Along with the other four members of the PMA team at OMB, I had the opportunity at this meeting to brief the President on one of the government-wide PMA initiatives and specifically talk about how we’re striving toward achieving results at the agencies in the area of financial performance.

The goal of the Improved Financial Performance initiative is to ensure that agencies have accurate financial information, that they have it when they need it, and that they’re using it to manage costs. If the information is out-of-date, then it’s useless. If the information is inaccurate, then it shouldn’t be used. A good sign that agencies have accurate information is that they get an unqualified audit opinion on their financial statements. In fiscal year 2003, 20 of 24 of the major agencies have reached that milestone – which is a record, and is up from 18 three years ago.

Another requirement is that information is available when it is needed. When this Administration entered office, agencies did not issue their financial reports until five months after the end of the year. With the financial reports being issued so late after the fiscal year, the information was nearly useless. This fiscal year, however, we’ll have them in just 45 days. That means agencies have the processes in place to produce information when they need it.

Now that agencies are better able to get good information on a timely basis, they’re starting to use it. Across the government, we’re assessing the accuracy of all agency payments in programs and activities. So far, we’ve identified $35 billion in improper payments annually. We plan to complete this assessment and have action plans in place at the agencies where needed by November 15th. And most important, we will start to eliminate improper payments before they take place.

Another focus is in the area of real property. The Federal Government owns hundreds of billions of dollars in real property, but we could manage it better. Under the real property executive order signed by the President in February, we’re evaluating what properties we own and lease versus what we need. We’ll better manage properties we need, and we’ll dispose of the excess.

At this point, five agencies have reached “green” status in the Improved Financial Performance initiative – the Departments of Education and Energy, Environmental Protection Agency, National Science Foundation, and the Social Security Administration. Achieving “green” status means these agencies are actively using financial information to better manage their costs and to achieve results. The Department of Education, for example, measured the unit costs of its loan servicing arrangements. After determining that the costs were too high, the department restructured its contract, and will save $1 billion over the next 10 years. That’s $1 billion of the taxpayers’ money that can now be put to better use. All Federal agencies will be able to manage like this when they have progressed from being good financial reporters to good financial managers.

The Improved Financial Performance initiative, as well as the other PMA initiatives, is focused on making our anticipated improvements and savings real and making results a habit. I look forward to providing you with further updates on our progress as these goals are achieved.