While the IC’s research organization looks into adding security to cloud environments, in the here and now, intelligence agencies are sharing more data.
The Bush administration is pushing agencies to apply managerial cost accounting (MCA) methods—the mixing of traditional financial reporting with other mission information to guide decision-making—and a new Government Accountability Office report can help agencies meet those expectations.
The report is the first in a series that GAO expects to do over the coming months about how agencies are applying MCA methods and how they are using the resulting data to make business decisions.
"Leadership and strong internal controls are necessary for the successful implementation and operation of MCA," GAO cautions.
The current review is of the Labor and Veterans Affairs departments. It is likely that for some agencies slated for MCA audits, in-depth interviews by GAO analysts have already begun. But for those yet to be grilled, the new report offers some pointers that agencies can apply sooner rather than later to their cost-accounting systems.
Specifically, GAO reports that both Labor and VA need to validate nonfinancial data and to document cost accounting policies and procedures. At VA, the congressional watchdog agency also recommends that the department make its MCA work a priority for leadership and do more to further automate its processes.
Unless the two departments make these changes, GAO says, they "could limit the reliability of data used by management to analyze costs and to make decisions."
By reviewing the GAO findings, other agencies can compare their progress in creating robust MCA programs against Labor and VA's efforts and then make adjustments accordingly.
Things to consider:
• Are you adequately verifying the nonfinancial data you include in your accounting systems?
The government already applies rigorous controls to the financial data it gathers and uses, but when agencies begin mixing nonfinancial data into their MCA systems and programs to aid in decision-making they don't always validate it, GAO says. The data—from the number of hours employees work on certain projects to how grants are parceled out, for example—can vary greatly from agency to agency based on their mission, but unless an agency can assure its integrity, the data's use ultimately will make any decisions based on it questionable, auditors point out.
• Have you created policy documents for use throughout your agency?
Even Labor, which GAO generally lauds for its efforts on MCA, needs to improve on this front. It's important to fully document policies, procedures and processes, and then to consolidate them so they are "readily available to systems users, managers and auditors," the report notes.
• Is the use of MCA as a decision-making tool a priority at your agency?
Unless top management takes the lead, the use of MCA will likely be uneven within an agency. GAO compared and contrasted the efforts at Labor and VA to make its point: The success of Labor in creating a departmentwide approach and implementing a system for all its agencies is directly attributable to the key role of management. (So far, only three of 18 component agencies have yet to build MCA systems on the departmentwide model, but those three organizations account for 0.1 percent of Labor's total budget.) At VA, there is no departmentwide system for aggregating MCA data and creating a financial snapshot of efforts across VA. (An accounting system planned for departmentwide use is running in one of the three major subagencies within the VA.)
In response to the findings, Labor officials say they generally agree with the thrust of the GAO recommendations, even if they dispute a few of the exact details of Labor's operations. The department plans to do more to check its nonfinancial data, according to Labor CFO Samuel T. Mok. "The department is implementing additional data validation systems," he says.
Meanwhile, VA essentially disagrees with the bulk of the GAO review and says it strongly supports MCA. Although the department does not have a central repository for accounting data, it "has an initiative under way to automate the preparation of consolidated financial statements," according to VA Deputy Secretary Gordon H. Mansfield. This effort will lead to the creation of a financial data warehouse, he adds.