Improving Federal Financial Management Systems

Since the enactment of key financial management reforms such as the Chief Financial Officers (CFO) Act of 1990 and the Federal Financial Management Improvement Act of 1996 (FFMIA), the federal government has devoted significant resources to improving financial management systems and the information they produce. Despite these efforts, there is a continued and widespread lack of effective financial management systems and problematic implementations indicating that additional efforts are needed to ensure agencies have systems that can provide reliable, useful, and timely information with which to make informed decisions on an ongoing basis.

• Auditors continue to report that many agency systems do not meet FFMIA requirements, and increasing concern exists regarding the criteria to be used for determining substantial compliance with FFMIA as a result of recent revisions to OMB guidance.

  Highlights of GAO-08-1018 (PDF), Highlights of GAO-09-328 (PDF), Highlights of GAO-09-805T (PDF)

• Further, agency efforts to implement financial management systems to address these problems have often resulted in failure, have been delayed, and have cost too much.

  Highlights of GAO-06-184 (PDF)

• Recognizing the seriousness of these problems, OMB is leading a governmentwide approach to improve the success of core financial system implementations through the financial management line of business. Although this is a step in the right direction, extensive work remains before its goals are achieved, and questions remain regarding basic elements integral to its success.

  Highlights of GAO-06-184 (PDF), Highlights of GAO-09-328 (PDF)

• The next administration should monitor this initiative closely, as well as OMB efforts to provide clear direction and effectively monitor system implementations, to ensure that agencies have financial management systems capable of effectively providing the information needed for management decision making.

  Highlights of GAO-08-447SP (PDF), Highlights of GAO-09-328 (PDF)

^ Back to topWhat Needs to Be Done

While CFO Act agencies have reported progress in meeting the goals of FFMIA, OMB needs to take additional steps to help ensure it provides agency management and auditors with the guidance needed to bring about reliable and consistent assessments of, and meaningful improvements in, financial management systems as envisioned by FFMIA, including

• resolving inconsistencies between the FFMIA requirements and OMB guidance related to determining substantial compliance, retaining financial management systems requirements for the financial portion of mixed systems, and requiring auditors to assess compliance against such requirements.

  Highlights of GAO-09-805T (PDF), Highlights of GAO-08-1018 (PDF)

• developing the concepts and underlying key issues needed to help facilitate the implementation of the financial management line of business and realignment initiatives across the government.

  Highlights of GAO-06-184 (PDF), Highlights of GAO-09-328 (PDF)

• taking actions to facilitate complete and accurate reporting of actual and planned spending related to financial management system modernization projects.

  Highlights of GAO-09-328 (PDF)

^ Back to topKey Reports

Financial Management Systems

Financial Management

Highlights of a Forum Convened by the Comptroller General of the United States

Financial Management Systems

More Reports