[Weekly Compilation of Presidential Documents Volume 34, Number 22 (Monday, June 1, 1998)]
[Page 966]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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.
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