The Chief Financial Officers Act of 1990, Conserving Resources for Readiness and National Security Through Better Financial Management.

Congress enacted the Chief Financial Officers CFO Act in November 1990 to improve financial management in the Federal Government. It requires 23 federal agencies, including DOD, to submit annual financial statements to the Office of Management and Budget. The Secretary of Defense, William Perry, testified before Congress in 1995 that, we need to reform our financial management. It is a mess, and it is costing us money we desperately need. The military services waste billions of dollars each year because of poor financial management practices. DOD is taking a centralized, top-down, and long-term approach to meet the requirements of the CFO Act. Its not working. This approach doesnt include the leaders in the field in the solution. Therefore, the operators stationed throughout the world are unaware of the massive changes that need to occur and largely uniformed of the readiness benefits and savings that could arise. We must improve our financial management practices. We cant afford to waste any of our defense dollars as resources continue to decline. The process of preparing auditable financial statements will provide our leaders with more reliable and accurate resource information which will improve their decisions and will lead to increased levels of readiness by the more efficient and effective use of federal funds.