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A Brief History of Federal Financial Management. David Norquist Indianapolis, IN November 8th, 2012. 10,000 BC. Early hunter gatherer societies: No central government No written language No accounting. 4,000 BC Early Accounting. Civilization starts w/ four key advances:

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Presentation Transcript
slide1

A Brief History of Federal Financial Management

David Norquist

Indianapolis, IN

November 8th, 2012

slide2

10,000 BC

Early hunter gatherer societies:

No central government

No written language

No accounting

slide3

4,000 BC

Early Accounting

  • Civilization starts w/
  • four key advances:
  • Shift to farming
  • Central government
  • Early writing (PP&E)
  • Accountants (Scribes)

Tablet from Sumaria

slide4

1787

U.S. Constitution

Article 1, Section 9“No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.”

slide5

1787

U.S. Constitution

Article 1, Section 9BudgetingAccounting“No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.”

slide6

1809

Purpose Statute

“Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law.” 31 U.S.C. § 1301(a)

slide7

1870

Anti-Deficiency Act

“That it shall not be lawful for any department of the government to expend in any one fiscal year any sum in excess of appropriations made by Congress for that fiscal year, or to involve the government in any contract for the future payment of money in excess ofsuch appropriations.”

slide8

1921

Budget and Accounting Act

1. Required the President to formally submit the national budget to Congress each year2. Created “BOB” – Bureau of the Budget (OMB)3. Established GAO responsible to Congress

slide9

1974

Names of laws get too long

Congressional Budget and Impoundment Act1. Established Committees on the Budget2. Established Congressional Budget Office 3. Limited executive branch “impoundments”4. Moved Fiscal Year from 1 July to 1 Oct.

slide10

1982

(Shift to acronyms) FMFIA

Requires Agency heads to provide assurance:1. Obligations are in compliance with law2. Funds and property are safeguarded against waste, loss or misuse.3. Revenues/expenditures are properly reported. From this law came OMB Circular A-123

slide11

1990

CFO Act

1. Shifted responsibility from GAO to OMB2. Led to CFOs in major Federal entities.3. Increased emphasis on internal controls4. Required annual independent audits of financial statements.

slide12

Where we are today

  • Annual Audited Financial Statements
    • 21 Clean Audit Opinions (out of 24 Agencies)
    • Use of “Generally Accepted Accounting Principles”
  • Mgmt Assurance and Internal Control Assessments
    • A-123 Process
  • 2011 Deficit was $1.29 Trillion.
  • S&P lowered outlook on US bonds to “Negative”
    • 1 in 3 chance they will lower AAA bond rating within 2 yrs
proposals on budget
Proposals on Budget
  • Peterson-PEW Commission on Budget Reform
    • http://budgetreform.org/
  • National Commission on Fiscal Responsibility and Reform (Obama appointed commission)
    • www.fiscalcommission.gov/
  • Office of Management and Budget
    • http://www.whitehouse.gov/omb/budget
  • House Budget Committee (Cong. Paul Ryan)
    • http://budget.house.gov/
slide16

Summary

Accounting led to writing and civilization

Budgeting led to overspending and more laws

slide17

Thank you

QUESTIONS?

David.Norquist@kearneyco.com