Audits In; Records Broken

As careful stewards of the taxpayers’ dollars, the Federal Government has a responsibility to ensure that it is spending money responsibly and keeping its books in order for all to see.  Just like companies in the private sector, our Federal agencies must undergo thorough audits each year to ensure that we are practicing sound financial management.  And today, I am pleased to announce that - for the first time since the passage of the Chief Financial Officers (CFO) Act over twenty years ago - twenty-three of the twenty-four applicable agencies obtained an opinion from the independent auditors on their financial statements. 

These results are not just about numbers on a ledger.  They are about this Administration’s commitment to watching every dollar that goes out the door and making sure that we have the proper controls, practices, and safeguards in place on those dollars.  And although this effort is an ongoing challenge, we are excited that we continue to make progress on improving financial reporting and internal controls.  This year’s audit results are evidence of this progress, showing twenty-one “clean” opinions, two qualified opinions, and only one remaining disclaimer. 

As always, agencies demonstrated their dedication to improving the timeliness and reliability of Federal financial reporting.  Most notable was the progress made at the National Aeronautics and Space Administration (NASA) and the Department of Homeland Security (DHS).  For several years, NASA has worked to remedy challenges they faced reporting certain unique assets, such as space exploration equipment.  This year, their efforts paid off and they moved from a position where the auditors could not express an opinion on their financial statements to a clean opinion.  DHS was also able to make progress, moving from a similar position where they could not get an opinion to now receiving a qualified opinion.

One agency, the Department of Defense (DOD), still faces several challenges in obtaining an audit opinion largely due to the size and complexity of the agency.  But they are committed to getting there.  Last month, Secretary Panetta went up to Congress and committed to achieving an audit by 2014 – three years sooner than previously planned.  To achieve this goal, DOD has established a path forward that focuses on improving the information the agency uses most in order to manage mission critical assets.  In addition, DOD has increased its resources that are dedicated to obtaining auditable financial statements and has established a strong, visible governance structure ─ key steps that will enable success for the agency.

This year’s achievement would not have been possible without the dedication and hard work that so many in the CFO and audit community have shown and continue to show.  As we all know, the financial management environment in the Federal Government is increasingly challenging at this time of tight budget constraints, and the dedicated civil servants and auditors continue to face these challenges head-on and make the necessary improvements to strengthen Federal financial management.

Danny Werfel is Controller of the Office of Federal Financial Management.