Treasury makes progress on financial reporting

The Treasury Department is making progress in modernizing its accounting and financial reporting systems so agency data will be more accurate and consistent, Ken Carfine, Treasury’s fiscal assistant secretary, said today.The department is reducing the number of older systems and developing new ones for its Financial Management Service (FMS) to help agencies track payment transactions, he said.The changes are designed to fix weaknesses in how Treasury and other major agencies report their financial activities and reconcile their transactions with one another, Carfine said at FMS’ annual Government Financial Management Conference.Because of those weaknesses, the Government Accountability Office has been unable to give an audit opinion about the federal government’s consolidated financial statement for the past 11 years. GAO officials have said the weaknesses make the data unreliable.“Our focus will be on aggressively moving forward on modernization of the central accounting systems and addressing the issues standing in the way of a clean audit opinion on the consolidated financial statement,” Carfine said.As part of the move toward standards, agencies will also begin using common accounting identifiers, he said. By early 2011, all relevant applications must be able to accept Treasury Account Symbols and Business Event Type Codes, he said.FMS began implementing the Governmentwide Accounting Modernization Project (GWAMP) in 2006, and it’s now gaining traction, Carfine said. Several agencies have already made the changes and are reporting their intragovernmental transactions using Treasury’s codes, which has reduced their reporting burden and facilitated reconciliation of accounting information, he added.GWAMP supports the Financial Management Line of Business, under which accounting and business processes will be incorporated into financial management systems.Agencies must move to those integrated financial systems when they are ready to update or replace their current systems, the Office of Management and Budget has said. The General Services Administration’s Office of Financial Management Systems will test and certify vendors’ products to ensure that they meet the requirements, OMB officials have said.Also by 2011, FMS will implement its Financial Information and Reporting Standardization (FIRST) initiative to improve the quality of financial reporting by ensuring the consistency of agency submissions to Treasury, such as monthly trial balances and financial statements, Carfine said.FIRST “will reduce the number of agency submissions from 13 to five, reduce the number of systems that agencies must interface with, and…enable FMS to retire several legacy systems,” he said.Treasury officials are working with OMB representatives and agency chief financial officers to develop road maps by early next year for agencies to implement GWAMP and resolve issues related to intragovernmental transactions, Carfine said. The tools will enable agencies to map the changes to their policies, procedures and systems, and designate the time frames for accomplishing them.