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Wednesday, December 29, 2010

GAO: Weaknesses in federal financial management

Bob Dacey, Chief Accountant, Government Accountability Office

For the 14th straight year, the Government Accountability Office announced that it could not issue an opinion on the federal government's consolidated financial statements.

In its report, the GAO highlights three main obstacles:

1.Serious financial management problems at the Defense Department.
2.An inability to effectively report inter-agency expenses.
3.An overall ineffective process for preparing financial statements.

Bob Dacey, chief accountant at GAO, told the Federal Drive that 20 of the 24 agencies of the CFO Act had "clean opinions" on their financial statements. However, in addition to DoD, Labor, Department of Homeland Security and NASA did not have clean opinions, Dacey said.

Dacey said weaknesses in DoD's financial management have been "pervasive and longstanding." Improvements are focused on two areas: budget information and mission-critical assets, he said.

The defense authorization bill includes implementation of the Defense Financial Improvement and Audit Readiness or FIRE Plan, which mandates DoD financial statements be audi-ready by the end of fiscal year 2017.

One problem persistent since consolidated audits started in 1997 is the lack of a standardized process across agencies for identifying interagency transactions, Dacey said.
-Jolie Lee, FederalNewsRadio.com

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