The AGA Weblog

Think Big! Act Courageously! Make a Difference!—The Era of ARRA!

By: William A. (Billy) Morehead, Ph.D., CPA, CGFM, Chair, Division of Accountancy, CIS, and Finance, Delta State University; AGA National President-Elect

It seems to me that most of our respective conversations over the past two months, at all levels of government, have in part included some aspect of the monies in the American Recovery and Reinvestment Act of 2009 (ARRA).

There have been, and will continue to be, a number of very healthy conversations among many governmental entities regarding the accountability aspects of distributing, using, and accounting for the hundreds of billions of dollars involved in ARRA. An excellent dialogue between federal and state governments occurred this past week at the National Association of State Comptrollers meeting in Annapolis, MD—what a GREAT meeting! I am quite proud of our governments who are focusing on the accountability aspect of ARRA funding. I hope and pray the “theory” in our discussions becomes the “reality” we see when the monies “hit the street” in coming weeks and months.

Rightfully so, there has been some reluctance on behalf of many state and local governments to begin drawing down monies contained in ARRA due to the absence of specific accountability criteria and guidelines – even editorial cartoonists have called attention to this in Mississippi—see Marshall Ramsey’s editorial cartoon in The Clarion Ledger on Tuesday, March 24, 2009. 

I applaud those at the federal government level who are working fast and furiously to establish appropriate criteria and guidelines. I don’t recall, in my 25-year career in government, any time when I have seen the federal government agencies and the state and local government offices working so closely together as they are now to achieve the performance outcomes and accountability goals desired with ARRA. I applaud you all!

As AGA continues to “trumpet” Intergovernmental Partnerships, accountability professionals throughout all levels of government must remember to use our positions wisely and exercise great leadership at this time in our nation’s history. We are responsible for ensuring that these monies are distributed, used, reported and accounted for wisely and appropriately.

Let’s look into this “Era of ARRA” with accountability and stewardship as our key focus! AGA can, and as well we should, lead the way!

Let’s “Think Big! Act Courageously! Make a Difference!”

AGA Tackles Intergovernmental Cooperation on Tuesday Radio Show

By: Relmond Van Daniker, DBA, CPA

AGA Executive Director Relmond Van Daniker, DBA, CPA, hosts the "Your Government, Your Money," radio show.

Happy New Year to everyone. I hope that you had a chance to listen to AGA’s first ‘Your Government, Your Money’ radio show that discussed the government transition featuring a joint interview with two former U.S. Office of Management and Budget (OMB) controllers, Linda M. Springer and Linda Combs, in December. Our next show will air tomorrow, Jan. 13, at noon EST on WFED AM 1500. Our conversation involves the ever-important subject of intergovernmental cooperation. Even if you are not in the Washington D.C. area, you can tune in online. The shows are also archived on this same Web page.

Why discuss intergovernmental cooperation?

Few people understand just how much money flows from the federal government to the states and individual cities and towns, and how inextricably linked government finances really are. Every year, the U.S. government sends hundreds of billions of dollars to the states. Local governments receive tens of billions of dollars, and state and local governments hold hundreds of billions in federal Treasury obligations.

The federal government is rushing to turn around a battered economy while facing its own internal financial challenges. States and local governments are caught in a fiscal trap: Unlike the federal government, they must balance their budgets. With most states five months into the 2009 fiscal year, 18 have already cut services. Sales tax revenues—the largest single source of state and local revenue—are eroding dramatically and retail sales are expected to remain sluggish as the country weathers an economic downturn that Economist magazine projects will be long and severe.

Tomorrow’s show will explore how a cohesive, intergovernmental response can be developed for dealing with the current economic downturn and other challenges.

Let me introduce the top leaders for our discussion tomorrow.

Taking the state perspective is Martin Benison, CGFM, Comptroller of the Commonwealth of Massachusetts. The local government perspective is brought to light by David Bennett, CGFM, Assistant County Mayor and Director of Accounts and Budgets for Blount County, TN.  Thomas Cooley, Chief Financial Officer and Director, Office of Budget, Finance and Award Administration (BFA), National Science Foundation and Jeanette Franzel, CGFM, Director of Financial Management and Assurance at the U.S. Government Accountability Office, take the federal perspective. 

I had a very dynamic discussion with these professionals about their position within the state, local, federal government framework and also listened to their ideas for better connectivity. We also talked about why we need an Intergovernmental Partnership, whether recent intergovernmental revenue flows will be sustainable and why it is important for the various levels of government to have a joint strategy for dealing with the current financial strains.

As we see and hear on the news, our world and concept of government is constantly changing. From your perspective, do you have any examples of intergovernmental issues or strategies to offer to our intergovernmental partnership panel?

Our hope is that this AGA show will provide a forum to discuss and offer common-sense examples, definitions and successful government financial management strategies. We’ll cover timely subjects with the top leaders in the government accountability profession.

AGA will be hosting a total of seven shows between now and mid-2009. Our third show will air on Jan. 27 and will feature a panel of leaders discussing performance reporting. Be sure to tune in!

Which Issues Should AGA’s Intergovernmental Partnership Tackle?

By: Martin Benison, CGFM

Martin Benison, CGFM, a member of AGA’s Greater Boston Chapter, is the controller for the Commonwealth of Massachusetts. He is the state co-chair of AGA’s Partnership for Intergovernmental Management and Accountability, which was created by AGA’s National Executive Committee in September 2007. Opinions expressed here are those of Mr. Benison and do not represent the views of the Partnership.

AGA has established an intergovernmental partnership to foster collaboration among governments and open lines of communication, eliminate duplication and waste, and improve performance and accountability. The Partnership for Intergovernmental Management and Accountability (Partnership) is comprised of high-ranking officials from the federal, state and local governments and higher education. The most fundamental goal of the Partnership is to enhance governments’ ability to effectively and efficiently serve citizens. View the Partnership’s website.

A 16-member Steering Committee governs the Partnership. I serve as the Partnership’s state co-chair and Tom Cooley, CFO of the National Science Foundation, is the federal co-chair.

The Partnership’s initial project was the issuance of the first of an occasional Intergovernmental Alert, which highlights federal initiatives that will have a significant impact on state and local governments. Issued on January 15, 2008, the Alert was emailed to more than 17,000 people and generated an unusually high level of interested among readers. View the Alert.

The Steering Committee also established work groups to implement two additional projects. The members of each work group will be announced shortly and they will begin work within two weeks. Additional information on the work groups is available on the Partnership’s website. In general, the work groups will focus on:

Federal Cost Allocation/Improving Implementation of OMB Circular A-87: This work group will identify how the process for preparing, submitting and negotiating Statewide Cost Allocation Plans in accordance with OMB Circular A-87 can be made more efficient and effective. The group, which is expected to complete its work in 12 months, will identify and prioritize issues or concerns, and provide recommendations for alternative approaches that could enhance implementation of Circular A-87 and provide benefits to all levels of government.

While the scope of the project will be further refined by the work group, possible areas of exploration include:

• Reviewing possible alternative approaches for the federal government to participate in the funding of working capital reserves for infrastructure and shared services arrangements for services such as information technology; and
• Exploring whether there should be a central adjudication process for issues arising between federal awarding agencies and other units of government.

Leveraging the Single Audit/Strategies for Reducing Erroneous Payments: This work group will determine how all levels of government can work smarter to leverage audit resources, including the Single Audit Act Amendments of 1996 (SAA) and the Improper Payments Act of 2002 (IPIA), while improving the usefulness of both acts to improve program integrity and reduce improper payments. SAA and IPIA both involve sampling at the grantee level (state, local, nonprofit organization) to determine whether federal awards were properly expended (the right payment to the right person for the right amount). Currently, these two efforts function independently with limited reliance on each other. The work group, which is expected to complete its work in one year, will strive to develop ways in which the two acts can be coordinated and leveraged to increase reliance between the two efforts and minimize the duplication of work.

Since the work group members have just been appointed and will begin their work within the next two weeks, this is the perfect time to provide them with input. Are you aware of any issues the Partnership should include in its next Intergovernmental Alert? Is there an issue or issues that you have encountered in negotiating or implementing Circular A-87 that should be addressed by the work group? What are some ways in which the SAA and IPIA can be leveraged and better coordinated? What steps can the various levels of government take together to enhance stewardship over taxpayers’ dollars? What are additional projects the Partnership should undertake?

FRIDAY: Is the Sky Really Falling or is the United States Financially Sound? By: Lynda M. Dennis, Ph.D., CPA, CGFO

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