Summary: The Chief Financial Officers (CFO) Act provides the blueprint for much-needed financial management reforms. The act's first 3-1/2 years represent a very successful start and show the relevance of its provisions to improving government operations. The act's requirement for producing annual financial statements, in particular, is proving its worth in several ways, such as providing a more accurate picture of agencies' financial conditions. Audited financial statements have also helped to identify management inefficiencies and weaknesses and expose gaps in how government assets are safeguarded as well as possible illegal acts. Additionally, CFO Act financial audits have identified actual and potential savings totaling hundreds of millions of dollars. GAO strongly supports expanding the act's requirements for agencywide audited financial statements to all 23 CFO Act agencies and to the government as a whole. The Comptroller General's testimony discusses (1) the value of the financial statements and audits mandated by the act, (2) the costs and the funding issues related to implementing the act and expanding its requirements, (3) the potential impact of future Office of Management and Budget (OMB) personnel cuts and OMB 2000 on the ability of OMB to carry out its responsibilities under the act, (4) the quality and the timeliness of appointments to positions mandated by the act, and (5) the ability of the Federal Accounting Standards Advisory Board to propose meaningful federal accounting standards in a timely manner.
