
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 31USC3512]

 
                       TITLE 31--MONEY AND FINANCE
 
                   SUBTITLE III--FINANCIAL MANAGEMENT
 
                  CHAPTER 35--ACCOUNTING AND COLLECTION
 
    SUBCHAPTER II--ACCOUNTING REQUIREMENTS, SYSTEMS, AND INFORMATION
 
Sec. 3512. Executive agency accounting and other financial 
        management reports and plans
        
    (a)(1) The Director of the Office of Management and Budget shall 
prepare and submit to the appropriate committees of the Congress 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 completed financial 
    statements--
            (i) of Federal agencies under section 3515 of this title; 
        and
            (ii) of Government corporations;

        (C) a summary of the most recently completed financial statement 
    audits and reports--
            (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 accounting 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 substantially with the requirements of Section \1\ 3(a) 
    \2\ the Federal Financial Management Improvement Act of 1996, and a 
    summary statement of the efforts underway to remedy the 
    noncompliance; and
---------------------------------------------------------------------------
    \1\ So in original. Probably should not be capitalized.
    \2\ So in original. Probably should be followed by ``of''. See 
References in Text note below.
---------------------------------------------------------------------------
        (F) any other information the Director considers appropriate to 
    fully inform the Congress regarding the financial management of the 
    Federal Government.

    (3)(A) A governmentwide 5-year financial management plan under this 
subsection shall describe 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 financial management of the 
Federal Government.
    (B) Each governmentwide 5-year financial management plan prepared 
under this subsection shall--
        (i) describe the existing financial management structure and any 
    changes needed to establish an integrated financial management 
    system;
        (ii) be consistent with applicable accounting principles, 
    standards, and requirements;
        (iii) provide a strategy for developing and integrating 
    individual agency accounting, financial information, and other 
    financial management systems to ensure adequacy, consistency, and 
    timeliness of financial information;
        (iv) identify and make proposals to eliminate duplicative and 
    unnecessary systems, including encouraging agencies to share systems 
    which have sufficient capacity to perform the functions needed;
        (v) identify projects to bring existing systems into compliance 
    with the applicable standards and requirements;
        (vi) contain milestones for equipment acquisitions and other 
    actions necessary to implement the 5-year plan consistent with the 
    requirements of this section;
        (vii) identify financial management personnel needs and actions 
    to ensure those needs are met;
        (viii) include a plan for ensuring the annual audit of financial 
    statements of executive 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 Director of the Office of Management and Budget 
shall submit the first financial management status 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 Management and Budget shall submit to the 
appropriate committees of the Congress a financial management status 
report and a revised governmentwide 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 preceding fiscal year.
    (ii) The Director shall include with each revised governmentwide 5-
year financial management 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 Government financial 
management related to preparation and audit of financial statements of 
executive 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 
Chairman of the Committee on Government Operations 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 Director.
    (b) The head of each executive agency shall establish and maintain 
systems of accounting and internal controls that provide--
        (1) complete disclosure of the financial results of the 
    activities of the agency;
        (2) adequate financial information the agency 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 standards the Comptroller General prescribes, the 
head of each executive agency shall establish internal accounting and 
administrative controls that reasonably ensure that--
        (A) obligations and costs comply with applicable 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 financial and statistical reports may be prepared and 
    accountability of the assets may be maintained.

    (2) Standards the Comptroller General prescribes 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 Management 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 systems of the agency 
    to decide whether the systems comply with subsection (c) of this 
    section; 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 
guidelines prescribed under paragraph (1) of this subsection, shall 
prepare a statement on whether the systems of the agency comply with 
subsection (c) of this section, including--
        (A) if the head of an executive agency decides the systems do 
    not comply with subsection (c) of this section, a report identifying 
    any material weakness in the systems and describing the plans and 
    schedule for correcting the weakness; and
        (B) a separate report on whether the accounting system of the 
    agency conforms to the principles, standards, and requirements the 
    Comptroller General prescribes under section 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 before it 
is made available if the information specifically 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 agency on an accrual basis to show the 
resources, liabilities, 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
        (2) approve the system when the Comptroller General considers it 
    to be adequate and in conformity with the principles, standards, and 
    requirements 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 report to Congress on a review when the 
Comptroller General considers it proper.

(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 959; Pub. L. 97-452, 
Sec. 1(12), Jan. 12, 1983, 96 Stat. 2468; Pub. L. 101-576, title III, 
Sec. 301(a), Nov. 15, 1990, 104 Stat. 2847; Pub. L. 103-272, 
Sec. 4(f)(1)(J), July 5, 1994, 108 Stat. 1362; Pub. L. 104-208, div. A, 
title I, Sec. 101(f) [title VIII, Sec. 805(b)], Sept. 30, 1996, 110 
Stat. 3009-314, 3009-392.)

                                          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, Secs.  112(c),
                                                                        113(a),
 64 Stat. 835; Reorg. Plan No. 2
                                                                        of 1970
, eff. July 1, 1970, Sec.
                                                                        102(a),
 84 Stat. 2085.
3512(b)..............................  31:66a(c).                      Sept. 12
, 1950, ch. 946, 64 Stat. 832,
                                                                        Sec.  1
13(c); added Aug. 1, 1956, ch.
                                                                        814, Se
c.  2(b), 70 Stat. 782.
3512(c)..............................  31:66(b)(less Treasury          Sept. 12
, 1950, ch. 946, Secs.
                                        Department).                    112(b)(
less Treasury Department),
                                                                        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 substituted for 
``Office 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 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 Office'' for consistency. The word 
``considers'' is substituted 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 ``Director of the Office of 
Management and Budget'' because 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,
                                                                        Sec.  1
13(d); added Sept. 8, 1982, Pub.
                                                                        L. 97-2
55, Sec.  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,
                                                                        Sec.  1
13(b)(last sentence); added Sept.
                                                                        8, 1982
, Pub. L. 97-255, Sec.  4, 96
                                                                        Stat. 8
15.
3512(c)(3)...........................  31 App.:66a(d)(5).
-------------------------------------------------------------------------------
---------------------------------

    In subsections (b)(1) and (c)(1)(A), the words ``the requirements 
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 ``beginning 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 
unnecessary words. In clause (B), the word ``related'' is omitted as 
surplus.
    In subsection (c)(3)(A), the words ``provision of'' are omitted as 
surplus.

                       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 section 66a of former Title 31, Money and 
Finance. Section 66a of former Title 31 was repealed by Pub. L. 97-258, 
Sec. 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, 
Sec. 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 requirements 
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

    1996--Subsec. (a)(2)(E), (F). Pub. L. 104-208 added subpar. (E) and 
redesignated former subpar. (E) as (F).
    1994--Subsec. (c)(1). Pub. L. 103-272, Sec. 4(f)(1)(J)(i), 
substituted ``subsection (b)(3)'' for ``subsection (a)(3)'' in 
introductory provisions.
    Subsec. (d)(1), (2). Pub. L. 103-272, Sec. 4(f)(1)(J)(ii), 
substituted ``subsection (c)'' for ``subsection (b)'' wherever 
appearing.
    1990--Pub. L. 101-576 substituted ``and other financial management 
reports and plans'' for ``systems'' in section 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 redesignated (d) and (e), respectively.
    Subsecs. (d) to (f). Pub. L. 97-452 redesignated former subsecs. (b) 
to (d) as (d) to (f), respectively.

                         Change of Name

    Committee on Government Operations of House of Representatives 
treated as referring to Committee on Government Reform and Oversight of 
House of Representatives 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.


                  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 
subsection (d)(3) of this section is listed on page 151), see section 
3003 of Pub. L. 104-66, as amended, and section 1(a)(4) [div. A, 
Sec. 1402(1)] of Pub. L. 106-554, set out as notes under section 1113 of 
this title.


                Federal Financial Management Improvement

    Section 101(f) [title VIII] of Pub. L. 104-208 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. Although progress has been 
    made in recent years, Federal 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 management 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 activities. The continued use of these practices 
    undermines the Government's ability to provide credible and reliable 
    financial data and encourages already widespread Government waste, 
    and will not assist in achieving a balanced budget.
        ``(4) Waste and inefficiency in the Federal Government undermine 
    the confidence of the American people in the government and reduce 
    the federal Government's ability to address vital public needs 
    adequately.
        ``(5) To rebuild the accountability and credibility of the 
    Federal Government, and restore public confidence in the Federal 
    Government, agencies must incorporate accounting standards and 
    reporting objectives 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 activities 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 (hereinafter referred to as the 
    `FASAB') has made substantial progress toward developing and 
    recommending a comprehensive set of accounting concepts and 
    standards for the Federal Government. When the accounting concepts 
    and standards developed by FASAB are incorporated into Federal 
    financial management systems, agencies will be able to provide cost 
    and financial information that will assist the Congress and 
    financial managers to evaluate the cost and performance 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 systems with the 
    capacity to support these standards and concepts will, over the long 
    term, improve Federal 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 Government;
        ``(2) require Federal financial management systems to support 
    full disclosure of Federal financial data, including the full costs 
    of Federal programs and activities, to the citizens, the Congress, 
    the President, and agency management, so that programs and 
    activities 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 efficiency 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 Performance 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 Government Management Reform Act 
    of 1994 (Public Law 103-356; 108 Stat. 3410) [see Short Title of 
    1994 Amendment 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.
``SEC. 803. IMPLEMENTATION OF FEDERAL FINANCIAL MANAGEMENT IMPROVEMENTS.
    ``(a) In General.--Each agency shall implement and maintain 
financial management systems that comply substantially with Federal 
financial management systems 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 performing the audit 
    required by section 3521(e) of title 31, United States Code, reports 
    that the agency financial management systems do not comply with the 
    requirements 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 subsection (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 noncompliance;
                ``(iii) the entity or organization responsible for the 
            non-compliance [sic]; and
                ``(iv) any relevant comments from any responsible 
            officer or employee; and
            ``(C) a statement with respect to the recommended remedial 
        actions and the time frames to implement such actions.
    ``(c) Compliance Implementation.--
        ``(1) Determination.--No later than the date described 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 agency 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 audited 
        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 Director, shall establish a remediation plan that shall 
        include 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 agency differs 
        from the audit compliance findings required in subsection (b), 
        the Director shall review such determinations and provide a 
        report on the findings to the appropriate committees of the 
        Congress.
        ``(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 management 
        systems cannot comply with the requirements 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 requirements 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 financial management status report and the 5-year financial 
management plan submitted under section 3512(a)(1) of title 31, United 
States Code.
    ``(b) Reports by the Inspector General[.]--Each Inspector General 
who prepares a report under section 5(a) of the Inspector General Act of 
1978 (5 U.S.C. App.) 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 accounting standards; and
        ``(2) the adequacy of applicable accounting standards 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 section 5 of the 
Inspector General Act of 1978, set out in the Appendix to Title 5, 
Government Organization and Employees.]
``SEC. 806. DEFINITIONS.
    ``For purposes of this title:
        ``(1) Agency.--The term `agency' means a department 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 Director of the 
    Office of Management and Budget.
        ``(3) Federal Accounting Standards.--The term `Federal 
    accounting standards' means applicable accounting principles, 
    standards, and requirements consistent with section 902(a)(3)(A) of 
    title 31, United States Code.
        ``(4) Financial management systems.--The term `financial 
    management systems' includes the financial systems and the financial 
    portions of mixed systems necessary to support financial management, 
    including automated and manual processes, procedures, controls, 
    data, hardware, software, and support personnel dedicated to the 
    operation and maintenance of system functions.
        ``(5) Financial system.--The term `financial system' includes an 
    information system, comprised of one or more applications, that is 
    used for--
            ``(A) collecting, processing, maintaining, transmitting, or 
        reporting data about financial events;
            ``(B) supporting financial planning or budgeting activities;
            ``(C) accumulating and reporting costs information; or
            ``(D) supporting the preparation of financial statements.
        ``(6) Mixed system.--The term `mixed system' means an 
    information system that supports both financial 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 note 
under section 251 of Title 41, Public Contracts.]
    ``(b) [Amended section 5001 of Pub. L. 104-106, set out as a note 
under section 1401 of Title 40, Public Buildings, Property, and Works.]
    ``(c) Any reference in any law, regulation, document, record, or 
other paper of the United States to the Federal Acquisition Reform Act 
of 1996 or to the Information 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 Amendment notes set out under 40 U.S.C. 1401 
and 41 U.S.C. 251].''

                  Section Referred to in Other Sections

    This section is referred to in sections 902, 3511, 3521, 5134, 7502 
of this title; title 10 sections 3022, 5025, 8022; title 22 section 
2421.
