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Government Leader home > August 2005 issue
August 2005; Vol. 1 No. 3
Getting a jump on CIRCULAR A-123: CFO council, IBM offer help on attaining 2006 compliance
By Trudy Walsh
Most federal agencies had better have their financial houses in order by next summer.
June 30, 2006, is when the 25 Chief Financial Officers Act agencies have to be in compliance with the Office of Management and Budget’s Circular A-123 on management’s responsibility for internal controls.
The CFO Council recently issued further guidance on implementing the circular. Agencies can download a 70-page guide to A-123 at www.cfoc.gov. The council’s Policy and Practices Committee will also be hosting informal discussion groups to help agencies troubleshoot problems and share best practices.
Operating much as the Sarbanes-Oxley Act of 2002 does for private companies in the post-Enron world, A-123 imposes on government agencies stricter internal controls over financial reporting.
Jay Hurt, director of financial management systems for the Education Department’s Federal Student Aid program, is reviewing some IBM software designed to make A-123 compliance a manageable process. “People who have done this in Microsoft Word and Excel tell us Lesson 1 is, ‘Don’t even try it,’” Hurt said.
Although they are evaluating other products, Hurt and his team were especially interested in trying out IBM Workplace for Business Controls and Reporting software because they were already using an IBM process modeling tool.
An earlier version of the software was designed for Sarbanes-Oxley compliance and debuted two years ago, said Rebecca Buisan, an IBM market manager. Version 2.5.1, which was released last month, incorporates support for A-123 requirements such as the statement of assurance—the final step in the management assessment process—and uses standard Government Accountability Office terminology.
Hurt said it would be a mistake for agencies to think they can start getting their financial reporting and documentation together now and apply the tools later. For example, the Homeland Security Department was required to meet the A-123 requirements earlier than most agencies.
“They had 14 or 15 binders per bureau,” he said. “It was very unwieldy. DHS said, ‘Get the tool when you set up the framework. Otherwise you’ll do a lot of backtracking and spend a lot of money doing it.’”
—Trudy Walsh
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