Putting money in workers' pockets

Money talks, and it could serve as an incentive to encourage federal workers to bring in a clean financial audit for their agencies, according to two financial management officials.

As federal agencies struggle to comply with the Federal Financial Management Improvement Act (FFMIA) of 1996, two experts suggested that bonuses are one way to spur action.

"We need a combination of a carrot and a stick," Sally Thompson, director of financial management and assurance at the Government Accounting Office, told the House Government Reform Committee's Government Efficiency and Financial Management Subcommittee.

Testifying Oct. 29 before the subcommittee, Thompson and Karen Cleary Alderman, executive director of the Joint Financial Management Improvement Program, said offering a bonus could motivate agencies to more rapidly comply with FFMIA. The law requires agencies to provide accurate data about budget management.

Thompson said she would like financial incentives to be awarded for work that is measurable, specific and time-sensitive.

Each year, GAO officials audit the financial statements of 24 federal agencies and attempt to form an overall view of federal finances. In fiscal 2002, for the sixth consecutive year, GAO officials were unable to rank the federal government's overall financial state, she said. Only five out of the 24 agencies are in compliance, including the Energy Department, the Environmental Protection Agency, the General Services Administration, the National Science Foundation and the Social Security Administration.

Alderman said there are solutions. She said there is a problem in finding, training and retaining qualified program managers, and bonuses should be one of the options that the federal government considers.

"As an observer of program managers in the federal government, I can say they are a scarce commodity and in high demand," she said. "And they could make double or more [in pay] in the private sector."

It would be "nice to have incentives for these folks," Alderman said.

Nevertheless, subcommittee members were more interested in penalties for noncompliance than bonuses for following the law. Rep. Marsha Blackburn (R-Tenn.) said she is tired of the lack of accountability in the federal government to produce clean audits, and the solution appears to always be further down the road.

"My constituents — when they find it takes 12 years to learn to count dollars [in the federal government] — aren't going to want to give their dollars any more," she said. "In the private sector, you don't have 'expectations,' you have 'requirements.' "

Blackburn said when agencies receive a disclaimer, or failing mark, on their federal audit, "nobody loses their job, nobody's hand gets slapped, and there's no change in the process and procedures."