Congress watching over financial systems

Congressional attention is necessary to keep agencies accountable for improving

their financial management systems, a top Office of Management and Budget

official told a House subcommittee Tuesday.

Agencies were allotted three years to comply with the Federal Financial

Management Improvement Act of 1996, but only three agencies — NASA, the

National Science Foundation and the Energy Department — have met that requirement.

Agencies that did not comply within three years were required to consult

with OMB and produce a remediation plan to meet the goal as soon as possible,

said Joshua Gotbaum, executive associate director and controller of OMB,

testifying before the House Government Reform Committee's Government Management,

Information and Technology Subcommittee. Although Gotbaum did not see the

need to modify the law in any way, he did request help from Congress to

keep agencies on task.

"Agencies really are working at this and really are making progress," Gotbaum


Rep. Douge Ose (R-Calif.) said he and Rep. Stephen Horn (R-Calif.) chairman

of the subcommittee, are committed to seeing agencies receive clean audit

opinions of their annual financial statements.

Agencies cited challenges such as balancing priorities and difficulty implementing

software systems as barriers to complying with FFMIA.

"Weak computer security is the reason cited most often," said Jeffrey Steinhoff,

assistant comptroller general for Accounting and Information Management

Programs at the General Accounting Office.

Although increasing numbers of agencies are receiving clean audit opinions

for their annual financial statements, most agencies' financial management

systems are still not compliant with FFMIA, Steinhoff said.

In addition, agencies such as NASA comply with FFMIA and achieve clean audit

opinions but do not have an integrated financial management system. NASA,

after a failed attempt to implement a commercial system, is restructuring

its program and is procuring a commercial system.

Arnold Holtz, NASA chief financial officer, said he hopes to award the core

financial system to a single vendor by November and will not customize the

software. Holtz also said the requirement that an agency "substantially

comply" with OMB's financial standards has made it possible for NASA to

comply with FFMIA.


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