WASHINGTON – Senate Governmental Affairs Committee Chairman Fred Thompson (R-TN) today praised the compliance of every federal agency in producing financial statements as required under the Chief Financial Officers Act. For the first time since the Act was enacted in 1990, every federal agency reported on time, and eighteen agencies passed financial audit, more than in any previous year.
“Most agencies are balancing their checkbooks. Knowing what you have and what you?ve spent is the first step in reducing waste, fraud, and abuse in the federal government,” said Senator Thompson. “Now we need to work on keeping track of this money on a regular basis, not just once a year.”
Agencies are required to prepare financial statements accounting for how they?ve spent the tax dollars allotted to them. Prior to passage of the Chief Financial Officers Act of 1990, agencies routinely failed to prepare a balance sheet, or ignored evidence that they had lost track of money and property within their control. Since passage of the Act, agencies have continued to have difficulty accurately producing such statements, but have shown steady improvement.
In his recent High-Risk Series report, GAO Comptroller General David Walker, the nation?s chief auditor, agreed that “agencies do not yet have the financial systems needed to dependably produce annual financial statements and other financial information needed to manage day-to-day operations.” In fact, according to GAO, 21 of the 24 largest federal agencies do not have adequate financial systems.
“Compliance in reporting agency expenditures is the best we?ve seen it to date. But there is more to be done,” noted Senator Thompson. “What the reports don?t show is that most agencies still do not have the procedures in place to track their expenditures, debts, property, and equipment on a regular basis, and fixing that is the next challenge.”
The Congress passed the Chief Financial Officers Act in 1990 to require audited financial statements. In 2000, the Senate Governmental Affairs Committee authored the Reports Consolidation Act (Public Law 106-531), which authorized agencies to consolidate many of their management related reports. The Act also required agencies to submit their audited financial statements for the previous fiscal year to Congress no later than March 1st.