Hill asked to get tough on agencies

Four years after passing a landmark law, Congress needs to step in and push

agencies to improve their financial management systems, according to the

Office of Management and Budget.

Agencies were given 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 this goal.

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

with OMB and produce a 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, he asked Congress

to keep agencies on task. "Agencies really are working at this and really

are making progress," he said.

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.

NASA has complied with FFMIA and achieves clean audit opinions but does

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's 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.