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Government Leader home > June 2005 issue
June 2005; Vol. 1 No. 2
FINANCIAL MANAGEMENT: Gearing up for A-123 Gearing up for A-123
By Kevin McCaney
When financial officials at the Commerce Department started planning their implementation of the revised Circular A-123, one of their first decisions was to keep the process in-house.
“It’s not that we want to go it alone,” said deputy CFO James Taylor, “it’s more the ownership issues.”
The Office of Management and Budget released the revised circular earlier this year and set the first reporting period for June next year. The revision
of the circular, aimed at strengthening agencies’ internal controls, parallels
requirements in the Sarbanes-Oxley Act of 2002 for publicly held companies.
Taylor said Commerce and other agencies could learn a few things from the
private sector—such as getting started on the process and learning to track the
documentation—but he concluded that agencies ultimately would benefit from
having their own employees handle the implementation.
For one thing, the federal government actually is a bit ahead of industry when it
comes to internal controls, he said. Agencies have long been governed by laws
such as the Federal Financial Management Improvement Act of 1996; in implementing
A-123, they can build on practices they already have.
Developing and assessing internal controls requires such judgement calls from agency management as “what is important to me, what is material to me,” Taylor said. “That’s why management has to have a hands-on approach.”
Help on the way
At press time, the CFO Council’s Financial Management Policies and Practices
Committee—of which Taylor is chairman—was finishing up an implementation
guide for A-123.
To find a link to the guide, go to OMB’s site, www.whitehouse.gov/omb, and click
on Circulars.
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