Agencies get finances in order

Twelve of the 17 federal agencies that submitted their fiscal 2000 financial statements to Congress this week received clean audit opinions, the highest number ever. The Department of Treasury stood out for getting a clean, or "unqualified," opinion for the first time ever. The State Department recorded its first clean, on-time opinion.

"This is great news," a congressional source said. The 1990 Chief Financial Officers Act requires the 24 largest federal departments and agencies to produce annual audited financial statements. Seven agencies have yet to turn in their fiscal 2000 statements. Auditors gave clean opinions to only 11 of the 24 largest agencies' fiscal 1999 books as of March 1 last year. Clean opinions on audited financial statements indicate sound financial management. But clean opinions don't present a complete picture of an agency's fiscal health. Last year, the General Accounting Office reported that of the 24 agencies covered under the Chief Financial Officers Act, only the Energy Department, NASA and the National Science Foundation fully complied with the financial requirements of the 1996 Federal Financial Management Improvement Act of 1996. The Office of Personnel Management's fiscal 2000 statement was judged to be "presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States," according to the auditing firm KPMG LLP. OPM has received a disclaimer on its financial statements for the past two years. "I am extremely proud of this accomplishment. It demonstrates that OPM is committed to fulfilling its stewardship responsibilities with sound financial management practices," said OPM Acting Director Steven Cohen. While the Defense Department overall did not receive a clean audit, two offices within Defense did, the Military Retirement Fund and the Defense Finance and Accounting Service. Defense Secretary Donald Rumsfeld "has indicated that he intends to include financial management reform among his top priorities. He has initiated a review of the department's financial operations, as well as the initiatives that the department currently has under way or planned, to improve financial management within the department," Defense's deputy chief financial officer, Nelson Toye, wrote in a letter accompanying the department's financial statement. Federal Agencies' Financial Audit Results
New fiscal 2000 audit opinions are highlighed

* An unqualified opinion means the agency's financial statements were reliable. A qualified opinion means segments of the statements were not reliable. A disclaimer of opinion means the auditor could not determine if the information in the statement was reliable. Late means the agency did not turn in its financial statement on time.

** In fiscal 1998, Commerce received an unqualified opinion on its balance sheet and a disclaimer on its other financial statements.

*** In fiscal 2000, Justice received an unqualified opinion on its balance sheet and custodial activity statement.