PDC 2004: A Big Success!

AGA would like to thank everyone for their participation at the 2004 Professional Development Conference in Washington, D.C.

See You Next Year in Orlando, Florida
AGA's 54th Annual Professional Development Conference & Exposition
July 10-13, 2005
Leadership: Preparing Tomorrow's Accountability Professionals

**Please be sure to fill out the appropriate conference evaluation form (attendee or exhibitor)**

• PDC PowerPoint Presentations (If you did not receive the URL address, contact Julie Cupp)

• PDC Photo Gallery

• Post-PDC Perspectives

• PDC Speaker Bios

• PDC Attendee List (If you did not receive the URL address, contact Julie Cupp)

• PDC Questions? Contact Ada Phillips or Julie Cupp

• PDC 2004 CPE Form - Complete this form and mail back to AGA at the address on the form for processing.  Please allow approximately 2 weeks for the form to be approved and mailed back to you.
   
  Please note CPE forms will be approved and processed for attendees whose registration fees are paid in full.  If you're registration has not yet been paid, please contact the billing office of your agency to expedite payment.  All invoices have been mailed to your agency's billing address information provided on the purchase order when your registration was processed.  If you or your agency has not received the invoice, please let us know.

Thank You to the PDC Technical and Host Committees!
The success of AGA's PDC is tied directly to the outstanding work done by the volunteer Technical and Host Committee members. Over the next two weeks we will be updating and finalizing the list of volunteers who gave so much of their time and energy to ensure the success of PDC 2004.

Thank You to the PDC 2004 Sponsors
Platinum Sponsors

Gold Sponsors

Silver Sponsors

Bronze Sponsor

Contributors

*Denotes AGA Corporate Partner

Thank you to the PDC 2004 Exhibitors!

*Denotes AGA Corporate Partner
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AGA Welcomes Nearly 1,700 to PDC in Washington
AGA's 53rd Annual Professional Development Conference & Exposition kicked off Monday in Washington as nearly 1,700 attendees gathered to address this year's theme of "Technology-Powering the Accountability Age." The conference began with the patriotic tunes of the 389th Army Band from the Aberdeen Proving Ground, MD, and a presentation of the colors by Boy Scout Troop 1345 of the Patriot District, Burke, VA. Comptroller General of the United States David M. Walker, CPA, began the technical program by discussing the many transformations in government he is championing as head of the U.S. General Accounting Office (GAO).

He warned that the federal government's financial condition is worse than advertised. "We are not doing a good job of being stewards for our children and grandchildren, and that has to change, and change now," Walker said. He said results matter-GAO returned $78 in savings for every dollar expended on the agency. On top of results, he said the focus must be on clients, people and partnerships. Walker touched on GAO's High Risk List, which is published every two years and puts the spotlight on areas of government where fraud, waste, abuse and mismanagement are concerns. In an entity the size of the US government, there will never be zero fraud, waste, abuse and mismanagement, but there should be zero tolerance for it, he said. "Government is on a burning platform," Walker said, "if we stand still, we will be consumed."

He is concerned about the rapid expansion of the federal debt, and said net interest was 7 percent of the federal budget in 1984 and after peaking at 13 percent in 1994, is back down again to 7 percent in 2004. "The status quo is not an option," Walker said. "Debt on top of debt is compounding and that is not good news." Walker suggests a change in how we keep score of how federal programs are doing by developing new ways to measure current spending choices and by reexamining the base of the federal government. He said we must:

• Restructure existing entitlement programs;
• Reexamine the base of discretionary and other spending;
• Review and revise tax policy and enforcement programs; and
• Reexamine the questions for every policy, program and service.

The recent corporate failures, which have sullied the reputation of the entire accounting profession, can be chalked up to one thing-greed, Walker said, "and, greed is not good." The corporate scandals were caused by inadequate corporate governance structures and confusion on the part of auditors about who their clients were, he said, adding that the Sarbanes-Oxley Act of 2002 has gone a long way toward addressing these issues, but more needs to be done. "I sign the audit report of the federal government and I am doing all I can to ensure that the accountability failures that occurred in the private sector do not occur in government, but I need your help," Walker told the audience.

He summarized the obstacles to a clean audit opinion as the serious problems at the US Department of Defense, the federal government's ineffective process for preparing consolidated financial statements and the government's inability to account for billions of dollars in intra-agency transactions. Every generation has left things better than they found them, but this is the first generation that may not accomplish that, he said. One of his transformation initiatives is the recently formed US Auditing Standards Coordinating Forum, which is made up of the principals of the PCAOB, GAO and ASB (AICPA). Walker was emphatic that this effort must be global in nature. "We must lead by example," he said. "We have to do what's right and not just what's acceptable."

Click here to read Walker's complete speech.

Working the Room
Susan RoAne, speaker, author and consultant of the RoAne Group, discussed the importance of networking and working a room. "Sometimes, we miss that it's the small talk we have in common." She advised attendees to use their time in Washington well and to make the most of their networking opportunities. "You can start a conversation with 'hi' or 'hello,' and the opportunity is not lost."

NASA: We Have A Problem
Gwendolyn Sykes, MBA, CGFM, CDFM, chief financial officer at the National Aeronautics and Space Administration (NASA) discussed her experiences with implementing a new financial system, which effectively took 10 different accounting systems and merged them into one system. The 10 systems were supported by 100 subsystems, all of which have also been merged into the one system. "It has not been easy," Sykes said.

Another challenge has been to achieve the support and buy in from the entire organization to ensure financial accountability throughout the agency. Importantly, she said, something that hasn't happened before is now-the finance people are sitting at the table, elbow to elbow with the decision-makers. Changing the mindset of the financial community isn't enough, Sykes said. "The entire agency has to understand and accept financial responsibility for their decisions."

She added with a smile, "Scientists are a little harder to get into the ones, twos and threes of accounting." At NASA, people are explorers, innovators and visionaries and the financial community is no different. "We have to focus on the people, the process and the technology," she said. Sykes is making a special point to get out to each of the agency's 10 centers to help "get them engaged in the process." She is also working with her staff to write clear, consistent and aligned policies and procedures.

She credits technology with making things easier for her staff, but said people are critical to the process. "We are providing a whole new series of toys to play with in the financial sandbox at NASA," Sykes said. Sykes also discussed the fact that her agency received a disclaimer opinion on its fiscal year 2003 audit, attributing the problems to issues related to the implementation of the new system. Despite that, when asked, she said she would not have slowed down the implementation process to ensure a clean audit opinion. "We are just out of the starting gate," Sykes concluded, "and I have packed my bags for a long journey."

On Tuesday participants heard from John Hamre, Ph.D., President and CEO, Center for Strategic and International Studies, who said he was glad to be home with his financial management colleagues. He was the comptroller at the US Department of Defense. "I miss the grandness of being a government employee," Hamre said, "it may be a bad day but you know you are going to be doing something important."

He sees four elements of the new era, which include the residue of the Cold War (including the fact that you can go to the Internet to learn how to build a bomb); the rise of transnational terrorist organizations; the existence of failed nation states; and the fact that we live in an era of remarkable ease. Homeland security will rely upon an openness of society, Hamre said, adding that we need to do something with our stockpile of chemical and biological weapons. More energy must be put into nonproliferation and we must rediscover our commitment to the Millennium Fund. "We are giving money to these countries with the stipulation that they build up their government competencies," he said.

View from Local Government
Representing the local government perspective was William D. Euille, Mayor of the City of Alexandria, Virginia, who discussed how local governments provide most of the front-line services that the public associates with government in general: police, fire, schools, health care and much more. "As a trained accountant, I know how tough your jobs can be," he told the AGA audience. AGA, like nearly 400 other trade associations, has its headquarters in Alexandria, which has undertaken an extensive effort to attract the organizations to the city. Alexandria ranks fourth in the nation, behind Chicago, New York and Washington, as the headquarters city for national trade organizations.

Euille cited six areas that he sees as common challenges for all cities, including protecting the homeland; fighting crime; transportation; children and families; affordable housing; the Internet tax moratorium that takes tax revenue away from localities; and unfunded mandates, such as recent energy legislation. The root problem underlying all of these issues is money, he said. "We have limited resources and what, at times, seems to be unlimited needs." Unfunded federal mandates continue to challenge cities across the nation as federal aid to cities has dropped in the wake of rising defense spending and as the impact of more tax cuts is absorbed. "Cities feel the squeeze," he said. "Most cities can not fill the gap in lost federal funding and what suffers is the quality of life."

There are positive trends occurring in many cities, he said, which have become desirable places to live for single adults and empty nesters alike. "Cities are fortunate at this time in history to be the place many people want to live," he said. He attributes this trend to better law enforcement and safer streets. Euille is continuing the city's efforts to expand the number of services offered through the Internet, saying his motto is "online not in line." He said change would occur when federal, state and local officials partner to reach real solutions. "We need real commitment by all three parties," he said. "That's teamwork."

Reforming the Auditing Profession
A panel discussion on the changes under way in the area of auditing standards was held Wednesday morning, with speakers Douglas Carmichael, chief auditor and director of professional standards, Public Company Accounting Oversight Board (PCAOB); John A. Fogarty, partner/director of assurance policies and methodologies, Deloitte, and chair of the AICPA's Auditing Standards Board (ASB); and David M. Walker, comptroller general of the United States. With moderator Jeffrey C. Steinhoff, CGFM, asking a series of probing questions the panelists discussed the reforms under way to coordinate and enhance auditing standards across all sectors.

When asked to name the greatest challenge facing the profession, Carmichael said it has to be the ongoing effort to restore investor confidence in the accuracy of financial statements. Walker agreed and went a step further to say that effort needs to extend across public and private boundaries. When asked whether the profession can make major changes, Fogarty said he sees "auditors taking new pride and recognition in the importance of their role." Walker said GAO is leading by example. "It is important to note that in many ways the public sector was ahead of the private sector" in instigating reforms. "We need to get back to basics and ultimately we're going to have to go global." Can the PCAOB make a lasting change? "We have to make sure standards are being implemented properly and, if necessary, take enforcement action," Carmichael said.

The US Auditing Standards Coordinating Forum, which was recently formed by the PCAOB, GAO and the ASB, is focusing its efforts on bringing harmony to the variety of standards that currently exist, and all the panelists said the Forum's focus needs to be on fraud. It is important to take action to ensure the auditor's ability to detect fraud, Carmichael said. Walker gave credit to the PCAOB for its internal controls standard and added that the importance of detecting fraud can't be overstated. He added that we need to determine whether it is time to move beyond pass/fail audit reports. One of the biggest challenges faced by the Forum is harmonizing words that have different meanings in different languages. The word "should" translates to "must" in many languages, Fogarty said. When auditing for fraud, Carmichael said auditors must know how fraud is perpetrated and how it is concealed, which takes extensive training. Fogarty said he wishes that the standards drove attitudes, but "what's happened in recent years has done more to change attitudes than any standard we could ever write."