When I last reported, 18 of the 24 largest Federal agencies completed their combined FY 2003 Performance and Accountability Reports. As of this date, all agencies have submitted their Accountability reports and agency audits are complete. All agencies are working diligently to meet the FY 2004 performance standard to submit these reports by 45 days of the fiscal year close. Not only are the agencies reviewing their existing processes for preparing audited financial statements, but they're also looking at best practices from other agencies that met the FY 2004 reporting deadline a year early.

A number of agencies are poised to receive a performance status upgrade for Improved Financial Performance in the near term. Equally encouraging is that agencies aren't stopping their improvement efforts once they achieve a Green status rating. The Department of Education, National Science Foundation, Social Security Administration, and Environmental Protection Agency are either committing to or expanding efforts to distribute and integrate financial data into management decision making. And not only are these agencies finding meaningful ways to distribute financial data to agency personnel, but they.re also finding ways to better present and report this same data to the taxpayer. In the February 2004 publication titled .E-Reporting: Strengthening Democratic Accountability,. the National Science Foundation, Environmental Protection Agency, National Aeronautics and Space Administration, and Department of State were recognized for providing consumer driven performance information. In fact, the National Science Foundation received an A+ rating.

With all of these achievements, we must also recognize that a considerable amount of work is yet to be completed. Efforts to implement the Improper Payments Information Act of 2002 continue on schedule and are being closely monitored. At this time, most agencies have completed compiling their program inventories, with the majority of the corresponding risk assessments scheduled for completion by the end of May 2004. The goal is to have all milestones completed by September 30, 2004 to allow adequate time to report agency results in the 2004 Performance and Accountability Reports on November 15, 2004. Efforts surrounding the Improper Payments Information Act have received considerable government and media attention this quarter. As we identify improper payments, we will communicate our achievements in eliminating them.

I opened by making the point that financial performance doesn.t improve instantaneously. That makes our achievements that much more notable. I look forward to communicating additional progress as agencies continue to implement new financial management systems, receive unqualified audit opinions, and eliminate improper payments in the coming quarters.