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Thursday, July 05, 2007

CFOs decry financial reporting requirements

Many managers say that federal financial reporting requirements are becoming more trouble than they are worth, a recent report says.

Financial executives and managers, interviewed by Grant Thornton and the Association of Government Accountants for their annual “CFO Survey,” estimated they spend a quarter of their time and money on financial statements and various accounting mandates.

Many of the survey’s 132 respondents said those activities crowded out more important jobs, such as strategic program and decision making, on which they estimated spending 19 percent of their time and staff resources. Participants ranked achieving a clean financial statement as their top priority, but many said they would prefer to prioritize work related to their agencies’ missions.

The 1990 Chief Financial Officers Act requires agencies to produce an annual financial report accompanied by an independent auditor’s opinion on the report’s reliability. But Congress and the Office of Management and Budget have steadily added new mandates, such as OMB’s Circular A-123, which requires internal accounting controls.

Survey respondents said the requirements have helped discipline financial statements and improve accounting. But many said a push for constant improvement yields diminishing returns.

-Daniel Friedman, FederalTimes.com


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