Improving Financial Management Issue Summary In the government structure of the past, financial management and project management failed to work together to achieve results. This was mainly because line managers did not have access to or control over the financial tools they needed to get things done. Even with some 120,000 federal employees producing hundreds of rules and thousands of reports, executives and managers often lacked a clear financial picture of their organizations. Worse, many never received the type of useful financial data they needed to support a results driven approach to providing customer service. Why? To start, past federal financial systems did not follow the same professional financial standards required of private companies, states, and localities. The federal financial management structure was a hodgepodge of redundant programs that failed to incorporate budgeting, accounting, and product sales within one coordinated system. Any private business that operated this way would soon go belly up. A total lack of focus on results was another key reason the financial structure was so unresponsive. To solve this problem, we have shifted the focus away from internal cash flow controls that have no connection with achieving results and toward financial information that supports the timely delivery of programs and services to customers. The President has articulated a clear vision of the future for federal financial management. It emphasizes technology for transferring funds quickly and cost effectively, and as an efficient way to collect and disperse meaningful financial information to line managers. The National Performance Review is implementing recommendations in support of this vision. The NPR has identified readily available technologies that can automatically compile and monitor financial data. Working in the background, these systems can alert managers to potential problem areas while monitoring accountability for program spending. Such automated capabilities can let line managers focus on performance and results while bringing financial personnel onto the project team as advisors and consultants. We are working to achieve two main objectives. One is to build a strong financial management infrastructure that takes much more advantage of Electronic Funds Transfer, Electronic Reporting, and other cost efficient technologies. The second is to incorporate sound business and financial practices. These will support line managers in achieving results, and provide the Administration and Congress with a clearer picture of federal finances. During the past year, working together, we have made progress. The Chief Financial Officer's Council has developed a strategic plan for integrating budget, financial, and program information government-wide. By the spring of 1995, the Financial Accounting Standards Advisory Board is committed to issuing a complete set of federal accounting standards. The Secretary of Commerce has approved a digital signature standard so agencies can now dramatically increase their use of electronic data interchange and fund transfers. At the agency level, we are seeing a new effort to market internal services, such as payroll processing, to other federal entities. Your participation in this Electronic Open Meeting will go a long way toward energizing, refining, and implementing NPR Recommendations affecting financial management systems. During the next two weeks you'll be able to connect, engage, and network with participants across the federal workforce. By sharing experiences and ideas on government reinvention, this Electronic Open Meeting will help forge the enterprising and pragmatic solutions needed to create a government that works better and costs less.
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