[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