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Audio Conference Scheduled for July 20: An Afternoon with OMB
NASACT, in conjunction with the AGA and N.A.L.G.A., is pleased to announce the latest in its series of audio conferences addressing timely issues in government financial management. The topic for this audio conference, An Afternoon with OMB, will cover a variety of timely and interesting financial management topics. From erroneous payments to internal controls, presenters from the Office of Management and Budget will highlight recent issues surrounding improper payments, grants management, internal control, and other financial management improvement priorities and policies of the Administration. The audio conference will run from 2 – 4 p.m. EDT July 20 and will offer 2 CPE hours. Speakers are David Zavada, chief, Financial Standards and Grants Branch, Office of Federal Financial Management, OMB; and Daniel Werfel, chief, Financial Integrity and Analysis Branch, Office of Federal Financial Management, OMB. The cost is $249 per site (unlimited attendance) if you register on or before Friday, July 15, and $299 thereafter. Click here to register. Don’t miss out on this important discussion!  If you have any questions, please call NASACT at 859.276.1147 or support@nasact.org.

Audio Conference Set for Aug. 3: Homeland Security Grants and Audit Coordination
Thousands of participants from hundreds of government agencies, private
firms and colleges have been tuning into AGA’s audio conference series this year. Don’t miss out as AGA, NASACT and N.A.L.G.A. present this audio
conference from 2 – 3:50 p.m. EDT Wednesday, Aug. 3. Expert speakers from the U.S. Department of Homeland Security and a State Auditors' Office will discuss homeland security grants and how they approached auditing them. Earn 2 CPE hours in the area of accounting and auditing. The cost is $249 per site (UNLIMITED ATTENDANCE) by July 29; $299 afterward. Details of the program will be available soon. Questions regarding the program should be directed to Raymond Harris, CGFM. Click here to view the 2005-2006 audio conference schedule.

July 11, 2005 • News from the Profession

AGA Today is Brought to You by AGA Corporate Partner Clifton Gunderson
Clifton Gunderson's DC office is looking for experienced professionals to join our public sector practice. The ideal candidate will have 5+ yrs of Public Accounting or equivalent audit experience along with your BA/BS in Accounting and CPA or CGFM. Duties will include audits of Federal entities, State & Local audits (GASB), A-133 audits, and compliance auditing. To apply please e-mail Jennifer.Busse@cliftoncpa.com

AGA’s FMSB Comments on GASB PV Document
The Financial Management Standards Board (FMSB) has provided lengthy comments to the Governmental Accounting Standards Board (GASB) on its Preliminary Views (PV) document on major issues related to Accounting and Financial Reporting for Pollution Remediation Obligations. In a June 24 letter to GASB, Chair Russell W. Hinton, CGFM, wrote, “The obligating events described in the PV appear to be reasonable because they are events that the government should have no difficulty in identifying. We believe that defining obligating events in the vast arena of pollution remediation provides the opportunity for uniformity in accounting and financial reporting.” The FMSB also provided specific suggestions in reponse to the issues in the PV. An FMSB representative testified at a June 29 hearing on the PV document, held at the Government Finance Officers Association Conference in San Antonio, TX. Go to AGA's homepage to link to the entire letter.

Surge in Aging Population Sparks Challenges for States
State leaders are getting gray hair worrying about the impending impact of America’s aging population, but they're only slowly taking steps to meet the challenges that will arise as post-World War II baby boomers start reaching retirement age in 2011. A rising population of people over 65 will drastically affect states' tax income because the elderly are allowed more tax breaks. The impact is already apparent in Florida, West Virginia, Pennsylvania, North Dakota and Iowa, states with the highest percentage of people over 65. But it will soon become more widespread. By 2030, nearly one American in five will be 65 or older. Fewer than one in eight are elderly now. "Very few states have done the kind of planning that would even let them become aware of what the needs are. I don't think there's any state that has implemented a comprehensive action plan… States, even more than the federal government, are faced with a lot of challenges in the immediate future, and they tend to focus on those," said John Rother, AARP's director of legislation and public policy. The states' financial outlook is bleak. Income tax revenue will plummet because seniors' incomes usually are lower. Sales tax revenue will decline because older people buy fewer taxable goods. —Kathleen Murphy, Stateline.org. Click here to read the entire article.

Accounting Firms Rushing to Fill Jobs; Minorities Targeted
With the demands of corporate reform legislation bearing down on public companies, the Big Four are hurriedly hiring new talent and seeking a more diverse workplace. According to CareerJournal.com, experienced financial managers are badly needed to deal with the rigors of the Sarbanes-Oxley Act's stricter auditing and accounting rules. Pay in this area has increased by 10 percent or more, recruiters estimate. Experienced team leaders or forensic accounting specialists can get 20 percent more than a year ago. Entry-level accountants are also needed to deal with the ever-growing workload. Accounting majors are in demand more than any other, and national firms are recruiting heavily at college campuses. In the rush to bring new employees on board, the Big Four are also looking for more diversity in the work place, launching the Center for Accounting Education at Howard University's Washington, D.C. campus to support Black/African-American accounting graduates. Only 1 percent of CPAs in the United States are black, according to the AICPA, making accounting one of the country's least diverse professions, the Washington Post reported. Blacks make up only about 4 percent of those who sit for the CPA exam. Nina Cordier is a 22-year-old, black graduate of Louisiana's Dillard University who works at Ernst & Young. She hopes to pass the CPA exam and eventually move up to partner. Cordier believes the profession is starting to catch on among her peers. "The number one major is accounting now," she said. "I think we are pretty hip." —AccountingWEB. Click here to read the entire article.

AGA Today is Brought to You by the U.S. Government Accountability Office
Controller/Deputy Chief Financial Officer
The U. S. Government Accountability Office (GAO) seeks an experienced executive to serve as its controller and deputy chief financial officer.  Relocation expenses will be paid. To apply, visit www.gao.gov, register in GAO Careers and submit your online resume and application to announcement number GAO-N-CASO-2005-001-98. Applications will be accepted online through July 22, 2005. Must apply online to receive full consideration. For information, call 202.512.4900. E.O.E., U.S. citizenship required.

Federal Workers Anxious Over New Pay System
Here is why working for the federal government is so good: Federal civil servants, on average, have received a pay raise in every year but two since 1969, meaning they can pretty much bank on seeing their paychecks grow annually. But there is a cloud inside that silver lining: Average annual wages and salaries in the private sector have grown faster than civil service pay in the past 36 years, and so have consumer prices. So while federal work has a lot to recommend it, pay is not one of the big draws, said Beth Moten, chief lobbyist for the American Federation of Government Employees. "Overall it's probably a negative," Moten said. "I don't think that salaries are comparable with similar occupations in the private sector. People come because they are public-service-minded." Many federal workers are growing increasingly anxious about their pay as the Bush administration prepares to toss out the 15-grade General Schedule, which links pay to longevity in a job, and replace it with a system that more directly ties salary increases to performance evaluations. Starting this summer, such systems will be phased in over several years at the departments of Defense and Homeland Security, which together employ more than 900,000 civilian workers. And Bush administration officials want similar changes throughout government. Colleen M. Kelley, president of the National Treasury Employees Union, said she fears that annual raises will suffer. —Christopher Lee, The Washington Post. Click here to read the entire article.

State Salary, Hiring Freezes Start to Thaw
States are feeling the heat to hike employee pay as the economy and tax revenues rebound from the recession. After three years marked by hiring and salary freezes, many state workers will get modest raises in the new fiscal year that began July 1—one of the signs that states’ bottom lines are looking better. Still, state personnel managers face growing pressure to lure qualified new employees and replenish a shrinking pool of aging workers in the face of higher-paying jobs in local governments or private companies. So far, a dozen states are raising salaries for workers represented by the American Federation of State, County and Municipal Employees (AFSCME). The increases range from 1.5 percent in Maryland to 5 percent in Illinois and are the first pay hikes that many employees have seen since 2001, said Steve Kreisberg, who helps negotiate employee contracts for the 1.4 million-member union. The union also won raises for members in Connecticut, Iowa, Massachusetts, Nebraska, New Jersey, New Mexico, New York, Ohio, Pennsylvania and Washington. Various union and non-union employees also are slated for pay hikes in California, Delaware, Georgia, Nevada, North Carolina, Tennessee and Texas, according to information from those states. — Eric Kelderman, Stateline.org. Click here to read the entire article.

Research: Admitting Missteps May Boost Stock Prices
Corporations that accept responsibility for a bad financial year rather than blame external forces may be rewarded by the stock market. Although authors of a new study stop short of saying that being candid about bad news causes stock prices to rise, they say 'fessing up to corporate missteps does predict higher future stock prices. The researchers, who include Stanford Graduate School of Business associate professor Larissa Tiedens and her former colleagues at the University of Michigan, studied 21 years' worth of annual reports from 14 major firms in three industries. They looked at how different companies in the pharmaceuticals, food and beverages, and industrial equipment industries used their annual report's letter to shareholders to explain company performance—and whether the type of explanation correlated to the company's stock price the following year. It did in surprising ways. For the period studied—1975 through 1995—companies that took personal responsibility for a bad year realized better stock performance the following year than did firms that blamed external, uncontrollable factors such as bad weather or the state of the economy. "Only explanations for negative events mattered, but those explanations mattered a lot," said Tiedens. Typically, stocks of the five companies whose annual reports had the highest measures of internal, controllable and specific attributions for negative events performed 14 to 19 percent better the following year than stocks of companies with the five lowest measures of these attribution patterns. —SmartPros. Click here to read the entire article.

Audit Details High Costs of Contractor
The money was spent in the name of improving security at the nation's airports:
• $526.95 for one phone call from the Hyatt Regency O'Hare in Chicago to Iowa City.
• $1,180 for 20 gallons of Starbucks Coffee—$3.69 a cup—at the Santa Clara Marriott in California.
• $1,540 to rent 14 extension cords at $5 each per day for three weeks at the Wyndham Peaks Resort and Golden Door Spa in Telluride, CO.
• $8,100 for elevator operators at the Marriott Marquis in Manhattan.
• $5.4 million claimed for nine months' salary for the chief executive of an "event logistics" firm that received a contract before it was incorporated and listed its address at a post office box.
Those details are contained in a federal audit that calls into question $303 million of the $741 million spent to assess and hire airport passenger screeners for the newly created Transportation Security Administration after the terrorist attacks of Sept. 11, 2001. The audit, along with interviews with people involved in the passenger-screener contract, paints a rare and detailed portrait of how officials at the fledgling agency lost control of the spending in the pell-mell rush to hire 60,000 screeners to meet a one-year congressional deadline. The audit, performed by the Defense Contract Audit Agency at the TSA's behest, spotlights scores of expenses: $20-an-hour temporary workers billed to the government at $48 per hour, subcontractors who signed out $5,000 in cash at a time with no supporting documents, $377,273.75 in unsubstantiated long distance phone calls, $514,201 to rent tents that flooded in a rainstorm, $4.4 million in "no show" fees for job candidates who did not appear for tests. The audit faulted the prime contractor, NCS Pearson Inc., which was hired by the TSA to test, interview, fingerprint, medically evaluate and pre-certify the candidates. The audit said Pearson failed to properly justify costs and improperly awarded subcontracts without competitive bidding. —Scott Higham and Robert O’Harrow Jr., The Washington Post. Click here to read the entire article.

GAO Report Faults States’ Medicaid Tactics
Two-thirds of the states use consultants to help them get more federal Medicaid money, often by using "questionable billing practices," and then reward those consultants by giving them a share of the money as a contingency fee, congressional investigators say. These consultants are driving up Medicaid costs by recommending financial tactics that violate federal law or policy, the investigators, from the Government Accountability Office, said in a report to Congress. Kathryn G. Allen, director of health care issues at the auditing agency, said: "A growing number of states are using consultants on a contingency-fee basis to maximize federal Medicaid reimbursements. As of 2004, 34 states—up from 10 states in 2002—used contingency-fee consultants for this purpose." In some cases, Allen said, states have exploited  federal Medicaid rules to obtain more federal money without increasing state contributions to the program, which provides health insurance for more than 50 million low-income people. But Allen said the federal government also bore some responsibility. "A lack of oversight and clear guidance from the Centers for Medicare and Medicaid Services has allowed states to develop new financing methods that generate additional federal costs," she said. —Robert Pear, The New York Times. Click here to read the entire article.

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