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Office of Management and Budget
News Release

 

FOR IMMEDIATE RELEASE
February 22, 2002
2002-09

ACCOUNTING GROUPS SUPPORT OMB PROPOSAL TO STRENGTHEN
ACCURACY OF GOVERNMENT BOOKKEEPING

AICPA, AGA and JFMIP Back Full-Cost Accounting in FY 2003 Budget

Washington, 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 employer’s 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.

 

"The 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.

 

David 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:

 

"A 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."

Charles Culkin, Executive Director of the 18,000 member Association of Government Accountants wrote the following in a recent letter to OMB Director Mitchell Daniels:

 

AGA supports the integration of accounting and budgeting concepts proposed by OMB with respect to federal post-employment benefits."

 

Barry Melancon, President and CEO of the American Institute of Certified Public Accountants, gave similar support in a recent letter to Director Daniels:

 

"We 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 government’s budgetary process with its financial accounting and reporting processes."

 

BACKGROUND:

The President’s 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.

 

 

 

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