Financial Management in the 21st Century - AGA Washington, DC ...

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9 Νοε 2013 (πριν από 4 χρόνια)

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Government Financial
Management in a

Time of Transition


McCoy Williams

Managing Director

Financial Management and Assurance


AGA Washington, DC Chapter and GWSCPA

7
th

Annual Conference

May 7, 2008

2

Presentation Outline


Overview of changing environment


Fiscal sustainability issues


Opportunities for the accountability
community

3

Overview of Changing
Environment

4

Transitions at GAO


Jeff Steinhoff retired earlier this year after more than 40 years of
government service. His contributions to the federal audit
community were exceptional.



These are large shoes to fill and I look forward to working with the
audit community, continuing GAO’s long
-
standing efforts in
coordinating with professional organizations such as the AGA.



Following David Walker’s resignation as the Comptroller General,
GAO will continue to work with the audit community under the
leadership of Gene Dodaro, who previously led our Financial
Management and Assurance team. He is well
-
positioned to provide
continuity and leadership in this area.



5

Overview of 21
st

Century Changes


Fiscal environment has changed significantly


Homeland security takes center stage


Defense budget increases dramatically


Domestic needs remain to be resolved


Effective management is essential


Financial managers need to change
with the times

6

Accountability Is Key


In this changing environment, achieving financial
accountability becomes even more critical


A clean opinion is not the finish line but rather a
byproduct of accountability based on sound controls and
accurate, timely, and meaningful financial data


Important to maintain efforts to achieve the larger CFO
Act goals


19 of 24 agencies received clean opinions for FY
2007

up from 6 in 1996


Work needed on key large departments


7

Impediments Related to the U.S. Government
Consolidated Financial Statements


Serious, long
-
standing financial management
problems at DOD


Inability to account for and reconcile intra
-
governmental activity


Ineffective process for preparing the
consolidated financial statements

8

Positive Developments Related to the U.S.
Government Consolidated Financial Statements


GAO issued first unqualified opinion on the fiscal year 2007
Consolidated Statement of Social Insurance. Covers some of
the largest numbers in the federal government

tens of
trillions of present
-
value dollars associated with future social
insurance expenditures.


First
-
ever “Citizen’s Guide” was issued on February 14, 2008.
Provides a user
-
friendly summary report of the
2007
Financial Report of the United States Government
.
Represents an important step forward in improving public
understanding of the federal government’s true financial
condition and fiscal challenges

both today and over the
longer term.


http://www.gao.gov/financial/fy2007financialreport.html




9



Fiscal Sustainability Issues

10

Aging of the Population

11

Federal Spending for Mandatory and
Discretionary Programs

26%
67%
7%
Net interest
Discretionary
Mandatory
14%
44%
42%
1966


Net Interest

1986

Discretionary


9%
38%
53%
2006


Mandatory


Source: Office of Management and Budget.


12

The Unsustainable Fiscal Path

0
10
20
30
40
50
2006
2010
2015
2020
2025
2030
2035
2040
2045
2050
Percent of GDP
Source: GAO analysis.

2017

Social
Security
benefits
exceed
taxes

2041

Full Social Security
benefits cannot be paid
from taxes; financed by
borrowing

2019

Full
Medicare
Part A
benefits
cannot be
paid from
taxes;
financed by
borrowing

2007

Medicare
Part A
benefits
exceed
taxes

Revenue

Deficit

2029

Debt/GDP
exceeds
historical
peak in
World
War II
period

13

Current Fiscal Policy Is Unsustainable


The “Status Quo” is not an option


We face large and growing structural deficits largely due
to known demographic trends and rising health care costs


GAO’s simulations show that balancing the budget in
2040 could require actions as large as


Cutting total federal spending by 60 percent or


Raising federal taxes to 2 times today’s level


We cannot grow our way out of this problem


Tough choices will be required

14



Opportunities for the
Accountability Community

15

Challenges as Opportunities


This challenging environment provides
opportunities for financial managers


Value
-
added skills in areas such as financial
analysis, performance metrics, and forensic
auditing are key


The ultimate goal is having real
-
time, accurate
information needed for day
-
to
-
day management

16

The Need for Good Governance,
Transparency, and Accountability


Good governance, transparency, and accountability are
critical to supporting a healthy economy and the efficient
and effective administration and assessment of public
policies


The accountability community has an opportunity and
an obligation to help steer the course for the new
administration in 2009 and beyond.

17

Be Forward Looking and Thinking


Look at how government does business day to day


Ensure managers routinely have timely, accurate, and
useful information for managing operations


Value added and forward thinking activities include
developing useful business metrics and demonstrating
the impact of effective internal controls on mission
effectiveness


One way to think of this role: we should be the
headlights to guide our organization not the taillights
looking back


18

Financial Managers as Leaders


Recent CG Forum on Financial Management Systems
brought together leaders from the CFO, CIO, and IG
communities as well as private sector experts



Emerging theme was the view that in order to remain
relevant, accounting professionals must be willing to embrace
change and identify ways to prove their value to the entire
organization


Roles of the CFO and federal financial organizations need to
be redefined


(GAO
-
08
-
447SP)

19

Financial Managers as Leaders


Financial managers must be prepared to provide the
tools needed to assist program managers in achieving
the organization’s mission


Those with the better tools will find themselves with a
seat at the table

side
-
by
-
side with agency leadership
for the 21
st

century


20

Questions and Answers