United States Government Accountability Office

GAO Report to the Committee on Homeland 

Security and Governmental Affairs, 

U.S. Senate, and the Committee on 

Government Oversight and Reform, 

House of Representatives 

FINANCIAL 

MANAGEMENT 

Long-standing 

Financial Systems 

Weaknesses Present a 

Formidable Challenge 

August 2007 

 

GAO-07-914 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

August 2007

FINANCIAL MANAGEMENT 

Long-standing Financial Systems 

Weaknesses Present a Formidable 

Challenge 

Highlights of GAO-07-914, a report to the 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate, and 

the Committee on Oversight and 

Government Reform, House of 

Representatives 

The Federal Financial Management 

Improvement Act of 1996 (FFMIA) 

requires the 24 Chief Financial 

Officers (CFO) Act agencies to

implement and maintain financial 

management systems that comply

substantially with (1) federal 

financial management systems 

requirements, (2) federal 

accounting standards, and (3) the 

U.S. Government Standard 

General Ledger (SGL). FFMIA also 

requires GAO to report annually on 

the implementation of the act. 

This report, primarily based on

GAO and inspectors general 

reports, discusses (1) the problems

that continued to affect agencies 

systems’ FFMIA compliance in 

fiscal year 2006 and (2) the

initiatives under way to help move

federal financial management 

toward FFMIA compliance. 

Federal agencies have continued to make progress in meeting the 

requirements of FFMIA since the passage of the law in 1996. Most agencies 

though, have not yet progressed to the stage that their systems are 

substantially compliant, and some agencies have made little progress. 

Accordingly, agencies continue to fall short in their attempts to establish the 

financial systems needed to create the full range of information needed for 

effective day-to-day management. In fiscal year 2006, auditors for 17 of the 

24 CFO Act agencies reported that agencies’ financial management systems 

did not substantially comply with at least one of the three FFMIA 

requirements. As shown below, based on audit reports, GAO identified six 

types of problems primarily related to agencies’ systems. These problems 

with agency financial systems remain a significant obstacle to supporting 

effective management of the federal government. 

Number of Agencies with Reported FFMIA Compliance Problems for Fiscal Years 2002 

through 2006 

0

6

12

18

24

Weak

security over

information

systems

Lack of

adherence

to federal

accounting

standards

Noncompliance

with the SGL

Lack of

accurate

and timely

recording

Inadequate

reconciliation

procedures

Nonintegrated

financial

management

systems

CFO Act agencies

Fiscal year

Source: GAO analysis, based on independent auditors' financial statement audit reports.

13

11 12 13 12 11 11 11

14 14

17

15 16 17

15

9 10 11 11

7

13

11 11 11 10

19

17

15 15 16

2002 2003 2004 2005 2006

With regard to improvement initiatives, GAO noted continued progress in 

two key areas: (1) agencies’ required remediation plans and (2) the Office of 

Management and Budget’s (OMB) efforts to address system implementation 

problems. All 12 of the remediation plans GAO reviewed included corrective 

actions, but several were missing key elements. Moreover, agencies continue

to struggle with efforts to modernize their financial management systems. 

This problem is particularly acute at the Department of Defense. Agency

modernization efforts have been consistently hampered by failure to follow 

best practices in systems development and implementation, commonly 

referred to as disciplined processes. As a result, these efforts far too often do

not meet cost, schedule, and performance goals. To help address these 

problems, OMB has demonstrated continued progress in the implementation 

of the financial management line of business initiative. However, additional 

steps forward are needed to provide a foundation for this initiative. 

What GAO Recommends

To further understand the key 

issues that affect FFMIA 

implementation and challenges in 

improving financial management 

systems, the Comptroller General 

is convening a forum later this year 

to bring together key officials and 

experts for a candid discussion of

these issues. Accordingly, this 

report does not include any new 

recommendations. OMB was 

supportive of the forum, agreed 

with GAO's assessment, and stated

it was working aggressively to

assist agencies in building a strong 

foundation of financial 

management practices.

www.gao.gov/cgi-bin/getrpt?GAO-07-914.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact McCoy 

Williams at (202) 512-9095 or 

williamsm1@gao.gov. 
Contents 

Letter 1

Results in Brief 2 

Background 8

Scope and Methodology 12 

FFMIA Assessments Identify Marginal Improvements in Some 

Cases 13

Efforts Are Under Way to Address Federal Financial Management 

System Challenges 27 

Conclusion 36

Agency Comments and Our Evaluation 37 

Appendix I Requirements and Standards Supporting Federal 

Financial Management 40 

Financial Management Systems Requirements 40 

Federal Accounting Standards 43 

U.S. Government Standard General Ledger (SGL) 44 

Internal Control Standards 44 

Appendix II Publications in the Federal Financial Management 

Systems Requirements Series 46 

Appendix III Statements of Federal Financial Accounting 

Concepts, Standards, Interpretations, and Technical 

Bulletins 47 

Appendix IV Accounting and Auditing Policy Committee Technical 

Releases 50 

Appendix V Checklists for Reviewing Systems under the Federal 

Financial Management Improvement Act 51 

Page i GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix VI Comments from the Office of Management 

and Budget 52 

Appendix VII GAO Contact and Staff Acknowledgments 54 

Figures 

Figure 1: Auditors’ FFMIA Assessments for Fiscal Years 1997 

through 2006 3 

Figure 2: Number of Agencies with Reported FFMIA Compliance 

Problems for Fiscal Years 2002 through 2006 5 

Figure 3: Auditors’ FFMIA Assessments for Fiscal Years 1997 

through 2006 13 

Figure 4: Number of Agencies with Reported FFMIA Compliance 

Problems for Fiscal Years 2002 through 2006 18 

Figure 5: Number of CFO Act Agencies with Reported 

Nonintegrated Financial Management Systems Problems 

for Fiscal Years 2002 through 2006 20 

Figure 6: Number of CFO Act Agencies with Reported Inadequate 

Reconciliation Procedures Problems for Fiscal Years 2002 

through 2006 21 

Figure 7: Number of CFO Act Agencies with Reported Lack of

Accurate and Timely Recording Problems for Fiscal Years 

2002 through 2006 22 

Figure 8: Number of CFO Act Agencies with Reported 

Noncompliance with the SGL Problems for Fiscal Years 

2002 through 2006 23 

Figure 9: Number of CFO Act Agencies with Reported Lack of

Adherence to Federal Accounting Standards Problems for 

Fiscal Years 2002 through 2006 25 

Figure 10: Number of CFO Act Agencies with Reported Weak 

Security over Information Systems Problems for Fiscal 

Years 2002 through 2006 26 

Figure 11: Summary of Analysis of Elements Included in 12 

Agencies’ Summarized Remediation Plans for Fiscal Year 

2006 29

Figure 12: Agency Systems Architecture 41 

Page ii GAO-07-914 FFMIA Fiscal Year 2006 Results
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Page iii GAO-07-914 FFMIA Fiscal Year 2006 Results
United States Government Accountability Office

Washington, DC 20548 

August 3, 2007 

The Honorable Joseph I. Lieberman 

Chairman 

The Honorable Susan M. Collins 

Ranking Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable Henry A. Waxman 

Chairman 

The Honorable Tom Davis 

Ranking Member 

Committee on Oversight and Government Reform 

House of Representatives 

Having the reliable, useful, and timely financial data needed to efficiently 

and effectively manage their day-to-day operations is a long-standing 

challenge for federal agencies. To address this challenge, the Congress 

mandated financial management reform within the federal government by 

enacting the Chief Financial Officers (CFO) Act of 1990.

1

 The CFO Act laid 

the foundation for a comprehensive reform of federal financial 

management by establishing a leadership structure, requiring audited

financial statements, and strengthening accountability reporting. This act 

also requires agencies to implement modern financial management 

systems in order to attain the systematic measurement of performance; 

the development of cost information; and the integration of program, 

budget, and financial information for management reporting. The end goal

of the CFO Act is to greatly enhance the ability of federal managers to do

their jobs by providing the full range of financial information needed for 

day-to-day management. 

Building on the foundation laid by the CFO Act, the Federal Financial 

Management Improvement Act of 19962

 (FFMIA) requires the major 

departments and agencies covered by the CFO Act to implement and 

 1

Pub. L. No. 101-576, 104 Stat. 2838 (Nov. 15, 1990). 

2

Federal Financial Management Improvement Act of 1996, Pub. L. No. 104-208, div. A., § 

101(f), title VIII, 110 Stat. 3009, 3009-389 (Sept. 30, 1996). 

Page 1 GAO-07-914 FFMIA Fiscal Year 2006 Results
maintain financial management systems that comply substantially with 

(1) federal financial management systems requirements, (2) applicable

federal accounting standards, and (3) the U.S. Government Standard 

General Ledger (SGL) at the transaction level. The act also requires the 

heads of agencies and auditors to determine whether the agencies’ 

financial management systems comply with the act’s requirements. In 

addition, we are required to report annually on the implementation of the 

act. 

This report discusses (1) the auditors’ assessments of federal agency

systems’ compliance with FFMIA requirements for fiscal years 1997 

through 2006 and the financial management systems problems that 

continued to affect systems’ FFMIA compliance in fiscal year 2006 and 

(2) the initiatives under way to help move federal financial management 

toward the goals of the CFO Act and FFMIA compliance. This report 

incorporates historical information from our prior FFMIA reports, other 

reports issued by GAO, and reports issued by inspectors general (IG). We 

analyzed and summarized information from these reports that related to 

FFMIA issues and determined that the data in these reports were 

sufficiently reliable for the purposes of this report. We conducted our 

work from January through June 2007 in Washington, D.C., in accordance

with generally accepted government auditing standards. We requested 

comments on a draft of this report from the Director of the Office of 

Management and Budget (OMB) or his designee. We received written 

comments from the OMB Controller. OMB’s comments are discussed in 

the Agency Comments and Our Evaluation section and reprinted in 

appendix VI.

Since the passage of FFMIA, agencies have made progress in improving 

their financial management systems. We have seen incremental 

improvements throughout government, with some agencies making 

dramatic improvements. At the same time, much work remains to fulfill 

the underlying goals of FFMIA. As shown in figure 1, the number of 

agencies reported as having systems that were not in substantial 

compliance with at least one of the three FFMIA systems requirements 

improved from 20 in fiscal year 1997 to 17 in fiscal year 2006. In fiscal year 

2006, as in the past, the majority of agencies’ financial management 

systems were still not able to routinely produce reliable, useful, and timely

financial information for day-to-day management. These shortcomings 

impede agency managers’ access to adequate financial data to effectively 

manage and oversee their major programs. 

Results in Brief 

Page 2 GAO-07-914 FFMIA Fiscal Year 2006 Results
Figure 1: Auditors’ FFMIA Assessments for Fiscal Years 1997 through 2006 

0

6

12

18

24

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CFO Act agencies not in compliance

Source: GAO compiled from independent auditors' financial statement audit reports

prepared by agency inspectors general and contract auditors for fiscal years 1997 through 2006.

Fiscal year

20

21 21

19

20

19

17

16

18

17

In fiscal year 2006, auditors for one CFO Act agency, the U.S. Agency for 

International Development (AID), provided positive assurance—which is 

an opinion based on the nature and extent of audit work performed—that 

AID’s financial management systems substantially complied with the 

requirements of FFMIA. Auditors for the remaining six3

 CFO Act agencies 

provided negative assurance of FFMIA compliance. In essence, they

reported that nothing came to their attention during the course of the 

audit to indicate that these agencies’ financial management systems did 

not meet FFMIA requirements. Negative assurance is the level of 

assurance specified by OMB’s audit guidance for reporting on FFMIA 

compliance. However, as we have previously reported, the extent of 

FFMIA compliance can be reliably determined through adequately testing 

systems to provide positive assurance. 

 3

Department of Commerce (Commerce), Environmental Protection Agency (EPA), General

Services Administration (GSA), National Science Foundation (NSF), Office of Personnel 

Management (OPM), and Social Security Administration (SSA). 

Page 3 GAO-07-914 FFMIA Fiscal Year 2006 Results
As shown in figure 2, agencies with systems reported not to be in 

substantial compliance with FFMIA requirements have made some 

progress in addressing the six problem areas that we have previously 

reported. For example, in fiscal year 2006 financial statement audit 

reports, auditors identified 7 instances of noncompliance with the SGL,4

compared with 11 reported in fiscal year 2005. As a case in point, auditors 

at AID identified various actions taken to improve the level of compliance, 

such as retiring legacy systems that were not SGL compliant and replacing

them with new systems that comply with the SGL. Nevertheless, the 

nature and seriousness of the problems reported indicate that most 

agencies’ financial management systems are frequently unable to routinely 

produce reliable, useful, and timely financial information to support dayto-day management. Addressing the problems with agencies’ financial 

management systems remains a significant challenge to improved financial 

management in the federal government. This problem is particularly 

severe at the Department of Defense. Many agencies are still a long way 

from accomplishing the goals of the CFO Act of 1990 and FFMIA. 

 4

The SGL provides a standard chart of accounts and standardized transactions that

agencies are to use in all their financial systems. 

Page 4 GAO-07-914 FFMIA Fiscal Year 2006 Results
Figure 2: Number of Agencies with Reported FFMIA Compliance Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

Weak security

over information

systems

Lack of adherence

to federal

accounting

standards

Noncompliance

with the SGL

Lack of accurate

and timely

recording

Inadequate

reconciliation

procedures

Nonintegrated

financial

management

systems

CFO Act agencies

Problem areas

Fiscal year

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

2002

2003

2004

2005

2006

13

11

12

13

12

11 11 11

14 14

17

15

16

17

15

9

10

11 11

7

13

11 11 11

10

19

17

15 15

16

With regard to initiatives that are under way to help move federal agencies

toward FFMIA compliance, we noted continued progress in two key areas: 

(1) agencies’ summarized remediation plans in their performance and 

accountability reports (PARs) and (2) OMB’s efforts to address system 

implementation problems. Heads of agencies that have systems not in 

substantial compliance are required to establish remediation plans to 

correct system deficiencies. FFMIA specifically requires that remedies, 

resources, and target dates be included in the remediation plans. OMB 

guidance requires agencies to summarize these plans in their PARs. A lack 

of the required data in the remediation plans can reduce the likelihood of 

successfully implementing corrective actions. Remediation plans provide a 

“road map” for management and staff to resolve financial management 

problems in a transparent manner, and also help hold managers 

Page 5 GAO-07-914 FFMIA Fiscal Year 2006 Results
accountable for needed improvements. For 55

of the 17 agencies for which 

the auditors reported FFMIA noncompliance for fiscal year 2006, the 

agency heads disagreed with the auditors and considered their agencies’ 

systems to be substantially compliant with FFMIA. Therefore, they did not 

prepare remediation plans. We reviewed the remaining 12 fiscal year 2006

PARs for the agencies’ systems that were deemed noncompliant by their 

agency head and auditor to determine if a summarized remediation plan 

with the required information was included in the agency PAR. All of the 

agencies’ PARs included summarized remediation plans along with 

proposed corrective actions. However, 4 of the 12 agencies did not include 

information on staffing resources required to complete the planned 

corrective actions. One agency omitted target dates for completion of the 

corrective actions to become substantially compliant with FFMIA. A 

discussion of the resource requirements needed to implement the 

corrective actions and the time frame for completion of corrective actions

is essential in determining whether the corrective actions can realistically

be accomplished. The significance of the issues facing federal agencies, 

now and in the future, necessitates remediation plans that clearly and fully 

describe the corrective actions necessary to resolve problems, as well as 

the resources and time frames required to successfully implement those 

actions. 

To help address systems implementation problems, OMB continues to 

move forward on initiatives that support the President’s Management 

Agenda (PMA) to enhance financial management and provide resultsoriented information in the federal government. A key initiative has been 

the further development of the financial management line of business to 

promote leveraging shared service solutions to enhance the government’s 

performance and services. OMB has demonstrated continued progress 

toward implementation of the financial management line of business 

initiative by developing, for example, migration planning guidance and 

financial management service performance metrics. OMB’s initial 

framework for the competitive migration to either a public shared service 

provider or a qualified private sector provider under the initiative is 

expected to help agencies maximize value by considering alternative 

solutions in a reasoned and structured manner. 

 5

Departments of Education, Housing and Urban Development (HUD), Interior, Labor, and 

State. 

Page 6 GAO-07-914 FFMIA Fiscal Year 2006 Results
Continuing progress needs to be made to provide a sound foundation for

this initiative. For example, as we reported in March 2006,6

 the lack of a 

federal governmentwide concept of operations7

 significantly impairs the 

potential success of this initiative. Moreover, shared service providers 

have been designated without common business rules and potential 

customer agencies continue to implement and operate individual stovepiped systems that may require additional work to adopt these processes. 

In addition, as of the completion of our audit work, none of the major CFO 

Act agencies had moved their financial management systems activities to 

an OMB-designated shared service provider,8

 although actions are under 

way at several major agencies to do so. 

To further understand the underlying issues that affect the development of

sound financial management systems and FFMIA implementation and to

develop steps to overcome long-standing challenges, the Comptroller 

General plans to convene a forum later this year to bring together key 

subject matter experts and practitioners to discuss these issues. After the 

forum, we plan to issue a separate report summarizing the discussion and 

consider the key issues in our future FFMIA work. Accordingly, we are not 

making any new recommendations in this report. 

In commenting on a draft of this report, OMB agreed with our assessment 

that federal agencies have continued to make progress in financial 

management and that many agencies still need to improve their financial

systems so that reliable, useful, and timely financial management 

information is available for day-to-day operations. OMB stated that it was 

working aggressively to assist agencies in building a strong foundation for

financial management practices and also applauded our plans to convene 

a forum on these issues. As in previous years, we and OMB have differing

views on the level of audit assurance necessary for assessing and reporting

on compliance with FFMIA. OMB stated in its comments that requiring a 

 6

GAO, Financial Management Systems: Additional Efforts Needed to Address Key Causes 

of Modernization Failures, GAO-06-184 (Washington, D.C.: Mar. 15, 2006).

7

A concept of operations defines how an organization’s day-to-day operations are (or will 

be) carried out to meet mission needs. It includes high-level descriptions of information

systems, their interrelationships, and information flows. It also describes the operations

that must be performed, who must perform them, and where and how the operations will 

be carried out. 

8

Some CFO Act agencies, such as the Department of Transportation, the General Services 

Administration, and the Nuclear Regulatory Commission were already using the shared

service provider concept prior to OMB’s financial management line of business initiative. 

Page 7 GAO-07-914 FFMIA Fiscal Year 2006 Results
statement of positive assurance would be costly and would not provide 

additional information that would be of benefit to the federal agency, 

OMB, or the taxpayer. We continue to believe that a statement of positive 

assurance is a statutory requirement under the act and there are a number 

of techniques that auditors can use to minimize the incremental cost of 

providing positive assurance.9

 In our view, the confidence afforded by 

auditors providing positive assurance that agency financial management 

systems convey reliable, useful, and timely information to help 

government leaders invest resources, oversee programs, and reduce costs, 

would be of significant value to the agency, OMB, the Congress, and the 

taxpayer. We will continue to work with OMB on this issue. OMB did agree 

to take under advisement our prior recommendation to clarify the 

meaning of “substantial compliance” as it updates OMB Circular No. A-127, 

Financial Management Systems. Our detailed discussion of OMB’s 

comments can be found in the Agency Comments and Our Evaluation 

section. We have reprinted OMB’s comments in appendix VI.

FFMIA is part of a series of management reform legislation passed by the 

Congress over the past two decades. This series of legislation started with 

the Federal Managers’ Financial Integrity Act of 198210 (FMFIA), which the 

Congress passed to strengthen internal controls and accounting systems 

throughout the federal government, among other purposes. Issued 

pursuant to FMFIA, the Comptroller General’s Standards for Internal 

Control in the Federal Government11 provides the standards that are 

directed at helping agency managers implement effective internal control, 

an integral part of improving financial management systems. Internal 

control is a major part of managing an organization and comprises the 

plans, methods, and procedures used to meet missions, goals, and 

objectives. In summary, internal control helps government program 

managers achieve desired results through effective management of public 

resources. 

Background 

 9

GAO has worked in partnership with the President’s Council on Integrity and Efficiency

(PCIE) to develop and maintain the joint Financial Audit Manual, which provides specific 

procedures auditors should perform when assessing FFMIA compliance. 

10Pub. L. No. 97-255, 96 Stat. 814 (Sept. 8, 1982) (codified at 31 U.S.C. § 3512 (c), (d)). 

11GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999). 

Page 8 GAO-07-914 FFMIA Fiscal Year 2006 Results
Effective internal control also helps in managing change to cope with 

shifting environments and evolving demands and priorities. As programs 

change and agencies strive to enhance operational processes and 

implement new technological developments, management must 

continually assess and evaluate its internal control to ensure that the 

control activities being used are effective and updated when necessary. 

While agencies had achieved some early success in identifying and 

correcting material internal control and accounting system weaknesses, 

their efforts to implement FMFIA had not produced the results intended 

by the Congress. 

Therefore, beginning in the 1990s, the Congress passed additional 

management reform legislation to improve the general and financial 

management of the federal government. This legislation includes the 

(1) CFO Act of 1990, (2) Government Performance and Results Act of 

1993,

12 (3) Government Management Reform Act of 1994,13 (4) FFMIA, 

(5) Clinger-Cohen Act of 1996,

14 (6) Accountability of Tax Dollars Act of 

2002,

15 (7) Improper Payments Information Act of 2002,16 (8) The Federal 

Information Security Management Act of 2002,17 and (9) Department of 

Homeland Security (DHS) Financial Accountability Act of 2004.18 The 

combination of reforms ushered in by these laws, if successfully 

implemented, provides a solid foundation to improve the accountability of 

government programs and operations as well as to routinely produce 

valuable cost and operating performance information. These financial 

management reform acts emphasize the importance of improving financial 

management of the federal government. 

 12Pub. L. No. 103-62, 107 Stat. 285 (Aug. 3, 1993). 

13Pub. L. No. 103-356, 108 Stat. 3410 (Oct. 13, 1994). 

14Pub. L. No. 104-106, div. E, 110 Stat. 186, 679 (Feb. 10, 1996). 

15Pub. L. No. 107-289, 116 Stat. 2049 (Nov. 7, 2002) (codified at 31 U.S.C. § 3515). The

Accountability of Tax Dollars Act of 2002 extends the requirement to prepare and submit 

audited financial statements to most executive agencies not subject to the CFO Act unless 

they are exempted by OMB. However, these agencies are not required to have systems that 

are compliant with FFMIA requirements. 

16Pub. L. No. 107-300, 116 Stat. 2350 (Nov. 26, 2002). 

17Pub L. No. 107-347, title III 116 Stat. 2946 (Dec. 17, 2002). 

18Pub. L. No. 108-330, 118 Stat. 1275 (Oct. 16, 2004). 

Page 9 GAO-07-914 FFMIA Fiscal Year 2006 Results
In particular, building on the foundation laid by the CFO Act, FFMIA 

emphasizes the need for CFO Act agencies to have systems that ensure 

ongoing accountability and generate reliable, useful, and timely 

information for decision-making purposes. FFMIA requires the 

departments and agencies covered by the CFO Act to implement and 

maintain financial management systems that comply substantially with 

(1) federal financial management systems requirements, (2) applicable

federal accounting standards,19 and (3) the SGL at the transaction level. 

FFMIA also requires auditors to state in their CFO Act financial statement 

audit reports whether the agencies’ financial management systems 

substantially comply with these three FFMIA systems requirements. 

Appendixes I through IV include details on the various requirements and 

standards that support federal financial management. 

Guidance for FFMIA

Issued by OMB 

OMB establishes governmentwide financial management systems policies 

and requirements and has issued two sources of guidance related to 

FFMIA reporting. First, OMB Bulletin No. 06-03, Audit Requirements for 

Federal Financial Statements, dated August 23, 2006, prescribes audit 

requirements, including language auditors should use when reporting on 

an agency system’s substantial compliance with the three FFMIA 

requirements. Specifically, this guidance calls for auditors to provide 

negative assurance when reporting on an agency system’s FFMIA 

compliance. Second, in the OMB Memorandum, Revised Implementation

Guidance for the Federal Financial Management Improvement Act 

(Jan. 4, 2001), OMB provides guidance for agencies and auditors to use in 

assessing substantial compliance.20 The guidance describes some of the 

factors that should be considered in determining whether an agency’s 

systems substantially comply with FFMIA’s three requirements and 

examples of indicators that should be used in assessing whether an 

agency’s systems are in substantial compliance with each of the three 

FFMIA requirements. Finally, the guidance addresses the development of 

remediation plans to be developed by agency officials for bringing their 

systems into compliance with FFMIA. 

 19The American Institute of Certified Public Accountants recognizes the federal accounting 

standards promulgated by the Federal Accounting Standards Advisory Board as generally 

accepted accounting principles. For a further description of federal accounting standards, 

see app. I. 

20OMB has announced that this guidance is under review and will be revised in 2007.

Page 10 GAO-07-914 FFMIA Fiscal Year 2006 Results
We have worked in partnership with the President’s Council on Integrity 

and Efficiency21 (PCIE) to develop and maintain the joint GAO/PCIE 

Financial Audit Manual (FAM). The FAM includes sections that provide 

specific procedures auditors should perform when assessing FFMIA 

compliance.22 These sections include detailed audit steps for testing 

agency systems’ substantial compliance with the requirements of FFMIA. 

Financial Audit Manual

Section on FFMIA 

Developed by GAO and the 

President’s Council on 

Integrity and Efficiency 

As detailed in appendix V, we have also issued a series of checklists to 

help assess whether agencies’ systems meet systems requirements. The 

FAM guidance on FFMIA assessments recognizes that while financial 

statement audits offer some assurance on FFMIA compliance, auditors 

should design and implement additional testing to satisfy FFMIA criteria. 

For example, in performing financial statement audits, auditors generally 

focus on the ability of the financial management systems to process and 

summarize financial information that flows into annual agency financial 

statements. In contrast, FFMIA requires auditors to assess whether an 

agency’s financial management systems comply with system requirements, 

accounting standards, and the SGL. To do this, auditors need to consider 

whether agency systems provide reliable, useful, and timely information 

for managing day-to-day operations so that agency managers would have 

the necessary information to measure performance on an ongoing basis 

rather than just at year end. Further, OMB’s current audit guidance23 calls 

for financial statement auditors to review performance information for 

consistency with the financial statements, but does not require auditors to

determine whether this information is available to managers for day-to-day 

decision making as called for by the FAM guidance for testing compliance 

with FFMIA. In collaboration with the PCIE, we are currently in the 

process of updating the FAM and expect to issue an updated version later

in 2007. 

 21The PCIE—which is governed by Executive Order No. 12805 of May 11, 1992—was 

established to (1) address integrity, economy, and effectiveness issues that transcend 

individual government agencies and (2) increase the professionalism and effectiveness of 

inspectors general personnel throughout the government. The PCIE is composed primarily 

of the presidentially appointed inspectors general. Officials from OMB, the Federal Bureau

of Investigation, Office of Government Ethics, Office of Special Counsel, and OPM serve on

the PCIE as well.

22GAO-01-765G, section 260.58-.60 and GAO-03-466G, sections 701, 701A, and 701B. 

23OMB Bulletin No. 06-03, Audit Requirements for Federal Financial Statements (Aug. 23, 

2006). 

Page 11 GAO-07-914 FFMIA Fiscal Year 2006 Results
We reviewed the fiscal year 2006 financial statement audit reports for the 

24 CFO Act agencies to identify the auditors’ assessments of agency

financial systems’ compliance and the problems that affect FFMIA 

compliance. To determine whether the data were sufficiently reliable, we 

performed the following procedures. We gained an understanding of the 

quality control environments at the respective IGs; leveraged our 

understanding of the methodology used by the IGs and their contract 

auditors in past years to reach conclusions with respect to FFMIA 

compliance at the respective agencies; considered management responses 

to the auditor’s findings and conclusions; and asked questions to improve 

our understanding of the procedures applied and/or conclusions drawn, 

where appropriate. We also reviewed the data for obvious inconsistencies 

or errors, completeness, and changes from the prior year. When we found 

data which were inconsistent or incomplete we brought them to the 

attention of the cognizant IG staff and worked with them to resolve any 

issues before using the data as a basis for this report. When we 

encountered data that varied from the prior year, we reviewed the PAR 

and/or IPA report to determine the reason for the change. Based on these

actions, we determined that the data from these reports were sufficiently 

reliable for the purposes of our report. 

Scope and 

Methodology 

Using the auditors’ reports for the 24 CFO Act agencies, we identified 

problems reported by the auditors that affect agency systems’ compliance 

with FFMIA. The problems identified in these reports are consistent with 

long-standing financial management weaknesses we have reported based 

on our work at a number of agencies. However, we caution that the 

occurrence of problems in a particular category may be even greater than

auditors’ reports of FFMIA noncompliance would suggest, because 

auditors may not have identified all instances of noncompliance with 

systems requirements and included all problems in their reports. Further, 

we identified other GAO and IG reports that discussed financial 

management systems issues and summarized the reports. We also 

obtained data from agencies’ annual PAR reports. We also met with OMB 

officials to discuss their current efforts to improve federal financial 

management and address our prior recommendations related to FFMIA. In 

addition, we reviewed documentation provided by OMB regarding its 

current initiatives. 

We conducted our work from January through June 2007, in accordance 

with U.S. generally accepted government auditing standards. We requested 

written comments on a draft of this report from the Director of OMB or his 

designee. We received written comments from the OMB Controller. OMB’s 

comments are discussed in the Agency Comments and Our Evaluation 

Page 12 GAO-07-914 FFMIA Fiscal Year 2006 Results
section and reprinted in appendix VI. We also received technical 

comments from OMB, which we incorporated as appropriate.

Many agencies still do not have effective financial management systems in 

place that can produce reliable, useful, and timely financial information, 

including cost data, with which to make informed decisions and help 

ensure accountability on an ongoing basis. Agencies are making progress 

in addressing their financial management systems weaknesses—some 

dramatically. Most agency systems, though, are not yet substantially in 

compliance with FFMIA’s requirements. As shown in figure 3, IGs and 

their contract auditors reported for fiscal year 2006 that 17 of the 24 CFO 

Act agencies did not substantially comply with at least one of FFMIA’s 

three requirements—federal financial management systems requirements, 

applicable federal accounting standards, or the SGL at the transaction 

level. Figure 3 also shows that the number of agencies’ systems reported 

by auditors as noncompliant with FFMIA has decreased marginally (from 

20 agencies to 17 agencies) since FFMIA was enacted. 

FFMIA Assessments 

Identify Marginal 

Improvements in 

Some Cases 

Figure 3: Auditors’ FFMIA Assessments for Fiscal Years 1997 through 2006 

0

6

12

18

24

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

CFO Act agencies not in compliance

Source: GAO compiled from independent auditors' financial statement audit reports

prepared by agency inspectors general and contract auditors for fiscal years 1997 through 2006.

Fiscal year

20

21 21

19

20

19

17

16

18

17

Page 13 GAO-07-914 FFMIA Fiscal Year 2006 Results
Of the seven remaining CFO Act agencies, one auditor provided positive 

assurance of FFMIA compliance, while the other six provided negative 

assurance in fiscal year 2006. However, it would be erroneous to assume 

that statements of negative assurance provided by auditors for the six 

agencies equate to compliance with FFMIA. Auditors’ assessments for 

three agencies changed from fiscal year 2005 to 2006. For fiscal year 2006,

auditors for GSA provided negative assurance that GSA’s financial 

management systems, as a whole, were substantially compliant with 

FFMIA’s three requirements. Auditors for AID provided positive assurance 

that AID’s financial management systems complied with FFMIA in fiscal 

year 2006. In fiscal year 2005, both AID and GSA were deemed 

noncompliant with FFMIA by the independent auditors. According to 

management, AID was able to become compliant due to completion of 

outstanding remediation items and the worldwide deployment of its 

financial management system. Conversely, auditors for the Department of 

Labor (Labor) reported that Labor’s financial management systems did not 

substantially comply with FFMIA requirements in fiscal year 2006, but had 

provided positive assurance of FFMIA compliance in fiscal year 2005. The 

change was primarily due to weaknesses Labor auditors identified 

concerning general computer access controls, application access controls, 

and related manual controls. 

FFMIA Guidance Issues Auditors for six agencies (Commerce, EPA, GSA, NSF, OPM, and SSA) 

provided negative assurance that the agencies’ systems were compliant 

with FFMIA requirements. Auditors provide negative assurance when they 

state that nothing came to their attention during the course of their 

planned procedures to indicate that the agency’s financial management 

systems did not meet FFMIA requirements. Although OMB’s current audit 

guidance24 instructs auditors to test for compliance with FFMIA, it does 

not provide guidance on the nature and extent of tests to be performed. It 

calls for auditors to provide negative assurance when reporting whether 

an agency’s systems are in substantial compliance with the three FFMIA 

requirements. However, financial statement users not familiar with the 

concept of negative assurance may incorrectly assume that these six 

agencies’ systems have been fully tested by the auditors and that the 

agencies have achieved FFMIA compliance. In addition, without 

adequately testing systems for FFMIA compliance in a manner that is 

 24OMB Bulletin No. 06-03, Audit Requirements for Federal Financial Statements 

(Aug. 23, 2006).

Page 14 GAO-07-914 FFMIA Fiscal Year 2006 Results
sufficient to support an opinion, auditors may not identify all areas of 

noncompliance; therefore, the number of problems may be even greater 

than those currently disclosed in auditors’ reports on FFMIA compliance 

based on negative assurance. 

As we have previously reported, from our perspective, FFMIA requires 

auditors to provide positive assurance, which is an opinion. Section 803 

(b) (1) of FFMIA requires auditors to “report whether the agency financial 

management systems comply with the requirements of [the act].” 

Providing positive assurance on FFMIA compliance involves additional 

testing to determine whether an agency’s financial management systems 

comply substantially with systems requirements, the SGL at the 

transaction level, and accounting standards. The procedures necessary to

provide such assurance go beyond those needed for performing a financial 

statement audit. While financial statement audits in general will offer some 

assurance on FFMIA compliance, auditors should also design and 

implement additional testing to satisfy the criteria in FFMIA. For example, 

in fiscal year 2006, agency auditors for AID stated that they interviewed 

staff and contract personnel and reviewed documentation related to the 

capabilities of Phoenix, AID’s core financial system. According to AID 

auditors, they examined documentation, including reports, system queries, 

system screen captures, testing documents generated during system 

implementation, and documents generated for certification and 

accreditation activity in order to determine if the implemented systems 

provide complete, accurate, and timely information for managing day-today operations necessary to achieve positive assurance. When reporting 

an agency’s financial management systems to be in substantial 

compliance, positive assurance from independent auditors can provide 

users with confidence that the agency systems provide the reliable, useful,

and timely information envisioned by the act. The fact that AID’s auditors 

provided positive assurance on FFMIA compliance is a noteworthy 

achievement. 

In addition, performing audit procedures designed to provide positive 

assurance of an agency’s financial management systems’ substantial 

compliance with FFMIA requirements can identify weaknesses and lead to

improvements that enhance the performance, productivity, and efficiency 

of federal financial management systems in support of day-to-day 

managerial decision making. It also provides a clear “bottom line,” 

whereas negative assurance does not. Some auditors we interviewed in 

prior years indicated that a revision to OMB’s guidance on FFMIA 

reporting would be necessary for them to provide an opinion of FFMIA 

compliance. Therefore, as we have discussed in prior reports covering 

Page 15 GAO-07-914 FFMIA Fiscal Year 2006 Results
fiscal years 2000 through 2005,25 we continue to believe that our prior 

recommendation for OMB to require agency auditors to thoroughly 

examine agencies’ financial management systems and provide a statement 

of positive assurance when reporting an agency’s systems to be in 

substantial compliance with the three FFMIA systems requirements is 

appropriate and required. Doing so will be key to achieving the act’s goal 

of effective financial management systems across government. 

However, OMB has not concurred with our recommendation in its 

responses to our prior reports and in its comments on a draft of this 

report. For example, last year, in response to our report26 on fiscal year 

2005 FFMIA results, OMB stated that the broad scope of the President’s 

Management Agenda and the fundamental changes occurring under the 

Financial Management Line of Business initiative, combined with 

strengthened reporting requirements under Circular No. A-123, are helping 

agencies identify and correct FFMIA deficiencies. In that context, OMB 

reiterated its belief that requiring a statement of positive assurance would 

prove only marginally useful. 

Further, as we have previously reported, a number of auditors have 

expressed a need for clarification on the definition of “substantial 

compliance.” They cited a need for additional guidance to assist them in 

assessing whether agency systems substantially comply with the three 

FFMIA requirements. The auditors reported a need for clearer guidance

from OMB on assessing FFMIA compliance that is consistent with the 

GAO/PCIE FAM. As a result, we continue to believe that implementation 

of our recommendation for OMB to explore clarifying the definition of 

“substantial compliance” would be useful. Other related concerns of 

agency auditors included a need for (1) more clearly defined and objective

criteria to assist in their determination of FFMIA compliance, (2) more 

specific guidance on testing and sampling methodologies, and 

 25GAO, Financial Management: FFMIA Implementation Critical for Federal 

Accountability, GAO-02-29 (Washington, D.C.: Oct. 1, 2001); Financial Management: 

FFMIA Implementation Necessary to Achieve Accountability, GAO-03-31 (Washington,

D.C.: Oct. 1, 2002); Financial Management: Sustained Efforts Needed to Achieve FFMIA 

Accountability, GAO-03-1062 (Washington, D.C.: Sept. 30, 2003); Financial Management: 

Improved Financial Systems Are Key to FFMIA Compliance, GAO-05-20 (Washington,

D.C.: Oct. 1, 2004); Financial Management: Achieving FFMIA Compliance Continues to

Challenge Agencies, GAO-05-881 (Washington, D.C.: Sept. 20, 2005); and Financial

Management: Improvements Under Way but Serious Financial Systems Problems 

Persist, GAO-06-970 (Washington, D.C.: Sept. 26, 2006). 

26GAO-06-970. 

Page 16 GAO-07-914 FFMIA Fiscal Year 2006 Results
(3) additional guidance for assessing compliance with certain accounting 

standards, such as the Statement of Federal Financial Accounting 

Standards (SFFAS) No. 4, Managerial Cost Accounting Concepts and 

Standards for the Federal Government. In its comments on prior reports, 

OMB stated that its growing experience helping agencies implement the 

PMA enables it to refine the existing FFMIA indicators associated with 

substantial compliance. Accordingly, OMB said it would consider our 

recommendation in any future policy and guidance updates. In

commenting on a draft of this report, OMB agreed to take this

recommendation under advisement as it updates Circular No. A-127, 

Financial Management Systems. 

Problems Reported by 

Agency Auditors 

Based on our review of the fiscal year 2006 audit reports for the 17 

agencies reported to have systems not in substantial compliance with one 

or more of FFMIA’s three requirements, we identified six primary reasons 

for agency systems not being compliant: 

• nonintegrated financial management systems, 

• inadequate reconciliation procedures, 

• lack of accurate and timely recording of financial information, 

• noncompliance with the SGL, 

• lack of adherence to federal accounting standards, and 

• weak security controls over information systems. 

The weaknesses reported by the auditors ranged from serious, pervasive 

systems problems to less serious problems that may affect only one aspect 

of an agency’s accounting operation. While at some agencies, the problems 

were so serious that they affected the auditor’s opinion on the agency’s 

financial statements, at other agencies, the auditors cited problems that 

represented significant deficiencies in the design or operation of internal 

control, but were not material to the financial statements as a whole. 

Figure 4 shows the relative frequency of these problems at the agencies 

reported to have noncompliant systems from fiscal years 2002 through 

2006. The same six types of problems have been cited by auditors although 

the auditors may not have reported these problems as specific reasons for 

their systems’ lack of substantial compliance with FFMIA’s requirements. 

Some agencies have made little progress addressing these areas. In 

addition, as previously discussed, the occurrence of problems in any 

particular category may be even greater than auditors’ reports of FFMIA 

noncompliance would suggest because auditors may not have identified all 

problems in their reviews conducted to provide negative assurance. 

Page 17 GAO-07-914 FFMIA Fiscal Year 2006 Results
Figure 4: Number of Agencies with Reported FFMIA Compliance Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

Weak security

over information

systems

Lack of adherence

to federal

accounting

standards

Noncompliance

with the SGL

Lack of accurate

and timely

recording

Inadequate

reconciliation

procedures

Nonintegrated

financial

management

systems

CFO Act agencies

Problem areas

Fiscal year

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

2002

2003

2004

2005

2006

13

11

12

13

12

11 11 11

14 14

17

15

16

17

15

9

10

11 11

7

13

11 11 11

10

19

17

15 15

16

The CFO Act calls for agencies to develop and maintain integrated 

accounting and financial management systems27 that comply with federal 

systems requirements and provide for (1) complete, reliable, consistent, 

and timely information that is responsive to the financial information 

Nonintegrated Financial 

Management Systems 

 27Federal financial system requirements define an integrated financial system as one that 

coordinates a number of previously unconnected functions to improve overall efficiency 

and control. Characteristics of such a system include (1) standard data classifications for 

recording financial events; (2) common processes for processing similar transactions; 

(3) consistent control over data entry, transaction processing, and reporting; and (4) a 

system design that eliminates unnecessary duplication of transaction entry. OMB Circular

No. A-127, Financial Management Systems, paragraph 7(b) (Revised Dec. 1, 2004). 

Page 18 GAO-07-914 FFMIA Fiscal Year 2006 Results
needs of the agency and facilitates the systematic measurement of 

performance; (2) the development and reporting of cost management 

information; and (3) the integration of accounting, budgeting, and program 

information. OMB Circular No. A-127, Financial Management Systems, 

requires agencies to establish and maintain a single integrated financial 

management system that conforms to functional requirements now issued

by the Office of Federal Financial Management (OFFM).28 More details on 

the financial management systems requirements can be found in 

appendixes I and II. 

The lack of integrated financial management systems typically results in 

agencies expending major effort and resources, including in some cases 

hiring external consultants, to develop information that their systems 

should be able to provide on a daily or recurring basis. Agencies with 

nonintegrated financial systems are also more likely to devote more time 

and resources to collecting information than those with integrated 

systems. In addition, opportunities for errors are increased when agencies’ 

systems are not integrated. 

Auditors frequently cited the lack of integrated financial management 

systems in their fiscal year 2006 audit reports. Although improvements 

have been made, as shown in figure 5, auditors for 12 of the 17 agencies 

with noncompliant systems in fiscal year 2006 reported nonintegrated 

systems as a problem, compared with 13 of the 18 agencies reporting such 

problems in fiscal year 2005. 

 28Effective December 1, 2004, all financial management system requirements documents 

and other guidance initially issued by the Joint Financial Management Improvement 

Program were transferred to OFFM and remain in effect until modified. 

Page 19 GAO-07-914 FFMIA Fiscal Year 2006 Results
Figure 5: Number of CFO Act Agencies with Reported Nonintegrated Financial 

Management Systems Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

2002 2003 2004 2005 2006

CFO Act agencies

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

Fiscal year

13

11

12

13

12

As a case in point, auditors for the Department of State (State) reported 

the lack of a modern, integrated financial management system in their 

fiscal year 2006 audit report. Since September 30, 2003, auditors have 

reported that State’s financial and accounting systems are inadequate, thus

preventing the department from routinely issuing timely financial 

statements and increasing the risk of materially misstating financial 

information. The principal areas of weakness included (1) certain 

elements of the financial statements, including, but not limited to, personal 

property, capital leases, and certain accounts payable, were developed 

from sources other than the general ledger; and (2) the department used 

several systems that were not integrated with the department’s centralized

financial management system for the management of grants and other 

types of financial assistance. 

A reconciliation process, whether manual or automated, is a necessary 

and valuable internal control in a sound financial management system. The 

less integrated the financial management system, the greater the need for 

adequate reconciliations because data are being accumulated from a 

number of different sources. Reconciliations are needed to ensure that 

Inadequate Reconciliation 

Procedures 

Page 20 GAO-07-914 FFMIA Fiscal Year 2006 Results
data have been recorded properly between the various systems and 

manual records. As shown in figure 6, for fiscal year 2006, auditors for 14 

of the 17 agencies with noncompliant systems reported that the agencies 

had reconciliation problems, as compared with 14 of the 18 agencies 

reporting such problems in fiscal year 2005. 

Figure 6: Number of CFO Act Agencies with Reported Inadequate Reconciliation 

Procedures Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

2002 2003 2004 2005 2006

CFO Act agencies

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

Fiscal year

11 11 11

14 14

While reconciling balances with the Department of the Treasury 

(Treasury) remains a common problem, many other types of reconciliation 

problems were also cited during fiscal year 2006. For example, at the

Department of Agriculture (Agriculture), the independent auditor reported 

that over 50 abnormal balances exceeding $360 million existed at year end. 

The abnormal balances stemmed from a variety of causes. In one case, the 

auditors reported that Agriculture did not perform timely research to 

ensure that account relationships were reconciled and corresponding 

corrections promptly made. The number and dollar value of abnormal 

account balances had been significantly reduced from last year at 

Agriculture; however, when abnormal balances exist, immediate research 

should be performed to identify the cause and correct the condition. 

Page 21 GAO-07-914 FFMIA Fiscal Year 2006 Results
As shown in figure 7, auditors for 15 of 17 agencies with noncompliant 

systems reported the lack of accurate and timely recording of financial

information as a problem for fiscal year 2006, compared with 17 of 18 

agencies reporting such problems in fiscal year 2005. 

Lack of Accurate and Timely

Recording of Financial 

Information 

Figure 7: Number of CFO Act Agencies with Reported Lack of Accurate and Timely 

Recording Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

2002 2003 2004 2005 2006

CFO Act agencies

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

Fiscal year

17

15

16

17

15

Accurate and timely recording of financial information is essential for 

effective financial management. Timely recording of transactions 

facilitates accurate reporting in agencies’ financial reports and other 

management reports used to guide managerial decision making. In 

addition, having systems that record information in an accurate and timely

manner is critical for key governmentwide initiatives, such as integrating 

budget and performance information. 

In contrast, lack of timely recording of transactions during the fiscal year 

can result in agencies making substantial efforts at fiscal year end to 

perform extensive manual financial statement preparation efforts that are 

susceptible to error and increase the risk of misstatements. For example, 

auditors for the Department of Energy (Energy) noted that the department 

has not completed all of the corrective actions needed to reconcile 

Page 22 GAO-07-914 FFMIA Fiscal Year 2006 Results
obligation data converted from Energy’s legacy systems to its new 

financial management system, the Standard Accounting and Reporting 

System (STARS), affecting the accuracy of undelivered order balances at 

every field office tested by the auditors. As of September 30, 2006, Energy

reported undelivered orders of $11.3 billion. Errors in recording 

obligations, such as duplicating obligation entries or recording obligations

in subsequent periods, resulted in misstatements of the undelivered orders

balance. These problems precluded the department from providing 

assurance of accurate and complete undelivered orders balance in 

Energy’s consolidated financial statements. Further, such problems 

typically result in funds not being available for use that otherwise would 

be, and in managers not having accurate financial information during the 

year for well-informed decisions. 

As shown in figure 8, auditors for 7 of the 17 agencies with noncompliant 

systems reported that the agencies’ systems did not comply with SGL 

requirements for fiscal year 2006, compared with 11 of the 18 agencies 

reporting such problems in fiscal year 2005. 

Noncompliance with the SGL 

Figure 8: Number of CFO Act Agencies with Reported Noncompliance with the SGL

Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

2002 2003 2004 2005 2006

CFO Act agencies

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

Fiscal year

9

10

11 11

7

Page 23 GAO-07-914 FFMIA Fiscal Year 2006 Results
FFMIA specifically requires federal agencies to implement the SGL at the 

transaction level. Using the SGL promotes consistency in financial 

transaction processing and reporting by providing a uniform chart of 

accounts and pro forma transactions and provides a basis for comparison 

at the agency and governmentwide levels. The defined accounts and pro 

forma transactions standardize the accumulation of agency financial 

information as well as enhance financial control and support internal and 

external reporting. 

According to auditors at Interior and AID, progress has been made in this 

area as a result of the agencies retiring legacy systems and implementing 

new systems that conform to the SGL. Nevertheless, failure to adhere to 

the SGL continues to impede the ability of some agencies to prepare 

accurate financial statements. For example, auditors for the Department 

of Health and Human Services (HHS) noted that its Division of Financial

Operations (DFO) CORE accounting system, which supports net outlays of 

more than $93 billion, is a legacy accounting system and does not fully 

support the SGL. Specifically, the auditors found that HHS compiles its 

financial statements through a multistep process using a combination of 

manual and automated procedures. Further, agency auditors identified 

over 100 instances with an approximate value of over $3 billion of general 

ledger accounts and crosswalks that were not used consistently or in 

compliance with Treasury’s guidance on the SGL. To address this issue, 

HHS is in the process of implementing a new financial management 

system. 

One of FFMIA’s requirements is that agencies’ financial management 

systems account for transactions in accordance with federal accounting 

standards. Appendixes III and IV list the federal financial accounting 

standards and other guidance issued by the Federal Accounting Standards 

Advisory Board and its Accounting and Auditing Committee, respectively.

The purpose of these standards and other guidance is to ensure that 

federal agencies’ financial reports provide users with understandable,

relevant, and reliable information about the financial position, activities, 

and results of operations of the U.S. government and its components. 

Many agencies face continuing challenges in this area. As shown in figure 

9, for fiscal year 2006, auditors for 10 of the 17 agencies with noncompliant 

systems reported that these agencies had problems complying with one or 

more federal accounting standards. 

Lack of Adherence to Federal 

Accounting Standards 

Page 24 GAO-07-914 FFMIA Fiscal Year 2006 Results
Figure 9: Number of CFO Act Agencies with Reported Lack of Adherence to Federal 

Accounting Standards Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

2002 2003 2004 2005 2006

CFO Act agencies

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

Fiscal year

13

11 11 11

10

Two agencies, the Department of the Interior (Interior) and Department of 

Transportation (DOT), reported weaknesses affecting compliance with the 

recently issued SFFAS 27, Identifying and Reporting Earmarked Funds, 

which became effective for fiscal year 2006. For example, at Interior, 

auditors noted that the Sport Fish Restoration and Boating Trust Fund was 

properly classified as an earmarked fund but that Interior had not fully 

established controls to ensure that its portion of the fund was accurately

included in the financial statements. As a result, Interior analyzed and 

adjusted the financial statements. While newly issued standards may cause 

significant compliance problems, agencies also struggled to implement 

standards which have been in effect for some time. 

Auditors reported compliance problems with 11 specific accounting 

standards in fiscal year 2006. Of those standards, the 4 that were most 

troublesome for agencies were SFFAS No. 1, Accounting for Selected 

Assets and Liabilities; SFFAS No. 4, Managerial Cost Accounting 

Concepts and Standards; SFFAS No. 6, Accounting for Property, Plant, 

Page 25 GAO-07-914 FFMIA Fiscal Year 2006 Results
and Equipment; and SFFAS No. 7, Accounting for Revenue and Other 

Financing Sources. 

Information security weaknesses are a major concern for federal agencies

and the general public and one of the frequent problems auditors cited 

concerning noncompliance with FFMIA. As shown in figure 10, auditors 

for 15 of the 17 agencies with noncompliant systems reported security 

weaknesses in information systems to be a problem, compared with 16 of

the 18 agencies reporting such problems in fiscal year 2005. 

Weak Security Controls over 

Information Systems 

Figure 10: Number of CFO Act Agencies with Reported Weak Security over 

Information Systems Problems for Fiscal Years 2002 through 2006 

0

6

12

18

24

2002 2003 2004 2005 2006

CFO Act agencies

Source: GAO analysis, based on independent auditors' financial statement audit reports prepared

by agency inspectors general and contract auditors for fiscal years 2002 through 2006.

Fiscal year

19

17

15

16

15

These control weaknesses place vast amounts of government assets at risk 

of inadvertent or deliberate misuse, financial information at risk of 

unauthorized modification or destruction, sensitive information at risk of 

inappropriate disclosure, and critical operations at risk of disruption. 

Since 1997, we have considered information security to be a high-risk area 

Page 26 GAO-07-914 FFMIA Fiscal Year 2006 Results
at a governmentwide level and continue to emphasize it on our most 

recent list issued in January 2007.29

For example, the Nuclear Regulatory Commission (NRC) auditors 

reported that only 1 out of 30 operational NRC information systems had a 

current certification and accreditation. Auditors also noted that in the past 

4 years NRC has not performed a current certification and accreditation of 

its general support systems. As a result, all NRC information systems that 

depend on the security controls provided by these general support 

systems are subject to an unknown potential risk. Two of NRC’s financial 

reporting systems, Federal Financial System (FFS) and the Federal 

Personnel and Payroll System (FPPS), were outsourced to the Department 

of Interior’s National Business Center (DOI-NBC) but continue to rely on

the NRC’s general support system. According to the auditors, their reliance

on the top tier of controls of the general support systems puts the FFS and 

the FPPS at risk despite the DOI-NBC assurance that the certification and

accreditations for the two systems have been performed. 

The security breaches at Department of Veterans Affairs (VA), Treasury, 

and other agencies compromised the personal data of millions of U.S. 

citizens and highlighted the importance of adequate system security 

policies and programs. Robust federal security programs are critically 

important to properly protect personal and financial information and the 

privacy of individuals. When there is a lack of reasonable assurance that 

controls are correctly implemented, operating as intended, and producing 

the desired outcome with respect to meeting the security requirements of 

the agency, the agencies’ information and systems are left vulnerable to 

attack or compromise. 

Agencies and OMB have a number of efforts under way to address their 

existing financial management systems problems. For example, 

noncompliant agencies are required by OMB to include in their annual 

PARs a summary of their detailed remediation plans including corrective 

actions as well as the resources and target dates for implementing the 

corrective actions. A number of those corrective actions involve 

implementing new financial management systems, which over time has 

proven to be very challenging. Efforts to modernize financial management 

systems have often exceeded budgeted costs, experienced delays in 

Efforts Are Under 

Way to Address 

Federal Financial 

Management System 

Challenges 

 29GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: Jan. 31, 2007). 

Page 27 GAO-07-914 FFMIA Fiscal Year 2006 Results
delivery dates, and not provided the anticipated system functionality and 

performance. This problem is particularly serious at the Department of 

Defense. To help provide a governmentwide solution, OMB has developed

the financial management line of business (FMLOB) initiative. While 

progress has been made in defining standard business processes and 

issuing draft guidance to facilitate a smooth transition to shared service 

providers, the FMLOB initiative involves complex issues that have farreaching implications for the government and private sector shared 

service providers. As we reported30 last year, the key for federal agencies 

to avoid the long-standing problems that have plagued financial 

management system improvement efforts is to address the foremost 

causes of those problems and adopt solutions that reduce the risks 

associated with these efforts to acceptable levels. 

Comprehensive 

Remediation Plans Are 

Critical to Agencies’ 

Improvement Efforts 

Correcting financial management system problems has proven to be 

particularly difficult for many agencies. To assist in this effort, FFMIA 

requires the heads of agencies with noncompliant systems to prepare 

detailed remediation plans to bring agencies’ systems into substantial 

compliance with the law. Specifically, the law requires the head of the 

agency to establish a remediation plan that includes resources, remedies, 

and intermediate target dates necessary to bring the agency’s financial

management systems into substantial compliance. Further, OMB Circular 

A-11 requires agencies with noncompliant systems to include in their 

annual PARs a summary of their detailed remediation plans containing 

(1) corrective actions to be taken, (2) resources to be used for 

implementation of the corrective actions, and (3) target dates for 

implementation of the corrective actions. 

As previously discussed, auditors reported that 17 agency systems were 

substantially noncompliant with FFMIA in fiscal year 2006. The agency 

heads for 5 of these agencies31 disagreed with the auditor and considered 

their agencies’ systems to be substantially compliant with FFMIA. The law 

does not require an agency to prepare a remediation plan if the agency 

head determines that the agency’s systems are in substantial compliance 

with the law even if the agency’s auditor determines the agency’s systems 

 30GAO-06-184. 

31Departments of Education, Housing and Urban Development (HUD), Interior, Labor, and 

State. 

Page 28 GAO-07-914 FFMIA Fiscal Year 2006 Results
are not substantially compliant. The remaining 12 agencies32 are required 

to include summarized remediation plans in their PARs. We reviewed the

12 PARs for those agencies to determine if their summarized remediation 

plans included the required information. Figure 11 presents the results of 

our analysis.

Figure 11: Summary of Analysis of Elements Included in 12 Agencies’ Summarized

Remediation Plans for Fiscal Year 2006 

Source: GAO analysis of agencies' PARs.

Target dates

Resources

Corrective actions

Yes

No

12

8 4

11 1

As shown in figure 11, all of the agencies’ summarized remediation plans 

included corrective actions. However, one third of the agencies’ 

summarized remediation plans did not include a discussion of the staffing 

resources required to complete the planned corrective actions. 

Remediation plans provide a “road map” to resolve financial management 

problems in a transparent manner, and also help hold managers 

accountable for needed improvements. A discussion of the resources to be 

 32Agriculture, DOD, Energy, HHS, DHS, DOJ, DOT, Treasury, VA, NASA, NRC, and SBA. 

Page 29 GAO-07-914 FFMIA Fiscal Year 2006 Results
used when implementing the corrective actions is essential in determining 

whether the corrective actions can realistically be accomplished within 

the specified time frames. Assigning resources to a corrective action 

facilitates on-time implementation and helps avoid confusion over what 

funding sources will be used and the personnel responsible for the 

implementation. 

One agency did not include target dates for completing corrective actions 

to become substantially compliant with FFMIA. Setting specific target 

dates, including intermediate target dates, facilitates tracking the progress 

agencies are making in reaching their specified goals. If agencies do not 

include target dates in their remediation plans, it is difficult for the 

Congress and the American taxpayer to hold them accountable for 

correcting long-standing financial management system problems. 

Agencies Struggle with 

Financial Management 

Systems Modernization 

Across the government, agencies have many efforts under way to 

implement new financial management systems or to upgrade existing 

systems that may help improve FFMIA compliance. However, these efforts 

far too often result in systems that do not meet their cost, schedule, and 

performance goals. While agencies anticipate that the new systems will 

provide reliable, useful, and timely data to support managerial decision 

making, our work and that of others has shown that has often not been the 

case. For example, many of DOD’s over 2,000 business systems are 

nonintegrated, stove piped, and not capable of providing departmental 

management and the Congress accurate and reliable information on DOD’s 

day-to-day operations. For decades, DOD has been challenged in 

modernizing its timeworn business systems. In 1995, we designated DOD’s 

business systems modernization program as high-risk, and we continue to

designate it as such in our most recent high-risk report.33 In another case, 

HHS has been plagued with systems implementation issues with its 

Unified Financial Management System (UFMS) from inception. In fiscal 

year 2006, HHS auditors reported that the agency continued to experience

significant challenges in resolving issues with the system conversion and 

implementation and that sustained efforts will be necessary to overcome 

the continuing serious weaknesses. 

Furthermore, modernization efforts at DHS and DOJ have been hampered

because these agencies did not follow best practices in systems 

 33GAO-07-310. 

Page 30 GAO-07-914 FFMIA Fiscal Year 2006 Results
development and implementation efforts (commonly referred to as 

disciplined processes34). 

• Since its establishment, DHS has faced the daunting task of bringing 

together 22 diverse agencies and developing an integrated financial 

management system. DHS halted implementation of the Electronically 

Managing Enterprise Resources for Government Effectiveness and 

Efficiency (Emerge2) program in December 2005, which was expected to 

integrate financial management systems across the entire department and 

to address its financial management weaknesses. DHS officials have stated

that approximately $52 million in total was spent on the Emerge2 project 

before it was halted. In fiscal year 2006, we testified35 and provided an 

assessment of the status of DHS’s efforts to modernize its financial 

management systems. In early March 2007, DHS officials issued a highlevel plan to address the existing internal control weaknesses. However, as

we recently reported and testified,36 more detailed implementation 

strategies will be necessary to fully address the financial management 

system challenges. DHS has received permission from OMB to leverage its 

current investments by consolidating and migrating components to either 

the Transportation Security Administration (TSA) or Customs and Border 

Protection financial management systems models. Our concern is that 

these components have numerous financial management weaknesses. For 

example, auditors for TSA reported that they were unable to provide 

sufficient evidential matter or make knowledgeable representations to 

support fiscal year 2005 and 2006 transactions and account balances, 

particularly for budgetary accounting and undelivered orders, and 

property, plant, and equipment, among others. 

• The Department of Justice has developed plans for a Unified Financial

Management System (UFMS) intended to correct many of its financial

accounting and reporting issues. The UFMS is expected to standardize and 

integrate financial processes and systems to more efficiently support 

accounting operations, facilitate preparation of financial statements, and 

streamline audit processes. The department’s efforts over the past few 

 34Disciplined processes have been shown to reduce the risks associated with software 

development and acquisition efforts to acceptable levels and are fundamental to successful 

system implementations. 

35GAO, Financial Management Systems: DHS Has an Opportunity to Incorporate Best

Practices in Modernization Efforts, GAO-06-553T (Washington, D.C.: Mar. 29, 2006). 

36GAO, Homeland Security: Departmentwide Integrated Financial Management Systems 

Remain a Challenge, GAO-07-536 (Washington, D.C.: June 21, 2007); Homeland Security: 

Transforming Departmentwide Financial Management Systems Remains a Challenge, 

GAO-07-1041T (Washington, D.C.: June 28, 2007). 

Page 31 GAO-07-914 FFMIA Fiscal Year 2006 Results
years to implement the UFMS to replace the seven major accounting 

systems currently used throughout the department have been challenging.

For example, 2 years after the department selected a vendor for the 

unified system, problems with funding, staff turnover, and other 

competing priorities caused delays in implementation of the new system. 

As of September 2006, none of Justice’s accounting systems were 

integrated with each other. The Drug Enforcement Administration (DEA) 

is scheduled to begin implementing the UFMS in fiscal year 2008, and 

current plans are for implementing the system in all department 

components by fiscal year 2012. 

OMB’s FMLOB initiative, launched in March 2004, promotes businessdriven, common solutions to enhance the federal government’s 

performance and services. This initiative is intended to address past 

financial management systems’ weaknesses and implementation failures 

and support the PMA goal of expanding electronic government. 

The goals of OMB’s Financial Management Line of Business initiative 

include: 

Challenges of Implementing the 

Financial Management Line of 

Business 

• providing timely and accurate data for decision making; 

• facilitating stronger internal controls that ensure integrity in 

accounting and other stewardship activities; 

• reducing costs by providing a competitive alternative for agencies to 

acquire, develop, implement, and operate financial management 

systems through shared service solutions; 

• standardizing systems, business processes, and data elements; and 

• providing for seamless data exchange between and among federal 

agencies by implementing a common language and structure for 

financial information and system interfaces. 

OMB’s initial framework for the competitive migration to either a public 

shared service provider or a qualified private sector provider under the 

initiative is expected to help agencies maximize value by considering 

alternative solutions in a reasoned and structured manner. We have long 

supported and called for initiatives to standardize and streamline common 

systems, which can reduce costs and, if done correctly, improve 

accountability. Likewise, OMB has correctly recognized that enhancing the 

government’s ability to implement financial management systems that are 

capable of providing accurate, reliable, and timely information on the 

results of operations needs to be addressed as a governmentwide solution,

rather than individual agency stove-piped efforts designed to meet a given

entity’s needs. The FMLOB is a work in progress, and OMB has not yet 

Page 32 GAO-07-914 FFMIA Fiscal Year 2006 Results
fully defined and implemented the processes necessary to successfully 

complete it. In our March 2006 report,37 we recommended that careful 

consideration of the following four concepts, each one building upon the 

former, would be integral to the success of OMB’s FMLOB initiative and 

could help break the cycle of failure in implementing financial

management systems. The four concepts were (1) developing a concept of

operations, (2) defining standard business processes, (3) developing a 

strategy for ensuring that agencies migrate to a limited number of service

providers in accordance with OMB’s stated approach, and (4) defining and

effectively implementing disciplined processes necessary to properly 

manage the specific projects. 

OMB has taken steps to develop the foundational guidance needed for the 

FMLOB, but many challenging tasks remain. As we reported last year, 

OMB has designated four federal agencies38 as shared service providers; 

released a competition framework in May 2006; issued migration planning

guidance in September 2006; and encouraged private sector providers that 

can satisfy the shared services requirements to participate in the 

procurement process for these services. In November 2006, OMB released 

an exposure draft of a common governmentwide accounting classification 

structure that may address lack of standardization among agency 

accounts. A critical factor for this project will be the ability to develop an 

approach that captures all stakeholders’ needs with minimal redundancy 

and complexity. 

In addition, OMB and the Financial Systems Integration Office39 (FSIO) 

have also developed and released an exposure draft for the funds control 

standard business process40 and the payment management standard 

 37GAO-06-184. 

38The four agencies designated as shared service providers were the Department of the 

Interior (National Business Center), GSA (Federal Integrated Solutions Center), 

Department of the Treasury (Bureau of the Public Debt Administrative Resource Center),

and Department of Transportation (Enterprise Services Center). 

39FSIO was formerly known as the Joint Financial Management Improvement Program 

(JFMIP) staff office. In December 2004, the JFMIP Principals voted to modify the roles and 

responsibilities of the JFMIP Program Office, now FSIO. The FSIO Executive reports to 

OMB’s Office of Federal Financial Management Controller. See OMB, Update on the 

Financial Management Line of Business and the Financial Systems Integration Office 

Memorandum (Washington, D.C.: Dec. 16, 2005). 

40OMB, FMLOB Funds Control Standard Business Process, Exposure Draft 

(Washington, D.C.: March 2007).

Page 33 GAO-07-914 FFMIA Fiscal Year 2006 Results
business process.41 Further, in March 2007, the Financial Services 

Assessment Guide (SAG)

42 was issued to establish a set of financial service 

metrics to facilitate an assessment of opportunities to improve 

performance and affordability of financial services provided by shared 

service providers and federal agencies. In order to promote consistency 

among agencies and service providers, starting June 15, 2007, and every 

month thereafter, OMB is requiring monthly reporting from all agencies on 

their performance data through a single system managed by FSIO, 

including data for each system listed as a core financial management 

system. 

Furthermore, FSIO released its core financial system product compliance 

test policy,43 documenting the specific core financial systems qualifications

test policy and procedures starting in 2007. This new policy provided 

detailed information about each test, including schedule, scope, and 

requirements to be tested. This is a useful tool to promote consistency in 

core financial systems governmentwide, clarify the system requirements, 

and reduce the risk that agencies will acquire noncompliant or ineffective 

core financial system software. This, though, does not eliminate the need

for agencies to conduct comprehensive testing efforts to ensure that 

financial system software meets their requirements, and the 

implementation of FSIO-tested software does not guarantee that the 

agencies will have financial systems that are compliant with FFMIA. 

While much has been accomplished by OMB, many important issues 

remain unresolved. For example, one of the recommendations in our 

March 2006 report44 called for a concept of operations to provide the 

foundation for the FMLOB. An effective concept of operations would 

describe, at a high level, (1) how all of the various elements of federal 

financial systems and mixed systems relate to each other and (2) how 

information flows from and through these systems. A concept of 

operations would provide a useful tool to explain how financial 

management systems at the agency and governmentwide levels can 

 41OMB, FMLOB Payment Management Standard Business Process Exposure Draft 

(Washington, D.C.: May 2007). 

42OMB, Financial Services Assessment Guide Version 1 (Washington, D.C.: Mar. 30, 2007).

43FSIO, Core Financial System Product Qualification Test Policy 

(Washington, D.C.: March 2007). 

44GAO-06-184. 

Page 34 GAO-07-914 FFMIA Fiscal Year 2006 Results
operate cohesively. It would be geared to a governmentwide solution 

rather than individual agency stove-piped efforts. Because the federal 

government does not have an overall concept of operations, there is no 

clear understanding of the interrelationships among federal financial 

systems and how the shared service provider concept fits into this 

framework. OMB officials recognize that standardization is important and 

are developing a standard set of business processes in four areas: funds 

control, accounts payable, accounts receivable, and financial reporting. In

addition, as the FMLOB initiative moves forward, there are numerous 

additional areas where standardization is also important, such as 

inventory, supplies, and material management, as well as the loan 

management areas. Absent this standardization, shared service providers 

have been designated without common business rules and potential 

customer agencies continue to implement and operate individual stovepiped systems that may require additional work to adopt these processes. 

Further, as we reported in September 2006,45 there are a number of factors 

that affect FFMIA compliance, including the quality of transaction data in 

agency feeder systems; the success of converting data from legacy

systems; and the interaction of people, process, and technology within an

agency’s environment. The shared service provider concept, if adopted, 

will still require that agencies address long-standing human capital 

problems and develop long-term strategies for acquiring, developing, and

retaining an organization’s total workforce to meet the needs of the future. 

To date, none of the major CFO Act agencies has moved to an OMBdesignated shared service provider to handle their financial management 

system activities, although some agencies, such as DOT, GSA, and NRC 

were already using the shared service provider concept prior to OMB’s 

financial management line of business initiative. In addition, other 

agencies such as Labor, use a commercial shared service provider to 

provide hosting and operations and maintenance services. There are some 

major CFO Act agencies, such as EPA, HUD, Agriculture, and OPM that 

are in the process of selecting a shared service provider for full financial

management systems activities. OMB officials told us that a successful 

FMLOB outcome would be for agencies to solicit for government or 

commercial shared service providers, identify the best value, and move 

forward in the FMLOB process. Whether agencies move to a shared 

service provider or implement their own systems, they must have 

 45GAO, Financial Management: Improvements Under Way but Serious Financial

Systems Problems Persist, GAO-06-970 (Washington, D.C..: Sept. 26, 2006). 

Page 35 GAO-07-914 FFMIA Fiscal Year 2006 Results
disciplined processes in place to achieve the intended results, within 

established resources, and on schedule. 

To address the challenges CFO agency managers and auditors face in

implementing and maintaining financial management systems that meet 

the intent of the CFO Act and the requirements of FFMIA, we are 

convening a Comptroller General forum later this year in Washington, D.C. 

The forum is intended to build on 10 years of experience with FFMIA 

implementation and foster discussion with a select group of experts and 

knowledgeable officials on the financial management systems 

opportunities and challenges facing agencies across the federal 

government. The discussion will focus on options for addressing the 

impediments faced by federal managers in attempting to bring their 

respective agencies into compliance with the requirements of the law. 

More importantly, after 10 years, this forum provides an opportunity to 

“think outside the box” and foster innovative ideas on how the federal

government can overcome long-standing challenges in improving financial 

management systems with the goal of providing meaningful data to 

support managerial decision making on a daily basis. 

Invitees to the forum will include representatives from the federal Chief 

Financial Officer and inspector general communities, key OMB officials 

and congressional staff, and selected other knowledgeable officials from 

the public and private sectors. After the forum, we plan to issue a separate 

report summarizing the discussion and to consider the key issues in our 

future FFMIA work. Accordingly, we are not making any new 

recommendations in this report. 

Over the 10 years since FFMIA’s enactment, the federal government has 

continued to make incremental improvement in implementing financial 

management systems that substantially comply with the requirements of 

the act. Nonetheless, significant and long-standing obstacles remain for 

developing and implementing effective financial management systems that 

can provide essential financial data in support of day-to-day managerial 

decision making—the ultimate goal of FFMIA. Continued high-priority and 

sustained top-level commitment by OMB and leaders throughout the 

federal government will be required to fully and effectively achieve the 

goal of FFMIA. In addition, to help address the fundamental obstacles 

impeding FFMIA implementation, we are taking a proactive stance by

convening a forum to help identify innovative approaches and corrective

actions. 

Comptroller General 

Convening Forum on 

FFMIA Issues 

Conclusion 

Page 36 GAO-07-914 FFMIA Fiscal Year 2006 Results
In written comments (reprinted in app. VI) on a draft of this report, OMB 

agreed with our assessment that while federal agencies have continued to 

make progress in financial management, many agencies still need to 

improve their financial systems so that reliable, useful, and timely financial 

management information is available for day-to-day operations. OMB 

stated that it was working aggressively to assist agencies in building a 

strong foundation for financial management practices and also applauded 

our plans to convene a forum on these issues. 

As in previous years, we and OMB have differing views on the necessity of 

agency auditors providing a statement of positive assurance when 

reporting agency systems to be in substantial compliance with the 

requirements of FFMIA. OMB stated that its three major initiatives, the 

PMA, FMLOB, and the revised Circular No. A-123, are helping agencies 

identify and correct FFMIA deficiencies. Further, OMB stated that many of

the ongoing assessments required under the revised Circular No. A-123 

mirror the types of assessments that would occur in establishing a 

statement of positive assurance under FFMIA. As a result, OMB believed

that requiring a statement of positive assurance would be costly and would 

not provide additional information that would be of benefit to the federal

agency, OMB, or the taxpayer. 

While we agree that these initiatives are helping drive improvements, 

auditors need to consider other aspects of financial management systems 

when assessing FFMIA compliance that are not fully addressed through 

the current reporting structure. For example, in preparing the PMA 

scorecard assessments, OMB officials meet with agencies to discuss a 

number of financial management issues and have systems demonstrations. 

Our concern is that some of the information provided by this approach 

does not come under audit scrutiny and may not be reliable. Similarly, 

internal control assessments performed under Circular No. A-123 are 

management’s judgments and are subject to an opinion-level review by 

independent auditors only in limited circumstances. An opinion by an 

independent auditor on FFMIA compliance would confirm whether an 

agency’s systems substantially met the requirements of FFMIA and could

also provide additional confidence in the information provided as a result 

of the PMA, FMLOB, and Circular No. A-123 initiatives. In our view, 

confidence that agency financial management systems provide reliable,

useful, and timely information to help government leaders invest 

resources, oversee programs, and reduce costs, would be of significant 

value to the federal agency, OMB, the Congress, and the taxpayer. 

Moreover, to minimize the cost of providing an audit opinion, the 

GAO/PCIE Financial Audit Manual includes a number of techniques that 

Agency Comments 

and Our Evaluation 

Page 37 GAO-07-914 FFMIA Fiscal Year 2006 Results
auditors can use to reduce the incremental cost of providing positive 

assurance. Finally, we continue to believe that a statement of positive 

assurance is a statutory requirement under the act. 

With regard to our prior recommendation for revised guidance that 

clarifies the definition of substantial compliance, OMB stated that in its 

update to Circular No. A-127, Financial Management Systems, its goal 

will be to simplify FFMIA compliance requirements as well as to better 

balance the FFMIA objectives of generating audited financial statements 

and providing meaningful information for decision makers. Accordingly,

OMB agreed to take this recommendation under advisement. As we noted 

in our prior reports,46 auditors we interviewed expressed a need for 

clarification regarding the meaning of substantial compliance.

OMB also provided technical comments which we incorporated as 

appropriate.

We are sending copies of this report to the Chairman and Ranking 

Member, Subcommittee on Federal Financial Management, Government 

Information, Federal Services, and International Security, Senate 

Committee on Homeland Security and Governmental Affairs, and to the 

Chairman and Ranking Member, Subcommittee on Government 

Management, Organization, and Procurement, House Committee on 

Oversight and Government Reform. We are also sending copies to the 

Director of the Office of Management and Budget, the heads of the 24 CFO

Act agencies in our review, and agency CFOs and inspectors general. 

Copies will be made available to others upon request. In addition, this 

report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

 46GAO-02-29, GAO-03-31, GAO-05-20, GAO-05-881, and GAO-06-970. 

Page 38 GAO-07-914 FFMIA Fiscal Year 2006 Results
This report was prepared under the direction of McCoy Williams, Director, 

Financial Management and Assurance, who may be reached at (202) 512-

9095 or williamsm1@gao.gov if you have any questions. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found on

the last page of this report. GAO staff that made key contributions to this 

report are listed in appendix VII. 

David M. Walker 

Comptroller General 

of the United States 

Page 39 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix I: Re

Supporting Fed

quirements and Standards 

eral Financial Management 

Page 40 GAO-07-914

Appendix I: Requirements and Standards 

Supporting Federal Financial Management 

The policies and standards prescribed for executive agencies to follow in 

developing, operating, evaluating, and reporting on financial management 

systems are defined in Office of Management and Budget (OMB) Circular 

No. A-127, Financial Management Systems. The components of an 

integrated financial management system include the core financial 

system,1

 managerial cost accounting system, administrative systems, and 

certain programmatic systems. Administrative systems are those that are 

common to all federal agency operations,2

 and programmatic systems are 

those needed to fulfill an agency’s mission. Circular No. A-127 refers to the 

series of publications entitled Federal Financial Management Systems 

Requirements, initially issued by the Joint Financial Management 

Improvement Program’s (JFMIP) Program Management Office (PMO) as 

the primary source of governmentwide requirements for financial 

management systems. However, as of December 2004, the Financial 

Systems Integration Office (FSIO) assumed responsibility for coordinating 

the work related to federal financial management systems requirements 

and OMB’s Office of Federal Financial Management (OFFM) is responsible 

for issuing the new or revised regulations. In December 2004, the JFMIP 

Principals voted to modify the roles and responsibilities of JFMIP, 

resulting in the creation of FSIO. Appendix II lists the federal financial

management systems requirements published to date. Figure 12 is the 

current model that illustrates how these systems interrelate in an agency’s 

overall systems architecture. 

Financial 

Management Systems 

Requirements 

 1

Core financial systems, as defined by the Office of Federal Financial Management (OFFM),

include managing general ledger, funding, payments, receivables, and certain basic cost

functions. 

2

Examples of administrative systems include budget, acquisition, travel, property, and

human resources and payroll. 

FFMIA Fiscal Year 2006 Results
Appendix I: Requirements and Standards 

Supporting Federal Financial Management 

Figure 12: Agency Systems Architecture 

Seized property and

forfeited assets Travel

Human

resources

and payroll

Non-financial

Budget formulation

Revenue

Acquisition/

Property financial

management

Inventory

supplies and

materials

Grant

financial

Insurance

Benefit

Guaranteed

loan

Direct

loan

Managerial cost

accounting

Core

financial

Source: OMB, Core Financial Systems Requirements, OFFM-NO-0106 (Washington, D.C.: January 2006).

FFMIA Guidance OMB establishes governmentwide financial management policies and 

requirements and has issued two sources of guidance related to FFMIA 

reporting. First, in OMB Memorandum, Revised Implementation 

Guidance for the Federal Financial Management Improvement Act (Jan. 

4, 2001), OMB provides guidance for agencies and auditors to use in 

assessing substantial compliance. The guidance describes the factors that

should be considered in determining whether an agency’s systems 

substantially comply with FFMIA’s three requirements. Further, the 

guidance provides examples of the types of indicators that should be used

as a basis for assessing whether an agency’s systems are in substantial 

compliance with each of the three FFMIA requirements. Finally, the

guidance discusses the corrective action plans, to be developed by agency 

heads, for bringing their systems into compliance with FFMIA. Second, on 

August 23, 2006, OMB issued Bulletin No. 06-03, Audit Requirements for 

Federal Financial Statements, which superseded OMB Bulletin No. 01-02. 

Page 41 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix I: Requirements and Standards 

Supporting Federal Financial Management 

This new bulletin did not substantially revise the FFMIA audit guidance

included in Bulletin No. 01-02, which calls for auditors to provide negative 

assurance when reporting on an agency system’s FFMIA compliance. 

We have worked in partnership with representatives from the President’s 

Council on Integrity and Efficiency (PCIE) to develop and maintain the 

joint GAO/PCIE Financial Audit Manual (FAM). The FAM provides 

specific procedures auditors should perform when assessing FFMIA 

compliance.3

 As detailed in appendix V, we have also issued a series of 

checklists to help assess whether agencies’ systems meet systems 

requirements. The FAM guidance on FFMIA assessments recognizes that 

while financial statement audits offer some assurance regarding FFMIA 

compliance, auditors should design and implement additional testing to 

satisfy FFMIA criteria. 

OMB Circular No. A-127 also requires agencies to purchase commercial 

off-the-shelf (COTS) software that has been tested and certified through 

the PMO software certification process when acquiring core financial 

systems. However, in December 2004, OMB transferred the responsibility 

of certifying systems to FSIO as part of the realignment of JFMIP. In 

March 2007, FSIO updated the testing policy for COTS software. However, 

the certification process does not eliminate or significantly reduce the 

need for agencies to develop and conduct comprehensive testing efforts to 

ensure that the COTS software meets their requirements. Moreover, core 

financial systems certification does not mean that agencies that install 

these packages will have financial management systems that are compliant 

with FFMIA. Many other factors can affect the capability of the systems to

comply with FFMIA, including modifications made to the FSIO-certified 

core financial management systems software and the validity and 

completeness of data from feeder systems. 

 

3

GAO-01-765G, section 260.58-.60 and GAO-03-466G, sections 701, 701A, and 701B. 

Page 42 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix I: Requirements and Standards 

Supporting Federal Financial Management 

The Federal Accounting Standards Advisory Board (FASAB)4 promulgates 

federal accounting standards and concepts that agency chief financial

officers use in developing financial management systems and preparing 

financial statements. FASAB develops the appropriate accounting 

standards and concepts after considering the financial and budgetary 

information needs of the Congress, executive agencies, and other users of 

federal financial information and comments from the public. FASAB 

forwards the standards and concepts to the Comptroller General, the 

Director of OMB, the Secretary of the Treasury, and the Director of the 

Congressional Budget Office (CBO) for a 90-day review. If, within 90 days,

neither the Comptroller General nor the Director of OMB objects to the 

standard or concept, then it is issued and becomes final. FASAB 

announces finalized concepts and standards in The Federal Register. 

Federal Accounting 

Standards 

The American Institute of Certified Public Accountants designated the 

federal accounting standards promulgated by FASAB as being generally 

accepted accounting principles for the federal government. This 

recognition enhances the acceptability of the standards, which form the 

foundation for preparing consistent and meaningful financial statements 

both for individual agencies and the government as a whole. Currently, 

there are 32 Statements of Federal Financial Accounting Standards 

(SFFAS) and 4 Statements of Federal Financial Accounting Concepts 

(SFFAC).5

 The concepts and standards are the basis for OMB’s guidance to

agencies on the form and content of their financial statements and for the

government’s consolidated financial statements. Appendix III lists the 

concepts, standards, interpretations,6

 and technical bulletins, along with 

their respective effective dates. 

 4

In October 1990, the Secretary of the Treasury, the Director of OMB, and the Comptroller 

General established FASAB to develop a set of generally accepted accounting standards

and concepts for the federal government. Effective October 1, 2003, FASAB is comprised of 

six nonfederal or public members, one member from the Congressional Budget Office, and 

the three sponsors. 

5

Accounting standards are authoritative statements of how particular types of transactions 

and other events should be reflected in financial statements. SFFACs explain the objectives 

and ideas upon which FASAB develops the standards. 

6

An interpretation is a document of narrow scope that provides clarifications of original 

meaning, additional definitions, or other guidance pertaining to an existing federal 

accounting standard. 

Page 43 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix I: Requirements and Standards 

Supporting Federal Financial Management 

FASAB’s Accounting and Auditing Policy Committee (AAPC)7 assists in 

resolving issues related to the implementation of accounting standards. 

AAPC’s efforts result in guidance for preparers and auditors of federal 

financial statements in connection with implementation of accounting 

standards. To date, AAPC has issued six technical releases, which are 

listed in appendix IV along with their release dates. 

The SGL was established by an interagency task force under the direction 

of OMB and mandated for use by agencies in OMB and Treasury 

regulations in 1986. The SGL promotes consistency in financial transaction 

processing and reporting by providing a uniform chart of accounts and pro 

forma transactions used to standardize federal agencies’ financial 

information accumulation and processing throughout the year, enhance 

financial control, and support budget and external reporting, including 

financial statement preparation. The SGL is intended to improve data

stewardship throughout the federal government, enabling consistent 

reporting at all levels within the agencies and providing comparable data

and financial analysis governmentwide.8

The Congress enacted legislation, 31 U.S.C. § 3512(c), (d) (commonly 

referred to as the Federal Managers’ Financial Integrity Act of 1982 

(FMFIA)), to strengthen internal controls and accounting systems 

throughout the federal government, among other purposes. Issued 

pursuant to FMFIA, the Comptroller General’s Standards for Internal 

Control in the Federal Government9

 provides standards that are directed

at helping agency managers implement effective internal control, an 

integral part of improving financial management systems. Internal control 

is a major part of managing an organization and comprises the plans, 

methods, and procedures used to meet missions, goals, and objectives. In

summary, internal control, which under OMB’s guidance for FMFIA is 

synonymous with management control, helps government program 

U.S. Government 

Standard General 

Ledger (SGL) 

Internal Control

Standards 

 7

In 1997, FASAB, in conjunction with OMB, Treasury, GAO, the Chief Financial Officers 

Council, and the President’s Council on Integrity and Efficiency, established AAPC to assist

the federal government in improving financial reporting. 

8

SGL guidance is published in the Treasury Financial Manual. Treasury’s Financial 

Management Service is responsible for maintaining the SGL and answering agency 

inquiries.

9

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3 

(Washington, D.C.: November 1999). 

Page 44 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix I: Requirements and Standards 

Supporting Federal Financial Management 

managers achieve desired results through effective stewardship of public 

resources. 

Effective fiscal year 2006, OMB strengthened the requirements for 

conducting management’s assessment of internal control over financial 

reporting by revising OMB Circular No. A-123.10 Significant revisions 

contained in Appendix A of the circular include requiring Chief Financial

Officers (CFO) Act agency management to annually assess the adequacy of 

internal control over financial reporting, provide a report on identified 

material weaknesses and corrective actions, and provide a separate 

assurance statement on the agency’s internal control over financial 

reporting. In initiating the revisions, OMB cited the internal control 

requirements for publicly traded companies that are contained in section

404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley).11 Sarbanes-Oxley 

was enacted in response to corporate accountability failures of several 

years prior to its enactment and contains a provision (section 404) calling 

for management’s assessment of internal control over financial reporting 

similar to the long-standing requirements for executive branch agencies 

contained in FMFIA to issue annual statements of assurance over internal 

control in the agencies. Opinions on internal control over financial 

reporting as required by Sarbanes-Oxley for publicly traded companies are 

important to protect investors by improving the accuracy and reliability of 

corporate disclosures made pursuant to the securities laws. 

 10OMB Circular No. A-123, Management’s Responsibility for Internal Control (revised 

Dec. 21, 2004). 

11Pub. L. No. 107-204, § 404, 116 Stat. 745, 789 (July 30, 2002). 

Page 45 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix II: Publications in the Federal 

Financial Management Systems Requirements Appendix II: Publications in the Federal Series 

Financial Management Systems 

Requirements Series 

FFMSR 

document Issue date 

FFMSR-8 System Requirements for Managerial Cost 

Accounting

February 1998

JFMIP-SR-99-5 Human Resources & Payroll Systems Requirements April 1999

JFMIP-SR-99-8 Direct Loan System Requirements June 1999

JFMIP-SR-99-9 Travel System Requirements July 1999

JFMIP-SR-99-14 Seized Property and Forfeited Assets Systems

Requirements

December 

1999 

JFMIP-SR-00-01 Guaranteed Loan System Requirements March 2000

JFMIP-SR-00-3 Grant Financial System Requirements June 2000

JFMIP-SR-00-4 Property Management Systems Requirements October 2000

JFMIP-SR-01-01 Benefit System Requirements September

2001 

JFMIP-SR-02-02 Acquisition/Financial Systems Interface 

Requirements

June 2002 

JFMIP-SR-03-01 Revenue System Requirements January 2003

JFMIP-SR-03-02 Inventory, Supplies and Materials System 

Requirements

August 2003

JFMIP-SR-02-01 Addendum to Core Financial System Requirements March 2004

JFMIP-SR-01-04 Framework for Federal Financial Management

Systems

April 2004 

OFFM-NO-0106 Core Financial System Requirements January 2006

OFFM-NO-0206 Insurance System Requirements June 2006

Source: OMB’s Office of Federal Financial Management (OFFM).

Note: Effective December 1, 2004, all financial management system requirements documents and 

other guidance initially issued by the JFMIP were transferred to OFFM and remain in effect until 

modified. 

Page 46 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix III: Statements of Federal Financial 

Accounting Concepts, Standards, 

Interpretations, and Technical Bulletins 

Concepts 

SFFAC No. 1 Objectives of Federal Financial Reporting

SFFAC No. 2 Entity and Display

SFFAC No. 3 Management’s Discussion and Analysis

SFFAC No. 4 Intended Audience and Qualitative Characteristics for the 

Consolidated Financial Report of the United States Government 

Standards Effective for

fiscal year

a

SFFAS No. 1 Accounting for Selected Assets and Liabilities 1994 

SFFAS No. 2 Accounting for Direct Loans and Loan Guarantees 1994 

SFFAS No. 3 Accounting for Inventory and Related Property 1994 

SFFAS No. 4 Managerial Cost Accounting Concepts and Standards

for the Federal Government

1998

SFFAS No. 5 Accounting for Liabilities of the Federal Government 1997 

SFFAS No. 6 Accounting for Property, Plant, and Equipment 1998

SFFAS No. 7 Accounting for Revenue and Other Financing Sources

and Concepts for Reconciling Budgetary and Financial Accounting

1998

SFFAS No. 8 Supplementary Stewardship Reporting 1998

SFFAS No. 9 Deferral of the Effective Date of Managerial Cost 

Accounting Standards for the Federal Government in SFFAS No. 4

1998

SFFAS No. 10 Accounting for Internal Use Software 2001 

SFFAS No.11 Amendments to Accounting for Property, Plant, and 

Equipment—Definitional Changes

1999 

SFFAS No.12 Recognition of Contingent Liabilities Arising from 

Litigation: An Amendment of SFFAS No. 5, Accounting for Liabilities of 

the Federal Government

1998

SFFAS No. 13 Deferral of Paragraph 65.2—Material Revenue-Related 

Transactions Disclosures

1999 

SFFAS No. 14 Amendments to Deferred Maintenance Reporting 1999 

SFFAS No. 15 Management’s Discussion and Analysis 2000 

SFFAS No. 16 Amendments to Accounting for Property, Plant, and 

Equipment

2000 

SFFAS No. 17 Accounting for Social Insurance 2000 

SFFAS No. 18 Amendments to Accounting Standards for Direct Loans

and Loan Guarantees in Statement of Federal Financial Accounting 

Standards No. 2

2001 

SFFAS No. 19 Technical Amendments to Accounting Standards for 

Direct Loans and Loan Guarantees in Statement of Federal Financial 

Accounting Standards No. 2

2003

Appendix III: Statements of Federal Financial 

Accounting Concepts, Standards, 

Interpretations, and Technical Bulletins 

Page 47 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix III: Statements of Federal Financial 

Accounting Concepts, Standards, 

Interpretations, and Technical Bulletins 

SFFAS No. 20 Elimination of Certain Disclosures Related to Tax 

Revenue Transactions by the Internal Revenue Service, Customs, and 

Others

2001 

SFFAS No. 21 Reporting Corrections of Errors and Changes in 

Accounting Principles

2002 

SFFAS No. 22 Change in Certain Requirements for Reconciling 

Obligations and Net Cost of Operations

2001 

SFFAS No. 23 Eliminating the Category National Defense Property, 

Plant, and Equipment

2003

SFFAS No. 24 Selected Standards for the Consolidated Financial 

Report of the United States Government

2002 

SFFAS No. 25 Reclassification of Stewardship Responsibilities and

Eliminating the Current Services Assessment

2006 

SFFAS No. 26 Presentation of Significant Assumptions for the 

Statement of Social Insurance: Amending SFFAS 25 

2006 

SFFAS No. 27 Identifying and Reporting Earmarked Funds 2006 

SFFAS No. 28 Deferral of the Effective Date of Reclassification of the 

Statement of Social Insurance: Amending SFFAS 25 and 26

2006 

SFFAS No. 29 Heritage Assets and Stewardship Land 2006 

SFFAS No. 30 Inter-Entity Cost Implementation Amending SFFAS 4, 

Managerial Cost Accounting Standards and Concepts

2009 

SFFAS No. 31 Accounting for Fiduciary Activities 2009 

SFFAS No. 32 CFR of the U.S. Government Requirements 2006 

Interpretations

No. 1 Reporting on Indian Trust Funds

No. 2 Accounting for Treasury Judgment Fund Transactions

No. 3 Measurement Date for Pension and Retirement Health Care Liabilities

No. 4 Accounting for Pension Payments in Excess of Pension Expense

No. 5 Recognition by Recipient Entities of Receivable Nonexchange Revenue

No. 6 Accounting for Imputed Intra-departmental Costs

No. 7 Items Held for Remanufacture

Technical bulletins

TB 2000-1 Purpose and Scope of FASAB Technical Bulletins and Procedures for 

Issuance

TB 2002-1 Assigning to Component Entities Costs and Liabilities That Result From Legal 

Claims Against the Federal Government

TB 2002-2 Disclosures Required by Paragraph 79(g) of SFFAS 7, Accounting for 

Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and

Financial Accounting

Page 48 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix III: Statements of Federal Financial 

Accounting Concepts, Standards, 

Interpretations, and Technical Bulletins 

TB 2003-1 Certain Questions and Answers Related to the Homeland Security Act of 

2002

TB 2006-1 Recognition and Measurement of Asbestos-Related Cleanup Costs

Source: FASAB. 

a

Effective dates do not apply to Statements of Federal Financial Accounting Concepts, 

Interpretations, and Technical Bulletins. 

Page 49 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix IV: Accounting and Auditing Policy

Appendix IV Committee Technical Releases : Accounting and Auditing Policy 

Committee Technical Releases 

Technical release 

AAPC release

date

TR-1 Audit Legal Representation Letter Guidance March 1, 1998

TR-2 Determining Probable and Reasonably Estimable for 

Environmental Liabilities in the Federal Government

March 15, 1998

TR-3 Preparing and Auditing Direct Loan and Loan Guarantee 

Subsidies Under the Federal Credit Reform Act

July 31, 1999 

TR-4 Reporting on Non-Valued Seized and Forfeited Property July 31, 1999 

TR-5 Implementation Guidance on SFFAS No. 10: Accounting for 

Internal Use Software

May 14, 2001 

TR-6 Preparing Estimates for Direct Loan and Loan Guarantee 

Subsidies Under the Federal Credit Reform Act (Amendments to TR-3)

January 2004 

Source: FASAB. 

Page 50 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix V: Checklists for Reviewing Systems

under the Federal Financial Management Appendix V Improvement Act : Checklists for Reviewing 

Systems under the Federal Financial 

Management Improvement Act 

Checklist Issue date

GAO/AIMD-00-21.2.3 Human Resources and Payroll Systems

Requirements

March 2000 

GAO-01-99G Seized Property and Forfeited Assets Systems

Requirements 

October 2000 

GAO/AIMD-21-2.6 Direct Loan System Requirements April 2000

GAO/AIMD-21.2.8 Travel System Requirements May 2000 

GAO/AIMD-99-21.2.9 System Requirements for Managerial Cost 

Accounting 

January 1999 

GAO-01-371G Guaranteed Loan System Requirements March 2001 

GAO-01-911G Grant Financial System Requirements September 2001

GAO-02-171G Property Management Systems Requirements December 2001

GAO-04-22G Benefit System Requirements October 2003

GAO-04-650G Acquisition/Financial Systems Interface Requirements June 2004 

GAO-05-225G Core Financial System Requirements February 2005

Source: GAO.

Page 51 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix VI: Comments from the Office of Appendix VI: Comments from the Office of Management and Budget 

Management and Budget 

Page 52 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix VI: Comments from the Office of

Management and Budget 

Page 53 GAO-07-914 FFMIA Fiscal Year 2006 Results
Appendix VII: 

A

GAO Contact and Staff 

cknowledgments 

Page 54 GAO-07-914

Appendix VII: GAO Contact and Staff 

Acknowledgments 

McCoy Williams, (202) 512-9095 or williamsm1@gao.gov 

In addition to the contact named above, Kay L. Daly, Assistant Director; 

F. Abe Dymond, Assistant General Counsel; Debra Cottrell; Francine 

DelVecchio; Lauren Fassler; C. Robin Hodge; Jennifer Leone; Sheila D. 

Miller; and George Warnock made key contributions to this report. 

FFMIA Fiscal Year 2006 Results

GAO Contact 

Acknowledgments 

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