OMB tries new tactic for fixing financial reporting problems

CFOs and IGs lead new effort to improve reporting accuracy and efficiency

Even as agencies close their financial books in record time, the government is looking at unreliable financial data. It’s hard to get a true financial picture because of seemingly intractable financial reporting problems.

Comptroller General David Walker, the top official at the Government Accountability Office, said the audit agency still can’t provide an opinion on the government’s consolidated financial statement, partially because of longstanding and pervasive financial-management problems at the Defense Department.

Other factors also contribute to the reporting problems, Walker said. One is the government’s inability to adequately account for and reconcile accounting practices among agencies. Another is the labor-intensive process agencies use to prepare financial statements.

However, the Office of Management and Budget will try something new to solve those problems. It has organized a group of chief financial officers and inspectors general to examine how agencies do their financial reporting. They want to find out what works and what doesn’t and then share their findings with other agencies.

The IG community alone spends more than $100 million a year conducting financial audits. “It’s a costly process, and we want to make sure that it is as efficient and effective from the IG perspective as it can possibly be,” said Greg Friedman, vice chairman of the President’s Council on Integrity and Efficiency and IG at the Energy Department. He is part of the study group. 

The issue is whether agencies can prepare statements that reflect their true financial condition, he said.

OMB is hoping that the best practices the initiative uncovers can help all federal agencies, said Linda Combs, OMB’s controller.

“Our goal is to have federal agencies produce user-friendly information in a format that facilitates internal controls,” Combs said at a recent hearing of the Senate Homeland Security and Governmental Affairs Committee’s Federal Financial Management, Government Information, Federal Services and International Security Subcommittee.

The CFOs and IGs will take a fresh look at financial reporting and assess whether agencies are asking the right questions and getting the most pertinent information.

Among other things, the study group will assess the quality and amount of communication that occurs between IGs who audit agencies’ financial statements and the agency staff members who prepare them, Friedman said.

The Fed 100

Save the date for 28th annual Federal 100 Awards Gala.

Featured

  • computer network

    How Einstein changes the way government does business

    The Department of Commerce is revising its confidentiality agreement for statistical data survey respondents to reflect the fact that the Department of Homeland Security could see some of that data if it is captured by the Einstein system.

  • Defense Secretary Jim Mattis. Army photo by Monica King. Jan. 26, 2017.

    Mattis mulls consolidation in IT, cyber

    In a Feb. 17 memo, Defense Secretary Jim Mattis told senior leadership to establish teams to look for duplication across the armed services in business operations, including in IT and cybersecurity.

  • Image from Shutterstock.com

    DHS vague on rules for election aid, say states

    State election officials had more questions than answers after a Department of Homeland Security presentation on the designation of election systems as critical U.S. infrastructure.

  • Org Chart Stock Art - Shutterstock

    How the hiring freeze targets millennials

    The government desperately needs younger talent to replace an aging workforce, and experts say that a freeze on hiring doesn't help.

  • Shutterstock image: healthcare digital interface.

    VA moves ahead with homegrown scheduling IT

    The Department of Veterans Affairs will test an internally developed scheduling module at primary care sites nationwide to see if it's ready to service the entire agency.

  • Shutterstock images (honglouwawa & 0beron): Bitcoin image overlay replaced with a dollar sign on a hardware circuit.

    MGT Act poised for a comeback

    After missing in the last Congress, drafters of a bill to encourage cloud adoption are looking for a new plan.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group