Creating a more efficient and effective government is a continuous
endeavor. Unlike a race with a finish line, this is a journey where
achievements and successes result from sustained day-to-day efforts to improve
how we deliver services to the public and to produce measurable results. Our
overall goal must reach beyond accurate and timely information. In the past,
Federal financial management has resembled the bystander in the story of the
lost hot air balloonist. The bystander accurately tells the balloonist how high
he is, but provides nothing useful to help the balloonist find his way. A
similar affliction affects the proverbial frog at the bottom of the well, who
provides in-depth information but of such narrow scope that it is irrelevant.
These stories highlight the need for information that is timely, accurate, and
relevant with a clear and definable perspective.
Four pillars support much of the Department's success in improving
financial management and realizing success on this journey:
leadership, ownership,
value, and effectiveness. These are not
passive ideals that can be taken for granted. Even one weak pillar can cause a
vital initiative to collapse, impeding the Department's mission to create a
prepared, secure, and competitive workforce and quality workplaces.
Leadership. Implementing and sustaining
necessary institutional initiatives requires the support of senior management.
The leadership of Secretary Elaine L. Chao, her senior management team, each
Departmental agency head, and every manager is instrumental to the effective
stewardship of all DOL programs. Secretary Chao has led and supported our
efforts to make sound financial management a priority at the
Departmentfrom improving internal controls to forging an environment
where integrated financial and performance information correlates with
improving program results.
Ownership. For an initiative to be
sustainable, managers must make a personal investment in the endeavor and do so
because they recognize the positive day-to-day impact on their programs.
Without embedding ownership, a new initiative often becomes another
well-intentioned, but unsustainable, management fix. Ownership also creates an
environment where the leader is dedicated to the eventual success of the
program. Ownership means management has adopted the initiative as a tool that
not only works, but is something with which they want to work.
Value. Financial managers must be able to
identify the relative value of every management tool. As fiduciary agents of
the Federal government, managers' time must be spent in the most efficient and
effective manner possible. Finding new tools and processes to make day-to-day
operations more efficient is extremely important.
Effectiveness. With each initiative, we must
evaluate whether the results justify the costs incurred to obtain them.
Maximizing each dollar's impact on programs and services is one of our key
goals. With finite resources, effectiveness and efficiency become ever more
critical to obtaining results.
This past year, our journey has passed several milestones that indicate
that we are headed in the right direction. Some highlights include:
- As a Department, we became the first Federal agency to obtain an
overall green rating for each of the initial five areas of the
President's Management Agenda (PMA).
- By the close of FY 2005 we had achieved a sixth green
rating for our efforts to eliminate improper payments. Our Unemployment
Insurance (UI) and Federal Employees Compensation Act (FECA) programs saw a
combined reduction of over half a billion dollars in FY 2005, exceeding our
targeted goals.
- We received our ninth consecutive clean audit opinion on our
consolidated financial statements and our fifth consecutive Certificate of
Excellence from the Association of Government Accountants (AGA).
- The Department successfully transferred its payroll operations to the
National Finance Center as part of the Government-wide e-Payroll initiative to
consolidate and standardize Federal civilian payroll services.
- DOL became the first Federal agency to pilot an end-to-end eTravel
system, and intends to deploy the full system by the end of FY 2006.
These pillars also are evident in the significant strides we have made
to implement managerial cost accounting to determine the true cost
of provided services. By integrating financial and performance information,
program managers and senior executives can evaluate operations more quickly
with better information than ever before. Stakeholders recognize the value of
this resource in making more informed decisions, and their support of this
initiative has contributed to its great success and recognition as a model for
other Federal agencies to follow. The use of integrated financial and
performance information in day-to-day operational decisions is a true paradigm
shift towards greater accountability and responsibility for resource
stewardship. Managerial cost accounting supports the production of this
Performance and Accountability Report by enabling the Department to report the
full costs of our strategic, outcome, and performance goals for the first
time.
The four pillars provide essential support for effective internal
control. Identifying risks, implementing compensating controls, and monitoring
the effectiveness of those controls are essential for ensuring that we use
resources effectively to achieve desired results. Every employee of the
Department must recognize his or her responsibility to promote internal
controls and improve the accountability and transparency of our programs and
missions. We have taken this responsibility to heart. I am pleased to report
that as I celebrate my fourth year in office, once again the Secretary has
assured the President and the Congress that the Department complies with the
Federal Managers' Financial Integrity Act (FMFIA). Our continuing challenge is
the transformation of internal control into an integral part of the
Department's entire cycle of planning, budgeting, management, accounting, and
auditing.
As our journey continues, we face new challenges such as responding to
the critical national needs that have arisen in the aftermath of recent natural
disasters. Our fiduciary responsibilities become ever more crucial as diverse
programs require funding from finite resources, meaning that we must continue
to extract improved results from shrinking funds. How well we succeed will
depend largely on our ability to build upon the positive results we have
attained to this point.
The success of each initiative undertaken at the Department of Labor
ultimately must be judged by whether the initiative is sustained over time and
has become a part of the management culture. There are no shortcuts on our
journey to improve financial management and enhance fiscal integrity. A lasting
legacy and reaching our goals come only through strong leadership, managerial
ownership, programmatic value, and results-driven effectiveness.
Samuel T. Mok
Chief Financial Officer
November 15, 2005
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