United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Accounting and Information Management Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2000-06-06 monographic deposited born digital 32 p. GA 1.13:T-AIMD-00-178 https://www.govinfo.gov/app/details/GAOREPORTS-T-AIMD-00-178 P0b002ee18039c3b0 f:ai00178t DGPO 2010-08-12 2011-03-28 GAOREPORTS-T-AIMD-00-178 machine generated eng fdlp REPORT GAOREPORTS-T-AIMD-00-178 T-AIMD-00-178 Financial management systems Financial statement audits Noncompliance Internal controls Federal agency accounting systems Accountability Financial records Information resources management Testimony AIMD E12340109 Pursuant to a congressional report, GAO discussed the challenges most of the major federal department agencies face in meeting the basic expectations laid out in the Federal Financial Management Improvement Act of 1996 (FFMIA), focusing on: (1) problems with agencies' systems that prevent them from meeting the expectations of FFMIA; (2) how agencies are able to receive a "clean" audit opinion on their financial statements even though their financial systems do not comply with FFMIA's requirements; and (3) key elements in addressing these systems problems, including the importance of sound information technology investment and control processes.<p/>GAO noted that: (1) FFMIA requires auditors performing annual financial statement audits of the Chief Financial Officers (CFO) Act of agencies to report whether agencies' financial management systems comply with the act's requirements; (2) the act defines financial management systems as the financial systems and financial portions of mixed systems necessary to support financial management, including automated and manual processes, procedures, controls, data, hardware, software, and support personnel dedicated to the operation and maintenance of systems functions; (3) based on GAO's review of fiscal year (FY) 1999 audit reports for the 20 agencies reported to be noncompliant with FFMIA, GAO identified five primary reasons: (a) nonintegrated financial management systems; (b) inadequate reconciliation procedures; (c) noncompliance with the U.S. Government Standard General Ledger; (d) lack of adherence to federal accounting standards; and (e) weak security over information systems; (4) although the number of agencies receiving unqualified audit opinions is increasing, the financial management systems of most agencies continue to be compliant with FFMIA's requirements; (5) in many cases, agencies spent considerable resources to obtain a clean opinion because their financial statements could not be produced from their financial systems; (6) key elements for improving financial systems include: (a) plans to replace or overhaul agencies' systems; (b) information technology investment and security guidance; (c) Joint Financial Management Improvement Program (JFMIP) software certification; and (d) systems requirements documents and checklist; (7) the federal government's size and complexity and the discipline needed to overhaul or replace its financial management systems presents a significant challenge, not simply a challenge to overcome a technical glitch, but a demanding management challenge that requires attention from the highest levels of government; and (8) however, with concerted effort, the federal government can make progress toward improving its financial management systems and thus achieve the goals of the CFO Act and provide accountability to the nation's taxpayers. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-AIMD-00-178/html/GAOREPORTS-T-AIMD-00-178.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-T-AIMD-00-178/pdf/GAOREPORTS-T-AIMD-00-178.pdf GAO/T-AIMD-00-178 https://www.govinfo.gov/app/details/GAOREPORTS-T-AIMD-00-178 Testimony GAO/T-AIMD-00-178; Financial Management: Agencies Face Many Challenges in; Financial management systems Financial statement audits Noncompliance Internal controls Federal agency accounting systems Accountability Financial records Information resources management