Congress Watching Over Financial Systems

WASHINGTON (06/07/2000) - Congressional attention is necessary to keep agencies accountable for improving their financial management systems, a top Office of Management and Budget official told a House subcommittee Tuesday.

Agencies were allotted three years to comply with the Federal Financial Management Improvement Act of 1996, but only three agencies - NASA, the National Science Foundation and the U.S. Department of Energy --have met that requirement.

Agencies that did not comply within three years were required to consult with OMB and produce a remediation plan to meet the goal as soon as possible, said Joshua Gotbaum, executive associate director and controller of OMB, testifying before the House Government Reform Committee's Government Management, Information and Technology Subcommittee. Although Gotbaum did not see the need to modify the law in any way, he did request help from Congress to keep agencies on task.

"Agencies really are working at this and really are making progress," Gotbaum said.

Representative Douge Ose (Republican-California) said he and Representative Stephen Horn (Republican-California) chairman of the subcommittee, are committed to seeing agencies receive clean audit opinions of their annual financial statements.

Agencies cited challenges such as balancing priorities and difficulty implementing software systems as barriers to complying with FFMIA.

"Weak computer security is the reason cited most often," said Jeffrey Steinhoff, assistant comptroller general for Accounting and Information Management Programs at the General Accounting Office.

Although increasing numbers of agencies are receiving clean audit opinions for their annual financial statements, most agencies' financial management systems are still not compliant with FFMIA, Steinhoff said.

In addition, agencies such as NASA comply with FFMIA and achieve clean audit opinions but do not have an integrated financial management system. NASA, after a failed attempt to implement a commercial system, is restructuring its program and is procuring a commercial system.

Arnold Holtz, NASA chief financial officer, said he hopes to award the core financial system to a single vendor by November and will not customize the software. Holtz also said the requirement that an agency "substantially comply" with OMB's financial standards has made it possible for NASA to comply with FFMIA.

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