Improving Federal Financial Management Systems

Since the enactment of key financial management reforms such as the Chief Financial Officers (CFO) Act of 1990 and the Federal Financial Management Improvement Act of 1996 (FFMIA), the federal government has devoted significant resources to improving financial management systems and the information they produce.

• OMB provides overall financial management direction and leadership to the executive branch by establishing financial management policies and system requirements and by monitoring the establishment and operation of these systems to ensure compliance with CFO Act and FFMIA requirements.

  Highlights of GAO-02-29 (PDF), GAO-08-1018 (PDF)

• Despite these efforts, there is a continued and widespread lack of effective financial management systems and problematic implementations indicating that additional efforts are needed to ensure agencies have systems that can provide reliable, useful, and timely information with which to make informed decisions on an ongoing basis.

  Highlights of GAO-081018 (PDF)

• Auditors continue to report that many agency systems do not meet these requirements, and increasing concern exists regarding the criteria to be used for determining compliance.

  Highlights of GAO-08-1018 (PDF)

• Further, agency efforts to implement financial management systems to address these problems have often resulted in failure, have been delayed, and have cost too much.

  Highlights of GAO-06-184 (PDF)

• Recognizing the seriousness of these problems, OMB is leading a governmentwide approach to improve the success of financial management system implementations through the financial management line of business. Although this is a step in the right direction, the initiative is in the early stage, and questions remain regarding basic elements integral to its success.

  Highlights of GAO-06-184 (PDF)

• The next administration should monitor this initiative closely, as well as OMB efforts to provide clear direction and effectively monitor system implementations, to ensure that agencies have financial management systems capable of effectively providing the information needed for management decision making.

  Highlights of GAO-08-447SP (PDF)

^ Back to topWhat Needs to Be Done

While CFO Act agencies have reported progress in meeting the goals of FFMIA, OMB needs to take additional steps to help ensure it provides agency management and auditors with the guidance needed to bring about reliable and consistent assessments of, and meaningful improvements in, financial management systems as envisioned by FFMIA, including

• clarifying the definition of substantial compliance, and

  Highlights of GAO-02-29 (PDF), Highlights of GAO-08-1018 (PDF)

• developing the concepts and underlying key issues needed to help facilitate the implementation of the financial management line of business and realignment initiatives across the government.

  Highlights of GAO-06-184 (PDF)

^ Back to topKey Reports

Financial Management: Persistent Financial Management Systems Issues Remain for Many CFO Act Agencies

GAO-08-1018, September 30, 2008

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 54 pages)   Accessible Text

Highlights of a Forum Convened by the Comptroller General of the United States: Improving the Federal Government's Financial Management Systems

GAO-08-447SP, April 16, 2008

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 56 pages)   Accessible Text

Financial Management Systems: Additional Efforts Needed to Address Key Causes of Modernization Failures

GAO-06-184, March 15, 2006

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 91 pages)   Accessible Text   Recommendations (HTML)

Financial Management: FFMIA Implementation Critical for Federal Accountability

GAO-02-29, October 1, 2001

Summary (HTML)   Full Report (PDF, 77 pages)     Recommendations (HTML)