Federal Government Accounting, Though Still Flawed, Is Moving in Right Direction

For many years after passage of the Chief Financial Officers Act, meeting guidelines looked to be a forlorn hope with less than 10% of federal agencies approaching compliance. Today, 19 federal agencies and departments have received "clean" audits during the past two fiscal years and 12 (up from one in 2001) now meet a broader test of five management areas. Long-time financial management specialist Linda Combs says that all this is evidence of progress in federal financial reporting. Two benefits: a 20% or $9 billion drop in improper payments and $4.5 billion from sales of surplus real estate. Even the traditionally lagging Defense Department is showing signs of improvement--the Army Corps of Engineers is having its first outside audit this year and the Marines will be ready next year.

Certainly, improved financial management will fall well behind Iraq, homeland security, tax cuts and even domestic economic performance as a legacy of the Bush administration. Nevertheless, it is encouraging for U.S. taxpayers everywhere to hear that the federal bookkeepers are making progress in upgrading federal financial reporting.