Dcgrrrl,

Thanks for sharing your experience. It is very useful. Looking forward to PART II.

dcgrrrl,

I appreciate this very much. Please continue with part II. I'm looking forward to it.

What makes government different?  In the big picture, it all goes back to the purpose of financial statements.  In industry, where the ultimate purpose is to make a profit, investors and creditors use financial statements to judge how well a business is performing.  However, government has no profit purpose; government exists to provide services for its citizens.  So, who cares about government financial statements?  At a state and local level, creditors do care, since it's their money at risk when they finance bonds or the like.  At the federal level, it's a different story.  Congress and citizens do care about accountability for federal tax dollars, but do financial statements show how money is being used, how efficiently and effectively programs are running, and how much fraud/waste/abuse exists?  The short answer is no.  Not to worry though, there are plenty of laws in effect that are intended to make agencies accountable for their performance.  I'll get to those later; first, let's talk financial statements.

In 1990, Congress passed the Chief Financial Officer's Act, which required agencies to appoint CFOs, prepare financial statements, and have those statements audited.  The first round of audits was pretty ugly - most agencies didn't have financial management systems designed to produce financial statements.  In 1996, Congress passed another law, the Federal Financial Management Improvement Act, which required agencies to have a single integrated financial management system which complies with accounting standards and internal control standards.  Financial systems are still the biggest barrier to a clean audit opinion.  Currently there are 24 agencies under the CFO act; all but 4 have unqualified audit opinions for FY 2003.  My career has been with Department of Defense (DoD), which is the biggest agency with the most problems.  In fact, in the late 90s, Congress told DoD not to waste any more money auditing financial statements until the financial statements were worth auditing.
http://www.whitehouse.gov/omb/financial/2004_report.pdf

So, what does this mean if you're an auditor working for the government?  First, don't expect to do financial statement audits.  Many agencies contract out their financial statement audits; other agencies (like DoD) aren't yet ready for audits.  Second, don't expect management to care about financial statements the same way that Fortune 500 management cares.  In my experience, federal managers care about running their programs effectively, which means making sure that they get the resources (budget $$) to do so.  So what do most federal auditors do?  The textbook answer is "performance audits," which theoretically means making sure programs are running efficiently and effectively.  In my experience, performance audits go back to compliance and internal controls.  There's plenty to comply with - internal control regs, performance measurement regs, budget regs, contracting and procurement regs.... the list could go on.

So, what have I done since I've been with the government?  Good question!  I've reviewed documentation for management's cost-benefit analysis for a new ERP system in implementation, I've looked at internal controls over credit card purchases, I've audited expenditures in trust fund financial statements, I've looked at how well one component's internal control program was functioning.  There's a tremendous variety of work that you can do, and there's almost always a finding.

Part III coming soon - how to find and apply for federal jobs.