GAO reviewed Australia's governmentwide financial management system, the Finance Information on Resource Management (FIRM) system, focusing on: (1) the history of FIRM's development and implementation; (2) the risks Australia encountered in developing a centralized system and the actions it took to mitigate those risks; and (3) key lessons learned from Australia's experience.

GAO noted that: (1) FIRM, Australia's current centralized financial system, tracks cash- and budget-related activity for the whole government; (2) it integrates budget and actual data, provides funds control on a near real-time basis, and assists in developing and monitoring budget estimates; (3) FIRM consists of two fully integrated subsystems-Financial Exchange and Resource Management; (4) the Financial Exchange subsystem is the core accounting system that processes all agencies' payment and receipt transactions and records them against Australia's primary bank account, the Commonwealth Public Account; (5) the Resource Management subsystem is the core budget system that fully integrates actual and budget data and tracks variances; (6) FIRM uses the same charts of accounts for budget estimates and actual data, thus allowing the data to be reported by appropriation, functional class, economic type, or portfolio "views"; (7) the "views" allow reporting of resource use: (a) against the annual appropriation acts, which can be used to ensure funds availability; (b) by government objective, such as health, education, and defense; (c) according to economic nature and impact; and (d) by agency; (8) however, FIRM does not capture the full cost of government; (9) it provides only a cash-based picture on a real-time basis and, thus, does not track accruals or account for assets other than cash; (10) FIRM does not track off-budget entities not funded by the Commonwealth Public Account; (11) according to the Department of Finance officials, FIRM does not yet strongly link the measurement of program outcomes with the budget; (12) the Australian public sector has emphasized centralized funds control and fiscal accountability from its constitutional beginnings; (13) FIRM designers ensured that users had adequate input into the system's design throughout the development process; (14) it took approximately 5 years to complete the development of all phases of FIRM; (15) based on GAO's review of FIRM, GAO identified three practices that should considered in any attempt to modify financial management systems; and (16) GAO identified various risks the Australian system developers recognized and actions designed to reduce such risks.