Government Agencies In Compliance for 2nd Consecutive Year

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The Office of Management and Budget (OMB) reports that for fiscal 2006, eighteen of 24 agencies received clean audits. reports that all 24 agencies required by the 1990 Chief Financial Officers (CFO) Act also closed their books within 45 days of the end of the fiscal year for the second year in a row.

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The CFO Act intends to improve the government's financial management, outlining standards of greater authority over federal financial management, according to OMB was given greater authority over federal financial management and the position of the Deputy Director of Management was created to act as the government's chief financial official. The position of chief financial officer was also created in each CFO Act agency. The GAO reports that the current CFO Act agencies are:

  • Department of Agriculture
  • Department of Commerce
  • Department of Defense
  • Department of Education
  • Department of Energy
  • Department of Health, and Human Services
  • Department of Homeland Security (DHS)
  • Department of Housing and Urban Development
  • Department of Interior
  • Department of Justice
  • Department of Labor
  • Department of State (DOS)
  • Department of Transportation (DOT)
  • Department of Treasury
  • Department of Veteran Affairs
  • Environmental Protection Agency (EPA)
  • General Service Administration (GSA)
  • National Aeronautics and Space Administration (NASA)
  • National Science Foundation
  • Nuclear Regulatory Commission
  • Office of Personnel Management
  • Small Business Administration (SBA)
  • Social Security Administration

A note is needed for the Department of Homeland Security. The Federal Emergency Management Agency (FEMA) was initially included in the CFO Act of 1990, but FEMA became part of DHS. DHS became a CFO Act agency in fiscal 2005, according to the GAO.

Of those agencies on the list for fiscal 2006, the Defense, Energy, Homeland Security, and State departments, and NASA received disclaimers of opinion because their financial statements could not be evaluated due to major problems in their accounting, according to The auditors identified particular problems in the Department of Transportation's books and the agency received a qualified opinion.

GSA received an unqualified opinion in fiscal 2006, an improvement over the disclaimer the agency secured last year. reports that the budgetary accounting problems found in fiscal 2005 included a dispute concerning whether it could continue to spend funds “parked” by the agency beyond their expiration.

DOS received a qualified opinion, indicating limited problems to a disclaimer in fiscal 2006. Department officials declined to release audit results or answer questions, but an OMB official told that the problem related to accounting for real property.

DOT had problems in fiscal 2006 accounting for the Federal Aviation Administration's (FAAs) balance of funds for ongoing construction projects that was reported at $4.7 billion. This entry weighed heavily in the agency's overall balance sheet.

Auditors identified problems to be addressed found in OMB's Circular A-123, according to Circular No. A-123, dated June 21, 1995, reads, “As Federal employees develop and implement strategies for reengineering agency programs and operations, they should design management structures that help ensure accountability for results, and include appropriate, cost-effective controls. The Circular provides guidance to Federal managers on improving the accountability and effectiveness of Federal programs and operations by establishing, assessing, correcting and reporting on management controls.”

The current Circular replaces Circular No. A-123, dated August 4, 1986. The issuance of the current Circular No. A-123 rescinds the OMB's 1982 “Internal Controls Guidelines” and associated “Questions and Answers” document.

Circular No. A-123, dated June 21, 1995, goes on to read, “Management controls are the organization, policies, and procedures used to reasonably ensure that (i) programs achieve their intended results; (ii) resources are used consistent with agency mission; (iii) programs and resources are protected from waste, fraud, and mismanagement; (iv) laws and regulations are followed; and (v) reliable and timely information is obtained, maintained, reported and used for decision making.”

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