Agencies should leverage existing audit work to comply with new financial management rules, and should expect the initial pain of compliance to last at least three years, officials said Thursday.
At a forum organized by Reston, Va.-based market analysis firm INPUT, government officials shared early lessons learned from the first year of implementing new financial reporting standards contained in the Office of Management and Budget's Circular A-123, the rulebook for financial management accountability and controls.
Paul Konka, director of debt referral and oversight at the Centers for Medicare and Medicaid Services, said his experience with implementing the new rules demonstrated the value of relying on other audit and reporting procedures to jump-start compliance. The first deadline under the revised Circular A-123 was in June, and required that agency managers attest to the effectiveness of their processes for financial reporting.
Konka and John Cox, chief financial officer at the Housing and Urban Development Department, agreed that, based on their experiences, agencies might overcome the early challenges of implementing Circular A-123 by their third time through the annual process, but Konka stressed that education will be an enduring part of the equation. He said building acceptance of the process with program managers was an important part of compliance for CMS, because those managers interact with the auditors.
The rules, which were instituted as the government's version of the private sector's 2002 Sarbanes-Oxley Act in response to several accounting scandals, differ from that law in that they pin less accountability on top officials, Cox said. Private sector CFOs can lose their bonuses and even their jobs based on Sarbanes-Oxley violations, he said, while consequences are not spelled out for government officials.
But he said government has its own limitations that do not apply in the private sector. For example, he said, many internal controls rely on information technology and might require new IT systems, but annual budget cycles make it difficult to plan and execute the kind of multiyear budgets that IT often requires.
Cox said he has found ways to use A-123 to reform internal procedures. For example, he learned that some parts of HUD far exceed the minimum requirement of three levels of approval for travel expenses. When new technology solutions streamline the tracking process, those additional layers of review and approval will be eliminated.
READ MORE...
No comments:
Post a Comment