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Financial Management Systems: Lack of Disciplined Process Puts Effective Implementation of Treasury's Governmentwide Financial Report System at Risk

GAO-06-413 Published: Apr 21, 2006. Publicly Released: Apr 21, 2006.
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Highlights

For the past 9 years, since the first audit of the consolidated financial statements of the U.S. government (CFS), one of the major impediments to our ability to render an opinion on the CFS is that the federal government has not had adequate system, controls, and procedures to properly prepare the CFS. To address some of the internal control weaknesses identified in our audit report, Treasury began developing the Governmentwide Financial Report System (GFRS). The goal of this new system is to directly link information from federal agencies' audited financial statements to amounts reported in the CFS, a concept that we strongly support. We reported internal control weaknesses and GAO recommendations regarding the preparation of the CFS, along with progress made in this area in a separate report. This report provides our assessment of Treasury's ongoing effort to develop and implement GFRS and makes recommendations for reducing the risks associated with the development of GFRS.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Treasury To reduce the risks associated with the development of GFRS, the Secretary of the Treasury should direct the Treasury Fiscal Assistant Secretary to follow the budget justification and reporting processes set out in OMB Circular No. A-11 and ensure that funding needs are fully addressed.
Closed – Implemented
During fiscal year 2008, we found that the Department of the Treasury implemented GAO's recommendation. Treasury followed the budget justification and reporting processes by including its Governmentwide Financial Report System (GFRS) as a component of another system development which integrated and streamlined several of Treasury's key systems.
Department of the Treasury To reduce the risks associated with the development of GFRS, the Secretary of the Treasury should direct the Treasury Fiscal Assistant Secretary to develop and adopt a concept of operations that fully describes the functionality expected to be provided by GFRS and the material internal control weaknesses that are expected to be addressed by the system.
Closed – Implemented
During fiscal year 2008, we found that the Department of the Treasury implemented GAO's recommendation. Treasury prepared a concept of operations for its Governmentwide Financial Report System (GFRS) as a component of another system development which integrated and streamlined several of Treasury's key systems.
Department of the Treasury To reduce the risks associated with the development of GFRS, the Secretary of the Treasury should direct the Treasury Fiscal Assistant Secretary to develop and effectively implement the disciplined processes necessary to properly manage the development of GFRS, including the development of a detailed project plan and schedule through the completion of the system.
Closed – Implemented
During fiscal year 2008, we found that the Department of the Treasury implemented GAO's recommendation. Treasury prepared (1) a risk assessment and mitigation plan for its Governmentwide Financial Report System (GFRS), (2) requirements documents describing the fiscal year 2007 enhancements, and (3) a project plan for GFRS.

Full Report

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Topics

Financial management systemsFinancial recordsFinancial statement auditsFinancial statementsInternal controlsRisk assessmentProgram goals or objectivesFinancial reportingFederal agenciesConcept of operations