Financial Management

GAO: (1) identified steps the Department of Veterans Affairs (VA) needs to take to implement financial management requirements in the Chief Financial Officers (CFO) Act of 1990; and (2) related VA problems in operating and enhancing its financial management systems to the steps identified for implementing the CFO Act.

GAO believes that, in order for VA to improve its financial management structure, it could: (1) organize agency financial management functions to ensure that responsibility for accounting, budgeting, and other financial activities is consolidated under the CFO, which would help eliminate problems arising from its various components' autonomously developing and operating financial management systems; (2) establish financial management systems that comply with applicable accounting principles, standards, and requirements, and internal control standards; (3) prepare a plan to guide financial management systems development and operations; (4) provide for annual audited financial statements and prepare annual reports on its financial condition to allow Congress and the public greater insight into and understanding of VA financial affairs, improve accountability for its programs and resources, and be useful for oversight and decisionmaking when assessing its programs; (5) develop and report cost data and performance measures, because by working as partners, the CFO and VA managers can better ensure that performance measures are useful and relevant; (6) improve credit management and accounting for property so that lending programs can have adequate internal controls and reporting requirements, amounts owed to the government through VA credit programs can be adequately accounted for and collected, and property can be accurately accounted for and controlled; (7) integrate accounting and budgeting information and operations; and (8) effectively recruit and retain financial management personnel.