20 Years of the CFO Act
Continuously making strides and improvements in financial management, accountability, and transparency is key to the effective stewardship of taxpayer dollars ─ a charge this Administration is committed to carry out. Last year marked a major milestone in this effort, with the 20th anniversary of the Chief Financial Officers Act of 1990 (CFO Act). The occasion of this anniversary is an opportune time to take a look back at what we have achieved and a look forward at how we can continue to make improvements in financial management.
With this in mind, Congress directed the Chief Financial Officers Council (CFOC) and the Council of the Inspectors General on Integrity and Efficiency (CIGIE) to evaluate the lessons learned over the last 20 years since the CFO Act went into effect. Drawing upon input and expertise from across the CFO and CIGIE communities, the Government Accountability Office (GAO), academia as well as private sector auditing and accounting groups, the Councils recently provided a report to Congress outlining the results of their review and recommendations for improvements in financial management.
The report highlights several benefits of the CFO Act, including the increased transparency, greater accountability and significant improvements in financial management and internal controls achieved in recent years. Last year, these strides contributed to 21 out of the 24 CFO Act agencies obtaining unqualified “Clean” opinions on their financial statement audits – only the second time in the last decade that the government reached that milestone.
The report also includes key recommendations for changes to the legislative and regulatory framework for financial management, such as:
- Enhancing the role of the CFO by standardizing the CFO’s portfolio to include leadership responsibility for budget formulation and execution, planning and performance, risk management and internal controls, financial systems, and accounting;
- Providing Deputy CFOs with similar breadth of responsibilities as their respective CFOs; and
- Directing OMB, GAO, and the Federal Accounting Standards Advisory Board (FASAB), in consultation with the CIGIE, to evolve the financial reporting model in an effort to further improve and streamline current reporting requirements and to better meet the needs of all stakeholders.
Although consensus has not been reached within the Federal community on all of these recommendations, they each warrant consideration as we explore ways to improve the impact of the CFO Act going forward.
Over the past 20 years, the CFO Act has played a pivotal role in improving financial accountability and transparency across the Federal Government. And this Administration is committed to building upon these accomplishments to ensure that we are careful and effective stewards of the taxpayers’ money. We look forward to continuing our work with the Congress, GAO, and the CFO community to achieve our mutual goal of providing reliable and relevant financial information to all stakeholders, as well as the new Government Accountability and Transparency Board.
Danny Werfel is Controller of the Office of Federal Financial Management.