Critical Read

OMB updates financial reporting rules

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What: Appendix D to Circular No. A-123, Compliance with the Federal Financial Management Improvement Act of 1996

Why: Federal agencies are getting new flexibility in modernizing their financial management systems, per a Sept. 20 memo from Sylvia Burwell, director of the Office of Management and Budget.

The new framework changes the way agencies comply with the Federal Financial Management Improvement Act (FFMIA), to eliminate some restrictions on technology products and phase out a testing and certification program for the deployment of financial management software, while paving the way for the use of shared services across agencies. The OMB has also established a set of common goals for financial management across all federal agencies. The memo also charges the Treasury Department with developing requirements for federal financial management systems.

Verbatim: "Initial efforts to implement the FFMIA resulted in burdensome compliance frameworks that contributed to outcomes that did not make sense. Specifically, financial system modernization projects all too often cost more than they should, took longer than necessary to deploy, and delivered solutions that did not meet our business needs."

Read the memo.

About the Author

Adam Mazmanian is a staff writer covering Congress, the FCC and other key agencies. Connect with him on Twitter: @thisismaz.

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Reader comments

Sun, Oct 20, 2013 Christopher Hanks United States

No progress will be made until legislation preceding and motivating the FFMIA - namely the CFO and GMRA laws from the 90's requiring govt agencies to produce private-sector-style financial statements (balance sheets and income statements) as if they were private-sector businesses (which they are not) - are either waived or rescinded. Audited "Statements of Budgetary Resources" (which OMB began requiring in 1998) are the only "financial statements" that make sense for government agencies that run on budgets (which is all of them).

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