Systems blamed for overspending

Roger Viadero's testimony

Because of weaknesses with their financial management systems, two agencies within the Agriculture Department spent more money than had been appropriated to them, USDA's inspector general told a House subcommittee Tuesday.

The Forest Service obligated $274 million more than the funds it was allocated to fight fires, Agriculture IG Roger Viadero testified. And the Commodity Credit Corporation disbursed $50,000 more than it had been appropriated for the livestock indemnity program.

The overspending violates the Antideficiency Act, which prohibits agencies from spending money not appropriated by Congress.

"These violations of law are examples of the negative impact the absence of reliable accounting systems and/or operational weaknesses can have," Viadero told the House Government Reform Committee's Government Efficiency, Financial Management and Intergovernmental Relations Subcommittee.

The subcommittee held a series of three hearings Tuesday looking at the three agencies that have had chronic financial management problems — the departments of Defense and Agriculture, and the U.S. Agency for International Development. Rep. Stephen Horn (R-Calif.), the subcommittee chairman, flunked the three agencies in his February report card grading the government's financial management status.

USDA's acting chief financial officer, Patricia Healy, said that while she knew of the problem at the Forest Service, she did not know of the problems at the Commodity Credit Corp. until she heard Viadero's testimony, and she said she would check on it further.

Healy and USAID officials told lawmakers that they are making progress.

The USDA has been focused on fixing systemic problems rather than an immediate, short-term effort of merely receiving a clean audit opinion. Healy said it would be a "hollow victory if we do not put into place the systems and processes necessary not only to sustain the clean opinion, but to provide accurate, reliable and useful financial information about our operations that can be used by program managers to effectively and efficiently manage the vast resources entrusted to USDA."

The USDA is in the final stages of replacing its Central Accounting System, although CAS problems will still hinder fiscal 2001 audit results. "This system is so inherently flawed that it cooks its own books," Viadero said.

The agency also is in the final stages of implementing its Foundation Financial Information System.

Meanwhile USAID, after years of perpetual problems with its so-called New Management System, was able to successfully implement its new accounting system, known as Phoenix. The system, however, is operational only at the Washington, D.C., headquarters and it will not be rolled out at USAID's overseas offices until 2003.