BARS POLICY ISSUES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00191R000100070063-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 23, 2016
• Document Release Date: October 24, 2013
• Sequence Number: 63
• Content Type: MISC

Declassified and Approved ForRelease2013/10/24 : CIA-RDP90-00191R000100070063-7
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BARS POLICY ISSUES
ISSUE NO. 1 - METHOD OF ACCOUNTING: CASH VERSUS ACCRUAL
A policy decision is needed to determine the method of accounting to be
employed in the new Budget and Accounting Resources System (BARS),
specifically cash or accrual.
BACKGROUND:
o Historically, the Agency has maintained its financial records
on a cash basis. However, two events have forced the Agency
to reconsider this method. The first was the recommendation
by the Long Range Financial task force of 1984 that the Agency
adopt an accrual basis of accounting, at least in respect to
the accounts payable area, and the second event was the Agency
decision to utilize commercial packaged software for the
new financial system.
o The Agency will be constrained by the capabilities of
Cullinet's 1.3 package software which utilizes the accrual
method of accounting for invoice type transactions.
o There is a potential work-around for using the cash method.
This could be accomplished by changing the effective date
to the pay date which would require an extra step t6 be
performed by the auditors using the accounts payable package.
ALTERNATIVES:
The options that are available are:
o Accrual Accounting - Under this concept, the Agency would
adopt the accrual method of accounting. This would be in
line with the recommendations of the Financial task force of
1984, as well as
bringing the Agency into conformance with the rest of the
government.
Advantage: conform with OMB/GAO and Cullinet 1.3
- Disadvantage: the Agency would have to switch to a new
method of accounting
o Cash method - All transactions would be on a cash basis.
- Advantage: no change in the present method of accounting;
the Agency's financial reports would remain unaffected
- Disadvantage: would require a work-around to the package
software;
would requir extrp step on the part of the auditors
Declassified and Approved For Release 2013/10/24: CIA-RDP90-00191R000100070063-7
Declassified and Approved For Release 2013/10/24: CIA-RDP90-00191R000100070063-7
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who input vendor invoices to the accounts payable package.
o Mixed accrual and cash accounting - This would utilize the
accrual method for vendor payment, and the cash method for
all other transactions.
- Advantage: flexibility and minimal adaption
- Disadvantage: financial reports would have to be
adjusted for two methods of accounting
RECOMMENDATION: Accrual method
The Agency is implementing a new system that utilizes accrual accounting
and the government has long mandated this method in an effort to
standardize reporting.
It would be feasible to take advantage of the method of accounting
presently utilized in the package software which would enhance our
adaptation effort. Therefore, we recommended that the Agency adopt the
accrual method of accounting for the BARS/CLAS effort.
Declassified and Approved For Release 2013/10/24: CIA-RDP90-00191R000100070063-7