Financial management organization says quiet goodbye

At the Joint Financial Management Improvement Program's last annual conference Thursday, financial management leaders pushed new ways of measuring--and controlling--government spending.

JFMIP, which has certified and tested financial systems since 1950, will soon cease to exist. Most of the organization's duties, formerly shared among the Treasury Department, the Government Accountability Office, the Office of Management and Budget and the Office of Personnel Management, will come under control of OMB.

More than 1,000 people attended the meeting, which was conducted with little fanfare or sentiment over the fact that JFMIP was disbanding. Financial leaders throughout government, as well as a couple from the private sector, spoke about their concern for the state of the economy, worrisome demographic trends, and the future of financial regulation and reform.

"We need to quickly get on a more prudent path," said David Walker, Comptroller General and JFMIP principal. He continued in his role as harbinger of an impending financial crisis, which he attributed to widening deficits, rising health care costs, and an increase in retirees.

He urged the audience, made up primarily of financial managers, to address the problem by creating more readable financial information, sharpening financial accounting and reporting procedures, and developing new ways of measuring the costs of programs.

"Companies can go down. Countries must not," he said.

Donald Hammond, Treasury's fiscal assistant secretary, explained the importance of making data more accessible with a story about his 14-year-old son. When Hammond showed his son a federal financial report, his son was so excited to read about NASA's budget that he wanted to read more online. That told Hammond that if material is available and written in an interesting way, people will be interested in it.

He noted that many financial managers spend much of their time creating reports. "But if nobody's reading them, then what exactly are we doing?" he asked.

Clay Johnson, OMB's deputy director for management, announced he will post data on the performance of 1,200 government programs online in the next six months. The Web site will include program outcomes and goals, and will be based on OMB's Program Assessment Rating Tool.

"[Taxpayers] deserve to know what we're doing with their money," he said.

Many familiar with federal financial management consider JFMIP an emblem of objectivity and high standards, and some expressed concern that the shift to OMB will affect financial systems testing and certification.

"From my perspective, getting rid of JFMIP is a mistake," said Pete Smith, president of the Private Sector Council, an organization devoted to the sharing of information about management practices between the public and private sectors. "A lot of money invested in [financial management] was misspent, and JFMIP had a lot to do with getting that under control," he added.

The big benefit of JFMIP, he said, is that it is isolated from political and budget issues. At OMB, that will no longer be the case. "It's harder for them to do an independent look at the technology," he said. "At JFMIP, there was no politics in the meeting."