Page 56 - Financial Report 2020

PRIVACY AND CIVIL LIBERTIES OVERSIGHT BOARD

Resources, are different from financial management reports, which are also prepared
pursuant to OMB directives that are used to monitor and control PCLOB’s use of budgetary
resources. The financial statements and associated notes are presented on a comparative
basis. Unless specified otherwise, all amounts are presented in dollars.

The financial statements represent intragovernmental and public activities. The
intragovernmental balances, revenues, and costs reflect financial transactions between
PCLOB and other federal agencies, while public activities are those with non-governmental
customers, including employees, contractors, and vendors. The Board’s financial
statements reflect agency-only financial activities and do not require consolidation.

C. Basis of Accounting

Accounting principles encompass both accrual and budgetary transactions. Under the
accrual method, revenues are recognized when earned and expenses are recognized when
a liability is incurred, without regard to receipt or payment of cash. Under the budgetary
basis, fund availability is recorded based upon legal considerations and constraints. The
agency receives financing sources through direct appropriations from the general fund of
the Treasury to support its operations. “Appropriations Used” recognizes that
appropriation authority has been applied against received goods and services.

D. Budgets and Budgetary Accounting

The Board follows standard federal budgetary accounting policies and practices in
accordance with OMB Circular A-11, Preparation, Submission, and Execution of the Budget.
Budgetary accounting facilitates compliance with legal constraints and controls over the
use of federal funds.

Congress annually passes multi-year appropriations that provide the agency with authority
to obligate funds over a two-year period for necessary expenses to carry out operations.
After the right to create new obligations has expired, this two-year budget authority is
available for five additional years for adjusting obligations and for completing the
liquidation of open obligations, advances, and receivables. After the five-year period, all
open transactions for the respective fiscal year will be canceled and funds will be returned
to Treasury. Any valid claims associated with these funds after closure must be processed
against current year appropriations.

E. Revenues and Other Financing Sources

The Board receives the funding needed to support its operating costs and program
expenses through appropriations which are used exclusively for operational costs of the
Board, such as personnel costs, office rent, telephones, and service agreements with other
federal agencies for administrative support, publications, and supplies. For financial
statement purposes, appropriations are recorded as a financing source and reported on the
Statement of Changes in Net Position at the time they are recognized as expenditures.

FY 2020 AGENCY FINANCIAL REPORT 47