Developing and Implementing Effective Federal Financial Management Systems

Financial management system problems continue to impair federal agency accountability and the flow of reliable, timely, and useful information to decision makers. The current extensive network of slow, error-prone, noncompliant, nonintegrated federal financial management systems are the result of decades of isolated system development efforts carried out to accommodate different federal agencies and components, each operating with its own policies and procedures.

• Many federal agencies expend extensive time and resources on elaborate work-arounds intended to develop needed financial information that their systems should be able to provide on a routine basis.
• Federal financial management system improvement efforts—initiated to address many long-standing system deficiencies—often do not provide anticipated system functionality and performance because agencies have not adopted disciplined processes and information technology management practices shown to minimize system implementation risks.
• Progress continues on the the Office of Management and Budget's (OMB) initiative to require federal agencies to migrate their core financial management system to an external provider but extensive work remains and its future success remains uncertain until key concepts and elements, such as a concept of operations and migration timeline, are fully integrated into its approach.
• One of the prevailing themes from a recent GAO Comptroller General forum on improving federal financial management systems was that they should go beyond providing the data necessary to comply with federal financial reporting requirements to also focus on routinely producing integrated financial, program, and budget information needed to effectively support systematic performance measurement.
• Transforming federal financial management systems, including standardizing, streamlining, and re-engineering supporting business processes, will require sustained commitment not only from the federal financial community but also from top leaders throughout the administration and the Congress.

^ Back to topWhat Needs to Be Done

To help further progress toward developing and implementing effective federal financial management systems and meeting the goals of the Federal Financial Management Improvement Act, OMB needs to

• work with chief financial officers, inspectors general, and GAO to resolve inconsistencies in FFMIA and OMB guidance for determining substantial compliance and to assist auditors and agency management in consistently evaluating agency systems' ability to provide reliable, timely, and useful information to decision makersas required by FFMIA;
• place a high priority on key concepts and related underlying issues integral to best facilitating the implementation of an effective federal financial management line of business and properly aligned financial system enhancement efforts across the federal government.
  
  Highlights of GAO-08-1018 (PDF), Highlights of GAO-09-328 (PDF)
• Obtain and report complete and accurate information on how much agencies spend on modernizing federal financial management systems to adequately understand and evaluate the risks associated with such projects.
  
  Highlights of GAO-09-328 (PDF)

^ Back to topKey Reports

Highlights of a Forum Convened by the Comptroller General of the United States

Financial Management Systems

Financial Management Systems

Financial Management

More Reports