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Return to Article: Financial management upgrades may take years

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  Paul - there is a private firm that has not reported financials for two years and it is Freddie Mac. Yes it is possible! Also, ENRO and Worldcom reported but the data were totally false and led to the biggest bankjruptcy in US history. That cost a lot of people their pension savings in whole or in part (me included) and the executives of those companies still are flying around on their jets having a good time - they should be in jail for the rest of their lives!

  Producing bad financial statements to meet some Congressional deadline is not a good idea. Also the task is not simple as you suggest because you are changing the entire accounting system for the federal government - it is not a simple change to the old process.

  tax payer Posted May 27, 2004 12:02 PM
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  I'm simply amazed at how we in the government allow this insanity to continue. Can you imagine GM informing the SEC, stockholders, creditors and everyone else in a yearend financial report footnote that it's going to take years to upgrade its financial system? In the interim we'll do the best we can and we hope you understand. Oh, by the way we need to borrow a few million to finance a plant expansion in Fairbanks, Alaska. Send cash.

  Paul Strapac Posted May 25, 2004 3:53 PM
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  As an extremely knowledgable person in financial management and as an employee involved in the DoD efforts I conclude the following: 1. The Congressional requirement is ridiculous. It requires that a government operation operating on a cash flow basis for budgets and execution change to an accrual reporting system. However, the cash basis will continue from appropriation to contract award and execution. This makes no sense and is a tremendous waste of money and effort! 2. The people hired for financial management do not have the educational or experience backgrounds necessary to insure proper control or reporting of financial data. Comptrollers do not have accounting training, cash management training or financial management training. Some represent retired military with MBAs, which is not the background necessary to develop and implement good financial controls and systems. 3. Congress wants to keep the status quo but wants the entire accounting and reporting system changed to reflect what "private secotr public firms do". This is not a private sector public firm and the goals are not financial per se. The goals are social and the financials simply reflect the money necessary to achieve the political goal. The financial system should be developed to control cash and reduce the ability to spend cash foolishly. It should insure accurate payments to contractors and suppliers in a timely manner. It should redfuce the probably for misuse and embezelment by government employees and outsiders. It should not be built to determine accrued liabilities that have no meaning now or in the future.

  The reason accounting and finance systems are being rebuilt is to satisfy a Congressional mandate that is not worth the money being spend! This is an employment bill for systems and financial people mainly in the Washington DC area but spread over the country.

  tax payer Posted May 25, 2004 1:04 PM