As we testified last month, given the serious and pervasive nature of DOD’s financial management problems, and the need for more immediate progress, the Department needs to consider additional steps to (1) establish a skilled financial management workforce, (2) ensure that financial management systems are capable of producing accurate data, and (3) build an effective financial management organization structure with clear accountability. CFO Act agencies, however, need to ensure that CFOs possess all the necessary authorities within their agencies to achieve change. Moreover, implementing the CFO Act’s objective of upgrading financial operations, such as developing performance measurement systems and integrating budget and accounting data, will require significantly enhanced staff skills. The first important step was taken with the CFO Act requirement for the preparation and audit of financial reports to achieve basic data reliability. Recent GAO Testimony on the Benefits on Preparing and Auditing Agencywide Financial Statements

Financial Management: Momentum Must Be Sustained to Achieve the Reform Goals of the Chief Financial Officers Act (GAO/T-AIMD-95-204, July 25, 1995).
Why GAO Did This Study

GAO discussed the progress being made to implement financial management reforms through the Chief Financial Officers (CFO) Act.

What GAO Found

GAO noted that improving financial management through implementation of the CFO Act requires: (1) implementing expanded requirements for financial statement audits to improve the reliability of data for decisionmaking; (2) strengthening the efficiency of revenue collection operations and controls; (3) building stronger financial management organizations by upgrading skill levels, enhancing training, and ensuring that CFO possess the necessary authority to achieve change; (4) better solutions to address problems with agencies' underlying financial systems; and (5) designing accountability reports to allow more thorough and objective assessments of agencies' performance and financial conditions and to enhance the budget preparation and deliberation process.