David Norquist Tampa Bay PDI April 3rd, 2014 A Brief History of Federal Financial Management.
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David Norquist Tampa Bay PDI April 3rd, 2014 A Brief History of Federal Financial Management
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Transcript of David Norquist Tampa Bay PDI April 3rd, 2014 A Brief History of Federal Financial Management.
David Norquist Tampa Bay PDIApril 3rd, 2014
A Brief History of Federal Financial Management
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10,000 BC
Early hunter gatherer societies:• No central government• No written language• No accounting
Civilization starts w/four key advances:
• Shift to farming• Central government• Early writing (PP&E)• Accountants (Scribes)
4,000 BC Early Accounting
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.”4
1787U.S. Constitution
Article 1, Section 9
Budgeting Accounting
“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.”5
1787U.S. Constitution
“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)
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1809Purpose Statute
“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 of
such appropriations.”
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1870Anti-Deficiency Act
1. Required the President to formally submit the national budget to Congress each year
2. Created “BOB” – Bureau of the Budget (OMB)
3. Established GAO responsible to Congress
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1921Budget and Accounting Act
Congressional Budget and Impoundment Act
1. Established Committees on the Budget
2. Established Congressional Budget Office
3. Limited executive branch “impoundments”
4. Moved Fiscal Year from 1 July to 1 Oct.
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1974Names of laws get too long
Requires Agency heads to provide assurance:
1. Obligations are in compliance with law
2. Funds and property are safeguarded against waste, loss or misuse.
3. Revenues/expenditures are properly reported.
From this law came OMB Circular A-12310
1982 (Shift to acronyms) FMFIA
1. Shifted responsibility from GAO to OMB
2. Led to CFOs in major Federal entities.
3. Increased emphasis on internal controls
4. Required annual independent audits of financial statements.
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1990 CFO Act
Accounting:• Annual Audited Financial Statements
• 22 Clean Audit Opinions (out of 24 CFO Act Agencies)
• Mgmt Assurance and Internal Control Assessments• A-123 Process
Budgeting:• Record Debt• Sequestration
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Where are we today?
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Gross Federal Debt
*Dollars are in millions.
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How did we get here?
Act created the “Congressional Joint Select Committee on Deficit Reduction.”
If legislation with $1.2 trillion in savings is not passed by January 15, 2012, automatic cuts go into effect in January 2013.
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Budget Control Act of 2011
Total Goal for Reduction $1,200
Reduction for Debt Service -$216
Reduction to Defense -$492 $492/nine years = -$55/year
Reduction to non-Defense -$492 Medicare (-$16 to -$22) and Discretionary (-$39 to-$33)
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What does Sequester do?
Dollars are in Billions.
2014 2015 2016Defense $552 $556 $577Sequester -55 -55 -55
$497 $511 $522
Nondefense $506 $520 $530Sequester -37 -37 -36
$469 $483 $494
Grand Total $966 $994 $1,01617
Year by Year View
Dollars are in Billions.
Bipartisan Budget Agreement
Raise the Sequester Caps for 2014/2015 +$63
Paid for by Cuts spread over 10 years: Extend Direct Spending CAPS into FY2022/23 -$28 Federal Employee Retirement Changes -$ 6 Military Retirement Changes -$ 6 Over a dozen smaller changes -$ 9 Higher Education Changes -$ 5 Strategic Petroleum Reserve -$ 3 New Health Benefit Option (FEHB self +1) -$ 3 Higher Pension Benefit Guaranty Premiums -$ 8 TSA Aviation Security Fee s -$12 Customs User Fees extended into FY2022/23 -$ 7Total Reduction -$85
18Dollars are in Billions.
2014 2015 2016Defense $497 $511 $522Adjustment +22 + 9 + 0
Nondefense $469 $483 $494Adjustment +22 + 9 + 0
Grand Total $1,012 $1,014 $1,016
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Budget Agreement by Year
Dollars are in Billions. Totals do not match due to rounding.
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Problem solved?
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The Other Shoe
Accounting led to writing and civilization
Budgeting led to overspending and more laws
Summary
