January 2005

Looking back on 2004, it was a year of demonstrable results and achievements in the Federal Government’s financial management.

For example, in the area of financial reporting, the agencies subject to the Chief Financial Officers (CFO) Act of 1990 achieved new levels of timeliness and frequency. In 2004, a record 22 of the 23 CFO Act agencies completed their Performance and Accountability Reports just 45 days after the end of the fiscal year. Before the Administration came to office, these same agencies took as long as five months to complete their financial reports. Additionally, 18 of the 23 agencies received unqualified opinions in an environment of increased audit rigor. With this year’s timely submission, the public and Congress have ready access to information on how tax dollars are being used.

The issuance of the consolidated Financial Report of the United States Government was also accelerated to December 15, 2004 – one month after the standalone agency reports were issued. This earlier issuance compares to a release date of late February 2004 for the FY 2003 report.

The earlier financial reporting dates for the individual CFO agencies, as well as the government-wide report, will now become the norm each year as required by the new OMB Circular A-136. Circular A-136, which was issued in late December, may be found at http://www.whitehouse.gov/omb/circulars/a136/a136.pdf.

Another notable achievement of the past year is the revised Circular A-123, Management’s Responsibility for Internal Control, which was issued by OMB in December 2004. This circular, which will serve to strengthen the requirements for conducting management’s assessment of internal control over financial reporting, may be found at http://www.whitehouse.gov/omb/circulars/a123/a123_rev.pdf.

The policy changes of the revised Circular A-123 follow the recommendations of a joint Chief Financial Officers Council and the Inspectors General committee that had convened in 2004 under the direction of OMB’s Office of Federal Financial Management. This joint CFO/IG committee had been tasked with reviewing the new internal control assurance requirements applicable to the private sector for their relevance to Federal Government agencies and developing new standards of assurance for internal control over financial reporting. I am most pleased with the efforts of this committee over the past year.

Another recent success of note is the debut of a new public website for financial metrics – the Metric Tracking System (MTS). This website is meant to provide federal financial managers, taxpayers, and others with information on federal agencies’ financial operations and performance using key financial management indicators. The MTS website is located at http://www.fido.gov/mts/cfo/public/200408/.

Other notable achievements of past year include:

• Making a comprehensive measurement of payment accuracy;
• Establishing the foundation for comprehensive real property management through the work of the Federal Real Property Council; and
• Developing a new paradigm for efficient and effective financial management systems investment.

Much remains to be done before the government can say that it has achieved the level of financial management for which we are striving. The path before the financial community is clear and, with the momentum and successes of 2004, there is every reason to expect sustained improvement. We owe the American citizens no less.

On a personal note, this will be my final message, as I have decided to reenter the private sector. It has been a privilege to serve the President, the financial management community, and the American citizens as OMB Controller. I leave with confidence that my successor will be the beneficiary of the same support that I have received, and I look forward to observing many years of continued progress.

Linda M. Springer