Financial Management: USDA Continues to Face Major Financial Management Challenges Page: 3 of 17
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In brief, USDA continues to face major challenges in correcting
severe and long-standing financial management problems and
achieving financial accountability. During the last 2 years USDA
financial managers have taken these challenges seriously and made
a commitment of resources not only to resolve financial
management weaknesses that have precluded the agency from
receiving an unqualified, or "clean" opinion on its financial
statements, but also to begin moving toward a long-term goal of
achieving financial accountability. There is one notable exception,
however, to our assessment of USDA's efforts. In August 2000, we
reported4 that Rural Development (RD), one of USDA's major
component agencies, has made slow progress in improving credit
program cost estimates and missed several milestone dates because
of a shortage in both the staff and funding resources that are needed
to resolve long-standing credit reform weaknesses. Because of this
issue, USDA is likely several years away from achieving financial
accountability.Background
Improving financial accountability throughout the federal
government has been an area of emphasis since implementation of
the Chief Financial Officers (CFO) Act of 1990, which established a
CFO structure in 24 major agencies and charged the Office of
Management and Budget to provide the necessary financial
management leadership and focus. To help instill greater
accountability and fix pervasive and costly breakdowns in internal
controls, financial statements were required to be prepared and
audited, beginning with those for fiscal year 1991, for revolving and
trust funds and commercial activities. For 10 agencies-including
USDA-audited financial statements were required as part of a pilot
program to test this concept for an agency's entire operations.
Since USDA's participation in the pilot program in 1991, USDA and
several of its component agencies have received a series of
unfavorable financial audit reports due to deficiencies in financial
reporting that are attributable primarily to weaknesses in the
4Credit Reform: Improving Rural Development's Credit Program Cost Estimates (GAO/AIMD-00-286R,
Aug. 22, 2000).GAO/T-AIMD-00-334 Financial Management at USDA
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United States. General Accounting Office. Financial Management: USDA Continues to Face Major Financial Management Challenges, text, September 27, 2000; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc289650/m1/3/: accessed May 4, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.