financial management plan to cover the succeeding 5 fiscal years, including a report on the accomplishments of the executive branch in implementing the plan during the pre- ceding fiscal year. (ii) The Director shall include with each re- vised governmentwide 5-year financial manage- ment plan a description of any substantive changes in the financial statement audit plan required by paragraph (3)(B)(viii), progress made by executive agencies in implementing the audit plan, and any improvements in Federal Govern- ment financial management related to prepara- tion and audit of financial statements of execu- tive agencies. (5) Not later than 30 days after receiving each annual report under section 902(a)(6) of this title, the Director shall transmit to the Chair- man of the Committee on Government Oper- ations of the House of Representatives and the Chairman of the Committee on Governmental Affairs of the Senate a final copy of that report and any comments on the report by the Direc- tor. (b) The head of each executive agency shall es- tablish and maintain systems of accounting and internal controls that provide— (1) complete disclosure of the financial re- sults of the activities of the agency; (2) adequate financial information the agen- cy needs for management purposes; (3) effective control over, and accountability for, assets for which the agency is responsible, including internal audit; (4) reliable accounting results that will be the basis for— (A) preparing and supporting the budget requests of the agency; (B) controlling the carrying out of the agency budget; and (C) providing financial information the President requires under section 1104(e) of this title; and (5) suitable integration of the accounting of the agency with the central accounting and reporting responsibilities of the Secretary of the Treasury under section 3513 of this title. (c)(1) To ensure compliance with subsection (b)(3) of this section and consistent with stand- ards the Comptroller General prescribes, the head of each executive agency shall establish in- ternal accounting and administrative controls that reasonably ensure that— (A) obligations and costs comply with appli- cable law; (B) all assets are safeguarded against waste, loss, unauthorized use, and misappropriation; and (C) revenues and expenditures applicable to agency operations are recorded and accounted for properly so that accounts and reliable fi- nancial and statistical reports may be pre- pared and accountability of the assets may be maintained. (2) Standards the Comptroller General pre- scribes under this subsection shall include standards to ensure the prompt resolution of all audit findings. (d)(1) In consultation with the Comptroller General, the Director of the Office of Manage- ment and Budget— (A) shall establish by December 31, 1982, guidelines that the head of each executive agency shall follow in evaluating the internal accounting and administrative control sys- tems of the agency to decide whether the sys- tems comply with subsection (c) of this sec- tion; and (B) may change a guideline when considered necessary. (2) By December 31 of each year (beginning in 1983), the head of each executive agency, based on an evaluation conducted according to guide- lines prescribed under paragraph (1) of this sub- section, shall prepare a statement on whether the systems of the agency comply with sub- section (c) of this section, including— (A) if the head of an executive agency de- cides the systems do not comply with sub- section (c) of this section, a report identifying any material weakness in the systems and de- scribing the plans and schedule for correcting the weakness; and (B) a separate report on whether the ac- counting system of the agency conforms to the principles, standards, and requirements the Comptroller General prescribes under sec- tion 3511(a) of this title. (3) The head of each executive agency shall sign the statement and reports required by this subsection and submit them to the President and Congress. The statement and reports are available to the public, except that information shall be deleted from a statement or report be- fore it is made available if the information spe- cifically is— (A) prohibited from disclosure by law; or (B) required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs. (e) To assist in preparing a cost-based budget under section 1108(b) of this title and consistent with principles and standards the Comptroller General prescribes, the head of each executive agency shall maintain the accounts of the agen- cy on an accrual basis to show the resources, li- abilities, and costs of operations of the agency. An accounting system under this subsection shall include monetary property accounting records. (f) The Comptroller General shall— (1) cooperate with the head of each executive agency in developing an accounting system for the agency; and Page 272 TITLE 31—MONEY AND FINANCE § 3512 (2) approve the system when the Comptroller General considers it to be adequate and in con- formity with the principles, standards, and re- quirements prescribed under section 3511 of this title. (g) The Comptroller General shall review the accounting systems of each executive agency. The results of a review shall be available to the head of the executive agency, the Secretary, and the President. The Comptroller General shall re- port to Congress on a review when the Comp- troller General considers it proper. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 959; Pub. L. 97–452, § 1(12), Jan. 12, 1983, 96 Stat. 2468; Pub. L. 101–576, title III, § 301(a), Nov. 15, 1990, 104 Stat. 2847; Pub. L. 103–272, § 4(f)(1)(J), July 5, 1994, 108 Stat. 1362; Pub. L. 104–208, div. A, title I, § 101(f) [title VIII, § 805(b)], Sept. 30, 1996, 110 Stat. 3009–314, 3009–392; Pub. L. 113–101, § 4, May 9, 2014, 128 Stat. 1153; Pub. L. 116–283, div. H, title XCVI, § 9601(c)(2)(E), Jan. 1, 2021, 134 Stat. 4828.) HISTORICAL AND REVISION NOTES 1982 ACT Revised Section Source (U.S. Code) Source (Statutes at Large) 3512(a) ..... 31:66a(a). Sept. 12, 1950, ch. 946, §§ 112(c), 113(a), 64 Stat. 835; Reorg. Plan No. 2 of 1970, eff. July 1, 1970, § 102(a), 84 Stat. 2085. 3512(b) ..... 31:66a(c). Sept. 12, 1950, ch. 946, 64 Stat. 832, § 113(c); added Aug. 1, 1956, ch. 814, § 2(b), 70 Stat. 782. 3512(c) ..... 31:66(b)(less Treas- ury Department). Sept. 12, 1950, ch. 946, §§ 112(b)(less Treasury De- partment), 113(b), 64 Stat. 835, 836. 31:66a(b). 3512(d) ..... 31:66(c). In subsection (a)(3), the words ‘‘funds, property, and other’’ are omitted as surplus. In subsection (a)(4)(C), the word ‘‘President’’ is sub- stituted for ‘‘Office of Management and Budget’’ be- cause sections 101 and 102(a) of Reorganization Plan No. 2 of 1970 (eff. July 1, 1970, 84 Stat. 2085) redesignated the Bureau of the Budget as the Office of Management and Budget and transferred all functions of the Bureau to the President. In subsection (a)(5), the words ‘‘the accounting of the Treasury Department in connection with’’ are omitted as surplus. In subsection (b), the words ‘‘As soon as practicable after August 1, 1956’’ are omitted as executed. The words ‘‘with a view’’, ‘‘adequate’’, and ‘‘as an integral part of the system’’ are omitted as surplus. In subsections (c) and (d), the words ‘‘Comptroller General’’ are substituted for ‘‘General Accounting Of- fice’’ for consistency. The word ‘‘considers’’ is sub- stituted for ‘‘deemed’’ as being more precise. In subsection (c), the text of 31:66a(b) is omitted as unnecessary. In clause (1), the words ‘‘the head of’’ are added for consistency with the revised title and other titles of the United States Code. In clause (2), the words ‘‘under section 3511 of this title’’ are substituted for ‘‘by him’’ in 31:66(b)(less Treasury Department) for clarity. In subsection (d), the word ‘‘concerned’’ is omitted as surplus. The word ‘‘President’’ is substituted for ‘‘Di- rector of the Office of Management and Budget’’ be- cause sections 101 and 102(a) of Reorganization Plan No. 2 of 1970 redesignated the Bureau of the Budget as the Office of Management and Budget and transferred all functions of the Bureau to the President. 1983 ACT Revised Section Source (U.S. Code) Source (Statutes at Large) 3512(b) ..... 31 App.:66a(d)(1). Sept. 12, 1950, ch. 946, 64 Stat. 832, § 113(d); added Sept. 8, 1982, Pub. L. 97–255, § 2, 96 Stat. 814. 3512(c)(1) 31 App.:66a(d)(2). 3512(c)(2) (A). 31 App.:66a(d)(3), (4). 3512(c)(2) (B). 31 App.:66a(b)(last sentence). Sept. 12, 1950, ch. 946, 64 Stat. 832, § 113(b)(last sentence); added Sept. 8, 1982, Pub. L. 97–255, § 4, 96 Stat. 815. 3512(c)(3) 31 App.:66a(d)(5). In subsections (b)(1) and (c)(1)(A), the words ‘‘the re- quirements of’’ are omitted as surplus. In subsection (b)(1), before clause (A), the words ‘‘the head of’’ are added for consistency in the revised title and with other titles of the United States Code. The word ‘‘provide’’ is omitted as surplus. In clause (B), the word ‘‘all’’ is substituted for ‘‘funds, property, and other’’ to eliminate unnecessary words. In subsection (c)(1)(A), the words ‘‘the head of each executive agency shall follow’’ are substituted for ‘‘agencies’’ for clarity and consistency in the revised title and with other titles of the Code. In subsection (c)(2), before clause (A), the words ‘‘be- ginning in’’ are substituted for ‘‘succeeding’’ because of the restatement. The words ‘‘on whether the systems of the agency comply with subsection (b) of this section’’ are substituted for 31 App.:66a(d)(3)(A) to eliminate un- necessary words. In clause (B), the word ‘‘related’’ is omitted as surplus. In subsection (c)(3)(A), the words ‘‘provision of’’ are omitted as surplus. Editorial Notes REFERENCES IN TEXT The Federal Managers’ Financial Integrity Act of 1982, referred to in subsec. (a)(2)(D), is Pub. L. 97–255, Sept. 8, 1982, 96 Stat. 814, which added subsec. (d) to sec- tion 66a of former Title 31, Money and Finance. Section 66a of former Title 31 was repealed by Pub. L. 97–258, § 5(b), Sept. 13, 1982, 96 Stat. 1068, and reenacted by the first section thereof as this section. Provisions relating to reports on internal accounting and administrative control systems are restated in subsec. (d)(2) and (3) of this section. The Federal Financial Management Improvement Act of 1996, referred to in subsec. (a)(2)(E), is Pub. L. 104–208, div. A, title I, § 101(f) [title VIII], Sept. 30, 1996, 110 Stat. 3009–314, 3009–389, which is set out as a note under this section. Section 3(a) of the act probably means section 803(a) of the act, which contains require- ments relating to financial management systems. The date of the enactment of this subsection, referred to in subsec. (a)(4)(A), is the date of enactment of Pub. L. 101–576, which added subsec. (a) and was approved Nov. 15, 1990. AMENDMENTS 2021—Subsec. (a)(1). Pub. L. 116–283 substituted ‘‘a website described in’’ for ‘‘the website described under’’. 2014—Subsec. (a)(1). Pub. L. 113–101, which directed the insertion of ‘‘and make available on the website de- scribed under section 1122’’ after ‘‘appropriate commit- tees of Congress’’ was executed by making the insertion after ‘‘appropriate committees of the Congress’’ to re- flect the probable intent of Congress. 1996—Subsec. (a)(2)(E), (F). Pub. L. 104–208 added sub- par. (E) and redesignated former subpar. (E) as (F). 1994—Subsec. (c)(1). Pub. L. 103–272, § 4(f)(1)(J)(i), sub- stituted ‘‘subsection (b)(3)’’ for ‘‘subsection (a)(3)’’ in introductory provisions. Subsec. (d)(1), (2). Pub. L. 103–272, § 4(f)(1)(J)(ii), sub- stituted ‘‘subsection (c)’’ for ‘‘subsection (b)’’ wherever appearing. Page 273 TITLE 31—MONEY AND FINANCE § 3512 1990—Pub. L. 101–576 substituted ‘‘and other financial management reports and plans’’ for ‘‘systems’’ in sec- tion catchline, added subsec. (a), and redesignated former subsecs. (a) to (f) as (b) to (g), respectively. 1983—Subsecs. (b), (c). Pub. L. 97–452 added subsecs. (b) and (c). Former subsecs. (b) and (c) were redesig- nated (d) and (e), respectively. Subsecs. (d) to (f). Pub. L. 97–452 redesignated former subsecs. (b) to (d) as (d) to (f), respectively. Statutory Notes and Related Subsidiaries CHANGE OF NAME Committee on Governmental Affairs of Senate changed to Committee on Homeland Security and Gov- ernmental Affairs of Senate, effective Jan. 4, 2005, by Senate Resolution No. 445, One Hundred Eighth Con- gress, Oct. 9, 2004. Committee on Government Operations of House of Representatives treated as referring to Committee on Government Reform and Oversight of House of Rep- resentatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Government Reform and Oversight of House of Representatives changed to Committee on Government Reform of House of Representatives by House Resolution No. 5, One Hundred Sixth Congress, Jan. 6, 1999. Committee on Government Reform of House of Representatives changed to Committee on Oversight and Government Reform of House of Rep- resentatives by House Resolution No. 6, One Hundred Tenth Congress, Jan. 5, 2007. Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Com- mittee on Oversight and Reform of House of Represent- atives changed to Committee on Oversight and Ac- countability of House of Representatives by House Res- olution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023. SHORT TITLE This section is popularly known as the ‘‘Federal Man- agers Financial Integrity Act’’. TERMINATION OF REPORTING REQUIREMENTS For termination, effective May 15, 2000, of provisions of law requiring submittal to Congress of any annual, semiannual, or other regular periodic report listed in House Document No. 103–7 (in which the requirement to submit statements and reports to Congress under sub- section (d)(3) of this section is listed on page 151), see section 3003 of Pub. L. 104–66, and section 1(a)(4) [div. A, § 1402(1)] of Pub. L. 106–554, set out as notes under sec- tion 1113 of this title. FEDERAL FINANCIAL MANAGEMENT IMPROVEMENT Pub. L. 104–208, div. A, title I, § 101(f) [title VIII], Sept. 30, 1996, 110 Stat. 3009–314, 3009–389, as amended by Pub. L. 117–286, § 4(b)(54), Dec. 27, 2022, 136 Stat. 4349, provided that: ‘‘SEC. 801. SHORT TITLE[.] ‘‘This title may be cited as the ‘Federal Financial Management Improvement Act of 1996.’ ‘‘SEC. 802. FINDINGS AND PURPOSES. ‘‘(a) FINDINGS.—The Congress finds the following: ‘‘(1) Much effort has been devoted to strengthening Federal internal accounting controls in the past. Al- though progress has been made in recent years, Fed- eral accounting standards have not been uniformly implemented in financial management systems for agencies. ‘‘(2) Federal financial management continues to be seriously deficient, and Federal financial manage- ment and fiscal practices have failed to— ‘‘(A) identify costs fully; ‘‘(B) reflect the total liabilities of congressional actions; and ‘‘(C) accurately report the financial condition of the Federal Government. ‘‘(3) Current Federal accounting practices do not accurately report financial results of the Federal Government or the full costs of programs and activi- ties. The continued use of these practices undermines the Government’s ability to provide credible and reli- able financial data and encourages already wide- spread Government waste, and will not assist in achieving a balanced budget. ‘‘(4) Waste and inefficiency in the Federal Govern- ment undermine the confidence of the American peo- ple in the government and reduce the federal Govern- ment’s ability to address vital public needs ade- quately. ‘‘(5) To rebuild the accountability and credibility of the Federal Government, and restore public con- fidence in the Federal Government, agencies must in- corporate accounting standards and reporting objec- tives established for the Federal Government into their financial management systems so that all the assets and liabilities, revenues, and expenditures or expenses, and the full costs of programs and activi- ties of the Federal Government can be consistently and accurately recorded, monitored, and uniformly reported throughout the Federal Government. ‘‘(6) Since its establishment in October 1990, the Federal Accounting Standards Advisory Board (here- inafter referred to as the ‘FASAB’) has made substan- tial progress toward developing and recommending a comprehensive set of accounting concepts and stand- ards for the Federal Government. When the account- ing concepts and standards developed by FASAB are incorporated into Federal financial management sys- tems, agencies will be able to provide cost and finan- cial information that will assist the Congress and fi- nancial managers to evaluate the cost and perform- ance of Federal programs and activities, and will therefore provide important information that has been lacking, but is needed for improved decision making by financial managers and the Congress. ‘‘(7) The development of financial management sys- tems with the capacity to support these standards and concepts will, over the long term, improve Fed- eral financial management. ‘‘(b) PURPOSE[.]—The purposes of this Act [title] are to— ‘‘(1) provide for consistency of accounting by an agency from one fiscal year to the next, and uniform accounting standards throughout the Federal Gov- ernment; ‘‘(2) require Federal financial management systems to support full disclosure of Federal financial data, including the full costs of Federal programs and ac- tivities, to the citizens, the Congress, the President, and agency management, so that programs and ac- tivities can be considered based on their full costs and merits; ‘‘(3) increase the accountability and credibility of federal [sic] financial management; ‘‘(4) improve performance, productivity and effi- ciency of Federal Government financial management; ‘‘(5) establish financial management systems to support controlling the cost of Federal Government; ‘‘(6) build upon and complement the Chief Financial Officers Act of 1990 (Public Law 101–576; 104 Stat 2838) [see Short Title of 1990 Amendment note set out under section 501 of this title], the Government Per- formance and Results Act of 1993 (Public Law 103–62[;] 107 Stat. 285) [see Short Title of 1993 Amendment note set out under section 1101 of this title] and the Gov- ernment Management Reform Act of 1994 (Public Law 103–356; 108 Stat. 3410) [see Short Title of 1994 Amend- ment note set out under section 3301 of this title]; and ‘‘(7) increase the capability of agencies to monitor execution of the budget by more readily permitting reports that compare spending of resources to results of activities. Page 274 TITLE 31—MONEY AND FINANCE § 3512 ‘‘SEC. 803. IMPLEMENTATION OF FEDERAL FINAN- CIAL MANAGEMENT IMPROVEMENTS. ‘‘(a) IN GENERAL.—Each agency shall implement and maintain financial management systems that comply substantially with Federal financial management sys- tems requirements, applicable Federal accounting standards, and the United States Government Standard General Ledger at the transaction level. ‘‘(b) AUDIT COMPLIANCE FINDING.— ‘‘(1) IN GENERAL.—Each audit required by section 3521(e) of title 31, United States Code, shall report whether the agency financial management systems comply with the requirements of subsection (a). ‘‘(2) CONTENT OF REPORTS.—When the person per- forming the audit required by section 3521(e) of title 31, United States Code, reports that the agency finan- cial management systems do not comply with the re- quirements of subsection (a), the person performing the audit shall include in the report on the audit— ‘‘(A) the entity or organization responsible for the financial management systems that have been found not to comply with the requirements of sub- section (a); ‘‘(B) all facts pertaining to the failure to comply with the requirements of subsection (a), including— ‘‘(i) the nature and extent of the noncompliance including areas in which there is substantial but not full compliance; ‘‘(ii) the primary reason or cause of the non- compliance; ‘‘(iii) the entity or organization responsible for the non-compliance [sic]; and ‘‘(iv) any relevant comments from any respon- sible officer or employee; and ‘‘(C) a statement with respect to the rec- ommended remedial actions and the time frames to implement such actions. ‘‘(c) COMPLIANCE IMPLEMENTATION.— ‘‘(1) DETERMINATION.—No later than the date de- scribed under paragraph (2), the Head of an agency shall determine whether the financial management systems of the agency comply with the requirements of subsection (a). Such determination shall be based on— ‘‘(A) a review of the report on the applicable agency-wide audited financial statement; ‘‘(B) any other information the Head of the agen- cy considers relevant and appropriate. ‘‘(2) DATE OF DETERMINATION.—The determination under paragraph (1) shall be made no later than 120 days after the earlier of— ‘‘(A) the date of the receipt of an agency-wide au- dited financial statement; or ‘‘(B) the last day of the fiscal year following the year covered by such statement. ‘‘(3) REMEDIATION PLAN.— ‘‘(A) If the Head of an agency determines that the agency’s financial management systems do not comply with the requirements of subsection (a), the head of the agency, in consultation with the Direc- tor, shall establish a remediation plan that shall in- clude resources, remedies, and intermediate target dates necessary to bring the agency’s financial management systems into substantial compliance. ‘‘(B) If the determination of the head of the agen- cy differs from the audit compliance findings re- quired in subsection (b), the Director shall review such determinations and provide a report on the findings to the appropriate committees of the Con- gress. ‘‘(4) TIME PERIOD FOR COMPLIANCE.—A remediation plan shall bring the agency’s financial management systems into substantial compliance no later than 3 years after the date a determination is made under paragraph (1), unless the agency, with concurrence of the Director— ‘‘(A) determines that the agency’s financial man- agement systems cannot comply with the require- ments of subsection (a) within 3 years; ‘‘(B) specifies the most feasible date for bringing the agency’s financial management systems into compliance with the requirements of subsection (a); and ‘‘(C) designates an official of the agency who shall be responsible for bringing the agency’s financial management systems into compliance with the re- quirements of subsection (a) by the date specified under subparagraph (B). ‘‘SEC. 804. REPORTING REQUIREMENTS. ‘‘(a) REPORTS BY THE DIRECTOR.—No later than March 31 of each year, the Director shall submit a report to the Congress regarding implementation of this Act [title]. The Director may include the report in the fi- nancial management status report and the 5-year fi- nancial management plan submitted under section 3512(a)(1) of title 31, United States Code. ‘‘(b) REPORTS BY THE INSPECTOR GENERAL[.]—Each In- spector General who prepares a report under section 405(b) of title 5, United States Code, shall report to Congress instances and reasons when an agency has not met the intermediate target dates established in the remediation plan required under section 3(c) [803(c)]. Specifically the report shall include— ‘‘(1) the entity or organization responsible for the non-compliance [sic]; ‘‘(2) the facts pertaining to the failure to comply with the requirements of subsection (a), including the nature and extent of the non-compliance [sic], the primary reason or cause for the failure to comply, and any extenuating circumstances; and ‘‘(3) a statement of the remedial actions needed to comply. ‘‘(c) REPORTS BY THE COMPTROLLER GENERAL.—No later than October 1, 1997, and October 1, of each year thereafter, the Comptroller General of the United States shall report to the appropriate committees of the Congress concerning— ‘‘(1) compliance with the requirements of section 3(a) of this Act [803(a) of this title], including whether the financial statements of the Federal Government have been prepared in accordance with applicable ac- counting standards; and ‘‘(2) the adequacy of applicable accounting stand- ards for the Federal Government. ‘‘SEC. 805. CONFORMING AMENDMENTS. ‘‘(a) AUDITS BY AGENCIES.—[Amended section 3521 of this title.] ‘‘(b) FINANCIAL MANAGEMENT STATUS REPORT.— [Amended this section.] ‘‘(c) INSPECTOR GENERAL ACT OF 1978.—[Amended sec- tion 5 of the Inspector General Act of 1978, formerly set out in the Appendix to Title 5, Government Organiza- tion and Employees.] ‘‘SEC. 806. DEFINITIONS. ‘‘For purposes of this title: ‘‘(1) AGENCY.—The term ‘agency’ means a depart- ment or agency of the United States Government as defined in section 901(b) of title 31, United States Code. ‘‘(2) DIRECTOR.—The term ‘Director’ means the Di- rector of the Office of Management and Budget. ‘‘(3) FEDERAL ACCOUNTING STANDARDS.—The term ‘Federal accounting standards’ means applicable ac- counting principles, standards, and requirements con- sistent with section 902(a)(3)(A) of title 31, United States Code. ‘‘(4) FINANCIAL MANAGEMENT SYSTEMS.—The term ‘financial management systems’ includes the finan- cial systems and the financial portions of mixed sys- tems necessary to support financial management, in- cluding automated and manual processes, procedures, controls, data, hardware, software, and support per- sonnel dedicated to the operation and maintenance of system functions. ‘‘(5) FINANCIAL SYSTEM.—The term ‘financial sys- tem’ includes an information system, comprised of one or more applications, that is used for— ‘‘(A) collecting, processing, maintaining, trans- mitting, or reporting data about financial events; Page 275 TITLE 31—MONEY AND FINANCE § 3515 1 So in original. No par. (2) has been enacted ‘‘(B) supporting financial planning or budgeting activities; ‘‘(C) accumulating and reporting costs informa- tion; or ‘‘(D) supporting the preparation of financial statements. ‘‘(6) MIXED SYSTEM.—The term ‘mixed system’ means an information system that supports both fi- nancial and nonfinancial functions of the Federal Government or components thereof. ‘‘SEC. 807. EFFECTIVE DATE. ‘‘This title shall take effect for the fiscal year ending September 30, 1997. ‘‘SEC. 808. REVISION OF SHORT TITLES. ‘‘(a) [Amended section 4001 of Pub. L. 104–106, set out as a Short Title of 1996 Act note under section 101 of Title 41, Public Contracts.] ‘‘(b) [Amended section 5001 of Pub. L. 104–106, div. E, Feb. 10, 1996, 110 Stat. 679, subsequently repealed by Pub. L. 107–217, § 6(b), Aug. 21, 2002, 116 Stat. 1304.] ‘‘(c) Any reference in any law, regulation, document, record, or other paper of the United States to the Fed- eral Acquisition Reform Act of 1996 or to the Informa- tion Technology Management Reform Act of 1996 shall be considered to be a reference to the Clinger-Cohen Act of 1996 [see Short Title of 1996 Act note set out under section 101 of Title 41].’’ § 3513. Financial reporting and accounting sys- tem (a) The Secretary of the Treasury shall pre- pare reports that will inform the President, Con- gress, and the public on the financial operations of the United States Government. The reports shall include financial information the Presi- dent requires. The head of each executive agen- cy shall give the Secretary reports and informa- tion on the financial conditions and operations of the agency the Secretary requires to prepare the reports. (b) The Secretary may— (1) establish facilities necessary to prepare the reports; and (2) reorganize the accounting functions and procedures and financial reports of the Depart- ment of the Treasury to develop an effective and coordinated system of accounting and fi- nancial reporting in the Department that will integrate the accounting results for the De- partment and be the operating center for con- solidating accounting results of other execu- tive agencies with accounting results of the Department. (c) The Comptroller General shall— (1) cooperate with the Secretary in devel- oping and establishing the reporting and ac- counting system under this section; and (2) approve the system when the Comptroller General considers it to be adequate and in con- formity with the principles, standards, and re- quirements prescribed under section 3511 of this title. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 960.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3513(a) ..... 31:66b(a). Sept. 12, 1950, ch. 946, § 114(a), 64 Stat. 836; Reorg. Plan No. 2 of 1970, eff. July 1, 1970, § 102(a), 84 Stat. 2085. 3513(b) ..... 31:66b(b). Sept. 12, 1950, ch. 946, §§ 112(b)(related to Treasury Department), 114(b), (c), 64 Stat. 835, 836. HISTORICAL AND REVISION NOTES—CONTINUED Revised Section Source (U.S. Code) Source (Statutes at Large) 3513(c) ..... 31:66(b)(related to Treasury Depart- ment). 31:66b(c). In subsection (a), the words ‘‘the results of’’ are omit- ted as surplus. The words ‘‘The report’’ are substituted for ‘‘Provided, That’’ for clarity. The word ‘‘informa- tion’’ is substituted for ‘‘data’’ for consistency. The word ‘‘President’’ is substituted for ‘‘Director of the Of- fice of Management and Budget’’ because sections 101 and 102(a) of Reorganization Plan No. 2 of 1970 (eff. July 1, 1970, 84 Stat. 2085) redesignated the Bureau of the Budget as the Office of Management and Budget and transferred all functions of the Bureau to the Presi- dent. The words ‘‘in connection with the preparation of the Budget or for other purposes of the Office’’ are omitted as unnecessary. The words ‘‘The head of’’ are added for consistency in the revised title and with other titles of the United States Code. The words ‘‘by rules and regulations’’ are omitted as unnecessary be- cause of section 321(b) of this title. The words ‘‘to pre- pare the reports’’ are substituted for ‘‘for the effective performance of his responsibilities under this section’’ for clarity and to eliminate unnecessary words. In subsection (b)(2), the words ‘‘install, revise, or eliminate’’, ‘‘the several bureaus and offices of’’, ‘‘with such concentration of accounting and reporting as is necessary’’, and ‘‘the activities of’’ are omitted as sur- plus. The word ‘‘be’’ is substituted for ‘‘provide’’ for clarity. The text of 31:66b(b)(last sentence) is omitted as unnecessary because of section 321 of this title. In subsection (c), before clause (1), the text of 31:66b(c) is omitted as unnecessary. The words ‘‘Comp- troller General’’ are substituted for ‘‘General Account- ing Office’’ for consistency. In clause (1), the word ‘‘Secretary’’ is substituted for ‘‘Treasury Department’’ in 31:66(b)(related to Treasury Department) for consist- ency. The word ‘‘central’’ is omitted as surplus. In clause (2), the word ‘‘considers’’ is substituted for ‘‘deemed’’ as being more precise. The words ‘‘under sec- tion 3511 of this title’’ are substituted for ‘‘by him’’ for clarity. § 3514. Discontinuing certain accounts main- tained by the Comptroller General The Comptroller General may discontinue an agency appropriation, expenditure, limitation, receipt, or personal ledger account maintained by the Comptroller General when the Comp- troller General believes that the accounting sys- tem and internal controls of the agency will allow the Comptroller General to carry out the functions related to the account. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 960.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3514 ......... 31:66d. Sept. 12, 1950, ch. 946, § 116, 64 Stat. 837. The words ‘‘Comptroller General’’ are substituted for ‘‘General Accounting Office’’ for consistency. The word ‘‘agency’’ is substituted for ‘‘executive, legislative, and judicial agencies’’ because of sections 101, 102, and 3501 of the revised title. The word ‘‘properly’’ is omitted as surplus. § 3515. Financial statements of agencies (a)(1) 1 Except as provided in subsection (e), not later than March 1 of 2003 and each year