IGs to keep closer watch on financial management, contracting, security

Agency inspectors general plan to increase their focus on financial management, contract oversight and homeland security measures, they told President Bush in their recently released annual report.

Even though a record number of agencies received clean audits for fiscal 2002, "much more needs to be done to improve the quality, timeliness and usefulness of financial information," said the IG progress report issued by the President's Council on Integrity and Efficiency (PCIE) and the Executive Council on Integrity and Efficiency (ECIE). The report summarized IG accomplishments in the last fiscal year and listed their goals for this year.

The PCIE is made up of presidentially appointed IGs and the ECIE represents agency head-appointed IGs. Inspectors general plan to take an in-depth look at agencies' financial management to ensure that positive audit results are not deceiving. "Over the years, our experience shows that for some agencies, attainment of a clean opinion is a fragile and somewhat artificial achievement because it results from extraordinary end-of-year efforts and may not reflect a reliable and constant accounting operation," they explained in the report.

Lawmakers highlighted the same problem at an April hearing on the Small Business Administration's loan system. Federal auditors withdrew clean opinions on SBA's fiscal 2000 and fiscal 2001 financial statements after the General Accounting Office pointed out flaws in the agency's methods of accounting for sales of outstanding debt to loan servicing companies.

Inspectors general also pledged to work with the Chief Financial Officers Council to help agencies complete the financial reporting and audit process faster than before. Without this help, some agencies will find that the administration's increasingly tight deadlines for submitting financial statements pose a "significant challenge," the inspectors general said. In 2004, agencies must submit financial statements no later than 45 days after the fiscal year ends.

In addition to financial management, IGs will take a closer look at contract oversight, which they said has generally been "lax," and at agencies' security precautions. Steps to protect information technology systems are of particular interest, they said.

The inspectors general issued several reports on homeland security over the last year, though it ranked sixth out of seven areas they emphasized. Of 33 inspector general offices surveyed, 21 reported on security in fiscal 2002. Last year, IGs paid the most attention to information technology management, followed by financial and performance management.

Through their overall efforts to reduce waste, fraud and abuse at federal agencies, the inspectors general say they saved the government up to $72 billion in fiscal 2002. This is more than double the amount of savings identified the previous year and more than quadruple the amount saved in fiscal 2000.

Over the past year, the IGs also set up forums where agencies could get advice about a variety of management topics, the report said. For example, they set up a roundtable where employees from 40 agencies had a chance to ask experts questions regarding efforts to put federal jobs up for private sector competition and the Office of Management and Budget's Program Assessment Rating Tool, used to link program performance and budget decisions.

The IGs also opened a new training center in Arlington, Va., in September 2002. The center offers courses to address skills gaps identified in a survey of the current IG workforce.