Just as shareholders are demanding more reliable financial information from public companies, citizens and officeholders are demanding a higher standard in how tax money is spent. Initiatives such as the Office of Management and Budget’s Circular A-123 require public agencies to provide many of the same internal controls required of the commercial sector by the Sarbanes-Oxley Act for publicly-traded companies. The White House has demanded government agencies improve key management practices, including their financial reporting, and posted their progress on a White House Web site.
Improving financial performance” is one of five key initiatives in the “The President’s Management Agenda,” requiring agencies to provide
- Accurate and timely financial information
- Legacy Transformation solutions
- Financial systems that meet federal requirements
- Clean and timely audit opinions with no material weaknesses
Among the heightened requirements at the federal level are the revisions to the Office of Management and Budget (OMB) Circular A-123. Issued considering the passage of the Sarbanes-Oxley Act, the revisions increase federal manager’s responsibility to review, assess and test their processes to ensure the accuracy of the financial information about their programs and operations. Federal agency managers also face several legislative mandates for improving the quality of their financial reporting. Board. Advisory Standards Accounting Federal the by promulgated standards and requirements systems management financial with comply substantially to agency requires which 1996, of Act Improvement Management Financial systems, control their own report evaluate annually heads 1982, Integrity Managers payments; improper prevent controls strengthening for accountable managers holds 2002, Information Payments Improper include
State and Local Governments
State and local governments also come under federal financial reporting requirements when entities they operate such as housing authorities or hospitals receive federal funds. For example, 24 CFR Part 84 requires institutions of higher learning hospitals and other non-profit institutions receiving funds from the federal Department of Housing and Urban Development to provide “Accurate, current and complete disclosure of the financial results of each federally-sponsored project or program.” Faced with budget shortfalls, rising needs and resistance to new taxes, state and local governments (and the agencies they support) must demonstrate they are spending taxpayers’ money wisely, and are detecting and preventing internal fraud or misuse of public funds by contractors.
Even if they are not obliged to comply with SOX mandates, the internal controls required by it can help state and local governments (and government agencies) retain public support by providing reliable, trustworthy financial information. Many state and local governments, or their agencies, follow financial reporting guidelines as determined by organizations such as the Financial Accounting Standards Board, Governmental Accounting Standards Boards and Cost Accounting Standards Board.
Solution AMPCUS helps the Federal, State and Local government in the following way:
- Strategic Planning
- Change Management
- Database Management services
- Data Integrity services
- Data warehousing and Business Intelligence
- Reporting and Analytics
- Government-wide Financial, Human Capital and Supply Chain management services