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In fact, the first prototype CFS was published in October 1976 for fiscal years 1974 and 1975. The fiscal year was changed in 1976 to end on September 30 so the second prototype CFS published in July 1977 had to accommodate a transition quarter. Much had changed by the time the second prototype CFS was published. Jimmy Carter was the newly-elected President and W. Michael Blumenthal was the new Secretary of the Treasury. Fiscal Assistant Secretary David Mosso left Treasury during 1977 to become a member of the Financial Accounting Standards Board. During 1976 Republican Congressional Representative Phil Crane of Illinois had sponsored legislation to require a CFS and his legislation had many co-sponsors, but it had become apparent by 1977 that such legislation would not be enacted into law. With Secretary Simon gone, the Advisory Committee process lost its momentum and was eventually discontinued. The preparation and publication of the CFS became a low profile operation.
FMS Deputy Commissioner Gerald Murphy was a strong advocate for the CFS and when Mr. Murphy became Deputy Fiscal Assistant Secretary in 1979, he was well placed to keep the CFS operation going. This was reinforced in 1986 when Mr. Murphy became Fiscal Assistant Secretary -- a position that he held until 1998. In 1990 the Chief Financial Officers Act was passed and the Federal Accounting Standards Advisory Board (FASAB) was established. The CFO Act of 1990 was the most significant federal financial management legislation in 40 years. When it was amended by the Government Management Reform Act of 1994, an audited CFS became a statutory requirement. The final Prototype (unaudited) CFS was published for fiscal year 1996 since the new law required Treasury to prepare an audited CFS starting in fiscal year 1997.
In 1994, the central financial agencies (Treasury, OMB, and GAO) began to plan for the preparation and audit of the fiscal year 1997 CFS. Under the leadership of Fiscal Assistant Secretary Gerald Murphy, FMS Assistant Commissioner for Financial Operations Mitch Levine and FMS Chief Accounting Officer Bill Patriarca, the fiscal year 1997 CFS was prepared and audited by the statutory due date of March 31, 1998. The following day, Mr. Murphy testified before a congressional subcommittee regarding the preparation of the CFS. He noted that the preparation of the CFS on a timely basis was made possible by the United States Government Standard General Ledger and the ability to collect agency data electronically.
Beginning in fiscal year 1998, the CFS became the Financial Report of the United States Government (FR). In 1998 Larry Stout became the Assistant Commissioner for Governmentwide Accounting. This new assistant commissioner area has the responsibility to prepare the FR. (Jim Sturgill became Assistant Commissioner for Governmentwide Accounting in 2002). Don Hammond became Fiscal Assistant Secretary in 1998, and Robert Reid became Deputy Assistant Secretary for Accounting Policy in 1999. Messrs. Hammond, Reid and Sturgill have major executive responsiblities for the preparation of the FR. Mr. Hammond testifies before a congressional subcommittee annually regarding the report.
Thanks to the dedication of a few people, the process of preparing a governmentwide report survived over the years when there was no statutory requirement. Now that there is a statutory requirement, many dedicated people are involved in preparing the report every year. It is never a routine process and FMS personnel do an outstanding job. Carol Loomis, who has been writing for Fortune Magazine for over 50 years, could write another Fortune Magazine article about the progress made in governmentwide reporting.
(This article was written by Allan Lund and published in the Financial Connection.)