OMB changes tack on agency financial reporting

The Office of Management and Budget updated audit requirements, effective immediately, to reflect more private-sector auditing practices for agencies reporting their annual financial statement.Agencies must submit their annual reports by Nov. 15, which is 45 days after the fiscal year ends.The most significant changes in the guidelines were expanding the definitions for material weakness and significant deficiency to align them more closely with the private sector, said OMB director Rob Portman in the posted today.OMB adds discussions on complying with Circular A-123 on internal controls designed to reduce risk and fraud in financial reporting and other federal financial-management mandates.“The new federal auditing guidelines reinforce the importance of proper accounting and reporting practices to ensure that we properly reduce wasteful spending in government and take care of the taxpayers’ money,” said Clay Johnson, OMB's deputy director for management, in a statement.Agencies account for their use of tax dollars in the year-end financial statement. As part of their financial reporting, agencies also provide information about their security controls to reduce risk under the Federal Information Security Management Act.