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A
popular circus performance involves motorcyclists racing around the inside
of a steel sphere. Defying gravity and with great precision, the cyclists
pass within inches of each other without colliding. Each performer is an
expert; yet as a group, the feat becomes possible only through careful planning
and close coordination.
Improving financial performance in the Federal government
involves similar efforts between the financial community and program
managers as we work to make financial information an integral part of
decision making. From day-to-day operations to senior management decisions,
accurate and timely financial information improves the efficiency and effectiveness
of our activities and enhances our accountability to the American people.
We have a responsibility to accurately measure the real cost of programs
and account for how well the funds entrusted to us have been spent.
Compliance
with Federal financial statutes provides an important indicator of accountability.
For FY 2004, the Department has received its fourth consecutive Certificate
of Excellence in Accountability Reporting from the Association of Government
Accountants and eighth consecutive clean audit opinion. These are strong
indicators and external validation of the strength of the Department's
financial management. For the fourth consecutive year, the Secretary has
reported that the Department's systems of accounting and internal controls
comply with the Federal Managers' Financial Integrity Act (FMFIA). The
Department has no material weaknesses in internal controls as defined by
the FMFIA. Similarly, DOL's financial management systems meet the requirements
of Federal Financial Management Improvement Act (FFMIA).
These statutory
provisions, however, provide just the foundation for good accountability.
At the direction of Secretary Chao, over the past year we have instituted
a new quarterly financial management attestation process that requires
each agency head to acknowledge responsibility for internal controls over
the funds entrusted to the agency. This certification must be accompanied
by a general operations certification by the agency's administrative officer,
and a detailed financial certification by the agency's financial manager.
Each quarter, I meet with each agency head and senior executives to
discuss the progress of the agency's efforts to resolve open audit findings
and discuss ways of preventing new issues. This new process furthers our
efforts toward early detection and effective resolution of internal control
weaknesses and enhanced accountability. Over the past year, we have worked
intensively with program agencies to implement managerial cost accounting,
department-wide, through the Cost Analysis Manager (CAM) initiative. This
effort improves our ability to report the full costs of programs and activities
and facilitates the use of integrated financial and performance information
for decision-making across the Department at all levels.
Effective use of financial information can result in more accurate
benefit and assistance payments to current recipients. As part of our efforts
to reduce improper payments, the Department signed a memorandum of understanding
with the Social Security Administration (SSA) to improve the accuracy
of payments in the Unemployment Insurance Program. The agreement facilitates
the exchange of data between the SSA and State unemployment agencies
to eliminate unemployment insurance payment to individuals who have returned
to work. DOL has one of the most progressive efforts in the Federal government
to proactively improve internal controls and eliminate systemic causes of
improper payments.
To make information more readily available in a more useful form, the
Department has begun a multi-year initiative to replace our aging
core accounting system with a new financial management information system
(Labor Accounting Works—LAW).
The new system will leverage technology and best-practice business processes
to improve information quality, availability, and usefulness to a broad spectrum
of managers and decision makers. The Office of the Chief Financial Officer
continues to co-lead the government-wide financial management line
of business with the Chief Information Officer of the Department of
Energy. This effort addresses redundant IT investments and business
processes across the government and focuses on business-driven, common
solutions developed through IT architectural processes. In efforts such
as this agencies government-wide are working together across traditional
boundaries rather than focusing on their individual needs to make government
more citizen-centered, results-oriented, and market-based.
The Department has actively participated in several e-Gov initiatives. Two
areas involving changes to the internal financial management of the Department
are e-Travel and e-Payroll. The e-Travel effort will connect the Department
to a government-wide, web-based, world-class travel management service.
With the selection of an e-Travel service provider this year, the Department
will be able to reduce or eliminate capital investments and minimize total
cost per travel transaction. The e-Payroll initiative involves the consolidation
of twenty-six federal payroll providers across the government. This year
the Department pursued a plan that will culminate in the migration of
the Department's payroll services to the National Finance Center of the U.S.
Department of Agriculture in FY 2005. In coming years, consolidation efforts
such as e-Travel and e-Payroll will generate significant savings of tax
dollars by reducing operating costs and avoiding costly modernization of
duplicative systems.
Under the leadership of Secretary Chao and President
Bush, the Department of Labor has made significant progress in improving
financial management beyond receiving an unqualified audit opinion. Under
the President's Management Agenda, we moved to "green" on the financial management scorecard at the
end of FY 2004. We are committed to staying "green" through continued efforts
to increase the integration of financial data into Departmental decision
making. We are putting in place the controls and programs to improve our
accountability to Congress and the American people and to provide our managers
with the financial information to improve the efficiency and effectiveness
of their programs. We are better prepared than ever to deliver results from
a Government that is well run and results-oriented.
Samuel T. Mok
Chief Financial Officer
November 15, 2004
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