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Most public sector financial managers know that technology can help solve financial management woes, but many of them do not low how to use it. Tilis is not an indictment of public sector financial managers, rather it is a reflection of the demands they face today. How do financial managers best use technology to solve current business problems? In order to begin examining this question, it is necessary first to understand the expectations and pressures facing today's federal financial managers.
Increasing Demands
The demands on federal financial managers are greater today than ever before. Just looking back nearly 10 years, we have seen a whirlwind of legislative change. Beginning with the Chief Financial Officers Act of 1990, Congress began to increase its level of oversight on such matters as financial statements, financial management plans and the systems in place to support these efforts. Congress has also taken a keen interest in the level and skills of candidates for chief financial officer positions.
In 1993, Congress passed the Government Performance and Results Act, which established a principle for making funding decisions on the basis of program effectiveness. Many agencies are still struggling with how best to establish program performance measures against agency activities that are difficult to quantify. Nevertheless, this legislation demands that beginning March 31, 2000, agencies produce annual reports on program performance that must be submitted to the president and Congress.
The Government Management Reform Act, enacted in 1994, further defined requirements for financial statement production against established deadlines. Not only did this act establish that beginning March 1, 1997, each agency must submit financial statements covering all accounts in the preceding fiscal year, but it also set forth that the Department of the Treasury must submit a consolidated financial statement for the executive branch, beginning in March 1998. The Federal Financial Management Improvement Act of 1996 defined, among other areas, that all federal departments and agencies are required to "...install and maintain financial management systems that comply substantially with federal financial management systems requirements, applicable federal accounting standards and the U.S. Standard General Ledger at the transaction level." In addition, if agency financial systems are unable to comply with this legislated requirement, a plan must be provided for bringing systems into compliance.
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