Three agencies recognized for financial management gains

Three agencies have proven their ability to use financial information in daily decision-making, earning recent promotions to "green" grades indicating success in that area of the President's Management Agenda.

The Housing and Urban Development Department, U.S. Agency for International Development and Office of Personnel Management all moved up from yellow, for mixed results, to green on the latest traffic-light-style report card released earlier this week.

With the latest change, 12 agencies have the top rating in financial management, while the other 14 graded -- including the behemoth Defense Department -- are stuck at red for poor performance.

To earn a yellow rating, agencies must meet standards that include obtaining a clean audit of their financial statement and not having any recurring material weaknesses, or significant problems with the accounting process. For many agencies, getting to the first clean audit is a huge hurdle. To move from yellow to green, agencies must show that they are using their newly available financial data to make informed management decisions.

Office of Management and Budget Controller Linda Combs said HUD, USAID and OPM had all met that standard.

Combs highlighted HUD's new systems for asset management and activity-based costing in public and Indian housing programs. She said OPM now is able to accurately calculate the cost of conducting investigations of employees' backgrounds and bill agencies accordingly, while USAID implemented a new financial system that shows actual cost allocations and helps hold managers accountable for meeting cost reduction targets.

Several agencies are within striking distance of getting a green rating in the near future, Combs said. She cited the Treasury and Interior departments and the Small Business Administration, which each had one material weakness, as examples. She said the Energy Department, which had and lost a clean audit opinion, also is making progress to get back to a good standing.

But Combs said the fact that no agencies are judged to be in the yellow zone could indicate a need to recalibrate the score card standards. "Either everybody is all bad, or all good, [and] we don't have, kind of, middle ground for these people to work on. I don't think that captures the reality of where agencies are," she said.