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Wednesday, September 30, 2009

Danny Werfel Approved by Senate Committee

The Senate Homeland Security and Governmental Affairs Committee unanimously approved the nomination of Danny Werfel to be Controller of the Office of Management and Budget's Office of Federal Financial Management. Committee chair Joe Lieberman, I-Conn. said that, as deputy controller and acting controller, Werfel "has demonstrated his commitment to improving the financial management of the federal agencies and is a well-qualified choice to lead OMB's efforts in this area." He said Werfel should be confirmed by the full Senate, and quickly.

-Elizabeth Newell, GovExec.com

AGA's FMSB Comments on GASB Proposal

AGA's Financial Management Standards Board (FMSB) has issued a comment letter to the Governmental Accounting Standards Board (GASB) on its exposure draft of a proposed statement on Accounting and Financial Reporting for Service Concession Arrangements

Monday, September 28, 2009

OMB will create new performance management framework for agencies

The Office of Management and Budget is developing a new federal performance management framework, the government's chief performance officer told lawmakers on Thursday.

The approach will incorporate elements from other initiatives, including the Bush administration's Performance Assessment Rating Tool and the 1993 Government Performance and Results Act, OMB's Jeff Zients told a Senate subcommittee.

Zients has recruited Shelley Metzenbaum to help lead the effort to design the plan. Metzenbaum founded the Collins Center for Public Management at the McCormack Graduate School of Policy Studies at the University of Massachusetts, Boston. She also has served as executive director of the Executive Session on Public Sector Performance Management at Harvard University's John F. Kennedy School of Government.

After three months as chief performance officer and deputy director for management, Zients said his "initial sense" is Congress and previous administrations have laid a strong foundation for the improvement of government performance. He named GPRA and PART in particular as important starting points. The programs, however, place too much emphasis on producing performance information for the purpose of compliance, and pay too little attention to analyzing and acting on the information collected, he said.

Despite the advances made by the Clinton and Bush administrations, agencies now need to focus on using performance information as a tool to facilitate long-term strategic decisions and support employees, contractors and other stakeholders, he said. The administration will rely heavily on information technologies to accomplish those goals, he added.

Bernice Steinhardt, GAO director of strategic issues, said the commitment of agency leaders and the communication of that commitment to managers were crucial to ensuring performance information drives decision-making. GAO studies have demonstrated that a lack of commitment from agency leadership often leads to inconsistent use of performance data across the agency.

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Friday, September 25, 2009

Recent GAO Publications

The Government Accountability Office recently released the following publications:

Troubled Asset Relief Program: Status of Efforts to Address Transparency and Accountability Issues, by Gene L. Dodaro, acting comptroller general, before the Senate Committee on Banking, Housing, and Urban Affairs.
GAO-09-1048T, September 24.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1048T

Results-Oriented Management: Strengthening Key Practices at FEMA and Interior Could Promote Greater Use of Performance Information.
GAO-09-676, August 17.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-676
Highlights - http://www.gao.gov/highlights/d09676high.pdf

Government Performance: Strategies for Building a Results-Oriented and Collaborative Culture in the Federal Government, by Bernice Steinhardt, director, strategic issues, before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, Senate Committee on Homeland Security and Governmental Affairs.
GAO-09-1011T, September 24.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1011T
Highlights - http://www.gao.gov/highlights/d091011thigh.pdf

DCAA Audits: Widespread Problems with Audit Quality Require Significant Reform.
GAO-09-468, September 23.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-468
Highlights - http://www.gao.gov/highlights/d09468high.pdf

DCAA Audits: Widespread Problems with Audit Quality Require Significant Reform, by Gregory D. Kutz, managing director, forensic audits and special investigations, and Gayle L. Fischer, assistant director, financial management and assurance, before the Senate Committee on Homeland Security and Governmental Affairs.
GAO-09-1009T, September 23.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1009T

Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed.
GAO-09-1016, September 23.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1016
Highlights - http://www.gao.gov/highlights/d091016high.pdf

Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed (State Appendixes).
GAO-09-1017SP, September 23.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1017SP

Troubled Asset Relief Program: Status of Government Assistance Provided to AIG.
GAO-09-975, September 21.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-975
Highlights - http://www.gao.gov/highlights/d09975high.pdf

Low-Income and Minority Serving Institutions: Management Attention to Long-standing Concerns Needed to Improve Education's Oversight of Grant Programs.
GAO-09-309, August 17.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-309
Highlights - http://www.gao.gov/highlights/d09309high.pdf

Ryan White CARE Act: Effects of Certain Funding Provisions on Grant Awards.
GAO-09-894, September 18.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-894
Highlights - http://www.gao.gov/highlights/d09894high.pdf

Pension Benefit Guaranty Corporation: More Strategic Approach Needed for Processing Complex Plans Prone to Delays and Overpayments.
GAO-09-716, August 17.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-716
Highlights - http://www.gao.gov/highlights/d09716high.pdf

Management Report: Opportunities for Improvements in FDIC's Internal Controls and Accounting Procedures.
GAO-09-943R, September 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-943R

DOD Business Systems Modernization: Navy Implementing a Number of Key Management Controls on Enterprise Resource Planning System, but Improvements Still Needed.
GAO-09-841, September 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-841
Highlights - http://www.gao.gov/highlights/d09841high.pdf

Mineral Revenues: MMS Could Do More to Improve the Accuracy of Key Data Used to Collect and Verify Oil and Gas Royalties.
GAO-09-549, July 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-549
Highlights - http://www.gao.gov/highlights/d09549high.pdf

Royalty-in-Kind Program: MMS Does Not Provide Reasonable Assurance It Receives Its Share of Gas, Resulting in Millions in Forgone Revenue.
GAO-09-744, August 14.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-744
Highlights - http://www.gao.gov/highlights/d09744high.pdf

Monday, September 21, 2009

Government management of real property improves slightly, report says

Agencies shed less than 1 percent of their total real property assets in fiscal 2008, according to the Federal Real Property Report released on Monday.

The annual report, produced by the interagency Federal Real Property Council, said the federal government's fiscal 2008 real property profile consists of almost 896,000 buildings and structures, with a total area of 3.29 billion square feet and more than 41 million acres of land.

The slight decrease in assets and area in fiscal 2008 from the previous year can be attributed to a number of factors, including the disposal of 24,682 assets in fiscal 2008, space consolidation efforts and improved data collection and reporting quality.

The report showed that agencies continue to struggle with finding the proper use of their real property, among other issues. Fifty-three percent of the 268,000 buildings that reported data were being properly used. Slightly less than one-third of the federal facilities were being overused, while 13 percent were underemployed and 7 percent were not being used at all.

Management of real property has been a challenge for the government. In January 2003, the Government Accountability Office put the issue on its high-risk list because of "long-standing problems with excess and underutilized property, deteriorating facilities, unreliable real property data and overreliance on costly leasing."

GAO repeatedly has reported that the federal real property portfolio reflects an outdated business model based on the technological and transportation environment of the 1950s. With guidance and assistance from the Office of Management and Budget, agencies have tried to improve real property management.

-Elizabeth Newell, GovExec.com
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Wednesday, September 16, 2009

Nominee lays out priorities for federal financial management

President Obama's pick to be the government's top financial executive on Wednesday told senators he would focus on reducing improper payments and managing stimulus spending if confirmed.

Danny Werfel, nominated to be head of the Office of Management and Budget's Office of Federal Financial Management, told the Senate Homeland Security and Governmental Affairs Committee eliminating inefficient spending, including payment errors and investments in unnecessary real property, would be a priority.

Other goals include controlling the cost of financial management operations and modernizations; improving grants management; strengthening financial statement audits at individual agencies and governmentwide; and meeting the Obama administration's transparency requirements, especially for Recovery Act spending, he said.

Werfel, who served as the principal deputy to the controller since March 2006 and completed several stints as acting controller, told the committee government is headed in the right direction. OMB has worked with agencies to reduce payment errors in previously measured programs, shed unneeded assets, improve audit results and make more financial information publicly available, the nominee noted.

While facing systemic and persistent challenges, the financial management office must tackle additional situational challenges such as those presented by the Recovery Act and the Troubled Asset Relief Program. These programs "demand more detailed and timely financial reporting and more sophisticated risk management approaches to be successful," he told senators.
Werfel said he would address these "sweeping challenges" by working with financial managers to move beyond the basics of accounting and reporting to more strategic thinking on how to improve the value of government services; control the cost of operations; prevent waste, fraud and abuse; and improve financial transparency.

Werfel has worked with agencies to initiate risk management processes for their stimulus efforts. He has asked them to identify areas rife with potential for financial errors and has helped them to develop risk mitigation plans. For example, a program that has received 500 to 600 times its normal level of funding as a result of the stimulus act and has not received significant staff boosts, would be susceptible to erroneous payments and should develop a plan for confronting that challenge, he said.

The tools necessary to meet financial management goals are at the government's disposal, according to Werfel. These range from detailed inventories of improper payments and unnecessary real property to technologies that support transaction processing.

Sen. Tom Carper, D-Del., acting as chairman of the Senate committee, joked that the sparse attendance at the hearing was a good sign that Werfel's nomination was noncontroversial, and praised Werfel's experience.

-Elizabeth Newell, GovExec.com
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Monday, September 14, 2009

AGA's Regional Dialogues Reveal ARRA Spawning Lasting Changes

Regional intergovernmental dialogues recently sponsored by AGA in four cities across the country reveal that the American Reinvestment and Recovery Act of 2009 (ARRA) is sweeping, not only in its size and complexity, but also in the impact that it is likely to have on government operations both now and in the future. New processes, procedures and tools developed to implement ARRA are reshaping intra- and intergovernmental relations and the ways that governments collect, maintain and report information.

The dialogues revealed that--despite the federal government's concerted efforts to promote intergovernmental collaboration--the complexity involved in implementing such a sweeping, highly-funded act in a short period of time has resulted in some key questions remaining unanswered at press time. These questions are captured in a report issued this week by AGA.

Read the Report Here

Sunday, September 13, 2009

CIA Seeks a Contract Auditor

Support our acquisition community and serve your nation as you conduct contract audits for the CIA. All applicants must be U.S. citizens who can successfully complete a thorough medical exam, polygraph interview and extensive background investigation. An equal opportunity employer and a drug-free work force.
To apply, visit: www.cia.gov

Financial Accountability at the DoD: Reviewing the Bidding

The Chief Financial Officers (CFO) Act of 1990 requires the DoD to produce private sector-style financial statements that can win unqualified opinions from auditors. After many years of effort to comply, the department is now projecting that its balance sheets will not be ready until 2017 and is unable to predict when its income statements will be ready. Given that discouraging situation, combined with the increasingly widespread realization that external financial statements are of no practical use for internal management, the question arises whether it makes sense for the DoD to continue its pursuit of “CFO compliance.” A review of the history of the CFO strategy suggests the DoD needs to shift its efforts to the development of managerial cost accounting—not private sector-style financial accounting—if progress is to be made.

-Christopher Hanks

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Thursday, September 10, 2009

Recent GAO Publications

The Government Accountability Office (GAO) recently released the following publications:

Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses, by J. Christopher Mihm, managing director, strategic issues, before the Senate Committee on Homeland Security and Governmental Affairs.
GAO-09-908T, September 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-908T
Highlights - http://www.gao.gov/highlights/d09908thigh.pdf

Social Security Disability: Additional Performance Measures and Better Cost Estimates Could Help Improve SSA's Efforts to Eliminate Its Hearings Backlog.
GAO-09-398, September 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-398
Highlights - http://www.gao.gov/highlights/d09398high.pdf

United States Merchant Marine Academy: Internal Control Weaknesses Resulted in Improper Sources and Uses of Funds; Some Corrective Actions Are Under Way.
GAO-09-635, August 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-635
Highlights - http://www.gao.gov/highlights/d09635high.pdf

Tuesday, September 08, 2009

Treasury Retreats From Standoff With TARP Watchdog

WASHINGTON -- The Treasury Department backed away from a standoff over the independence of the special government watchdog appointed to scrutinize how last year's $700 billion financial-industry bailout is being spent.

Neil Barofsky, special inspector general for the Troubled Asset Relief Program, a position also known as Sigtarp, declared victory Wednesday in his effort to clarify that he doesn't answer to Treasury Secretary Timothy Geithner.

Mr. Barofsky has gained a reputation for his aggressive posture and demands for information from government officials and Wall Street. The former federal prosecutor is charged with tracking the money spent to prop up the banking system during the financial crisis and to report the results of his audits directly to Congress.

In a letter Wednesday to members of Congress, Mr. Barofsky said the Treasury had withdrawn an earlier request to the Justice Department seeking a legal opinion on how much independence the Sigtarp office enjoys. Mr. Barofsky had told lawmakers he feared that being subject to the Treasury secretary's supervision would be "a threat to our independence."

By Evan Perez and Deborah Solomon
The Wall Street Journal, Page A3

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Friday, September 04, 2009

Is GAO Always Objective?

Forty years ago, at a Senate Government Operations Committee hearing on the role of GAO, Sen. Alan Cranston of California (a former state comptroller) observed that when GAO is asked to evaluate programs the GAO itself has recommended, objectivity problems can arise. As Sen. Cranston put it at the hearing: “If they [GAO officials] make a recommendation and it is adopted by Congress, they then have a sort of vested interest in that particular program, and their independence and ability to judge are somewhat impaired and, I think, less reliable.”

By: Christopher Hanks, Ph.D.

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Wednesday, September 02, 2009

Senior agency leaders focus on measuring success of their programs

In keeping with what the Obama administration sees as a high priority, officials at the Labor, Agriculture and Veterans Affairs departments are making program and performance evaluation a key focus in their strategic planning. Agencies already have been working hard narrow down their top objectives -- like the Agriculture Department's push to ensure all children in America have access to safe and nutritious meals -- and now they are tackling the even more difficult task of determining how to measure success.

Well into the process of submitting high-priority performance goals to the Office of Management and Budget, senior officials say they are identifying their program objectives and designing ways to evaluate progress toward those outcomes.

Labor will create a new position -- chief evaluation officer -- and a corresponding office within the policy office. The chief evaluation officer will develop a strategic approach that ties together the diverse goals and priorities of the department's many agencies and offices.

At Agriculture, Deputy Secretary Kathleen Merrigan's staff aims to establish metrics that can accurately measure success and to make sure each metric involves multiple agencies and mission areas.

Veterans Affairs Deputy Secretary W. Scott Gould said the elevator test applies to budgetary questions as well as metrics.

"There are three basic questions when you go see an appropriator -- what are you buying, how much does it cost and what do I get for it," he said. "If you can't answer that question in 30 seconds, it's on to the next line item."

Gould, Merrigan and Harris all anticipate the budget environment will be increasingly Spartan in the coming years, making program evaluation even more important.

-Elizabeth Newell, GovExec.com

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