Larry Fisher
This Email is in response to your request that I review the Booz Allen Hamilton (BAH) write-up concerning EPA's internal control weaknesses, as mandated by OMB A-123. My first general comment is that the majority of the information contained in BAH's review of EPA's internal control weaknesses are not revelations bu a regurgitation of information that is already known within EPA. In short, the survey was not only unnecessary but another example of why I characterized the actions of the Central Agencies' and EPA's (current and prospective) revolving door bureaucrats and their politically connected contractors as self serving and a gross waste of our tax dollars.
In my April 7 OCFO Gallup Survey Email, I expressed my concern that the sole function of the Central Agencies' and agency's revolving door bureaucrats was not to resolve the government's accountability problems but to secure a lucrative and on-going revenue source for themselves and their corporate benefactors. The rational for that statement is based upon my 6- year experience as a Veterans Administration (VA) Branch Chief where my staff prepared the VA's agency level financial statements (using the Central Agencies' policies), lO-years system accountant experience with EPA and the Treasury Department (and liaison work with OMS and GAO). In additio I have successfully completed an accounting model (in 3-years) replicating the federa government's accounting and budgeting processes. That process has been reviewed by a former government CPA along with other government accountants. Whether my accounting logic is correct or not is immaterial. What is material is that EPA's managers have ostracized me for the past lO-years for questioning both their accounting deficiencies along with the Central Agencies' simplistic and untested accounting and financial system standards. While I have documented EPA manager's blatant efforts to hide all accounting deficiencies in search of that clean (and meaningless) audit opinion, I have not articulated the reasons for my comments regarding the Central Agencies. They are as follows:
GAO relies on AICPA contractors to formulate the government's accounting Standard and related policies. These professionals are not just 4-year degreed Accountants (as I am) but, in addition, these contractors passed their AICPA exams. In short, they are professionals in the accounting field. They, more than anyone, know that new or revised accounting processes (like the government's accounting standard)are always tested before implementation (i.e. imposing this standard on an entire federal bureaucracy). An accounting model is typically used for this purpose and the process is quite basic: 1) design the journal entries that represent the accounting logic for each possible transaction type, 2) summarize those journal entries to produce a trial balance, and 3) generate the government's financial statements from that single trial balance. If, after entering all possible journal entry variations, the resultant trial balance can generate all government accounting and budgeting financial statements, the accounting model is a success. If not, the entire process must be repeated until the desired effect is achieved.
I find it very difficult to believe that, after 15 years (beginning in OctobeJ 1990), that this very talented group of professionals were unable to design a single working accounting model. This is significant because with no accounting model, there is no basis for designing the government's financial (accounting) software. So, the question that I keep asking myself is -- how is it possible for a single government accountant to design an accounting model in 3-years when the AICPA's best and brightest could not achieve a comparable result in IS-years? As much as I do have a very positive image of myself, I am also not delusional. Something just does not add up!! In addition to this fact, I also find it particularly troubling that the government's revolving door bureaucrats are going to considerable length to undermine the integrity of our government by eliminating its 4-year degreed accountants and then replacing them with minimally (G.E.D)educated people.
The Treasury Department (and their financial software contractor partners) provide the first real opportunity to test the legitimacy of the GAO (and AICPA) accounting standard. This occurs when Treasury's systems accountants (of which I was one in 1987) enter all possible journal entry combinations and generate a trial balance along with the government's financial statements. The only problem was that in 1987, the government had no accounting standard and, thus, no basis for testing the financial software that it was purchasing. I was selected as Treasury's representative along with two other individuals (one from GAO and one from OMB) on a joint task force. I explained this problem and was told that the decision had already been made and that our responsibility was to complete a (meaningless) systems questionnaire where all vendors (AMS and CDSI) would certify that they had met all government system requirements (which were none) .
As the Treasury systems accountant, I was also responsible for testing CDSI's software. The result was that the software was so bad that I could enter only 13 transactions per hour and no reports were generated. All reports still had to be done manually. I made all supervisors aware of this deficient software. Despite these very serious problems, this software was made available to an entire federal bureaucracy. The logic for this very bad decision was soon apparent when we learned that the Deputy Commissioner of Treasury became a vice president with CDSI. Enter the world of the self serving revolving door bureaucrat!! The direct cost of misdirecting the resources of an entire federal bureaucracy over this 19-year period (2006 - 1987) for the AMS and CDSI software is easily in the tens of billions. The indirect costs of these very bad decisions in lost/stolen assets, uncollected receivables, etc. is in the hundreds of billions of dollars.
The bottom line is that with no credible government-wide accounting standard, There is no point in procuring financial (accounting) software. If there are any Questions regarding this statement, look at GAO's own written Congressional testimony and its inability (ever) to consolidate the government's financial statements (as is required of all corporations). OMB is responsible for resolving (??) the agency's self-induced accounting Deficiencies that were caused by our government accountant (non-accountant) managers, as mandated by OMB Circular A-123. The typical approach is to use former agency managers and revolving door bureaucrats who typically caused the agencies accounting deficiencies, in the first place, by intentionally hiring non-accountants to ensure a failed process. To illustrate their agency team spirit, however, all agency deficiencies are first hidden and any non-team players (usually accountants) are retaliated against and eliminated in pursuit of that clean audit opinion. Then, the agencies hidden problems are revealed and, now, OMB with its politically connected contractors (including that new EPA revolving door bureaucrat) perform their superficial and meaningless analysis -- all in the name of government accountability. All parties come out a lot richer with the exception of the taxpayers and any (accountant) whistlelblowers who try to prevent this gross waste of our tax dollars.
The problem is that in government finance, staff and managers are promoted Solely upon three minimal requirements: 1) paying invoices, 2) obtaining 24 credit Hours from any podunk college, and 3) loyalty to their supervisor. These technically unqualified accountant (non-accountants) fill the ranks of our government's GS-9 thru GS-15, SES, and political appointees finance positions. The problem is that the government's accounting, budgeting, and financial software requirements demand technically qualified accountants and Information Technology (IT)professionals if these processes are to work. I have already given you a glimpse of the hundreds of billions that are wasted each year.
The bottom line is that it makes much more sense to hire accountants (at Comparable salaries with the private sector) into accounting technician positions and cross train them in all facets of the government than it does to hire minimally educated people and call them accountants. The benefit is that these accountants will ensure the integrity of the data at the front of the process (agency level) and at the point that the government's data is generated (agency and GAO's consolidated financial statements). The down side to that idea is that it eliminates the need for revolving door bureaucrats and their politically connected contractors. Then agai what are we trying to accomplish, cut our deficit, or provide luxurious life styles for our minimally qualified revolving door bureaucrats and their corporate benefactor These problems will only get resolved if we increase our educational requirements dramatically (as noted in Attachment 2 of my April 7 OCFO Gallup Survey Email)and start providing jail time for our self-serving and corrupt ROB's and contractors.