November 15, 2004
I am pleased to present EEOC's financial statements for FY 2004. Our financial statements are an integral component of our Performance and Accountability Report. The President signed the Accountability of Tax Dollars Act of 2002 on November 7, 2002. This Act extends to the Commission a requirement to prepare and submit audited financial statements. The President's Management Agenda, Improved Financial Performance component, also requires us to obtain and sustain clean audit opinions on our financial statements. The Office of Management and Budget Memorandum M-04-20 dated July 22, 2004, requires the agency to prepare a PAR starting this fiscal year, however, the agency elected to produce a PAR for FY 2003, one year ahead of schedule.
Our FY 2004 financial statements received an unqualified opinion. This achievement is a major success story considering only three years ago the previous financial system was unauditable. In October 2001, we successfully implemented and operated an approved government financial system with our business partner, Department of the Interior's National Business Center. However, this year we were notified by our service provider that the current version of our financial software is no longer certified by the Joint Financial Management Improvement Program (JFMIP) and is therefore considered obsolete. We have made budget plans to replace the financial system in FY 2006 with financial software that has been certified by JFMIP. The agency will also begin the implementation of the mandated e-Travel software in FY 2006. We will continue our partnership with the National Business Center for these system changes.
In support of the Budget and Performance Integration component of the President's Management Agenda and to close FY 2003 compliance and internal control audit findings, we implemented an interim cost accounting data collection process in FY 2004. We used a one-time survey instrument that was sent to all employees to compile hours by program element and calculate costs. For FY 2005, the agency will integrate the methodology in the time and attendance component of the payroll system. Over the next year, the agency will determine what level of program cost detail is necessary to support the objectives of activity-based costing.
EEOC's FY 2004 budget was $325 million. We completed the fiscal year within budget with improved financial management and an additional focus on cost controls and cost accounting. Compensation and benefit costs continue to consume about 70% of the budget. Initial progress has been made to bring rising office space rent costs under control. However, rent costs remain about 9% of our total budget. With 10% of the budget dedicated to the state and local program, only 11% of the budget is available for technology, programs, travel and other general expenses. We continue to explore ways to reduce the agency's cost structure.
At a September 8, 2003, Commission meeting, I reported that there were several critical fiscal issues which I advised the Commission to focus on to improve the long-term financial health of the agency. The status of these agenda items is provided below.
In FY 2005, guided by our Strategic Plan, EEOC will continue its focus on accountability and results through improved performance metrics, budget planning and financial management.
Jeffrey A. Smith, CPA, CGFM
Chief Financial Officer
This page was last modified on November 18, 2004
