OMB: Agencies attain financial reporting milestones

Most major agencies achieved a clean audit for their fiscal 2008 year-end financial statements, a vast improvement over several years ago, Clay Johnson, deputy director for management at the Office of Management and Budget, said today. Twenty of the 24 major agencies received a clean rating, which means their financial data and processes are reliable, he said.The number of material or major accounting weaknesses governmentwide declined from 39 to 32, he said. This is the fifth consecutive year that material weaknesses have declined, with a nearly 50 percent decrease since 2001, he added.“This last year was a big step forward,” Johnson said in a briefing with reporters. “A record number of agencies produced an unqualified audit opinion, the material weaknesses were reduced over this past year, and all financial statements were produced in 45 days. That means you have to have year-round, day in and day out financial disciplines to be able to produce audit financials in that period of time.”Previously, agencies would wait until the end of the year and then try to determine where the money had gone, he said.Some agencies stood out for their improvements this year, said another OMB official, who did not wish to be named. The Army Corps of Engineers received its first-ever clean audit opinion. It is the largest Defense Department organization to reach that milestone.The Treasury Department achieved a clean audit this year, and it faced the challenge of accounting for a complex array of activities related to the financial package to stabilize the economy, the official said.The Transportation Department also attained a clean audit opinion with no material weaknesses for the first time, joining the Justice and Housing and Urban Development departments as the only large, complex agencies to reach that milestone, the official said.Agencies also strengthened their reporting of improper payments so they could be more effective at getting the right amounts to the correct recipients, the official said. With this year’s financial reports, agencies are now reporting improper payment measurements for nearly 95 percent of all high-risk programs, up from 85 percent in 2007, the official said. In 2004, agencies reported on 27 programs. This year, they are reporting on 78 programs that might have improper payments, the official said.The results from the past four years of reporting on improper payments demonstrate that once an agency has measured and reported program errors, it is able to implement corrective actions to reduce those errors in subsequent years, the official said.