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Financial Management: Federal Financial Management Improvement Act Results for Fiscal Year 1998

AIMD-00-3 Published: Oct 01, 1999. Publicly Released: Oct 01, 1999.
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Highlights

Pursuant to a legislative requirement, GAO reviewed federal agencies' efforts to implement the Federal Financial Management Improvement Act (FFMIA), focusing on: (1) compliance of chief financial officer (CFO) agencies' financial systems with FFMIA's requirements; (2) whether CFO agencies' financial statements have been prepared in accordance with applicable accounting standards; and (3) agencies' plans to ensure that their systems comply with FFMIA requirements.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget The Director of the Office of Management and Budget should require the Deputy Director for Management, as part of the consultative process for future remediation plans, to work with the agencies to ensure that all remediation plans are prepared and submitted timely and to review the plans for: (1) detailed corrective actions that fully address reported problems; (2) inclusion of resource requirements; and (3) specific timeframes needed to implement and resolve problems.
Closed – Implemented
OMB's multidisciplinary approach to reviewing agency remediation plans appears to have prompted significant improvements in the plans. As discussed in its report, Financial Management: FFMIA Implementation Necessary to Achieve Accountability (GAO-03-31), GAO reviewed 15 FFMIA remediation plans prepared and submitted by federal agencies. GAO's review showed that 14 of the 15 plans contained detailed corrective actions for all instances of FFMIA noncompliance. Although only 5 of the 15 remediation plans specifically mentioned resource requirements, OMB has instructed agencies to include this information in their OMB Circular A-11 budget submissions. OMB Circular A-11, Section 52.2 states that the guidance in Section 52 outlines the information that must be provided on remediation activities to fulfill FFMIA requirements. Specifically, Section 52.4 directs officials to identify FFMIA remediation activities planned and underway and describe the resources, remedies, interim target dates, and officials responsible for bringing systems into substantial compliance with FFMIA. Although not available to GAO at the time of its report, GAO has subsequently reviewed 17 business cases from five different agencies. Sixteen of the 17 business plans were for financial management systems, although only nine of the plans addressed a FFMIA compliance area. However, all of the plans had a table (OMB Exhibit 300) listing the resources needed for the project. Finally, GAO's review showed that 14 of the 15 plans provided specific time frames for the corrective actions.
Office of Management and Budget The Director of the Office of Management and Budget should require the Deputy Director for Management to work with the agencies to ensure that the agencies' financial statements are audited and issued by the March 1 statutory deadline.
Closed – Implemented
All 24 CFO Act agency audits were completed by March 1, 2001.

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Topics

Accounting proceduresAccounting standardsChief financial officersFederal agency accounting systemsFinancial management systemsFinancial statement auditsFinancial statementsInternal controlsNoncomplianceReporting requirements