GROUPS SUPPORT OMB PROPOSAL TO STRENGTHEN
ACCURACY OF GOVERNMENT BOOKKEEPING
AGA and JFMIP Back Full-Cost Accounting in FY 2003 Budget
DC -- Two mainstream accounting groups, together with the Joint
Financial Management Programs (JFMIP) chaired by the U.S. Comptroller
General David Walker, are citing the need for a proposal by the
Office of Management and Budget (OMB) to strengthen budgeting for
federal employee costs. The proposal would fund the employers
share of the annual cost of all federal pensions and retiree health
benefits from the salary and expense accounts of the agencies where
employees work, as most federal pensions are now.
time is right for this improvement, especially given the heightened
sensitivity to the need for accuracy and transparency in accounting.
We welcome this strong support in the professional community, which
adds momentum to making this improvement this year," said OMB Controller
Mark W. Everson.
M. Walker, Comptroller General of the U.S. and currently Chair of
the Joint Financial Management Improvement Program (JFMIP), said
in a statement on behalf of the JFMIP Principals:
key element of financial planning and evaluations is clear measurement
of the full costs of agencies activities during each fiscal
year. Including these costs in data used for budgetary decision-making
would enhance both the planning process and the evaluation of the
cost of operations. It would also provide for enhanced consistency
and transparency relating to presentation of this information and
greater accountability for results."
Culkin, Executive Director of the 18,000 member Association of Government
Accountants wrote the following in a recent letter to OMB Director
supports the integration of accounting and budgeting concepts proposed
by OMB with respect to federal post-employment benefits."
Melancon, President and CEO of the American Institute of Certified
Public Accountants, gave similar support in a recent letter to Director
support providing for the full costs of agencies activities,
including Federal employee retirement costs, in individual agency
budgets. This would enhance the evaluation of the true costs of
operations within each Federal agency, and more closely align the
Federal governments budgetary process with its financial accounting
and reporting processes."
Presidents FY 2003 Budget proposes to charge employee costs,
including those related to retirement, to the programs themselves.
By recording the accruing costs as employees earn benefits, managers
can get a better sense of the true costs of operations. The proposal
would bring budgeting for federal employees in the Civil Service
Retirement System (and several smaller retirement systems) in line
with what the law already requires for employees in the Federal
Employees Retirement System and the Military Retirement System.
The unfunded liabilities of all retirement programs would be amortized
centrally. The proposal would have no effect on total budget outlays.