Taking account of financial management systems (Part 1)
- By James C. Miller III
- Nov 01, 1998
In the early 1980s, the media reported on billions of dollars worth of transactions and millions of dollars worth of military equipment that were improperly recorded or lost. Taxpayers understandably became irate, wondering what the government was doing with their money.
In 1986, during my tenure as director of the Office of Management and Budget, the government developed a financial system that cleaned up the financial chaos. Previously, agencies had been unsuccessful in developing financial systems to replace those implemented in the 1960s. No packaged software products for the federal market existed, and agencies could not ensure the integrity of common accounting transactions. Audited financial statements were only a distant vision.
Responding to this problem, OMB and the General Services Administration developed policies promoting the use of commercial off-the-shelf (COTS) software for financial management. In 1986, OMB, working with GSA, created the Financial Management System Software (FMSS) schedule, which produced an accurate system of tracking government finances.
The FMSS schedule was designed to save money, save time and avoid confusion, and that is exactly what it has done. Agencies using FMSS products have achieved 85 percent compliance with Federal Standard General Ledger requirements— achieving clean audits— compared with 48 percent for agencies not using FMSS.
So the government should be boasting about the success of the FMSS schedule, right? It's not. A behind-the-scenes move by a handful of government officials could cripple the government's ability to track and manage its finances accurately and to provide taxpayer accountability. Without asking Congress for its opinion, and without analyzing the cost and benefits to taxpayers, GSA officials behind closed doors are proposing to eliminate or severely modify the FMSS program.
The vendors who sell this software, and the taxpayers who benefit from it, are unclear about why this proposal is moving forward. GSA said that the administration of the schedule is not "the best use of its resources." GSA said this proposal is part of its efforts "to revise and improve federal financial systems." How can GSA improve on a program that has been an unqualified success by eliminating it?
The proposed change will take effect just three months before the Year 2000. At a time when the government is frantically trying to patch most federal computer systems to avoid the Year 2000 date-code problem, do we really want to take additional risks with our financial computer systems? Most FMSS schedule products are free of Year 2000 problems, thereby saving millions in repairs and ensuring that many of the government's key financial operations will continue without interruption.
Changing the FMSS schedule, like any other procurement procedure, must be an evolving process. No system should ever be written in stone because it must change based on current needs. However, we must keep in mind the initial goal of the FMSS schedule: federal financial accountability. We have a right to know how our tax dollars are being spent. We cannot allow a system that has improved the accountability of the federal government in a fundamental way to be altered without careful consideration.
Imagine what it will feel like to pick up the newspaper in September 2000 and see a headline that reads "Waste, fraud and abuse in government." Remember that this could have been avoided. Without the FMSS program in place to provide clean audits and track where every dollar is going, millions of taxpayers' dollars will go unaccounted for.
As a former budget director who was so tight with the public's money that I earned the nickname "Dr. No," I urge Congress to investigate this initiative proposed by GSA. Maybe GSA should learn to say "no" to a proposal that could lead to financial chaos.
-- Miller is a member of the Coalition for Federal Accountability and was director of OMB from 1985 to 1988.