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
Showing posts with label NASA. Show all posts
Showing posts with label NASA. Show all posts
Tuesday, May 31, 2011
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
READ MORE or LISTEN HERE...
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
READ MORE or LISTEN HERE...
Tuesday, November 16, 2010
NASA Financials Get Clean Bill of Health
WASHINGTON, Nov. 16, 2010 /PRNewswire-USNewswire/ -- The National Aeronautics and Space Administration received a much-improved financial statement audit opinion for the 2010 fiscal year.
"I am pleased to receive this qualified audit opinion that reflects the fact NASA is fairly stating our financial position to our stakeholders," NASA Chief Financial Officer Elizabeth Robinson said. "We are working hard to provide useful, accurate information about our financial results, and this audit opinion is an important achievement in that effort."
It marked the first time since the 2002 fiscal year that independent auditors issued a qualified opinion, with no material weaknesses, rather than a disclaimer of opinion on NASA's financial statements. The agency's independent auditors also reported that, in their opinion, NASA's fiscal 2010 financial statements fairly represent the financial position of the agency as of Sept. 30, 2010, and its budgetary resources for the year that ended. This significant achievement is clear evidence of NASA's progress in financial management during the past decade.
As a result of successful efforts to fully integrate the financial accounting system, the auditors concluded for the first time since the 2000 fiscal year that NASA is now substantially compliant with federal financial management systems requirements of the Federal Financial Management Improvement Act.
"I am pleased to receive this qualified audit opinion that reflects the fact NASA is fairly stating our financial position to our stakeholders," NASA Chief Financial Officer Elizabeth Robinson said. "We are working hard to provide useful, accurate information about our financial results, and this audit opinion is an important achievement in that effort."
It marked the first time since the 2002 fiscal year that independent auditors issued a qualified opinion, with no material weaknesses, rather than a disclaimer of opinion on NASA's financial statements. The agency's independent auditors also reported that, in their opinion, NASA's fiscal 2010 financial statements fairly represent the financial position of the agency as of Sept. 30, 2010, and its budgetary resources for the year that ended. This significant achievement is clear evidence of NASA's progress in financial management during the past decade.
As a result of successful efforts to fully integrate the financial accounting system, the auditors concluded for the first time since the 2000 fiscal year that NASA is now substantially compliant with federal financial management systems requirements of the Federal Financial Management Improvement Act.
Monday, December 07, 2009
NASA Still Struggles with Accounting
SAN FRANCISCO — Although NASA failed for the seventh year in a row to receive a passing grade from independent auditors, the U.S. space agency has made significant progress in cleaning up its financial records, Elizabeth Robinson, NASA’s newly appointed chief financial officer, told members of the House Science and Technology Committee during a Dec. 3 hearing.
The major problem preventing auditors from Ernst & Young LLP from approving NASA’s books is the space agency’s difficulty in calculating the value of its two largest assets: the space shuttle and international space station, said Paul Martin, NASA’s new inspector general. That problem was serious enough to be deemed a material weakness because it made it impossible for auditors to determine whether information included in the space agency’s balance sheets was accurate, said Daniel Murrin, a partner in New York-based Ernst & Young.
Space agency officials have been trying to determine the value of NASA’s largest assets for years, a task complicated by the size and scope of the programs, changes in NASA’s financial systems, revised federal accounting rules and the hiring of new teams of auditors. “This tale has gone on for so many years and has so many twists and turns,” Robinson told the panel.
The issue is likely to be resolved in the near future, however, because the agency that issues guidance in this area, the Federal Accounting Standards Advisory Board, published new rules in October designed to assist federal agencies, including NASA, in calculating the cost of extremely large assets based on estimates. “The adoption of the new rule provides a unique opportunity for NASA to address the issue,” Murrin said.
In addition, the space shuttle and space station will become less prominent features of NASA’s financial accounts because the programs are nearing completion. At the end of 2009, those two programs comprised approximately 77 percent of the total value of NASA’s property, plants and equipment as well as 38 percent of the space agency’s total assets, Robinson said. Since the shuttle program is scheduled to conclude in 2010, and the space station is on a depreciation schedule that ends in 2016, NASA will not have to account for the cost of those assets much longer, she added.
Nevertheless, NASA’s financial managers are not waiting until the completion of the space station program to clear up their financial records. Instead, NASA officials testifying at the hearing were cautiously optimistic that they would be able to calculate the value of the shuttle and space station programs and obtain a clean bill of health from auditors in 2010.
Robinson also assured the committee that NASA will be better able to evaluate the cost of major assets because the space agency is better able to track financial data. “It is now standard practice in contracts to acquire the accounting information we need,” Robinson said. “Our contractors have felt the burden of giving us all of the data and have worked very closely with us to ensure it is the right data. … We feel like we are on a strong footing.”
Still, NASA financial managers have two other issues to tackle. The Ernst & Young auditors cited deficiencies in NASA’s ability to calculate its environmental liability as well as the space agency’s failure to comply with the Federal Financial Management Act of 1996.
READ MORE...
The major problem preventing auditors from Ernst & Young LLP from approving NASA’s books is the space agency’s difficulty in calculating the value of its two largest assets: the space shuttle and international space station, said Paul Martin, NASA’s new inspector general. That problem was serious enough to be deemed a material weakness because it made it impossible for auditors to determine whether information included in the space agency’s balance sheets was accurate, said Daniel Murrin, a partner in New York-based Ernst & Young.
Space agency officials have been trying to determine the value of NASA’s largest assets for years, a task complicated by the size and scope of the programs, changes in NASA’s financial systems, revised federal accounting rules and the hiring of new teams of auditors. “This tale has gone on for so many years and has so many twists and turns,” Robinson told the panel.
The issue is likely to be resolved in the near future, however, because the agency that issues guidance in this area, the Federal Accounting Standards Advisory Board, published new rules in October designed to assist federal agencies, including NASA, in calculating the cost of extremely large assets based on estimates. “The adoption of the new rule provides a unique opportunity for NASA to address the issue,” Murrin said.
In addition, the space shuttle and space station will become less prominent features of NASA’s financial accounts because the programs are nearing completion. At the end of 2009, those two programs comprised approximately 77 percent of the total value of NASA’s property, plants and equipment as well as 38 percent of the space agency’s total assets, Robinson said. Since the shuttle program is scheduled to conclude in 2010, and the space station is on a depreciation schedule that ends in 2016, NASA will not have to account for the cost of those assets much longer, she added.
Nevertheless, NASA’s financial managers are not waiting until the completion of the space station program to clear up their financial records. Instead, NASA officials testifying at the hearing were cautiously optimistic that they would be able to calculate the value of the shuttle and space station programs and obtain a clean bill of health from auditors in 2010.
Robinson also assured the committee that NASA will be better able to evaluate the cost of major assets because the space agency is better able to track financial data. “It is now standard practice in contracts to acquire the accounting information we need,” Robinson said. “Our contractors have felt the burden of giving us all of the data and have worked very closely with us to ensure it is the right data. … We feel like we are on a strong footing.”
Still, NASA financial managers have two other issues to tackle. The Ernst & Young auditors cited deficiencies in NASA’s ability to calculate its environmental liability as well as the space agency’s failure to comply with the Federal Financial Management Act of 1996.
READ MORE...
Monday, January 12, 2009
Today's GAO Publications
The Government Accountability Office (GAO) today released the following reports and correspondence:
Inspectors General: Actions Needed to Improve Audit Coverage of NASA.
GAO-09-88, December 18.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-88
Highlights - http://www.gao.gov/highlights/d0988high.pdf
Defense Logistics: Lack of Key Information May Impede DOD's Ability to Improve Supply Chain Management.
GAO-09-150, January 12.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-150
Highlights - http://www.gao.gov/highlights/d09150high.pdf
Inspectors General: Actions Needed to Improve Audit Coverage of NASA.
GAO-09-88, December 18.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-88
Highlights - http://www.gao.gov/highlights/d0988high.pdf
Defense Logistics: Lack of Key Information May Impede DOD's Ability to Improve Supply Chain Management.
GAO-09-150, January 12.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-150
Highlights - http://www.gao.gov/highlights/d09150high.pdf
Monday, December 15, 2008
GAO: U.S. Government’s 2008 Financial Report Demonstrates Significant Problems
WASHINGTON (December 15, 2008) - For the 12th 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 numerous material internal control weaknesses and other limitations.
"While significant progress has been made in improving financial management since the federal government began preparing consolidated financial statements 12 years ago, three major impediments have continued to prevent us from rendering an opinion on the accrual basis consolidated financial statements over this period of time," said Gene L Dodaro, Acting Comptroller General of the United States and head of the GAO. "Those include serious financial management problems at the Department of Defense, the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and the federal government’s ineffective process for preparing the consolidated financial statements." Dodaro also noted three additional material weaknesses related to improper payments, information security, and tax collection activities. Dodaro added that at least three major agencies did not get clean opinions – the Department of Defense, the Department of Homeland Security, and the National Aeronautics and Space Administration (NASA).
"The need for reliable, high-quality financial information has never been greater," Dodaro said, pointing out that much work remains to be done on improving the state of federal financial management. "Continued improvement needs to be a top priority of the new administration and Congress to help provide the financial accountability the public deserves and the information decision makers need to help evaluate government programs and manage the government in a cost-effective manner".
The fiscal year 2008 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. Dodaro noted that the report would not be possible without the commitment and professionalism of Inspectors General throughout the federal government who are responsible for annually auditing the financial statements of individual federal agencies. The report is also available on GAO’s web site at
www.gao.gov/financial/fy2008financialreport.html.
"While significant progress has been made in improving financial management since the federal government began preparing consolidated financial statements 12 years ago, three major impediments have continued to prevent us from rendering an opinion on the accrual basis consolidated financial statements over this period of time," said Gene L Dodaro, Acting Comptroller General of the United States and head of the GAO. "Those include serious financial management problems at the Department of Defense, the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and the federal government’s ineffective process for preparing the consolidated financial statements." Dodaro also noted three additional material weaknesses related to improper payments, information security, and tax collection activities. Dodaro added that at least three major agencies did not get clean opinions – the Department of Defense, the Department of Homeland Security, and the National Aeronautics and Space Administration (NASA).
"The need for reliable, high-quality financial information has never been greater," Dodaro said, pointing out that much work remains to be done on improving the state of federal financial management. "Continued improvement needs to be a top priority of the new administration and Congress to help provide the financial accountability the public deserves and the information decision makers need to help evaluate government programs and manage the government in a cost-effective manner".
The fiscal year 2008 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. Dodaro noted that the report would not be possible without the commitment and professionalism of Inspectors General throughout the federal government who are responsible for annually auditing the financial statements of individual federal agencies. The report is also available on GAO’s web site at
www.gao.gov/financial/fy2008financialreport.html.
Thursday, November 20, 2008
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
READ MORE...
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
READ MORE...
Friday, July 25, 2008
Agencies urged to make better use of performance measures
The number of federal managers who measure program performance has increased over the past decade, but managers are not using the results to inform their decisions any more than they have in the past, a Government Accountability Office official told lawmakers on Thursday.
GAO credited agencies and the Office of Management and Budget with making program planning and measurement "slowly, yet increasingly" part of the government's culture. Bernice Steinhardt, GAO director of strategic issues, told members of a Senate Homeland Security and Governmental Affairs subcommittee that she has observed a transformation in the government's ability to manage for results.
This progress provides a solid foundation for improving government programs, Steinhardt said, but she added that the value of measures in and of themselves is limited.
"Unless federal managers use performance data to make management decisions and to inform policy-makers, the benefit of collecting performance information cannot be realized and real improvement in management and program results are less likely to be achieved," Steinhardt stated in her report (GAO-08-1026T).
A number of witnesses shared best practices for the use of performance information. Gov. Martin O'Malley, D-Md., touted the CitiStat and StateStat programs, which identify problems such as crime spots and Chesapeake Bay pollution and target resources toward addressing them. The success of these programs, O'Malley said, has hinged on four tenets: timely, accurate information shared by all; rapid deployment of resources; effective tactics and strategies; and relentless follow-up and assessment.
Representatives from the Nuclear Regulatory Commission, NASA and the Veterans Affairs Department also spoke about their relative success in using performance measures.
Steinhardt said GAO will issue a second report stemming from the survey of managers. It will examine which agencies are putting performance information to the best use and how certain agencies could improve.
-Elizabeth Newell, GovExec.com
READ MORE...
GAO credited agencies and the Office of Management and Budget with making program planning and measurement "slowly, yet increasingly" part of the government's culture. Bernice Steinhardt, GAO director of strategic issues, told members of a Senate Homeland Security and Governmental Affairs subcommittee that she has observed a transformation in the government's ability to manage for results.
This progress provides a solid foundation for improving government programs, Steinhardt said, but she added that the value of measures in and of themselves is limited.
"Unless federal managers use performance data to make management decisions and to inform policy-makers, the benefit of collecting performance information cannot be realized and real improvement in management and program results are less likely to be achieved," Steinhardt stated in her report (GAO-08-1026T).
A number of witnesses shared best practices for the use of performance information. Gov. Martin O'Malley, D-Md., touted the CitiStat and StateStat programs, which identify problems such as crime spots and Chesapeake Bay pollution and target resources toward addressing them. The success of these programs, O'Malley said, has hinged on four tenets: timely, accurate information shared by all; rapid deployment of resources; effective tactics and strategies; and relentless follow-up and assessment.
Representatives from the Nuclear Regulatory Commission, NASA and the Veterans Affairs Department also spoke about their relative success in using performance measures.
Steinhardt said GAO will issue a second report stemming from the survey of managers. It will examine which agencies are putting performance information to the best use and how certain agencies could improve.
-Elizabeth Newell, GovExec.com
READ MORE...
Monday, December 10, 2007
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
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
Monday, November 26, 2007
NASA Inspector General: Audit of the National Aeronautics and Space Administration's Fiscal Year 2007 Financial Statements
Date Released: Monday, November 26, 2007
Source: NASA Office of Inspector General
Full Report
15 Nov 2007
TO: AdministratorChief Financial Officer
FROM: Inspector General
SUBJECT: Audit of the National Aeronautics and Space Administration's Fiscal Year 2007 Financial Statements (Report No. IG-08-001)
Under the Chief Financial Officers Act of 1990, NASA's financial statements are to be audited in accordance with generally accepted government auditing standards. The Office of Inspector General contracted with the independent certified public accounting firm Ernst & Young LLP (E&Y) to audit NASA's financial statements in accordance with Government Auditing Standards and Office of Management and Budget's Bulletin No. 07-04, Audit Requirements for Federal Financial Statements.
In the Report of Independent Auditors (Enclosure 1), E&Y disclaimed an opinion on NASA's financial statements for the fiscal years ended September 30, 2007 and 2006. The disclaimer resulted from NASA's inability to provide E&Y auditable financial statements and sufficient evidence to support the financial statements throughout the fiscal year and at year-end.
The E&Y Report on Internal Control (Enclosure 2) includes two significant deficiencies, which are considered to be material weaknesses. Material weaknesses were found in NASA's controls for (1) financial systems, analyses, and oversight used to prepare the financial statements, and (2) assuring that property, plant, and equipment and materials are presented fairly in the financial statements. These material weaknesses have been reported for several years.
The E&Y Report on Compliance with Laws and Regulations (Enclosure 3) identifies several instances in which NASA's financial management systems did not substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA). For example, the report notes that certain subsidiary systems, including property, are not integrated with the Core Financial module and are not complemented by sufficient manual preventative and detect type controls.
Read More...
Source: NASA Office of Inspector General
Full Report
15 Nov 2007
TO: AdministratorChief Financial Officer
FROM: Inspector General
SUBJECT: Audit of the National Aeronautics and Space Administration's Fiscal Year 2007 Financial Statements (Report No. IG-08-001)
Under the Chief Financial Officers Act of 1990, NASA's financial statements are to be audited in accordance with generally accepted government auditing standards. The Office of Inspector General contracted with the independent certified public accounting firm Ernst & Young LLP (E&Y) to audit NASA's financial statements in accordance with Government Auditing Standards and Office of Management and Budget's Bulletin No. 07-04, Audit Requirements for Federal Financial Statements.
In the Report of Independent Auditors (Enclosure 1), E&Y disclaimed an opinion on NASA's financial statements for the fiscal years ended September 30, 2007 and 2006. The disclaimer resulted from NASA's inability to provide E&Y auditable financial statements and sufficient evidence to support the financial statements throughout the fiscal year and at year-end.
The E&Y Report on Internal Control (Enclosure 2) includes two significant deficiencies, which are considered to be material weaknesses. Material weaknesses were found in NASA's controls for (1) financial systems, analyses, and oversight used to prepare the financial statements, and (2) assuring that property, plant, and equipment and materials are presented fairly in the financial statements. These material weaknesses have been reported for several years.
The E&Y Report on Compliance with Laws and Regulations (Enclosure 3) identifies several instances in which NASA's financial management systems did not substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA). For example, the report notes that certain subsidiary systems, including property, are not integrated with the Core Financial module and are not complemented by sufficient manual preventative and detect type controls.
Read More...
Wednesday, September 05, 2007
NASA Deputy Administrator Shana Dale's Blog: Financial Management
Shana Dale discusses NASA's financial management history and plans for improvement in the areas of internal controls, material weaknesses, management challenges, processes, tools, and PP&E. Ms. Dale also commends the deputy CFO and appointed CFO in her blog post.
READ MORE...
READ MORE...
Wednesday, August 22, 2007
Progress cited on NASA business systems modernization
NASA is chipping away at potential problems facing its new system to manage contracts and other business processes, according to a Government Accountability Office report released Monday.
NASA's contract management has been a GAO-classified area of high risk since 1990. The agency began the Integrated Enterprise Management Program (IEMP) systems modernization initiative in April 2000 to improve handling of contracts and other business processes. IEMP includes the creation of a core financial tool and systems to monitor contract spending, assets and human resources.
The report (GAO-07-691) concluded that NASA has made "significant strides" to develop and implement better business management. But auditors also identified areas of concern. GAO determined that despite progress, NASA needs to return to basics and address weaknesses in scheduling and requirements development before moving forward.
GAO has issued periodic reports on the progress of NASA's financial management improvement efforts at the request of Reps. Bart Gordon, D-Tenn., chairman of the House Science and Technology Committee, and Todd Platts, R-Pa. The last report on the modernization was released in September 2005.
GAO recognized the project as an avenue for major improvement to NASA's business management, but cautioned that neglecting best practices early in the process could cause problems during implementation and future upgrades.
-Elizabeth Newell, GovExec.com
READ MORE...
NASA's contract management has been a GAO-classified area of high risk since 1990. The agency began the Integrated Enterprise Management Program (IEMP) systems modernization initiative in April 2000 to improve handling of contracts and other business processes. IEMP includes the creation of a core financial tool and systems to monitor contract spending, assets and human resources.
The report (GAO-07-691) concluded that NASA has made "significant strides" to develop and implement better business management. But auditors also identified areas of concern. GAO determined that despite progress, NASA needs to return to basics and address weaknesses in scheduling and requirements development before moving forward.
GAO has issued periodic reports on the progress of NASA's financial management improvement efforts at the request of Reps. Bart Gordon, D-Tenn., chairman of the House Science and Technology Committee, and Todd Platts, R-Pa. The last report on the modernization was released in September 2005.
GAO recognized the project as an avenue for major improvement to NASA's business management, but cautioned that neglecting best practices early in the process could cause problems during implementation and future upgrades.
-Elizabeth Newell, GovExec.com
READ MORE...
Monday, August 20, 2007
Today's GAO Publication
The Government Accountability Office (GAO) today released the following report:
Business Modernization: NASA Must Consider Agencywide Needs to Reap the Full Benefits of Its Enterprise Management System Modernization Effort.
GAO-07-691, July 20.
http://www.gao.gov/new.items/d07691.pdf
Highlights - http://www.gao.gov/highlights/d07691high.pdf
Business Modernization: NASA Must Consider Agencywide Needs to Reap the Full Benefits of Its Enterprise Management System Modernization Effort.
GAO-07-691, July 20.
http://www.gao.gov/new.items/d07691.pdf
Highlights - http://www.gao.gov/highlights/d07691high.pdf
Wednesday, July 25, 2007
Today's GAO Publications
The Government Accountability Office (GAO) today released the following reports, correspondence and testimonies:
Report
Property Management: Lack of Accountability and Weak Internal Controls Leave NASA Equipment Vulnerable to Loss, Theft, and Misuse.
GAO-07-432, June 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-432
Highlights - http://www.gao.gov/highlights/d07432high.pdf
Correspondence
Food and Drug Administration: Methodologies for Identifying and Allocating Costs of Reviewing Medical Device Applications Are Consistent with Federal Cost Accounting Standards, and Staffing Levels for Reviews Have Generally Increased in Recent Years.
GAO-07-882R, June 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-882R
Testimonies
Long-Term Fiscal Challenge: Additional Transparency and Controls Are Needed, by David M. Walker, comptroller general of the United States, before the House Committee on the Budget.
GAO-07-1144T, July 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1144T
Inspectors General: Opportunities to Enhance Independence and Accountability, statement for the record by David M. Walker, comptroller general of the United States, before the Senate Committee on Homeland Security and Governmental Affairs.
GAO-07-1089T, July 11.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1089T
Highlights - http://www.gao.gov/highlights/d071089thigh.pdf
Report
Property Management: Lack of Accountability and Weak Internal Controls Leave NASA Equipment Vulnerable to Loss, Theft, and Misuse.
GAO-07-432, June 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-432
Highlights - http://www.gao.gov/highlights/d07432high.pdf
Correspondence
Food and Drug Administration: Methodologies for Identifying and Allocating Costs of Reviewing Medical Device Applications Are Consistent with Federal Cost Accounting Standards, and Staffing Levels for Reviews Have Generally Increased in Recent Years.
GAO-07-882R, June 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-882R
Testimonies
Long-Term Fiscal Challenge: Additional Transparency and Controls Are Needed, by David M. Walker, comptroller general of the United States, before the House Committee on the Budget.
GAO-07-1144T, July 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1144T
Inspectors General: Opportunities to Enhance Independence and Accountability, statement for the record by David M. Walker, comptroller general of the United States, before the Senate Committee on Homeland Security and Governmental Affairs.
GAO-07-1089T, July 11.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1089T
Highlights - http://www.gao.gov/highlights/d071089thigh.pdf
Thursday, June 21, 2007
Bill aims to enhance inspector generals' independence
Current and former inspectors general on Wednesday supported legislation aimed at strengthening the independence of IGs, while a top administration official defended the performance of an IG oversight group.
The measure (H.R. 928) introduced by Rep. Jim Cooper, D-Tenn., would update the 1978 Inspector General Act and mirrors similar measures presented over the past five years. The latest version comes amid a wave of recent battles among inspectors general, agency heads and congressional overseers at NASA, the General Services Administration and the Commerce Department.
Under provisions designed to enhance independence from agency heads, the legislation would set renewable seven-year term limits for IGs and stipulate that they could only be removed from office for a list of offenses including malfeasance, neglect of duty and "inefficiency."
The measure would also codify an existing IG oversight group, the President's Council on Integrity and Efficiency, into a statutorily chartered council and would allow it to submit independent budget requests to supplement those forwarded by agency heads. In addition, it would close a pay loophole under which career employee IGs often are capped at a pay grade below that of their top subordinates, by ensuring that IGs are considered at the level of agency senior staff members.
-Jenny Mandel, GovExec.com
READ MORE...
The measure (H.R. 928) introduced by Rep. Jim Cooper, D-Tenn., would update the 1978 Inspector General Act and mirrors similar measures presented over the past five years. The latest version comes amid a wave of recent battles among inspectors general, agency heads and congressional overseers at NASA, the General Services Administration and the Commerce Department.
Under provisions designed to enhance independence from agency heads, the legislation would set renewable seven-year term limits for IGs and stipulate that they could only be removed from office for a list of offenses including malfeasance, neglect of duty and "inefficiency."
The measure would also codify an existing IG oversight group, the President's Council on Integrity and Efficiency, into a statutorily chartered council and would allow it to submit independent budget requests to supplement those forwarded by agency heads. In addition, it would close a pay loophole under which career employee IGs often are capped at a pay grade below that of their top subordinates, by ensuring that IGs are considered at the level of agency senior staff members.
-Jenny Mandel, GovExec.com
READ MORE...
Friday, April 20, 2007
OMB reports progress in IT management
A new Office of Management and Budget report gives agencies positive marks for making strong business cases for information technology projects, but identifies an increasing number of high-risk initiatives.
The report shows that the number of IT business cases on the OMB management watch list dropped from 346 as of December 31, 2006, to 183 as of March 31, 2007.
Business cases for IT investments end up on the list if OMB officials find one or more weaknesses. The plans -- required under the 1996 Clinger-Cohen Act -- are then targeted for follow-up so that potential problems can be corrected before the project begins.
Plans are dropped from the list once agencies demonstrate through additional documentation and information on planning that they have addressed the problems.
Meanwhile, the number of projects on a separate "high risk" list jumped from 477 to 549 during the first quarter of 2007 (from Dec. 31, 2006, to March 31, 2007). According to OMB, the high-risk designations have increased because agencies are doing a better job of overseeing projects.
Placements on the high risk list, established by OMB in August 2005, are determined by projects' complexity or level of importance. The 549 initiatives on the list represent about $12.9 billion in projected IT spending for fiscal 2008. OMB has decided they need attention from "the highest level of agency management," but in a statement, noted they are not necessarily at risk for failure.
- Daniel Pulliam, GovExec.com
Notable Projects Included on the Watch List:
USDA
Human Resources Line of Business: Service Center
Farm Program Modernization (MIDAS)
ED
Grants Administration Payment System (GAPS)
Travel Management System (TMS)
Contracts and Purchasing Support System (CPSS)
Budget Formulation and Execution Line of Business
Federal Student Aid Financial Management System (FSA FMS)
HHS
HHS Consolidated Acquisition System
DHS
DHS - Financial Management Transformation (2008)
FEMA -Integrated Financial Management Information System (IFMIS) (2008)
DOL
OCFO - DOL Labor Executive Accountability Program
DOT
DOTXX071: DOT eGrants Consolidation
Treasury
Financial Analysis & Reporting System (FARS) Applications -Major
Debt Management Accounting System (DMAS)
Oracle e-Business Suite
Travel Reimbursement and Accounting System
Financial Management Information System (FMIS)
Integrated Financial System/CORE Financial System (IFS)
OCC ENTERPRISE SYSTEMS
VA
VA-Wide e-Travel Solution-2008
Financial & Logistics Integrated Technology Enterprise (FLITE)-2008
Financial Management System (FMS)-2008
Payroll/HR Systems-2008
Capital Asset Management System-2008
NASA
NASA Integrated Enterprise Management - Core Financial
NASA Integrated Enterprise Management - Integrated Asset Management
NRC
Budget Formulation Application (BFA)
License Fee Billing System Replacement (Fees System Replacement)
Human Resources Management System (HRMS)
License Fee Billing System (Fees System)
Cost Accounting System (CAS)
OPM
Human Resources Line of Business (HR LOB)
READ MORE...
The report shows that the number of IT business cases on the OMB management watch list dropped from 346 as of December 31, 2006, to 183 as of March 31, 2007.
Business cases for IT investments end up on the list if OMB officials find one or more weaknesses. The plans -- required under the 1996 Clinger-Cohen Act -- are then targeted for follow-up so that potential problems can be corrected before the project begins.
Plans are dropped from the list once agencies demonstrate through additional documentation and information on planning that they have addressed the problems.
Meanwhile, the number of projects on a separate "high risk" list jumped from 477 to 549 during the first quarter of 2007 (from Dec. 31, 2006, to March 31, 2007). According to OMB, the high-risk designations have increased because agencies are doing a better job of overseeing projects.
Placements on the high risk list, established by OMB in August 2005, are determined by projects' complexity or level of importance. The 549 initiatives on the list represent about $12.9 billion in projected IT spending for fiscal 2008. OMB has decided they need attention from "the highest level of agency management," but in a statement, noted they are not necessarily at risk for failure.
- Daniel Pulliam, GovExec.com
Notable Projects Included on the Watch List:
USDA
Human Resources Line of Business: Service Center
Farm Program Modernization (MIDAS)
ED
Grants Administration Payment System (GAPS)
Travel Management System (TMS)
Contracts and Purchasing Support System (CPSS)
Budget Formulation and Execution Line of Business
Federal Student Aid Financial Management System (FSA FMS)
HHS
HHS Consolidated Acquisition System
DHS
DHS - Financial Management Transformation (2008)
FEMA -Integrated Financial Management Information System (IFMIS) (2008)
DOL
OCFO - DOL Labor Executive Accountability Program
DOT
DOTXX071: DOT eGrants Consolidation
Treasury
Financial Analysis & Reporting System (FARS) Applications -Major
Debt Management Accounting System (DMAS)
Oracle e-Business Suite
Travel Reimbursement and Accounting System
Financial Management Information System (FMIS)
Integrated Financial System/CORE Financial System (IFS)
OCC ENTERPRISE SYSTEMS
VA
VA-Wide e-Travel Solution-2008
Financial & Logistics Integrated Technology Enterprise (FLITE)-2008
Financial Management System (FMS)-2008
Payroll/HR Systems-2008
Capital Asset Management System-2008
NASA
NASA Integrated Enterprise Management - Core Financial
NASA Integrated Enterprise Management - Integrated Asset Management
NRC
Budget Formulation Application (BFA)
License Fee Billing System Replacement (Fees System Replacement)
Human Resources Management System (HRMS)
License Fee Billing System (Fees System)
Cost Accounting System (CAS)
OPM
Human Resources Line of Business (HR LOB)
READ MORE...
Friday, March 02, 2007
OMB: Agencies slowly improving financial management
Agencies are still struggling with major financial management problems that make it difficult to produce accurate year-end reports on their programs, but the Office of Management and Budget sees potential for further improvements.
The most significant of these problems are weaknesses in financial reporting, financial systems and security, according to OMB.
Still, individual agencies have made improvements; an increasing numbers of agencies are producing clean audits, meaning data for their financial statements is accurate and timely, said Linda Combs, OMB controller. Agencies have also reduced their improper payments, such as inaccurate benefits payments.
OMB hopes to see further improvement in financial management from a joint effort it has begun with chief financial officers and the inspector general community to determine how to report financial statements in a more cost-effective manner.
The CFO Council and the President’s Council on Integrity and Efficiency will look for best practices that agencies can share, Combs said at a hearing March 1 held by the Senate Homeland Security and Government Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.
The two organizations will determine if agencies are sharing the right information, if the data is timely and in the right format to make decisions and if there is an appropriate amount of audit scrutiny.
OMB has directed agencies to reform their financial management as part of the President’s Management Agenda. Agencies are to improve, strengthen and monitor their financial systems, internal controls, payments accuracy, property management, grants management and financial reporting, Combs said.
Even as some agencies have taken steps to improve their financial management, the Government Accountability Office is unable to provide an audit opinion on the federal government’s consolidated financial statement.
This situation is due to longstanding and pervasive financial management problems at the Defense Department, the government’s inability to adequately account for and reconcile accounting between agencies and the government’s ineffective process for preparing its financial statements, said Comptroller General David Walker.
Financial management systems must be modernized to provide the complete range of information needed for accountability, performance reporting and making decisions, he said.
Last year, the financial statements of the Defense, Homeland Security, Energy and Transportation departments and NASA failed their audits because their financial information was unreliable, Walker said.
-Mary Mosquera, FCW.com
READ MORE...
The most significant of these problems are weaknesses in financial reporting, financial systems and security, according to OMB.
Still, individual agencies have made improvements; an increasing numbers of agencies are producing clean audits, meaning data for their financial statements is accurate and timely, said Linda Combs, OMB controller. Agencies have also reduced their improper payments, such as inaccurate benefits payments.
OMB hopes to see further improvement in financial management from a joint effort it has begun with chief financial officers and the inspector general community to determine how to report financial statements in a more cost-effective manner.
The CFO Council and the President’s Council on Integrity and Efficiency will look for best practices that agencies can share, Combs said at a hearing March 1 held by the Senate Homeland Security and Government Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.
The two organizations will determine if agencies are sharing the right information, if the data is timely and in the right format to make decisions and if there is an appropriate amount of audit scrutiny.
OMB has directed agencies to reform their financial management as part of the President’s Management Agenda. Agencies are to improve, strengthen and monitor their financial systems, internal controls, payments accuracy, property management, grants management and financial reporting, Combs said.
Even as some agencies have taken steps to improve their financial management, the Government Accountability Office is unable to provide an audit opinion on the federal government’s consolidated financial statement.
This situation is due to longstanding and pervasive financial management problems at the Defense Department, the government’s inability to adequately account for and reconcile accounting between agencies and the government’s ineffective process for preparing its financial statements, said Comptroller General David Walker.
Financial management systems must be modernized to provide the complete range of information needed for accountability, performance reporting and making decisions, he said.
Last year, the financial statements of the Defense, Homeland Security, Energy and Transportation departments and NASA failed their audits because their financial information was unreliable, Walker said.
-Mary Mosquera, FCW.com
READ MORE...
Monday, February 12, 2007
Sykes, Radford Appointed to AGA National Executive Committee
On February 1, the Bylaws and Procedures Committee certified the current slate of officers and Samuel T. Mok, CGFM, officially became AGA’s National President-Elect Designate. He will begin his term as President-Elect on July 1. Mok, the chief financial officer at the U.S. Department of Labor, was already serving on the National Executive Committee (NEC) as the presidential appointee of National President-Elect RIchard Fair, CGFM. As a result of the nomination of Mok as President-Elect, Gwendolyn Sykes, MBA, CGFM, CDFM, has been named by Fair to be his new presidential appointee to complete Mok’s original term.
Sykes, the chief financial officer at the National Aeronautics and Space Administration, will join the NEC on July 1 and will serve until June 30, 2009. Sykes joined NASA in November 2002 when she was selected as the deputy chief financial officer for Financial Management. Since that time, she has made significant strides toward improving agency-wide financial integrity. She has launched several management initiatives designed to improve NASA's financial health and performance. Her leadership and resourcefulness are invaluable assets to the NASA community. A member of AGA’s Washington, D.C. Chapter, Sykes served as co-chair of the 2005 PDC Technical Committee. She received an AGA National President’s Award in 2005.
Mok has named Oregon State Controller John J. Radford, CGFM, CIA, CFE, to be his presidential appointee to the NEC. His three-year term will begin on July 1. Radford began his career working for the City of Omaha, Nebraska, in various financial management positions. In 1983, he moved to Oregon and began work as the budget officer in the Oregon Judicial Department and was promoted to management services director in 1985. In 1989, the governor appointed him to the position of state controller. He has served in this capacity under five consecutive Oregon governors.
A founding member of AGA’s Mid-Willamette Valley Chapter, Radford received an AGA National President’s Award in 2006 for his chapter development and human capital initiatives. Radford was also recently appointed to a three-year term as a trustee of the Financial Accounting Foundation, the oversight body of the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB).
Sykes, the chief financial officer at the National Aeronautics and Space Administration, will join the NEC on July 1 and will serve until June 30, 2009. Sykes joined NASA in November 2002 when she was selected as the deputy chief financial officer for Financial Management. Since that time, she has made significant strides toward improving agency-wide financial integrity. She has launched several management initiatives designed to improve NASA's financial health and performance. Her leadership and resourcefulness are invaluable assets to the NASA community. A member of AGA’s Washington, D.C. Chapter, Sykes served as co-chair of the 2005 PDC Technical Committee. She received an AGA National President’s Award in 2005.
Mok has named Oregon State Controller John J. Radford, CGFM, CIA, CFE, to be his presidential appointee to the NEC. His three-year term will begin on July 1. Radford began his career working for the City of Omaha, Nebraska, in various financial management positions. In 1983, he moved to Oregon and began work as the budget officer in the Oregon Judicial Department and was promoted to management services director in 1985. In 1989, the governor appointed him to the position of state controller. He has served in this capacity under five consecutive Oregon governors.
A founding member of AGA’s Mid-Willamette Valley Chapter, Radford received an AGA National President’s Award in 2006 for his chapter development and human capital initiatives. Radford was also recently appointed to a three-year term as a trustee of the Financial Accounting Foundation, the oversight body of the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB).
Monday, February 05, 2007
Agencies scrutinize more payments for mistakes
Administration officials announced Wednesday that the number of federal programs susceptible to making erroneous payments has gone up, as has the total estimate of federal outlays at risk of mistakes -- and that the increases represent good news for the government's ability to assess mistaken payments.
For fiscal 2006, the federal improper payment rate, which includes payments made mistakenly to ineligible recipients or as a result of fraud or other error, was 2.9 percent, translating to $40.5 billion in errors, according to a new Office of Management and Budget report.
That represents a drop from the fiscal 2005 rate of 3.1 percent.
But in its latest report, OMB focused on increases in the federal dollars that have come under scrutiny for improper payment risk in the third year of reporting under the 2002 Improper Payment Improvement Act. Those outlays rose to $1.7 trillion in fiscal 2006, from $1.4 trillion in fiscal 2004. Of that amount, $184 billion was newly identified in 2006 as risk susceptible.
Officials said major progress was made in reducing mistaken payments in Medicare, which reduced errors from $12.1 billion in fiscal 2005 to $10.8 billion in fiscal 2006. They attributed much of the change to better processes for documenting claims.
OMB also highlighted progress at the Housing and Urban Development Department, which reduced payment problems in its rental assistance and public housing programs. The Agriculture Department also made strides by improving its error rate in the Food Stamp program. And at the Social Security Administration's Old Age, Survivors and Disability Insurance program, a 0.1 percent drop in the improper payment rate yielded a $401 million reduction.
The Government Accountability Office has questioned agencies' mistaken payment estimates. A November report noted that the Homeland Security Department, General Services Administration and NASA were among eight agencies reporting that they had no programs with significant risk of improper payments.
Senior GAO and OMB officials have debated where the risk threshold should be set, and how cost-benefit analyses should be used to focus on priorities. The officials agreed that lawmakers can help address the problem by allowing greater sharing of data on the beneficiaries of federal payments.
-Jenny Mandel, GovExec.com
READ MORE...
For fiscal 2006, the federal improper payment rate, which includes payments made mistakenly to ineligible recipients or as a result of fraud or other error, was 2.9 percent, translating to $40.5 billion in errors, according to a new Office of Management and Budget report.
That represents a drop from the fiscal 2005 rate of 3.1 percent.
But in its latest report, OMB focused on increases in the federal dollars that have come under scrutiny for improper payment risk in the third year of reporting under the 2002 Improper Payment Improvement Act. Those outlays rose to $1.7 trillion in fiscal 2006, from $1.4 trillion in fiscal 2004. Of that amount, $184 billion was newly identified in 2006 as risk susceptible.
Officials said major progress was made in reducing mistaken payments in Medicare, which reduced errors from $12.1 billion in fiscal 2005 to $10.8 billion in fiscal 2006. They attributed much of the change to better processes for documenting claims.
OMB also highlighted progress at the Housing and Urban Development Department, which reduced payment problems in its rental assistance and public housing programs. The Agriculture Department also made strides by improving its error rate in the Food Stamp program. And at the Social Security Administration's Old Age, Survivors and Disability Insurance program, a 0.1 percent drop in the improper payment rate yielded a $401 million reduction.
The Government Accountability Office has questioned agencies' mistaken payment estimates. A November report noted that the Homeland Security Department, General Services Administration and NASA were among eight agencies reporting that they had no programs with significant risk of improper payments.
Senior GAO and OMB officials have debated where the risk threshold should be set, and how cost-benefit analyses should be used to focus on priorities. The officials agreed that lawmakers can help address the problem by allowing greater sharing of data on the beneficiaries of federal payments.
-Jenny Mandel, GovExec.com
READ MORE...
Sunday, January 07, 2007
Defense IG finds major flaws in contracts issued via Treasury
A recent Defense inspector general investigation into interagency purchases placed through the Treasury Department's FedSource program uncovered major problems, including inadequate competition.
Every award examined by the IG was flawed. Other problems included missing contracting agreements, insufficient price documentation and a lack of market research.
Defense auditors also identified 21 potential violations of the Anti-Deficiency Act, which bars spending in excess of available resources. These included funds being kept after the end of the year for which they were appropriated, and spending from the wrong accounts for particular projects.
Despite these findings, the IG's report did not advocate cutting off Defense purchases through FedSource. Rather, it urged Defense officials to ensure that acquisition planning is carried out, interagency agreements are signed and funds are monitored through regular reporting.
The IG recommended that the Defense comptroller de-obligate $19.6 million in prior-year funds being held by Treasury's contracting shop. The department's acting deputy chief financial officer, in official comments, said such a move already was under way.
Auditors also suggested that the Defense CFO work with Treasury officials to set up a system to monitor interagency contracts in a way that would yield regular reports on uncommitted fund balances, amounts obligated and expended, expired funds, and service fees paid. The CFO office said implementation of that recommendation also was under way.
The report was produced under a requirement in the fiscal 2006 Defense Authorization Act that called on the IG to work with its counterparts at Treasury, the Interior Department, the General Services Administration and NASA to assess interagency purchasing through those agencies.
-Jenny Mandel, GovExec.com
READ MORE...
Every award examined by the IG was flawed. Other problems included missing contracting agreements, insufficient price documentation and a lack of market research.
Defense auditors also identified 21 potential violations of the Anti-Deficiency Act, which bars spending in excess of available resources. These included funds being kept after the end of the year for which they were appropriated, and spending from the wrong accounts for particular projects.
Despite these findings, the IG's report did not advocate cutting off Defense purchases through FedSource. Rather, it urged Defense officials to ensure that acquisition planning is carried out, interagency agreements are signed and funds are monitored through regular reporting.
The IG recommended that the Defense comptroller de-obligate $19.6 million in prior-year funds being held by Treasury's contracting shop. The department's acting deputy chief financial officer, in official comments, said such a move already was under way.
Auditors also suggested that the Defense CFO work with Treasury officials to set up a system to monitor interagency contracts in a way that would yield regular reports on uncommitted fund balances, amounts obligated and expended, expired funds, and service fees paid. The CFO office said implementation of that recommendation also was under way.
The report was produced under a requirement in the fiscal 2006 Defense Authorization Act that called on the IG to work with its counterparts at Treasury, the Interior Department, the General Services Administration and NASA to assess interagency purchasing through those agencies.
-Jenny Mandel, GovExec.com
READ MORE...
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