Today I have signed into law S. 2170, the "Government Management Reform Act of 1994."
In September of last year, Vice President Gore and his team at the National Performance Review (NPR) stated this simple fact in their report entitled, "From Red Tape to Results":
"Management isn't about guessing, it's about knowing. Those in positions of responsibility must have the information they need to make good decisions. Good managers have the right information at their fingertips. Poor managers don't."
By passing the Government Management Reform Act of 1994, which is largely based on ideas developed by the NPR, the Congress has helped ensure that the Federal Government's managers will have the financial information and flexibility they need to make sound policy decisions and manage resources.
The Act expands the coverage initially mandated by the Chief Financial Officers Act so that 24 major Government departments and agencies will now provide annual audited financial reports of all their activities, spending, and revenues. Not later than 1998, the Federal Government will produce a consolidated financial statement covering virtually all of the $1.5 trillion annual budget authority of the Government and the revenues it receives.
The NPR report also stated that "we believe Americans deserve numbers they can trust" and recommended that the Federal Government provide an annual accountability report to our citizens. This Act's requirement for an audited consolidated financial report is a step in achieving this goal. To advance the process of accountability, I have requested that the Secretary of the Treasury, with the Director of the Office of Management and Budget (OMB), also produce an Annual Accountability Report to the Citizens in 1995, as recommended by the Vice President in the NPR report. The Accountability Report will be a straightforward description of the money spent and its effects on achieving results.
Measuring results is an important management goal of this Administration. The financial statements promise to be an excellent tool for providing agency performance and financial data, so we can have a closer look at results and whether Government indeed works better and costs less.
S. 2170 contains a number of other significant provisions. These include: the establishment of pilot programs to create franchising operations that will consolidate administrative support services, improve competition, and cut costs; expansion of the use of electronic funds transfers for Federal payments; and authority for the OMB Director to streamline management reporting to the Congress.
The Franchise Fund Pilot Program authorized by this Act will create internal markets through "franchising" common administrative support services to many agencies so the service providers may compete with one another. Injecting competition and market forces into the delivery of these services will reduce duplication, lower overhead costs, and better serve the American people.
Starting on January 1, 1995, S. 2170 promotes the use of direct deposit through electronic funds transfer for Federal wages, salaries, and retirement payments. The costs of disbursing money electronically are considerably less than the costs of printing, mailing, and processing paper checks.
The Act also provides tools to the OMB Director to consolidate and streamline management reporting processes. In particular, the Director will have the flexibility to determine the most meaningful timing and presentation of financial management reports from agencies to OMB and the Congress.
By expanding the scope of the financial statement requirements, the Act ensures the American people will have financial information they can trust. We will be better able to show the taxpayers what they are getting for their dollar. In short, this law means greater accountability. I commend the Congress for passing the Government Management Reform Act of 1994, and I am pleased to sign this legislation into law.
WILLIAM J. CLINTON
The White House, October 13, 1994.