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Government accountants and auditors work in the public sector to maintain and examine the records of
government agencies and also to audit private businesses and individuals who pay taxes. Government
accountants also audit entities subject to other government regulations, such as businesses providing
contract services to the government or organizations receiving government grant money.
The goals of federal, state or municipal government agencies when applying the principals of accounting are
different from the private sector's main business objective of earning profit. Budgets are among the most
important considerations in government accounting since government agencies and other recipients of
government money are fiscally accountable to tax payers and must demonstrate compliance with the
intended uses of budgeted resources.
A statement of net assets is similar to a balance sheet and lists assets and debts of an organization.
A statement of activities is similar to an income statement except it uses the terms excess or deficit
instead of profit or loss.
These statements use the accrual basis of accounting, meaning that revenues are recorded in the accounting
period they are earned and become measurable, even if they aren't available for use, and measurable
expenses are recorded in the period incurred.
Government Accountability Office
Although accountants work in all levels of government, one of the more high profile federal entities is the
Government Accountability Office (GAO), an independent, nonpartisan agency that works as the
investigative arm of Congress. The GAO's activities include auditing government agency operations to
determine if federal funds are being spent efficiently and effectively and investigating allegations of illegal
and improper activities. Every two years, the GAO publishes a list (The Watchdog Report) of government
programs that are at high risk for waste, fraud, abuse, and mismanagement.
Internal Revenue Agents that audit returns for accuracy and usually handle complicated income,
sales, and excise tax returns of businesses and large corporations. Entry-level positions require at
least 30 hours of accounting courses.
Tax Specialists that help taxpayers who have questions about filing returns and who conduct
surveys, studies and focus groups to find out how effective IRS products, services, and
communications are. Tax specialists also produce communication materials to help people
voluntarily comply with tax code. The minimum requirement is six semester hours of accounting or
passing an accounting proficiency test.
Tax Compliance Officers examine and investigate individual and business taxpayers. According to
the IRS, successful candidates are usually business majors and others who have six semester hours
of accounting or who can pass an accounting proficiency test.
Governmental, or source and use funds, such as general, special revenue, debt service, capital
projects, and permanent funds.
Proprietary, or income-determining funds report on activities paid for primarily by revenues from
the activities themselves, such as a municipal utility.
Fiduciary funds are used to account for assets that a governmental unit holds in a trustee capacity,
such as a trust fund for a public employee pension plan.
Fund accounting uses modified accrual accounting in which four things happen:
1. Rather than recording revenue when earned, revenue is recorded when measurable and available
for use.
2. Acquisitions of long-term assets are treated like expenses. Long-term debt is treated like income.
Therefore, fund-based governmental balance sheets show no long-term assets or liabilities, just
working capital.
3. The budget is entered into the accounts in reverse. That is, debits are used for budgeted revenue
and credits are used for budgeted expenditures.
4. When goods are ordered, an entry (called an encumbrance) is made. When the goods arrive, the
encumbrance is reversed and an expense is entered in the same way as it would be in for-profit
accounting.
Grant Accountants perform governmental audits to help ensure that the billions of dollars in grants, loans
and loan guarantees, property, cooperative agreements, interest subsidies, insurance, food commodities,
direct appropriations, and federal cost reimbursements awarded by the government every year are properly
used by the recipients.
There are 26 federal grant-making agencies providing grants that support everything from education to
agriculture, and from health and human services to arts and culture. Grants are made to state and local
governments, education organizations, public housing organizations, non-profit organizations, businesses,
and even individuals who are conducting research or developing and running programs that fall within the
scope of a grant's purpose. Ultimately, these entities all must be able to show that they spent the grant
money for intended purposes.
1. Governmental environment, including the levels and branches of government, legal aspects of the
governmental environment, and the budgeting process
2. Governmental accounting, financial reporting and budgeting
3. Governmental financial management and control
Prior to June 2002, the National Association of Certified Valuation Analysts (NACVA) offered a certification
called Government Valuation Analyst (GVA). That certification then became part of the Accredited
Valuation Analyst (AVA) designation. However, the AVA requirements for government-employed valuators
are different from the requirements for other AVA applicants and include:
Auditor's office
Comptroller's office
Finance departments
State-run hospitals
State universities
Finance departments
Local-government owned hospitals
Public Works
School districts or Boards of Education
Private accounting firms that provide contract services to the government or that provide services to
government contractors also retain accountants knowledgeable in government accounting.
Although government accounting salaries vary by geographic location, education, certification, and other
factors, as of May 2014 the US Bureau of Labor Statistics (BLS) reported the average salaries for accountants
and auditors working for local, state and federal government agencies to be:
According to a survey conducted by the American Institute of Certified Public Accountants (AICPA), about
three percent of accounting program graduates with bachelor's degrees and another three percent with
master's degrees begin their careers in government accounting.