    [Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
    [May 26, 1998]
    [Pages 839-840]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Memorandum on Improving Financial Management
    May 26, 1998

    Memorandum for the Heads of Executive Departments and Agencies

    Subject: Actions to Further Improve Financial Management

        My Administration has made a significant commitment to achieving the
    highest standards of financial management and accountability for the
    American people. Since the enactment of the Government Management Reform
    Act of 1994, the Federal Government has made substantial progress toward
    achieving our goals of fiscal discipline and reporting reliably to the
    American people on the Government's operations and fiscal condition.
        An important step in this direction has been the efforts of the
    Federal Accounting Standards Advisory Board to develop accounting
    standards for the Federal Government. This effort was consistent with
    the recommendations of the National Performance Review led by Vice
    President Gore. These standards formed the basis for the first ever
    government-wide financial statement of the Federal Government, issued on
    time on March 31, 1998.
        While our financial management program has resulted in significant
    improvements, there are several areas in which agencies must focus
    additional attention. Financial auditors reported accounting system
    weaknesses and problems with fundamental accounting practices across the
    Federal Government. These specifically include practices related to the
    Government's property, Federal credit programs, liabilities related to
    the disposal of hazardous waste and remediation of environmental
    contamination, Federal Government employment-related benefits
    liabilities, and transactions between Federal entities. My FY 1999
    budget request to the Congress outlined my commitment to addressing
    these problems and obtaining an ``unqualified audit opinion''--the
    highest opinion available from auditors--on the Government's financial
    statements for FY 1999.
        To achieve these goals, I am now directing the additional steps set
    forth below:
        1. The Office of Management and Budget (OMB) shall identify agencies
    subject to reporting under this memorandum and monitor agency progress
    towards the goal of obtaining an unqualified audit opinion on the FY
    1999 consolidated Federal Government financial statements.

    [[Page 840]]

        2. The head of each agency identified by the OMB shall submit to the
    OMB a plan, including milestones, for resolving by September 30, 1999,
    financial reporting deficiencies identified by the auditors. The initial
    agency plan is due to the OMB by July 31, 1998.
        3. The head of each agency submitting a plan shall provide quarterly
    reports to the OMB, starting on September 30, 1998, describing progress
    in meeting the milestones in their action plan. The head of each
    affected agency shall report to the OMB any impediments that would
    impact the government-wide goal.
        4. The OMB shall provide periodic reports to the Vice President on
    the agency submissions and government-wide actions taken to obtain an
    unqualified audit opinion of the Government's FY 1999 financial
    statements.

                                                          William J. Clinton