Improving Federal Financial Management Act
The Improving Federal Financial Management Act would overhaul and modernize how the federal government plans, executes, and reports on financial management. It shifts the governmentwide financial management plan from a 5-year horizon to a 4-year horizon, requires a robust agency-level plan to implement that governmentwide plan, and mandates ongoing performance and cost integration. The bill elevates the role of agency Chief Financial Officers (CFOs) and requires close coordination with other senior officials (e.g., Chief Data Officer, Chief Information Officer, Chief Performance Officer, etc.). It also increases transparency by requiring public availability of agency plans and annual financial management status reports concurrent with the President’s budget process. Finally, it tightens audit expectations on internal controls and broadens reporting requirements to Congress and GAO. In short, the bill aims to improve cost efficiency, performance visibility, and risk management across federal financial management by making planning, execution, reporting, and oversight more coordinated, timely, and data-driven.
Key Points
- 1Four-year governmentwide financial management plan and mandatory status reporting
- 2- Replaces the prior 5-year framework with a 4-year plan designed to be strategic, comprehensive, and cost-effective.
- 3- Requires the plan to be developed with broad agency-wide collaboration and to include comprehensive performance-based metrics.
- 4- Agencies must publicly publish their implementation plans and submit them to the President’s Budget, Congress, and GAO.
- 5Expanded CFO responsibilities and agency-level planning
- 6- Each agency CFO must oversee and lead budget formulation, planning and performance, risk management, internal controls, financial systems, and cost information integration.
- 7- Agencies must create an internal plan to implement the governmentwide 4-year plan, including performance-based metrics, completed within 90 days of the governmentwide plan’s issuance, with updates as needed.
- 8- The CFO must coordinate with senior agency officials (e.g., CDO, CIO, Chief Performance Officer, Chief Acquisition Officer, Chief Risk Officer, Chief Evaluation Officer) on strategic planning, performance measurement, and risk management.
- 9Annual financial management status reports aligned with the budget
- 10- The Director of the OMB must annually provide a financial management status report to Congress and the Comptroller General concurrently with the annual budget submission.
- 11- Status reports cover progress on the 4-year plan, remaining challenges, agency performance against metrics, statements of financial statements and audits, compliance with FFMA-related requirements, and a strategy for reporting performance and cost information.
- 12- Agencies must report on noncompliant systems and efforts to remedy them, and include data on agency spending and FFMA-related reporting.
- 13Enhanced internal controls and audits
- 14- Agencies must annually assess and conclude on the effectiveness of their internal controls over financial reporting and identified key financial information.
- 15- Audits under the standard federal process must evaluate design and implementation of internal controls, test whether controls are operating effectively, and report control deficiencies.
- 16Vacancy rules for Chief Financial Officers
- 17- If there is a vacancy in the agency CFO position, the Deputy CFO serves as acting CFO, ensuring continuity in leadership.
- 18Technical and conforming amendments
- 19- Various drafting changes to align sections of title 31 and related provisions with the new 4-year framework, including updates to how reports are described and how the planning process interacts with budget and accountability mechanisms.