Lawmakers call on President to fill widespread IG vacancies

House and Senate lawmakers have called on President Barack Obama to fill inspector general vacancies at six large agencies, including open spots at the departments of Homeland Security and State.

"The value of the inspectors general goes beyond dollars; these offices also help reveal and prosecute wrongdoing, and promote the integrity of government," Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.), the chairman and ranking member, respectively, of the Senate Homeland Security and Governmental Affairs Committee wrote in a Jan. 24 letter to the president. "They provide invaluable support to Congressional budgeting and oversight work. Inspectors General are an essential component of government oversight."

"Inspectors General occupy a unique role — tasked with 'speaking truth to power' and with dual reporting obligations to their agency head and to Congress," the letter stated. "Those unique pressures may be especially challenging for an acting inspector general, serving without the endorsement of presidential selection and Senate confirmation."

The letter also pointed to vacancies at the departments of Interior, Labor and State. The latter has not had a permanent leader since January 2008 — the longest vacancy among the 73 IG positions across the federal government, according to the Council on Inspectors General on Integrity and Efficiency (CIGIE).

In a separate letter, the House Oversight and Government Reform Committee urged the president to appoint a permanent IG at State.

"During your entire first term as President, you did not nominate anyone to serve in this critical position," Chairman Darrell Issa (R-Calif.) and Ranking Member Elijah Cummings (D-Md.) wrote in the letter. "This failure evidences a clear disregard for the Inspector General Act and the will of Congress. It is particularly troubling given that, in addition to combating waste, fraud, abuse and mismanagement, the State Department inspector general is required by the Foreign Service Act of 1980 to perform inspections of the department's bureaus and posts around the world."



-Jack Moore, FederalNewsRadio.com
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Watchdog group: Four IG offices now leaderless for years

Hard to believe, but the State Department’s Office of Inspector General has been without a permanent head for more than four years.

That fact, highlighted this week by the Project on Government Oversight, puts the office in an unlucky class of four IG agencies that have had vacancies at the top for at least 1,000 days.

The others are the Interior and Labor departments and the Corporation for National and Community Service. While the Obama administration last fall nominated attorney Deborah Jeffrey for the inspector general’s job at the national service corporation, the Senate has yet to confirm her.

But the White House has named no one for the top positions at the other three offices. Although there are undoubtedly plenty of competent career folks to carry on in the meantime, ‘”a permanent IG has the ability to set a long-term strategic plan, . . . including setting investigative and audit priorities,” POGO said on its web site, adding that the administration has “no good excuse” for failing to nominate someone for a post that has been vacant for years.

-Sean Riley, FederalTimes.com
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Recent GAO Publications

The Government Accountability Office (GAO) recently released the following reports, correspondences and testimony:


Secure Border Initiative: Controls over Contractor Payments for the Technology Component Need Improvement.
GAO-11-68, May 25.
http://www.gao.gov/products/GAO-11-68
Highlights - http://www.gao.gov/highlights/d1168high.pdf

Management Report: Improvements Needed in Controls over the Preparation of the U.S. Consolidated Financial Statements.
GAO-11-525, May 26.
http://www.gao.gov/products/GAO-11-525
Highlights - http://www.gao.gov/highlights/d11525high.pdf

Reimbursable Space Act Agreements: NASA Generally Adhering to Fair Reimbursement Controls, but Guidance on Waived Cost Justifications Needs Refinement.
GAO-11-553R, May 26.
http://www.gao.gov/products/GAO-11-553R

Department of State's Counternarcotics Performance Management System.
GAO-11-564R, May 26.
http://www.gao.gov/products/GAO-11-564R

CGI awarded 10-year BPA with the U.S. Department of State and U.S. Agency for International Development

CGI awarded 10-year, US$395 million BPA with the U.S. Department of State and U.S. Agency for International Development

FAIRFAX, VA, Jan. 19 /PRNewswire-FirstCall/ - The U.S. Department of State has awarded CGI Federal Inc. (CGI), a wholly-owned U.S. operating subsidiary of CGI Group Inc. (NYSE: GIB ; TSX: GIB.A), a competitive, single award, 10-year Blanket Purchase Agreement (BPA) with a ceiling of up to US$395 million under CGI's GSA-IT Schedule Contract in support of the agencies' Joint Financial Management System (JFMS).

JFMS is a global platform based on CGI's Momentum(R) software used by both the Department of State and the U.S. Agency for International Development to efficiently and cost-effectively manage domestic and overseas financial management activities. Under this BPA, CGI will provide systems integration, consulting services, and operational support for more than 5,000 JFMS users in more than 300 posts and missions around the world.

PUBLISHER'S NOTE: TeraThink Corporation is a member of the CGI JFMS team.

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Administration touts continued progress on financial audits

Agencies have achieved the best audit results in recent years, giving the incoming administration a solid foundation for further progress, the Office of Management and Budget announced on Wednesday.

All but four of the 24 agencies required to have annual audits under the 1990 Chief Financial Officers Act received clean opinions for fiscal 2008, and all submitted their paperwork on time, OMB reported. In fact, seven agencies handed in their reports three days early, and every agency left a cushion of at least an hour before the midnight deadline on Monday, according to an OMB official who spoke on condition of anonymity. This was in marked contrast to 2004 -- the first year agencies were required to accelerate reporting to 45 days after the close of the fiscal year -- when agencies were "using every minute" available, the official said.

Of particular note, the Treasury Department achieved a passing mark despite last-minute complications as the government got more involved in stabilizing the economy. The takeover of mortgage giants Fannie Mae and Freddie Mac had to be reflected in the department's financial statements, for instance, since it occurred shortly before the end of the fiscal year on Sept. 30.

Administration officials also praised the Army Corps of Engineers, which earned its first clean audit, providing a glimmer of hope for its parent agency, the Defense Department. The Army Corps is the largest Defense entity to achieve a passing mark thus far, and doing so required a massive concerted effort because of the agency's large property inventory and decentralized structure, the OMB official said.

Agencies also made a dent in material weaknesses -- issues that give auditors pause about the reliability of financial information -- reducing them by 18 percent from 39 in fiscal 2007 to 32 in fiscal 2008. The Transportation Department boasted its first clean audit with no material weaknesses, showing that this combination is "very possible and viable" even for large agencies, the OMB official noted.

Agencies won plaudits for identifying more improper payments, which include over- or underpayments to beneficiaries of federal programs such as housing assistance and food stamps.

OMB estimated that the governmentwide payment error rate in fiscal 2008 was 3.9 percent or $71.7 billion. While this is an increase of $16.7 billion over fiscal 2007, it includes mistaken payments for 12 programs that were reviewed the first time in 2008 and is a much more comprehensive estimate than before, the OMB official said. Agencies have taken steps to eliminate mistakes identified in past years, the budget office noted, reducing the error rate for programs examined in fiscal 2004 from 4.4 percent to 3 percent.

It will fall to President-elect Obama's management team to continue this progress, and address lingering material weakness and bringing the four agencies that failed their audits up to speed. Those agencies -- the Defense, Homeland Security and State departments, and NASA -- share some challenges. Defense and Homeland Security have trouble with property inventories and keeping track of how much cash they have on hand, for instance. But other obstacles, such as Defense's outdated financial systems, are more unique.

Johnson recommended that the incoming administration set clear financial management goals and marshal the energy to achieve them. Motivating employees shouldn't be hard, he said. "The Obama administration is going to be very pleased with how well-prepared the financial management people are in each of the agencies to tackle these issues," Johnson said.

-Amelia Gruber, GovExec.com
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Today's GAO Publications

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

Business Systems Modernization: Air Force Needs to Fully Define Policies and Procedures for Institutionally Managing Investments.
GAO-08-52, October 31.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-52
Highlights - http://www.gao.gov/highlights/d0852high.pdf

Business Systems Modernization: Department of the Navy Needs to Establish Management Structure and Fully Define Policies and Procedures for Institutionally Managing Investments.
GAO-08-53, October 31.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-53
Highlights - http://www.gao.gov/highlights/d0853high.pdf

Inspectors General: Limitations of IG Oversight at the Department of State, by David M. Walker, comptroller general of the United States, before the Subcommittee on International Organizations, Human Rights, and Oversight, House Committee on Foreign Affairs.
GAO-08-135T, October 31.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-135T
Highlights - http://www.gao.gov/highlights/d08135thigh.pdf

FEATURES: Watched Cops

While inspectors general trace their roots to George Washington's Continental Army, the modern version is less than three decades old, a byproduct of the post-Watergate era of mistrust and skepticism about government. The 1974 midterm election ushered in a new Democratic Congress, packed with hungry young legislators, including Henry Waxman, D-Calif., now chairman of House Committee on Oversight and Government Reform, who were chomping at the bit to transform Washington and regain a measure of access to executive branch information. Enter the 1978 Inspector General Act.

The bill created a dozen presidentially appointed IGs - two already had been established at the Energy and Health, Education and Welfare departments - who would serve as internal agency auditors and investigators. In a virtually unprecedented move, the measure directed that IGs would report both to Congress and the president, a duty that former State Department IG Sherman Funk once compared to "straddling a barbed wire fence."

Early on, Congress had a difficult time defining the role of the would-be watchdogs, according to Monitoring Government, Inspectors General and the Search for Accountability (Brookings Institution Press, 1993).

Eventually, two competing models developed: the IG as a tough-as-nails lone wolf, with substantial oversight responsibilities, and the IG as strong right arm of the agency who uncovers dirt but keeps it within the family.

The models continue to compete as IGs struggle to find the right balance between investigator and departmental cheerleader. Opinions differ on how to best to walk that tightrope, but most agree that either extreme is fraught with peril.

The relationship between an agency's inspector general and top administrator might be the most complex in all government. While both are political appointees who manage career employees, the similarities end there. Agency heads earn a long life span in public service by keeping their noses clean and staying out of congressional crosshairs. IGs, on the other hand, build their reputations by shining a spotlight on the waste, fraud and mismanagement that by virtue of size and happenstance inhabits virtually all federal agencies. According to the integrity and efficiency council, IG audits resulted in $9.9 billion in potential savings last year while criminal, civil and personnel investigations saved the government another $6.8 billion.

-Robert Brodsky, GovExec.com

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EVENT - A New Road to Improved Financial Management in Government: Process-Based Financial Reporting

The Government Results Center In Association with the United States Department of Agriculture and Grant Thornton Present:

GOVERNMENT ENTERPRISE INTEGRATORS GROUP (GEIG) Meeting
Tuesday April 17, 2007, 8:45-Noon, [Agenda]

A PRACTITIONERS SERIES FORUM ON: "A New Road to Improved Financial Management in Government: Process-Based Financial Reporting"

Meeting location is in the Jefferson Auditorium, U.S. Department of Agriculture, 12th and Independence Avenue, S.W.

The purpose of the Government Enterprise Integrators Group is to enable sharing between government agencies and offices of lessons learned and better practices to integrate planning, budgeting, financial management, execution through people, technology and evaluation feedback into an effective performance management system.

All GEIG meetings are free of cost but restricted to government officials or public administration academics. Reservations are required for security, badge preparation, and copying of handouts.

In 2006 the Association of Government Accountants (AGA), with funding from the Grant Thornton’s Global Public Sector group, initiated a research study to determine the applicability of process-based accounting to federal agencies. Process-based accounting was first proposed by James A. Brimson in his book The Handbook of Process-Based Accounting: Leveraging Processes to Predict Results (American Institute of Certified Public Accountants, 2002). Through interviews with 28 Federal Chief Financial Officers and other top government executives involved in financial management, the survey revealed a need for financial and performance reporting that was not focused on compliance but rather toward providing information necessary for sound business decisions.

The GEIG April session will feature an explanation of process-based accounting in developing integrated financial and performance reports. Secondly, we will explore how all federal agencies might use process-based accounting tools to increase transparency, highlight problems and opportunities for operations improvement, and increase the amount of forward-looking information for decision-making. Finally, we will consider how some agencies are integrating and institutionalizing these tools to create value-added financial and performance reports.

REGISTER HERE

Federal financial report reveals ongoing reliability gaps

Agencies continue to struggle with major weaknesses in financial reporting in the first year that they have had to account for internal controls, the Treasury Department said in its fiscal 2006 Financial Report of the U.S. Government.

All major agencies improved financial management by meeting the accelerated Nov. 15 deadline for their financial reports and complied with new requirements to report on their assessment of internal controls over financial reporting under Office of Management and Budget’s Circular A-123.

Of the major agencies, 18 received clean audit opinions this year, while auditors said the information from five agencies was unreliable. These were the Defense, Energy, Homeland Security and State departments, and NASA. The Transportation Department earned a qualified opinion because it had serious weaknesses.

The next scorecard, rating agency performance under the President’s Management Agenda for the period ending Dec. 31, will reflect findings from the government’s financial report, the report said. For example, several agency audit opinions and internal controls declined during the 2006 fiscal year.

OMB will work with the Chief Financial Officers Council over the coming year to identify potential areas for more guidance and to share best practices that agencies found helpful, the report said. OMB also will continue to incorporate key milestones from agencies’ plans for this year’s assessment into the improved financial performance category of the PMA scorecard to ensure that agencies meet their goals.

“Federal agencies continue to show their resolve to implement rigorous corrective action plans to reduce material process, systems and control weakness,” said the report released Friday.

Improved financial business practices, management systems and reporting tools assist agencies in the timeliness, accuracy and reliability of financial information, which better accounts for their use of federal dollars.

Another agency challenge is implementing certified financial management systems successfully. The Financial Management Line of Business will help agencies meet federal standards through use of shared services. Many FMLOB initiatives are under way, including standardizing financial processes across government, promoting the use of shared-services providers to support many customers and increasing transparency by establishing performance measure to evaluate results.

OMB in the fall issued guidance for agencies to migrate to shared-services providers and a draft of standard governmentwide accounting classifications.

In an accompanying report, the Government Accountability Office said that a significant number of material weaknesses related to financial systems, recordkeeping and financial reporting, and that incomplete documentation continued to prevent it from giving an opinion on the government’s consolidated financial statement, as has been the case since 1997. Major problems include the government’s inability to:

• Determine Defense Department property, equipment and inventories
• Support major portions of operations cost, especially at DOD
• Account for and reconcile transactions between agencies
• Provide adequate systems and personnel to address the magnitude of fiscal 2006 financial reporting challenges, including further development of Treasury’s Governmentwide
• Financial Report System.

-Mary Mosquera, GCN.com

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Most agencies get clean audits, but big problems persist

Eighteen agencies received clean audit opinions for fiscal 2006, and for the second year in a row all 24 major agencies met a deadline to close their books within 45 days of the end of the fiscal year, the Office of Management and Budget announced Thursday.

The 24 agencies named in the 1990 Chief Financial Officers Act had a Nov. 15 deadline to submit the results of their annual financial audits along with annual Performance and Accountability reports. Eighteen of those received unqualified opinions, indicting that auditors were satisfied that the agencies' financial statements were reliable.

Auditors returned disclaimers of opinion, reflecting such major problems in an agency's accounting that its financial statement could not be evaluated, to the Defense, Energy, Homeland Security and State departments, and NASA.

The Transportation Department earned a qualified opinion, meaning auditors identified a particular problem, but were otherwise satisfied with the accounting.

Even among agencies judged well, auditors identified problems to be addressed. Some were in the area of internal controls, the processes that guard against fraud and error, which agencies for the first time were required to test and report on. The requirement is in OMB's Circular A-123.

Rep. Todd Platts, R-Pa., who has pressed agencies to address their financial management problems from his seat as chairman of the House Government Reform Subcommittee on Management, Finance and Accountability, lauded agencies for meeting the demanding 45-day reporting deadline.

"With this focus on internal controls ... I expect to see some of the longstanding financial management issues resolved over time," Platts said. The subcommittee has worked closely with DHS, in particular, over the past year to make progress on recurring financial management problems.

The audit results announced this week are likely to change for some agencies, as chief financial officers work with their auditors to resolve questions in the fiscal 2006 books and arrive at a final result. An October Government Accountability Office report found that 11 agencies restated the results of their fiscal 2003 audits; nine of those agencies initially received unqualified opinions.

In the study, GAO concluded that agencies and OMB were not fully transparent in how they restated financial results. They didn't always indicate which results had changed or the causes or results of those adjustments. It was not immediately clear how many agencies took the 2006 audit as an opportunity to restate past results, because of delays in agencies' release of their reports.

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Agencies improve financial rigor

All major federal agencies beat out the private sector for the second consecutive year by completing their Performance and Accountability Reports and financial statements on the 45-day accelerated schedule. The accelerated deadline for corporate filers is 60 days.

Again, 18 agencies received clean audit opinions this year, while auditors said the information from five agencies was unreliable. These were the Defense, Energy, Homeland Security and State departments, and NASA. The Transportation Department earned a qualified opinion because it had serious weaknesses.

The Housing and Urban Development Department not only received a clean audit, but for the first time since audited financial statements were required reported no material weaknesses. The General Services Administration regained its clean opinion, implemented actions to fix last year’s major weaknesses and completed its PART several days ahead of the accelerated Nov. 15 deadline.

“We are holding agencies accountable with high standards and greater transparency,” said Linda Combs, OMB controller and head of OMB’s Office of Federal Financial Management, in a statement after release of the report.

Combs has said that use of integrated financial systems by agencies provides timely and accurate financial reports that make the year-end statement process smoother.

“Now we are closer to the goal of making financial information more timely and useful in the budget process,” said Rep. Todd Platts (R-Pa.), chairman of the Government Reform Subcommittee on government Management, Finance and Accountability.

Last fiscal year was the first time that agencies evaluated the effectiveness of internal controls over financial reporting under Circular A-123, helping to root out financial management problems that may have gone undiscovered in the past. Agencies included their A-123 reports in their year-end statements.

Even among agencies that earned clean audits, auditors identified financial problems, Platts said, especially weaknesses in safeguards to protect against fraud and error.

“With this focus on internal controls, I expect to see some of the long-standing financial management issues resolved over time,” he said.

Agencies share secrets for boosting e-gov grades

Federal agencies graded on the Bush administration's quarterly management score card continue to have mixed results in the area of expanding electronic government. But progress on the final fiscal 2006 score card could represent a turning point for several agencies.

Four moved out of the failing red category in e-government: the Environmental Protection Agency, Small Business Administration, and State and Transportation departments. The turnarounds at Transportation and SBA were particularly noteworthy because the agencies jumped up two levels, from red to the top mark of green.

Three agencies -- the Agriculture and Health and Human Services departments and NASA -- fell from yellow to red. Another 10 agencies are at the middle mark of yellow.

The Army Corps of Engineers and Homeland Security Department have never moved out of red in the e-government category, and the Veterans Affairs Department has not moved higher since the fourth quarter of fiscal 2004.

Agencies' grades are based on a set of standards developed by the President's Management Council.

To achieve a green e-government grade, agencies must show that they have an effective enterprise architecture describing the structure of their IT processes and systems. They also need adequate IT security and acceptable business cases for all major system investments. None of the business cases can be on the "management watch list." They must also comply with the lines of business initiatives to consolidate back-end technology systems in areas such as financial management.

Agencies that score red have an inadequate enterprise architecture, unacceptable business cases for more than half of major IT investments, and inadequate compliance with IT security policies and procedures.

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FederalNewsRadio - Ask the CFO - Brad Higgins (State) Part 2 of 2

Brad Higgins was sworn in as Assistant Secretary of State for Resource Management and Chief Financial Officer on February 21, 2006. In that capacity, Mr. Higgins is responsible for overseeing all financial activities relating to the programs and operations of the Department.

• The dangers of putting too much of a focus on reporting
• Making the most out of your retired workforce
• It's not finances - it's really decision support data

Listen with Windows Media Player

FederalNewsRadio - Ask the CFO - Brad Higgins (State) Part 1 of 2

Brad Higgins was sworn in as Assistant Secretary of State for Resource Management and Chief Financial Officer on February 21, 2006. In that capacity, Mr. Higgins is responsible for overseeing all financial activities relating to the programs and operations of the Department.

• Budgeting not just for tomorrow but for the generations to come
• Measuring results case by case, mission by mission, country by country
• The importance of paying to "be there"

Listen with Windows Media Player

Federal managers look for where LOBs intersect

The success of the slow-moving plan to consolidate grant management systems across government will depend on how well these few applications integrate financial-management systems at agencies and shared-services centers.

While the Office of Management and Budget and the Grants Line of Business Consolidation Initiative executive boards decide on the final list of consortia providers, a working group of financial-management and grants experts are starting to develop a high-level architecture to see where the two functions intersect.

“Our fate is somewhat tied together,” said Mary Mitchell, FM LOB’s program manager, at a recent event on the Lines of Business sponsored by the Armed Forces Communications and Electronics Association’s Bethesda, Md., chapter. “We are working with the Grants LOB to identify touch points to a standard interface. We will work on data standardization and standardized business processes in 2007.”

The working group will prioritize the interfaces that both functions use, she added. In the meantime, the grants executive board has whittled the number of agency proposals to become additional consortia members from eight to three. OMB now will decide on the final consortia providers to go with the Education and Health and Human Services departments and the National Science Foundation, which the administration named last February.

OMB is expected to name the new consortia leads when the president submits his fiscal 2008 budget to Congress in February.

Sources said there is a push by some to have all eight agencies become consortia members, which still would reduce the number of grant systems to 11 from about 100.

Charles Havekost, Grants LOB program manager and HHS CIO, said he would not comment on the number of proposals submitted to OMB, but said the agencies who want to be consortia members demonstrated over the past year that they could be good cross-service providers.

While OMB decides on the next set of consortia providers, agencies are figuring out which one would fit their needs best and are preparing migration plans to the shared-services centers.

At least one consortia member and two other agencies are not waiting for the Grants and FM LOBs to figure things out.

HHS has connected its grant system with its financial system, which runs Oracle Federal Financials, Havekost said.

Meanwhile, the State Department and the Agency for International Development are working on a system to pull grant data into the shared financial system, CGI-AMS Momentum.

Grice Mulligan, director of federal solutions for Infoterra Inc. of Arlington, Va., whose software package, Grantium, is being used by USAID and State, said the agencies are about a month away from releasing the final design notes on how the data will flow from one system to the other.

“State and USAID could not wait for high-level guidance to come out,” he said. “We are trying to ensure what we embark upon is something that complies with all the modern technology standards, Joint Financial Management Improvement Program rules and other relevant guidance and standards.”

Ensuring data transfers from grants systems to financial apps is fairly straightforward, experts say. Mulligan said the data fields and the relationships between them are well-known, which will make it easier.

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