Financial Management Federal Financial Management Improvement Act Results For Fiscal Year 1999

The inability to produce the data needed to efficiently & effectively manage the day-to-day operations of the fed. gov¿t. & provide accountability to taxpayers historically has been a major weakness at most of the largest fed. agencies. The central challenge in generating such data is overhauling inadequate & outdated accounting & financial-related mgmt. information systems. This annual report addresses: (1) compliance of the Chief Financial Officers (CFO) Act agencies¿ financial systems with the requirements of the Fed. Financial Mgmt. Improvement Act of 1996 (FFMIA); (2) agencies¿ plans to bring their systems into compliance; & (3) other efforts to improve the government¿s financial mgmt. systems. Charts & tables.

The inability to produce the data needed to efficiently and effectively manage the day-to-day operations of the federal government and provide accountability to taxpayers has been a long-standing weakness at many federal agencies. The Federal Financial Management Improvement Act of 1996 requires the 24 major departments and agencies to adhere to certain management and accounting standards. The act also requires auditors to indicate in their audit reports whether their financial management systems comply with the act's requirements. GAO is required to report annually on the implementation of the act. This, GAO's fourth annual report, discusses: (1) whether the financial systems of the 24 major agencies substantially comply with the act's requirements; (2) agencies' plans to bring their systems into compliance; and (3) other efforts to improve the government's financial management systems. For fiscal year 1999, auditors for 21 of the 24 major agencies reported that the agencies' financial systems did not comply substantially with the act's requirements. However, the number of agencies receiving "clean," or unqualified, audit opinions on their financial statements is increasing. Fifteen of the 24 CFO Act agencies received unqualified audit opinions in fiscal year 1999, up from 12 in fiscal year 1998 and 11 in fiscal year 1997. Agencies are slowly making progress in addressing the problems caused by financial management weaknesses. However, the continued widespread noncompliance with the act shows that there is still a long way to go to achieve systems, processes, and controls that routinely generate reliable, useful, and timely information for managers and other decisionmakers.

FFMIA and other financial management reform legislation, most notably the CFO Act, have underscored the importance of improving financial management across the federal government. The primary purpose of FFMIA is to ensure that agency financial management systems routinely provide reliable, useful, and timely financial information. With such information, government leaders will be better positioned to invest resources, reduce costs, oversee programs, and hold agency managers accountable for the way they run government programs. Financial management systems compliance with federal financial management systems requirements, applicable accounting standards, and the SGL are the building blocks to help achieve these goals.

AIMD-98-268 Financial Management: Federal Financial Management Improvement Act Results for Fiscal Year 1997

The U.S. Government Accountability Office (GAO) is an independent agency that works for Congress. The GAO watches over Congress, and investigates how the federal government spends taxpayers dollars. The Comptroller General of the United States is the leader of the GAO, and is appointed to a 15-year term by the U.S. President. The GAO wants to support Congress, while at the same time doing right by the citizens of the United States. They audit, investigate, perform analyses, issue legal decisions and report anything that the government is doing. This is one of their reports.