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THOMPSON: FEDERAL AGENCIES
NEED SOUND FINANCIAL MANAGEMENT SYSTEMS NOW MORE THAN EVER
Latest Report Shows Slow Progress
as Fiscal Year 2002 Begins
Monday, October 1, 2001
WASHINGTON - Senate Governmental Affairs
Committee Ranking Member Fred Thompson (R-TN), a leading
Congressional advocate for efficient government, today lamented
the slow progress of improving federal financial management in the
Executive Branch. A recently released General Accounting Office
(GAO) report revealed that during the fiscal year ending in
September 2000, at least 19 of the Executive Branch’s major
agencies had inadequate financial management systems in place.
"Agencies simply aren’t able to tell us
on a regular basis where taxpayer dollars are going and whether we’re
getting what we paid for," Thompson said. "At a time
like this, where every dollar, every asset, every resource counts,
sound financial management is more important than ever."
The GAO report, required annually by the 1996
Federal Financial Managers Improvement Act, assessed the quality
of agency financial systems, and the extent to which they complied
with federal standards. According to the report, "[M]ost
agencies’ financial management systems are unable to routinely
produce timely, reliable, and useful information...Agency managers
and other decisionmakers need this information for managing day to
day operations effectively, efficiently, and economically;
measuring program performance; executing the budget; maintaining
accountability; and preparing financial statements."
The report cites specific consequences of poor
financial management. Weaknesses in security, for instance, in
financial systems at the Department of the Treasury "increase
the risk of fraud associated with billions of dollars of federal
payments and collections, and weaknesses at the Department of
Defense increase the vulnerability of various military
operations."
Senator Thompson emphasized the importance of
financial management, particularly in times of emergency. "We
can’t afford to lose the momentum we’ve gained in improving
federal financial management because of the current crisis.
Agencies – especially those like the Departments of Defense and
State – need to know how much money they have, where their
assets are, and whether they’re getting what they paid for. The
vulnerabilities cited in the report make it imperative that we
redouble our efforts to shore up the government’s financial
management."
Senator Thompson lauded recent efforts by the
President and the Office of Management and Budget to address the
government’s financial management weaknesses, stating, "It
was encouraging to see financial management such a prominent part
of the President’s Management Agenda and we can expect to see
more substantial improvement in the near future."
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The GAO report will be available online at http://www.gao.gov
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