The Federal government has over 130 direct loan or loan guarantee programs across 16 agencies that are subject to complex credit reform requirements. Over the last 10 years, the amount spent on federal credit programs has more than doubled, and, as such, there has been an increased emphasis on the proper implementation of FCRA.
Since the release of FCRA, federal agencies have spent a significant amount of time understanding the unique requirements and complexities of the law. One of the major provisions of FCRA is the recognition of cost on a net present value basis. As a result, many agencies have focused heavily on cost estimation and independent validation and verification (IV&V) functions. However, challenges still remain for presenting a consistent approach to the Federal Credit Reform process, specifically regarding the domains of risk assessment, cost estimation and validation, internal controls, compliance with laws and regulations, and ultimately, recording and reporting the credit reform accounting transactions in accordance with the budgetary and proprietary accounting standards.
PwC understands the process that federal credit programs subject to FCRA must follow and is well qualified to support agencies needing to comply with FCRA and credit reform accounting standards. PwC provides direct support in establishing a robust internal control environment.