OMB: Agencies slowly improving financial management

Agencies are still struggling with major financial management problems that make it difficult to produce accurate year-end reports on their programs, but the Office of Management and Budget sees potential for further improvements.The most significant of these problems are weaknesses in financial reporting, financial systems and security, according to OMB.Still, individual agencies have made improvements; an increasing numbers of agencies are producing clean audits, meaning data for their financial statements is accurate and timely, said Linda Combs, OMB controller. Agencies have also reduced their improper payments, such as inaccurate benefits payments.OMB hopes to see further improvement in financial management from a joint effort it has begun with chief financial officers and the inspector general community to determine how to report financial statements in a more cost-effective manner.The CFO Council and the President’s Council on Integrity and Efficiency will look for best practices that agencies can share, Combs said at a hearing March 1 held by the Senate Homeland Security and Government Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.“The presentation of our financial data should be understandable and useful without becoming an excessive cost and drain on agency resources,” she said.The two organizations will determine if agencies are sharing the right information, if the data is timely and in the right format to make decisions and if there is an appropriate amount of audit scrutiny.OMB has directed agencies to reform their financial management as part of the President’s Management Agenda. Agencies are to improve, strengthen and monitor their financial systems, internal controls, payments accuracy, property management, grants management and financial reporting, Combs said.Even as some agencies have taken steps to improve their financial management, the Government Accountability Office is unable to provide an audit opinion on the federal government’s consolidated financial statement. This situation is due to longstanding and pervasive financial management problems at the Defense Department, the government’s inability to adequately account for and reconcile accounting between agencies and the government’s ineffective process for preparing its financial statements, said Comptroller General David Walker.Financial management systems must be modernized to provide the complete range of information needed for accountability, performance reporting and making decisions, he said.Last year, the financial statements of the Defense, Homeland Security, Energy and Transportation departments and NASA failed their audits because their financial information was unreliable, Walker said.Agencies are still struggling with major financial management problems that make it difficult to produce accurate year-end reports on their programs, but the Office of Management and Budget sees potential for further improvement. The most significant of these problems are weaknesses in financial reporting, financial systems and security. Still, individual agencies have made some gains, which is reflected in the increasing numbers of agencies producing clean audits, meaning data for their financial statements is accurate and timely, said Linda Combs, OMB controller. Agencies have also reduced their improper payments, such as inaccurate benefits. OMB hopes to see further improvement in federal financial management with a joint effort it has begun by chief financial officers and the inspector general community to determine how to report financial statements in a more cost-effective manner. The CFO Council and the President’s Council on Integrity and Efficiency will look for best practices that agencies can share, Combs said at a hearing yesterday of the Senate Homeland Security and Government Affairs Subcommittee on Federal Financial Management, government Information, Federal Services and International Security. “The presentation of our financial data should be understandable and useful without becoming an excessive cost and drain on agency resources,” she said at The two organizations will determine if agencies are sharing the right information, if the data is timely and in the right format to make decisions and if there is an appropriate amount of audit scrutiny. OMB has directed agencies to reform their financial management, as part of the President’s Management Agenda. Agencies are to improve, strengthen and monitor their financial systems, internal controls, payments accuracy, property management, grants management and financial reporting, Combs said. Even as some agencies have taken steps to improve their financial management, the Government Accountability Office is unable to provide an audit opinion on the federal government’s consolidated financial statement. This is due to long-standing and pervasive financial management problems at the Defense Department, the government’s inability to adequately account for and reconcile accounting between agencies and the government’s ineffective process for preparing its financial statements, said Comptroller General David Walker. Financial management systems must be modernized to provide the complete range of information needed for accountability, performance reporting and making decisions. Last year, the financial statements of the Defense, Homeland Security, Energy and Transportation departments and NASA failed their audits because their financial information was unreliable, he said.