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Tuesday, November 08, 2005

FINANCE: Clean Audits Weak Systems

The good news: More agencies are receiving clean audits on the their financial statements. The bad news: Their financial systems can?t generate the comprehensive data needed for day-to-day financial management.

'The underlying financial systems are a serious problem,' the Government Accountability Office said in a recent report (GAO-05-881 at www.gao.gov). 'Systems of most agencies are still unable to routinely produce reliable, useful and timely financial information,' as required by the Federal Financial Management Improvement Act of 1996.

Ultimately, this shortcoming prevents agencies from effectively managing major programs, according to GAO.

For fiscal 2004, auditors for 16 of the 23 agencies covered by the Chief Information Officers Act of 1990 reported that the agencies? financial management systems failed to comply with FFMIA. In reviewing the reports, GAO criticized auditors for six of the seven other agencies for providing only 'negative assurance,' meaning nothing came to the auditors' attention during their investigations to indicate that the systems didn?t meet FFMIA standards.

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