Agencies move beyond clean financial audits

With a clean audit opinion behind them, chief financial officers of three agencies said Tuesday that they are focusing on providing program managers access to timely and accurate financial information.

Such access will help managers analyze the costs and benefits of policy options and allow them to better assess programs' performance, the financial officers said during a panel discussion hosted by the Joint Financial Management Improvement Program.

After getting past the basics of sound financial management, the Social Security Administration developed technology to help managers track progress at meeting program performance goals and related costs, said Dale Sopper, the agency's CFO. This is a capability many agencies have yet to develop, according to recent research by the accounting firm KPMG LLP.

Using the tracking systems, SSA managers can look up data such as the average time spent answering customer inquiries at the agency's toll-free information lines. The data in the system is up-to-date and reliable, Sopper said. SSA managers also can use database information to analyze policy alternatives and make more informed decisions among various choices, he added.

For example, SSA managers recently realized that due to a staffing shortage, the agency's Frederick, Md., office had fallen behind on meeting performance goals for processing reviews of eligibility for disability benefits. Using data in the tracking systems, managers quickly determined that they had enough money to send staff members on detail to help out in the Frederick office. They chose this over the option of transferring some of the Frederick eligibility cases to alternative locations.

SSA is slightly ahead of the curve on financial management. The agency consistently receives clean opinions on annual audits, and two years ahead of schedule met an accelerated mid-November deadline for submitting financial statements to Office of Management and Budget. Unlike many agencies receiving clean audits, SSA is in compliance with financial laws, and analysts have not located any "material weakness" in the agency's accounts.

For these and other accomplishments, SSA in the third-quarter of fiscal 2003 moved up a notch to a green light -- the highest rating -- on the financial portion of OMB's management score card.

While the Agency for International Development and Labor Department have reported financial management weaknesses and have failed to comply with some provisions in financial laws, they also are working to provide timely financial information to program managers.

The Labor Department's financial office has expended a lot of resources meeting the accelerated schedule for submitting financial statements to OMB. But these efforts will not pay off unless program managers use the more timely information, said Samuel Mok, the agency's CFO. To that end, Mok's staff is working to publicize and promote the information available to program managers.

Labor also is developing an accounting system that will automate tasks currently performed by hand. The new system should free up time for staff to focus on providing meaningful analysis of finances to the department's program managers, Mok said.

The Agency for International Development, which received a clean audit for the first time in fiscal 2003 and met OMB's mid-November deadline for submitting statements one year ahead of schedule, is surveying program managers to determine what kinds of financial information they need to see, said Lisa Fiely, the agency's CFO. Now that AID has passable books, the financial experts can start to act as advisers to program managers, rather than "bean counters," she said.

"There are people out there who think that a clean opinion is more than it really is," Fiely said. In reality, "getting beyond" a clean audit and focusing on effective use of financial data is more important, she said.

The three chief financial officers added that accurate, up-to-date financial information helps program managers answer lawmakers' questions about budget requests. For example, with more financial tracking tools at their disposal, SSA officials can usually answer within eight hours congressional inquiries on such matters as how a flat budget would affect program performance, Sopper said.