Academic journal article The Public Manager

The Joint Financial Management Improvement Program Strikes Gold

Academic journal article The Public Manager

The Joint Financial Management Improvement Program Strikes Gold

Article excerpt

The JFMIP, at 50, continues its dedication to improved practices, as substantial legislative requirements are implemented by the feds.

This year is the golden anniversary for the Joint Financial Management Improvement Program (JFMIP), which was established by the 1950 Budget and Accounting Procedures Act. Our mission is to improve financial management practices in the government through the joint and cooperative efforts of the US Department of the Treasury (Treasury), the General Accounting Office (GAO), the Office of Management and Budget (OMB), the Office of Personnel Management (OPM), and all federal agencies.

However, our focus has evolved significantly in step with major changes in federal financial management statutes, institutional arrangements, business processes, and technology infrastructure.

The Financial Management Challenge: Raising the Bar

Statutes passed in the 1990s continue to drive change in the federal financial management framework. Compliance with these laws increased accountability now measured by consistent standards and reporting methodologies. Also, technology available to support systems has changed dramatically in the last decade with the emergence of powerful computing and communications technologies. Finally, government is experiencing unprecedented human capital challenges to replace the graying federal workforce with a new workforce. The future workforce must be able to conduct the business of government that has been redefined by recent legislation and using new technology and business processes.

What are the recent changes? The 1990 Chief Financial Officers (CFO) Act changed federal accounting and reporting by transferring responsibility for establishing accounting standards to the executive branch, requiring agencies to improve financial systems and internal controls, and mandating the conduct of independent audits of agencywide financial statements. The CFO Act provided for the designation of a CFO in each major agency to oversee these responsibilities and for the establishment of a government-wide CFO Council to collaborate on common challenges.

The Government Performance and Results Act of 1993 amplified accountability by requiring a formal strategic planning, performance planning consistent with an agency budget request, and performance reporting to disclose what federal agencies achieved for what they spent. The Government Management Reform Act of 1994 further expanded accountability activities by mandating the consolidated annual audited financial statement for the preceding year that includes all accounts and associated activities of the executive branch. The passage of the Federal Financial Management Improvement Act (FFMIA) in 1996 reemphasized the need for federal financial systems to support the building blocks of financial and performance information by placing in statute three existing policy requirements. This statute recognized the Federal Accounting Standards Advisory Board. Section 803 (a) requires that each agency shall implement and maintain financial management systems that comply substantially with federal financial management sys tems requirements, applicable federal accounting standards, and the US government standard general ledger at the transaction level.

Financial management systems that support federal accounting needs are key for achieving the improvement in financial management envisioned by the CFO Act and subsequent legislation. The vision for federal financial management systems is to support partnership between program and financial management to assure integrity of information for decision making and performance measurement. To achieve that vision, federal financial systems need to:

* produce accurate, timely, complete, reliable, and consistent information;

* provide adequate agency management reporting;

* support governmentwide and agency policy decisions;

* support preparation and execution of agency budgets;

* facilitate financial statement preparation;

* provide information to central agencies; and

* provide audit trail information. …

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