Federal agencies continue to have problems producing data
needed to manage daily operations and comply with the
Federal Financial Management Improvement Act, the Government
Accountability Office has said in a new report calling for
clearer guidance.
It said while most of the Chief Financial Officers Act
agencies have obtained clean or unqualified audits of
their financial statements, “underlying financial systems
remain a serious problem.”
“Agencies still lack the capacity to create the full range
of information needed for effective day-to-day management,”
according to GAO-05-881.
It said that in fiscal 2004 auditors for 16 of the 23 CFO
Act agencies found them out of compliance with FFMIA,
largely due to six types of problems: nonintegrated
financial management systems; inadequate reconciliation
procedures; lack of accurate and timely recording of
financial information; noncompliance with the SGL; lack of
adherence to federal accounting standards; and, weak
security controls over information systems.
GAO said the Office of Management and Budget should clarify
what “substantial compliance” means, noting that six
agencies gave “negative assurance,” as called for in OMB
guidance, meaning nothing came to their attention that
they were out of compliance with FFMIA, which doesn’t
really guarantee they are in compliance.
The Department of Labor is one agency that gave “positive
assurance,” and has plans to refocus audit procedures to
develop the reliability and use of managerial cost
information, said GAO, adding that other agencies could do
more of that with better OMB guidance.
