We also reviewed the auditors’ workpapers for the 24 CFO Act agencies to  assess the nature and extent of FFMIA testing. Auditors for 19 of the 24 CFO Act  agencies reported that for fiscal year 2000, the agencies’ systems did not  comply substantially with one or more FFMIA requirements—federal  systems requirements, federal accounting standards, or the SGL. 01-02, these auditors are not saying that the  systems are in substantial compliance, but that the results of their tests  disclosed no instances in which the agencies’ systems did not substantially  comply with FFMIA. Nonintegrated Financial Management Systems

One of the federal financial management systems requirements is that  agencies’ financial management systems be integrated. The CFO Act calls  for agencies to develop and maintain an integrated accounting and  financial management system that complies with federal systems  requirements and provides for (1) complete, reliable, consistent, and timely  information that responds to the financial information needs of the agency  and facilitates the systematic measurement of performance; (2) the  development and reporting of cost information; and (3) the integration of  accounting, budgeting, and program information. Many of these officials agree  that a key to improving financial management and complying with FFMIA  is to have an integrated financial system that provides reliable, useful, and  timely information that managers can use for day-to-day operations. Of the 21 agencies whose systems were reported to be noncompliant with  FFMIA in fiscal year 1999, 16 prepared remediation plans. The plans would be further  enhanced by including intermediate target dates.
What GAO Found

Effective management of the government's day-to-day operations has been hampered by a lack of necessary data. The Chief Financial Officers (CFO) Act of 1990 calls for the modernization of federal financial management systems, including the systematic measurement of performance; the development of cost information; and the integration of program, budget, and financial information. The Federal Financial Management Improvement Act of 1996 (FFMIA) encourages agencies to have systems that generate timely, accurate, and useful information with which to make informed decisions and to ensure accountability on an ongoing basis. Auditors for 19 of the 24 CFO Act agencies reported that their agencies' financial management systems did not comply substantially with FFMIA requirements, compared to 21 agencies reported as not being substantially compliant for 1999. The auditors for five CFO Act agencies reported no instances in which the agencies' systems did not substantially comply with FFMIA. These auditors, however, did not definitively state whether the agencies' financial management systems substantially complied with FFMIA. FFMIA requires agencies to prepare remediation plans to overcome financial management systems problems. These plans have improved over the fiscal year 1998 plans; however, further enhancements are needed.