Bookkeeping pressures mount

JFMIP updated core financial system requirements

With budget surpluses becoming a thing of the past, financial management is more important than ever, which means that agencies can expect to place greater requirements on their financial systems, according to senior government officials.

The Bush administration wants agencies to have clear auditable books and data for making sound management decisions, said Jeff Steinhoff, the General Accounting Office's managing director of the financial management and assurance division.

As a result, agencies will be under increased pressure to implement sound financial systems and practices, he said at a meeting Jan. 8 hosted by the governmentwide Joint Financial Management Improvement Program (JFMIP).

This is becoming more challenging. While agencies traditionally have had six months to close their books when a fiscal year ends, they will have only one month to close their books by the end of fiscal 2004, Steinhoff said. This deadline could have been tighter -- one senior administration official wanted to require agencies to close their books within three days of the end of the fiscal year.

Given that timetable, agencies will be unable to undertake the Herculean efforts necessary to have auditable books, he said. Instead, they will have to roll out new commercial financial management systems more attune to the needs of federal agencies in order to do the work, Steinhoff said.

Meanwhile, JFMIP's core financial system requirements "continue to be refined, continue to be updated, and the testing has become more robust," Steinhoff said. "We are fixing the underlying problems that have rendered financial management a high-risk endeavor."

The group's final version of its requirements document, released late last year, defines the minimum level of operation that core financial systems must have to support agency missions and comply with laws and regulations. It is at the heart of an ongoing governmentwide effort to improve federal financial management systems by enabling agencies to use commercial software rather than more expensive customized packages.

Karen Alderman, JFMIP's executive director, said agencies have made progress in recent years so that 18 of the 24 agencies covered under the Chief Financial Officers Act have been able to produce auditable books. But things aren't perfect. "A lot of that is brute force labor," she acknowledged, rather than sound financial practices and systems.