The Department of Veterans Affairs received a clean opinion on its financial statements for 1999 and, retroactively, for 1998, VA officials announced last week.
The announcement means that 13 of the 24 largest federal departments and agencies have now received clean opinions on their finances. Clean audited financial statements are an indicator of sound financial management.
"We're very pleased. The folks here deserve a tremendous amount of credit," said Edward Powell, VA's chief financial officer. VA is the government's largest civilian agency, employing about 19 percent of non-Defense federal employees.
Under the 1990 Chief Financial Officers Act, March 1 was the deadline for agencies to submit their annual audited financial statements.
VA missed the deadline by 10 days. As the deadline approached, the agency had some areas that required additional work. The problems "were very isolated," Powell said. "We're talking about the real crumbs on the table. After meeting with the IG, it became pretty clear that we had a week to 10 days worth of work to get them comfortable. I made the decision that it was better to get the clean opinion than to be on time. It seemed to me that was a reasonable thing to do."
The Senate Governmental Affairs Committee, which has been keeping watch over the audit process, seemed to agree. "VA's clean opinion is one indicator that they take seriously the need for responsible financial management. The purpose of financial audits is to ensure we are putting systems in place that give agencies the information they need to do their jobs," a committee spokesperson said.
In 1998, VA received a qualified opinion, meaning segments of its financial statements were not reliable. But with the new information provided by 1999's fixes, auditors were able to go back and give the 1998 statements a clean bill of health too, Powell said.
VA is working on a new core financial management system that will integrate and streamline data from the 48 different systems that now feed in to a central database. The new system, scheduled to be completed in two years, is designed to automatically catch the types of errors that staff must now be alert to.
In the meantime, mundane tasks, such as monthly reconciliations, making sure reports are generated and ensuring that debits and credits balance out, have been institutionalized, Powell said.
"It's like flossing your teeth-it's a preventative activity that should be second nature. It's just getting people in the habit of doing it that's hard," he said.
Still, Powell isn't convinced that VA will always get a clean audit opinion. "It's easy to break the habit," he said. Getting a clean opinion requires "a constant attention to detail."
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