Agencies still lag behind in tracking finances

Financial Management Status Report

Problems with federal financial management systems remain a "huge" obstacle in the government's efforts to have auditable financial statements, according to the head of the General Accounting Office. "Agencies have made marked strides in obtaining unqualified audit opinions on their annual financial statements," Comptroller General David Walker said March 30 during testimony before the House Government Reform Committee's Government Efficiency, Financial Management and Intergovernmental Relations Subcommittee.

In fact, for the first time in four years, all 24 of the government's major agencies filed statements by the March 1 deadline, and a number of agencies received clean audit opinions.

Yet despite those improvements, the government's financial books could not be audited. "We have made incremental progress each year, but incremental progress may not prove to be sufficient," said Donald Hammond, the Treasury Department's acting undersecretary for domestic finance.

Overall, the government received a C-minus for its efforts in balancing its books, according to Rep. Stephen Horn's (R-Calif.) most recent report card. "The failures of a few agencies continue to tarnish the overall record" of improvement, said Horn, the subcommittee chairman.

Most agencies undertake Herculean efforts to produce their annual financial statements, Walker said. "The need for such time-consuming procedures, which often represent "heroic efforts' by agency and contractor personnel, primarily result from inadequate financial management systems."

Such efforts are misleading about the true state of the government's financial books, Walker said. "In such a case, an unqualified opinion would become an accomplishment without much substance," he said. True success will come when agencies have and use financial data to make informed decisions. Mitchell Daniels Jr., director of the Office of Management and Budget, said the Bush administration is going to make the annual audits a priority. But he noted that those audits are "meaningless unless they lead to the next step — the generating of reliable financial information."

Horn said he was disturbed by the "abysmal lack of achievement" by the departments of Defense and Agriculture and the Agency for International Development, all of which received failing grades.

Financial management systems are a huge problem, Walker said. "A central challenge is the need for agencies to generate timely, accurate and useful data through the year by overhauling financial and related management information systems."

Dorobek is a freelance writer based in Arlington, Va.

the best and the worst

These agencies received an A for financial management: n Energy Department

n NASA

n Small Business Administration

These agencies got an F: n Agriculture Department

n Defense Department

n U.S. Agency for Inter- national DevelopmentFor a look at all the agency report cards, visit www.house.gov/reform/gmit/hearings/2000 hearings/fiscal_year_2000.htm.

About the Author

Christopher J. Dorobek is the co-anchor of Federal News Radio’s afternoon drive program, The Daily Debrief with Chris Dorobek and Amy Morris, and the founder, publisher and editor of the DorobekInsider.com, a leading blog for the Federal IT community.

Dorobek joined Federal News Radio in 2008 with 16 years of experience covering government issues with an emphasis on government information technology. Prior to joining Federal News Radio, Dorobek was editor-in-chief of Federal Computer Week, the leading news magazine for government IT decision-makers and the flagship of the 1105 Government Information Group portfolio of publications. As editor-in-chief, Dorobek served as a member of the senior leadership team at 1105 Government Information Group, providing daily editorial direction and management for FCW magazine, FCW.com, Government Health IT and its other editorial products.

Dorobek joined FCW in 2001 as a senior reporter and assumed increasing responsibilities, becoming managing editor and executive editor before being named editor-in-chief in 2006. Prior to joining FCW, Dorobek was a technology reporter at PlanetGov.com, one of the first online community centers for current and former government employees. He also spent five years at Government Computer News, another leading industry publication, covering a variety of federal IT-related issues.

Dorobek is a frequent speaker on issues involving the government IT industry, and has appeared as a frequent contributor to NewsChannel 8’s Federal News Today program. He began his career as a reporter at the Foster’s Daily Democrat, a daily newspaper in Dover, N.H. He is a graduate of the University of Southern California. He lives in Washington, DC.


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