White House pushes for clean finances by 1999

President Clinton wants the federal government's fiscal 1999 financial statement to earn a clean opinion from auditors, so he has asked the Office of Management and Budget to push agencies to scrub their finances.

In a May 26 memorandum to heads of agencies, Clinton instructed any agency that did not receive an unqualified opinion from auditors on their fiscal 1997 financial statements to start reporting regularly to OMB on their progress toward that goal. That includes every major agency except the Energy Department and NASA, the only ones to receive top marks from auditors this year.

"We have a very, very tough goal of getting a clean opinion for fiscal 1999," G. Edward DeSeve, OMB's acting deputy director for management, told GovExec.com.

Under the 1994 Government Management Reform Act, the 24 largest departments and agencies were required to prepare annual audited financial statements starting in fiscal 1997. The federal government produced its first consolidated financial statement this year. General Accounting Office auditors declared the statement unauditable. In addition, auditors found problems with most agencies' financial statements. Nine agencies did not even file their statements by the March 31 deadline.

"No president from George Washington to George Bush had caused the federal government to be subject to an audit," DeSeve said. "The president is saying, 'Let's continue the work we've been doing, and let's work even harder" for fiscal 1999.

The memorandum directs agencies to submit a plan to OMB by July 31 showing how they will improve their financial reporting systems. Then, starting Sept. 30, agencies will submit quarterly progress reports to OMB. OMB must prepare periodic reports to the Vice President on governmentwide progress.

DeSeve said the Defense Department will receive the most attention, because as the largest department, DoD has the largest challenges in meeting the president's goal. DoD must focus on major issues like inventory management and environmental liabilities issues, DeSeve said.