Federal government fails fifth straight audit

The federal government has failed its fifth consecutive financial audit, Comptroller General David Walker announced on Friday.

Although 18 of the 24 agencies covered by the 1990 Chief Financial Officers Act received a clean opinion on their fiscal 2001 audits, the government received a disclaimer on its overall financial statement because of persistent financial weaknesses at the Defense Department and poor accounting of interagency transactions. Outdated information systems and bureaucratic turf battles continue to hold up financial management reforms at the Defense Department, Walker said.

"Cultural resistance to change and military service parochialism have played a significant role in impeding previous attempts to implement broad-based management reforms at the Defense Department," wrote Walker in a cover letter to the audit. Defense financial management has been on the General Accounting Office's "high-risk" list of management challenges since 1995.

Timely and accurate financial statements are a top goal of the Office of Management and Budget, which is pressing agencies to speed up their audits so the information can help inform budgeting decisions. This year, all 24 agencies met a Feb. 27 deadline for submitting their audited financial statements to OMB. The audit deadline will be Feb. 1 for fiscal 2002 and 2003 audits, and OMB will ask for fiscal 2004 financial statements by mid-November 2004--just 45 days after the close of the fiscal year.

The new audit deadlines should allow GAO to complete the governmentwide audit earlier and enable OMB and the Treasury Department to issue its governmentwide financial statement shortly after the fiscal year ends. "We are not satisfied with the publication of this report six months after the end of the fiscal year," said OMB Controller Mark Everson.

Agencies must also improve compliance with the 1996 Federal Financial Management Improvement Act to pass muster with OMB. Twenty of the 24 agencies covered by the CFO Act did not fully comply with the law in fiscal 2001, according to Walker. The act requires agencies to meet federal accounting standards and to comply with the government's standard general ledger at the level of transactions.

Everson, Walker, Treasury Secretary Paul O'Neill and Office of Personnel Management Director Kay Coles James are now meeting regularly to discuss financial management reform. OMB has also added more private sector officials to the Federal Accounting Standards Advisory Board, which sets accounting standards for the government, in a move that officials hope will lead to tougher financial standards.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.