The objective of the audit was to determine if the USMS executed its approved budgets for FY 2002 and FY 2003 in accordance with Congressional spending instructions. We conducted our audit in accordance with Government Auditing Standards and included such tests as were considered necessary to accomplish our objectives. Our audit concentrated on, but was not limited to, FY 2002 and FY 2003.

We reviewed listings of transactions obtained from the USMS STARS accounting system and judgmentally selected transactions for review. We did not perform testing to express an opinion on the STARS system, and therefore we do not express an opinion on the system. However, as a part of the annual financial statement audit for the USMS, the USMS financial management systems are reviewed to determine their compliance with the federal financial management systems requirements, applicable federal accounting standards, and the United States General Ledger. These systems were found to comply with these requirements for the FY 2002 financial statement audit. Therefore, we believe that data used was adequate our sampling and testing purposes.

We obtained an understanding of the USMS's budget execution process by reviewing pertinent documents including the FY 2002 and 2003: 1) appropriations laws; 2) conference reports; 3) House reports; 4) Senate reports; and 5) DOJ and OMB publications. We also reviewed the USMS's documentation of its allocations and obligations and relevant policy memoranda. We conducted interviews with officials from various offices in the USMS, including the MBD, the BSD, the CCMG, the ISD, the Office of District Affairs, and the Office of the Director. Our fieldwork was performed from June 2, 2003, through July 24, 2003, at the Arlington, Virginia offices of the USMS. In all cases, our samples were judgmentally selected and represented ten percent of the available universe.