TDC – Accounting For More than the Obvious
Find the ‘true downtime costs’ of running an organization. Firms should always focus on simple expenses of overhead that include payroll, utilities and general upkeep, but keep in mind how they derived these expenses. Using TDC to determine a predetermined overhead rate can help plan for future costs. Accurate rates can be applied to all future events. No longer does overhead costs account for simple labor hours times the wage rate. Learn to incorporate more and make accurate predictions to better understand costs (and how to potentially decrease them) using simple mathematical formulas that can be implemented in any business.

OPM Drops Effort to Shift Financial Management to Treasury Bureau
The Office of Personnel Management’s effort to move their back-end financial management responsibilities to the Treasury Bureau have fallen through. In an announcement released last week, OPM officials said they will conduct a public-private competition to determine the best place for the agency's financial management and procurement operations. The contest will take place by the fourth quarter of fiscal 2007, which begins July 1.

Financial Audit: Securities and Exchange Commission's Financial Statements for Fiscal Years 2006 and 2005
GAO found that the SEC has reported and complied with the applicable guidelines in a fair manner. A notable achievement during fiscal year 2006 was the significant efforts SEC made in addressing the material weaknesses reported in GAO's previous years' financial statement audits of SEC. As a result, GAO concluded that, although certain controls should be improved, SEC had effective internal control over financial reporting and compliance with laws and regulations. To read the entire report, click on the following link.

Report: Create Single Financial Management Statute
According to a new National Academy of Public Administration report, federal financial management lacks a single source for guidance and many officials view its importance as minimal. It recommends creating a single, integrated financial management statute. The report states that “the academy’s discussions with financial managers suggested that many view the world of financial management as a collection of disjoined sectors rather than a single, coherent community.”

Restated Financial Statements: Agencies’ Management and Auditor Disclosures of Causes and Effects and Timely Communication to Users
A recent GAO report found that 9 agencies reviewed did not properly report financial statement restatements. According to the report, “all nine agencies could have greatly enhanced the adequacy, effectiveness, and timeliness of their restatement disclosures to users.”

OMB Chief Talks Management
Office of Management and Budget Chief, Rob Portman addressed federal employees at a luncheon last month. Portman stressed the need for providing federal lawmakers more detailed information about the benefits of management initiatives. According to Portman, “Congress is a target-rich environment -- there are plenty of members of Congress who need to hear more about management." He concluded his talk by praising the integration of budget and management issues at OMB during his tenure.

Improvements Under Way but Serious Financial Systems Problems Persist
GAO recently released a very sobering report on the status of federal financial management. The report says that the number of CFO Act agencies receiving unqualified financial statements has steadily increased since 1997. In addition, the number of agencies that substantially do not comply with FFMIA has seen relatively no improvement. The report states that, “Although agencies have made improvements and have other enhancements under way, the systems deficiencies that have prompted unfavorable FFMIA assessments indicate that the financial management systems of many agencies are still not able to routinely produce reliable, useful, and timely financial information.”

21st Century Accountability Challenges
At the AICPA GAAC Annual Conference, US Comptroller General, David M. Walker delivered the following presentation on 21st century federal financial accountability challenges. In the presentation Walker discusses his case for change in federal financial management practices. He lays out the major spending problems the federal government faces every year and provides a three-pronged strategy for a successful future.

Audit Requirements for Federal Financial Statements
OMB recently released the updated audit requirements for federal financial statements. The report was issued to the heads, inspector generals, and chief financial officers of departments and programs. The report provides a listing of the minimum standards for these audits. It goes into issues such as frequency, scope, and responsibility for the audit. To read more on the requirements, please click the following link.

Opportunities for Improvements in FDIC's Internal Controls and Accounting Procedures
A recent report shows that there are several areas where the Federal Deposit Insurance Corporation’s (FDIC) could improve its financial management processes. According to the report the FDIC made errors in several of its operating expense allocation percentages. In addition, the FDIC did not detect several internal control deficiencies in its procurement process. The Performance Institute would like to see the FDIC implement the GAO recommendations listed in the following report. To read more on the FDIC’s financial management practices, click the following link.  

Agencies Still In the Red on Financial Performance
The Executive Branch Management Scorecard is still showing that federal agencies are performing at a low level in the area of financial management. According to the following article, “In the third quarter of fiscal 2006, 16 of 26 departments and agencies earned red, the lowest grade. Moreover, 12 of those 16 agencies have always gotten red scores in financial performance.” The Performance Institute urges all departments to practice responsible financial management. Please read more about the article by clicking the following link. 

Mid-Session Review US Budget
The following report is the mid-session US budget review. The Executive Office of the President prepared the report and highlighted certain goals and success areas. The review highlights the President’s strategy to bolster the economy, cut the federal deficit in half, and decline federal debt. Click the following link to read the entire report.  

Auditors to look into Federal Protective Service Finances
Senate appropriators recently rejected a Homeland Security Department request to shift $42million to Federal Protective Service because of their recent financial troubles. Senators have accused the plan as a short term fix for FPS financial problems. The only way they would approve such a funding boost would be if the FPS outlined ways that it would correct its financial management practices for the long run. Click on the link below for more information.   

The Clinger-Cohen Act, 10 Years Later: The Age of Results
The following article is Part 4 of Govexec’s analysis of the Clinger-Cohen Act’s tenth year anniversary. The article discusses whether or not the Act has helped achieve better financial management and savings. The article argues that there has not been a measurable difference in savings, but suggests that government IT entities are not solely at fault. The Act placed additional responsibilities on IT departments and the added duties don’t make it easy to save money. In addition, the article argues that efficiency has not been greatly improved. “Much internal alignment still needs to be done in order to show how today's investments are effecting results-oriented outcomes.” Read the following article for more information.

Steps Taken to Improve Federal Oversight but Other Actions Needed to Sustain Efforts
The Centers for Medicare and Medicaid (CMS) have implemented several measures to improve Medicaid financial management. CMS hired 90 funding specialists to address inappropriately increased federal costs and high-risk state funding practices. CMS created guidelines to ensure greater financial management accountability. The Performance Institute recognizes the progress of CMS, but still sees room for improvement. CMS has still failed to implement risk management techniques to ensure maximum efficiency with financial interactions. In addition, CMS still has no strategic plan for its Medicaid financial management activities.

Steps Taken to Improve Federal Oversight but Other Actions Needed to Sustain Efforts
The Centers for Medicare and Medicaid (CMS) have implemented several measures to improve Medicaid financial management. CMS hired 90 funding specialists to address inappropriately increased federal costs and high-risk state funding practices. CMS created guidelines to ensure greater financial management accountability. The Performance Institute recognizes the progress of CMS, but still sees room for improvement. CMS has still failed to implement risk management techniques to ensure maximum efficiency with financial interactions. In addition, CMS still has no strategic plan for its Medicaid financial management activities.

On Right and Left, a Push for Government Openness
Oklahoma Senator, Tom Coburn is pushing a bipartisan effort to expand transparency for federal government financial management. Coburn’s tentative plan would be to create an internet searchable database that would expose all federal grants and contracts. Coburn suggests that creating this kind of openness in government finances will alert the public to wasteful spending. The Performance Institute acknowledges Coburn’s effort as critical in the fight to create more transparency and accountability in government.

California Pursues Plans to Implement Performance-Based Budgeting
In a report by the California Performance Review , the state government was criticized for not collecting accurate performance data to improve accountability. The state's current strategic planning system does not yield the results necessary for lawmakers to make adjustments in funding to poor performing departments. The Performance Review suggests that the Governor issue an executive order mandating performance-based budgeting in all agencies and departments to remedy the situation.

Virginia's Successful Financial Performance  
The following site demonstrates the financial management initiatives for Virginia . It outlines broad goals for improvement and details the strategy the state plans on taking to achieve their mission. The site describes the state's budget reform and six-year financial plan. Through diligent reform and planning , Virginia has become one of the best managed states in the US.

New Financial Reporting System for Utah Government  
The state of Utah is bracing for the implementation of their new financial management framework , FINET. The new version of FINET will affect all aspects of financial management for the state. The new system will affect the location of reported data and the underlying file structures that manage the data. The new FINET was created to streamline the financial management process in Utah to make the reporting process easier for state employees.