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Friday, December 21, 2007

Today's GAO Publications

The Government Accountability Office (GAO) today released the following reports:

Budget Issues: Accrual Budgeting Useful in Certain Areas but Does Not Provide Sufficient Information for Reporting on Our Nation's Longer-Term Fiscal Challenge.
GAO-08-206, December 20.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-206
Highlights - http://www.gao.gov/highlights/d08206high.pdf

Veterans' Benefits: Improved Operational Controls and Management Data Would Enhance VBA's Disability Reevaluation Process.
GAO-08-75, December 6.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-75
Highlights - http://www.gao.gov/highlights/d0875high.pdf

Navy ready to launch ERP system

The Navy Enterprise Resource Planning program, which includes financial management, project management and other key business applications, is about to go live after about three years of development.

The Naval Air Systems Command (Navair) in Patuxent River, Md., with 15,000 users, will be first to use the system. After that, the Navy will turn on the ERP system next year at five Space and Naval Warfare Systems Command (Spawar) locations with 10,000 users. The rollout will reach 88,000 users by 2013, officials said.

The initial release, which utilizes the SAP for Public Sector product, includes financial management, procurement and acquisition management, project management and workforce management functionality.

The validation of the system included more than 21,000 test scripts and nearly 53 million data conversions in six testing cycles, Gardiner said. The company included Navair personnel in testing the system.

The Navy’s achievement also is a big change from previous ERP attempts. The Government Accountability Office said in a September 2005 report that the service invested more than $1 billion since 1998 in ERP pilots and had not achieved marked business process improvements.

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Thursday, December 20, 2007

FederalNewsRadio - Ask the CFO - Michael Kane (NNSA)

National Nuclear Security Administration

Michael Kane - Associate Administrator for Management and Administration

Breaking down barriers. That type of talk is all the rage among tech-savvy government officials. Only Kane, winner of a Meritorious Presidential Rank award, says now financial officers are getting into the act using increased transparency to eliminate redundancy across agency lines. Kane says while this save money it also means putting a greater burden on financial officers to adopt business manager-type skills to ensure there are no hiccups along the way, something which could have far-ranging implications for the way we look at careers in government. He also talks about NNSA's recruiting efforts and the impact merging NNSA's physical and IT security functions will have on the agency's finances.

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FederalNewsRadio - Ask the CFO - David Walker (GAO)

Government Accountability Office

David Walker - Comptroller General

Walker paints a stark picture of the nation's fiscal health, warning that if the government was a private sector company the recently released 2007 Financial Report of the United States would have "our stock dropping and there would be talk about whether the company's management and directors needed a major shake-up." He says what is needed is a return to strict budget controls, the development of key national indicators and more of an effort to translate complex financial statistics into plain, old English. He also weighs in on how the fiscal crisis ranks with terrorism as far as threats go and on what all this means for government CFOs.

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Today's GAO Publication

The Government Accountability Office (GAO) today released the following report:

Centers for Medicare and Medicaid Services: Internal Control Deficiencies Resulted in Millions of Dollars of Questionable Contract Payments.
GAO-08-54, November 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-54
Highlights - http://www.gao.gov/highlights/d0854high.pdf

Tuesday, December 18, 2007

GAO says government failed yet another financial audit

For the 11th straight year, the federal government failed its financial audit, GAO announced Monday, in a widely anticipated finding that Comptroller General David Walker used to underscore the government's troubled fiscal health.

"If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up" Walker said this afternoon in a speech at the National Press Club.

Just before his address, GAO issued a statement saying it could not express an opinion on the government's fiscal 2007 consolidated financial statements, mostly due to the Defense Department's financial management problems. In an announcement this morning, the agency also pointed to the government's failure to account for intergovernmental activity and balances between agencies and federal agencies' "ineffective process for preparing consolidated financial statements."

But Walker pointed to some positives. For the first time, his agency gave an unqualified opinion on the government's "Statement of Social Insurance," which deals with the most expensive programs, such as Social Security, Medicare, railroad retirement and black lung healthcare. Walker used his speech to reiterate the themes of his "Fiscal Wake-Up Tour," through which he has warned that rising healthcare costs and baby boomer retirements will cause an unmanageable increase in debt burdens.

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Monday, December 17, 2007

GAO: Some Progress on U.S. Government's Financial Statements But Significant Problems Remain

Serious Material Weaknesses Affecting Financial Systems, Fundamental Recordkeeping, and Financial Reporting

WASHINGTON (December 17, 2007) - For the 11th year in a row, the U.S. Government Accountability Office (GAO) was prevented from expressing an opinion on the consolidated financial statements of the U.S. government--other than the Statement of Social Insurance--because of serious material weaknesses affecting financial systems, fundamental recordkeeping, and financial reporting.

David M. Walker, the Comptroller General of the United States and head of GAO, did note some progress in this year's audit. This year GAO expressed an unqualified opinion on the fiscal year 2007 Statement of Social Insurance, which includes the Social Security, Medicare, Railroad Retirement, and Black Lung programs. This is significant because the statement covers some of the largest numbers in the federal government--tens of trillions of present-value dollars associated with future social insurance expenditures.

Overall, however, Walker was not satisfied. In a speech today at the National Press Club, he said, "If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up." Walker urged greater transparency and accountability over the federal government's operations, financial condition, and fiscal outlook.

Despite improvements in financial management since the U.S. government began preparing consolidated financial statements more than a decade ago, three major impediments prevent the U.S. government from obtaining a clean opinion: (1) serious financial management problems at the Department of Defense, (2) the federal government's inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government's ineffective process for preparing the consolidated financial statements.

"Until the problems outlined in our audit report are adequately addressed, they will continue to have adverse implications for the federal government and American taxpayers," Walker said in a letter to the President and Congress.

"The federal government's fiscal exposures totaled approximately $53 trillion as of September 30, 2007, up more than $2 trillion from September 30, 2006, and an increase of more than $32 trillion from about $20 trillion as of September 30, 2000," Walker said. "This translates into a current burden of about $175,000 per American or approximately $455,000 per American household."

The fiscal year 2007 Financial Report of the United States Government, which includes financial information from the 24 major federal departments and agencies and GAO's audit report, is being released today by the Treasury Department. It is also available on GAO's web site at http://www.gao.gov/financial.html

For more information, contact GAO's Office of Public Affairs at (202) 512-4800.

Today's GAO Publications

The Government Accountability Office (GAO) today released the following correspondence:

Department of Veterans Affairs: Actions Needed to Strengthen VA's Foreclosed Property Management Contractor Oversight.
GAO-08-60, November 15
http://www.gao.gov/cgi-bin/getrpt?GAO-08-60
Highlights - http://www.gao.gov/highlights/d0860high.pdf

Tax Compliance: Federal Grant and Direct Assistance Recipients Who Abuse the Federal Tax System.
GAO-08-31, November 16
http://www.gao.gov/cgi-bin/getrpt?GAO-08-31
Highlights - http://www.gao.gov/highlights/d0831high.pdf

Friday, December 14, 2007

Today's GAO Publication

The Government Accountability Office (GAO) today released the following report:

DOD Travel Improper Payments: Fiscal Year 2006 Reporting Was Incomplete and Planned Improvement Efforts Face Challenges.
GAO-08-16, December 14
http://www.gao.gov/cgi-bin/getrpt?GAO-08-16
Highlights - http://www.gao.gov/highlights/d0816high.pdf

FederalNewsRadio - Ask the CFO - Thomas Bellamy (PC)

US Peace Corps

Thomas Bellamy - Deputy Chief Financial Officer

An unqualified audit opinion with no material weaknesses for FY 2007 certainly is reason to celebrate at the Peace Corps. Bellamy says what makes the achievement even more gratifying is that it came sooner than expected. Still, he says it was not easy. Getting the unqualified opinion required the financial managers to work ever more closely with posts across the world to ensure they had the necessary documentation as well as the right amount of flexibility so that funds did not go unused. Bellamy says the process also benefited from strong leadership at all levels, a focus on fiscal responsibility through strong customer service and a solid relationship with the Peace Corps Inspector General.

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Thursday, December 13, 2007

Federal spending database defies doubters

The Office of Management and Budget initially doubted the need for or the possibility of developing a single, online, publicly accessible database with all contracts, grants, loans and other transactions. But after Sens. Tom Coburn (R-Okla.) and Barack Obama (D-Ill.) shepherded the Federal Funding Accountability and Transparency Act through Congress and it became law, administration officials rethought the possible.

And now 15 months later, that database is reality. OMB today officially launched the first version of USASpending.gov, more than two weeks before the congressionally mandated Jan. 1 deadline.

“This is an example of what can happen when Congress and the executive branch have a shared goal and Congress holds the executive branch accountable,” said Robert Shea, OMB’s associate director of administration and government performance and the lead in developing the FederalSpending.gov Web site, at the launch briefing in Washington. “We saw what could be done when OMBWatch launched their version and we partnered with them.”

In fact, the administration bought OMBWatch’s software for about $600,000 and developed the entire database for less than $1 million. This doesn’t count the hundreds of hours agencies put toward collecting, formatting and uploading data on all these transactions. Agencies spent more than $400 billion on contracts in fiscal 2006 and $2.8 trillion across all categories.

USASpending.gov is similar to the recently updated version of the OMBWatch site. Users of the federal site can search by name, place of performance, agency, product or service category or the top 100 recipients governmentwide. The agency searches are limited to top 10 contracts, top five congressional districts, and products or services.

Shea said the first iteration of the federal spending database includes all transactions after there was some concern it would provide only contracts and grants.

Coburn said at the launch that the database was a “herculean task,” and does more than create transparency. He said it continues to ensure we have a free society.

“The only thing that enables us to have a free society is transparency,” he said. “It will make the government more efficient through its accounting and financial management.”

Coburn added that he was pleased OMB beat the deadline because so many times Congress passes legislation and the implementation never comes on time.

Rep. Tom Davis (R-Va.), one of the main House sponsors of the bill, said in a statement today that the launch of USASpending.gov was a watershed moment for government accountability.

“Today’s an important day for all of us who believe sunshine is the best disinfectant,” Davis said. “We included an ambitious time frame; we knew it would be difficult. I congratulate all of those who rose to the occasion and met this challenge” two weeks ahead of schedule.

-Jason Miller, FCW.com

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Federal Finance Skills Must Catch up on Transformation

When pundits predict a retirement-driven government brain drain, it’s folks like Mary Mitchell they have in mind.

Mitchell, a 32-year veteran of federal service, will retire Jan. 3, 2008 from the General Services Administration. The FCW account of her plans made the magazine’s most-viewed story list, beating out a You-Tube video of GSA Administrator Lurita Doan on Halloween, dressed as a witch, riding the agency’s hallways aboard a Sedgeway.

Currently GSA’s deputy associate Administrator for the Office of Technology Strategy, Mitchell has been focusing on the financial services line of business and, in a larger sense, the changing skills requirements of the federal financial function.

Financial types “have not been there in program decisions until now. The main focus has been on transaction processing and reporting,” she says.

But that’s changing.

As the mechanical functions of financial management go towards shared service providers, those in the CFO community “must be a party at the table making good business decisions.” Mitchell says she believes the integration of finance with agency budget and program goals requires transformation of the financial skills set. That transformation that has already occurred in IT as data processing was outsourced and CIOs became strategists.

-FedInsider.com

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Today's GAO Publications

LETTER REPORT
Organizational Transformation: Implementing Chief Operating Officer/Chief Management Officer Positions in Federal Agencies.
GAO-08-34, November 1
http://www.gao.gov/cgi-bin/getrpt?GAO-08-34
Highlights - http://www.gao.gov/highlights/d0834high.pdf

TESTIMONY
Organizational Transformation: Implementing Chief Operating Officer/Chief Management Officer Positions in Federal Agencies.
GAO-08-322T, December 13 http://www.gao.gov/cgi-bin/getrpt?GAO-08-322T
Highlights - http://www.gao.gov/highlights/d08322thigh.pdf

Wednesday, December 12, 2007

Today's GAO Publication

The Government Accountability Office (GAO) today released the following testimony:

Smithsonian Institution: Status of Efforts to Address a Range of Funding and Governance Challenges, by Mark L. Goldstein, director, physical infrastructure issues, before the Senate Committee on Rules and Administration.
GAO-08-250T, December 12.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-250T
Highlights - http://www.gao.gov/highlights/d08250thigh.pdf

Comptroller General to Speak at National Press Club

WASHINGTON (Dec. 12, 2007) - On Monday, December 17, the same day the annual financial report of the U.S. government is due to be released, David M. Walker, Comptroller General of the United States and head of the Government Accountability Office (GAO), will speak at the National Press Club as part of its newsmaker luncheon series. His remarks, entitled "A Call for Stewardship," outline the need for increased fiscal discipline and for greater attention to be placed on a number of large and growing sustainability challenges facing the United States.

GAO will also release a new report on December 17 that discusses various tools and techniques, such as key national indicators and fiscal future commissions, to help policymakers meet these challenges and capitalize on related opportunities. Mr. Walker will also address this report.

In light of the government's latest financial report and the GAO's new stewardship report, Walker will discuss the government's overall financial condition and the increasing fiscal burdens facing the nation.

He will also discuss what needs to be done to turn things around.

The audience will include leaders from public, private and not-for-profit sectors as well as working journalists. NPR and C-SPAN are expected to air Walker's remarks.

Lunch will be served at 12:30 p.m. in the ballroom, followed by Walker's speech and a question-and-answer session.

The public is invited to attend. For ticket reservations, please visit http://press.org/speakers/luncheonspeakers.cfm or contact the Press Club at (202) 662-7539.

The National Press Club is located at 14th and F Streets, NW, one block west of Metro Center. For additional information, please contact GAO's Office of Public Affairs at (202) 512-4800.

Monday, December 10, 2007

U.S. Department of Labor Earns 11th Consecutive 'Clean' Audit Opinion on Annual Financial Statements

WASHINGTON, Dec. 10 /PRNewswire-USNewswire/ -- Secretary of Labor Elaine L. Chao announced that the U.S. Department of Labor has received an unqualified, or "clean," audit opinion, on its fiscal year 2007 financial statements, marking the department's 11th consecutive annual clean audit opinion.

"This department has demonstrated a commitment to responsible stewardship of taxpayers' dollars and adherence to the fundamentals of sound financial management," said Secretary Chao. "This 11th consecutive clean audit and the department's continued leadership in meeting and exceeding the goals of the President's Management Agenda are a legacy which everyone at the Department of Labor can be proud of."

A clean audit opinion provides independent confirmation that the department's financial statements are presented fairly and in conformity with generally accepted accounting principles. Accurate and timely financial information improves the Labor Department's accountability to Americans and allows the department to make informed operational, budget and policy decisions.

"The clean audit opinion ensures that we have the timely, accurate and reliable information needed to manage our programs efficiently and effectively," said Lisa D. Fiely, the Labor Department's acting chief financial officer.

The Office of the Chief Financial Officer leads the department's financial management and fiscal integrity effort. For more information,visit the office's Web site at http://www.dol.gov/ocfo.

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Today's GAO Publications

The Government Accountability Office (GAO) today released the following reports and correspondence:

Improper Payments: Weaknesses in USAID's and NASA's Implementation of the Improper Payments Information Act and Recovery Auditing.
GAO-08-77, November 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-77
Highlights - http://www.gao.gov/highlights/d0877high.pdf

Responses to Posthearing Questions Related to Improving Single Audit Quality.
GAO-08-318R, December 7.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-318R

Focus on financial management pays off at DHS unit

Three years after severe financial management problems forced a hiring freeze and spending restrictions that jeopardized its operations, leaders at Immigration and Customs Enforcement can claim significant progress in overcoming weaknesses in the way it manages money, according to an independent audit of the Homeland Security Department's fiscal 2007 financial statements. ICE is part of Homeland Security.

While DHS remains unable to garner an audit opinion, due in large part to continuing finance and accounting problems at the Coast Guard and the Federal Emergency Management Agency, auditing firm KPMG found that ICE had remedied several material weaknesses noted in earlier audits of the bureau's financial statements.

ICE Chief Financial Officer Alexander Keenan attributed much of the bureau's success to support from top management and to his predecessor, Debra Bond, its first CFO. Bond and ICE Director Julie Myers, who appointed Bond to a permanent position (she had been acting CFO prior to Myers' appointment) just days after taking office herself in January 2006, crafted a multiyear plan to improve financial reporting at the $5 billion investigative agency.

"Having financial integrity is important for an agency in terms of garnering the support of Congress," Myers said. Also, because ICE performs financial management services for other agencies within Homeland Security, it had a responsibility to resolve problems. ICE received substantial help from the Office of the Inspector General at Homeland Security, Myers added.

The benefits of addressing material weaknesses have been significant, she said: In 2007, ICE was able to fully spend its appropriation, unlike previous years, when the bureau left some funds untouched because it didn't have enough confidence in the accuracy of its bookkeeping to avoid overspending. "That has really made a tangible difference," Myers said. "It also has given program directors a much higher level of confidence in terms of what the CFO is doing and how they're helping them manage money."

Of eight material weaknesses identified by auditors, Keenan said the most significant was that ICE's fund balance did not match Treasury's fund balance. Fixing that, which the agency was able to do in 2006, had a trickle- down effect and allowed ICE to fix several other weaknesses, he said.

Another related weakness -- budgetary accounting -- will be harder to address on a sustained basis. While fixing the fund balance with Treasury required changing processes at ICE's three finance centers, fixing budgetary accounting weaknesses will require changing processes and behavior at dozens of field offices. For example, if a field office contracts for a service, but that service ends up costing less than originally estimated, then the records must reflect that change in obligation.

ICE reaped substantial benefits this year by doing all invoice processing for the Federal Protective Service at the ICE finance center in Burlington, Vt. Previously, invoices were processed at 11 FPS regional offices. In 2008, ICE expects to consolidate the rest of the agency's invoice processing in Burlington as well.

- Katherine McIntire Peters, GovExec.com

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Thursday, December 06, 2007

FederalNewsRadio - Ask the CFO - Lyons Gray (EPA)

Environmental Protection Agency

Lyons Gray - Chief Financial Officer

There is green, as in money, and there is green, as in environmentally friendly. At the EPA the two are no longer that different. Gray says it starts with powering up and that all the energy that is required to run the department comes from green sources. He says this type of green thinking also factors into the business decisions at EPA, whether it is consolidation or its one-stop shop for relocating employees, called eRelocate. Gray says this lead-by-example approach is serious from top to bottom, whether it means making sure that the office of the chief financial office and the department's IT staff are joined at the hip or being better about turning off lights that are not being used. Finally, Gray talks about making his office more of a resource by making sure that the financial metrics are communicated in English.

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