Summary: GAO discussed the Office of Management and Budget's (OMB) current management leadership efforts and the condition of federal management. GAO noted that, in response to recommendations it made to help OMB achieve a stable management framework, OMB: (1) increased its management division staff; (2) established two management oversight processes for high-risk internal control weaknesses and a system to track agency progress in addressing major program policy and management issues; (3) pursued a five-point financial management improvement program for reviewing agency financial management practices and providing audited agency financial statements; (4) presented a plan for renewing priorities for improving agency practices; and (5) made progress in securing support for its management efforts, fostered communication across executive agencies and tapped agency talent in addressing common management problems. GAO also noted that: (1) OMB continued to experience such problems as changing leadership, slow development of management agenda, and limited delegation of authority; and (2) some agencies were not implementing the OMB management-by-objectives approach. GAO believes that: (1) strong centralized leadership to direct the government's financial management activities is essential for a successful financial management reform program; and (2) annual preparation and audit of agency financial statements is essential to ensuring that financial management systems are working, government assets are safeguarded, and reliable information is provided to program managers.
