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Friday, November 17, 2006

Agencies improve financial rigor

All major federal agencies beat out the private sector for the second consecutive year by completing their Performance and Accountability Reports and financial statements on the 45-day accelerated schedule. The accelerated deadline for corporate filers is 60 days.

Again, 18 agencies received clean audit opinions this year, while auditors said the information from five agencies was unreliable. These were the Defense, Energy, Homeland Security and State departments, and NASA. The Transportation Department earned a qualified opinion because it had serious weaknesses.

The Housing and Urban Development Department not only received a clean audit, but for the first time since audited financial statements were required reported no material weaknesses. The General Services Administration regained its clean opinion, implemented actions to fix last year’s major weaknesses and completed its PART several days ahead of the accelerated Nov. 15 deadline.

“We are holding agencies accountable with high standards and greater transparency,” said Linda Combs, OMB controller and head of OMB’s Office of Federal Financial Management, in a statement after release of the report.

Combs has said that use of integrated financial systems by agencies provides timely and accurate financial reports that make the year-end statement process smoother.

“Now we are closer to the goal of making financial information more timely and useful in the budget process,” said Rep. Todd Platts (R-Pa.), chairman of the Government Reform Subcommittee on government Management, Finance and Accountability.

Last fiscal year was the first time that agencies evaluated the effectiveness of internal controls over financial reporting under Circular A-123, helping to root out financial management problems that may have gone undiscovered in the past. Agencies included their A-123 reports in their year-end statements.

Even among agencies that earned clean audits, auditors identified financial problems, Platts said, especially weaknesses in safeguards to protect against fraud and error.

“With this focus on internal controls, I expect to see some of the long-standing financial management issues resolved over time,” he said.

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