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Friday, June 06, 2008

Officials outline financial management problems

Federal agencies need to strengthen accounting practices and internal controls in high-risk spending areas if they are going to prove themselves responsible to taxpayers, a senior White House official told House lawmakers on June 5.

“The financial management community is not only responsible for reporting on the extent and nature of our fiscal challenges, it also plays a critical role in developing and implementing strategies to control federal spending and otherwise ensure that the fiscal health of the federal government remains sound,” Daniel Werfel, Office of Management and Budget deputy controller, said in prepared testimony.

To achieve these ends, agencies need to reduce improper payments, eliminate the misuse of government charge cards and make financial reports more transparent and readable, Werfel told the House Oversight and Government Reform Committee.

By making these improvements, agencies will be able to meet OMB’s goal of getting a clean audit opinion from the Government Accountability Office, he said. Several agencies have already taken part in pilot programs to make financial reports more understandable, Werfel said. Agencies are also getting better at catching improper payments, he said.

Despite these improvements in financial reporting, GAO for the 11th year in a row could not offer an opinion of the government’s financial audits, GAO’s Gene Dodaro, acting comptroller general, said in written testimony.

An audit opinion remains elusive in part because the Defense Department is not able to fix weaknesses in its financial statements, Dodaro said. GAO is also held back by agencies’ inability to reconcile their intergovernmental transactions balances with each other and government’s ineffective process for preparing the governmentwide financial statement, Dodaro said.

-Elise Castelli, FederalTimes.com

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