Managing the Cost of Government: Building and Effective Financial Management Structure

Federal finances are managed through an elaborate structure of decision processes and information systems. Many of these processes and systems, now obsolete face ever-increasing difficulties in coping with the demands placed upon them. The most visible evidence of difficulties is the enormous cost in time, energy, and public confidence involved in the annual search for consensus on the budget. Problems elsewhere in the structure that are less visible but equally real include: (1) the processes by which we decide how much to spend, and for what purposes, are cumbersome, repetitive, and time-consuming, (2) controls over how federal money is spend are detailed and burdensome, but they are routinely found to be ineffective in preventing abuses, and (3) budgeting, accounting, and management information stems often yield data that are unreliable, and all too often irrelevant.