AGA Audio Conference
The CFO Act: Leveraging Lessons
Learned to Improve
Federal Financial Management
August 3, 2011
James Taylor, Chief Financial Officer, Department of Labor
Daniel I. Werfel, JD, MBA, Controller, Office of Management and Budget
Elliot Lewis, Assistant Inspector General for Audit, Department of Labor
David Zavada, Partner, Kearney & Company
Background on the CFO Act
• Landmark legislation
– Called for major Federal financial management reforms
• Federal governance structure
• Complete, reliable, timely, and consistent financial information
• Improved systems of accounting, financial management, and internal
– Resulted in partnership between the Congress, OMB, and
– Signed into law on November 15, 1990
• Catalyst for other management reform legislation geared
to improve government accountability
Why We Did the Review
• Section 3(e) of the Improper Payments Elimination
and Recovery Act of 2010
– Joint CFO Council-CIGIE examination of CFO Act of 1990 to
• Lessons learned, or successes, implementing the CFO
• Reforms or improvements to the Federal financial
– Consult with experts and stakeholders in government
accounting and financial management
• What do you think the general feeling is in regard to the
benefits and challenges in the area of financial reporting and
audited financial statements?
– What were the biggest successes?
– Where have we fallen short?
– What were the overall lessons learned?
• More financial information than ever is being reported - -
everything from transactional data required by
FFATA/Recovery Act, to special Congressional
requests/reports, to audited financial statements. What was
the feeling about the usefulness, quality and overall
cost/benefit of this collective information.
• Given the range of information being reported, is there a
better way to meet the needs of the users of federal financial
information/reports? Is there a clear understanding of who
the users are (internal/external) and their needs?
• Where there any reporting gaps raised? For example, in the
areas of program cost or performance information?
• Prior to the CFO Act GAO developed accounting standards - -
what were the feelings about the process of adopting
“Generally Accepted Accounting Principles” to improve
transparency and accountability in financial reporting?
• Were there observations about more innovative ways to
communicate financial information and to demonstrated
accountability? Any thoughts about how to maintain integrity
and consistency in fast-moving and fluid environment (e.g.,
communicating via social media)?
Audits and Internal Control
• Any observations about how the A-123 internal control
assessment and audit process could better address the
integrity of information being reported?
• There has been a lot of discussion surrounding the
coordination of audit/oversight efforts to zero in on the areas
where risk/benefit exists - - was this an area that came up
during your discussions?
• Was there a feeling that the financial audits were hitting the
mark in terms of focusing in on the right processes and
internal controls? Are there areas discussed that need a
Audits and Internal Control
• Federal agencies are large and complex entities, is this the
right level for audited financial reporting - - are there reasons
to go lower, higher or different frequency?
• We are in a very tight budget environment - - how do we
leverage the foundational benefits of the CFO Act to develop
more useful and reliable information to support both budget
and program management decisions?
• Do you see the role of the CFO changing in this environment?
(i.e. responsibilities, focus, etc)
• Where do we go from here?