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AHRQ Annual Report on Research and Management, FY 2004

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Message from the Chief Financial Officer

The Agency for Healthcare Research and Quality's (AHRQ) FY 2004 Annual Report highlights the research and financial management activities and accomplishments of the Agency and its employees. Through this report, we describe our efforts to strengthen our financial management environment, to improve our accountability and performance, identify approaching challenges, and better protect the integrity of the resources entrusted to us.

The key to successful financial management is the implementation of the five government-wide goals identified in the President's Management Agenda (PMA): strategic management of human capital, competitive sourcing, improved financial performance, expanded electronic government, and budget and performance integration.

In FY 2004, AHRQ made significant progress toward implementing each of these initiatives. We aggressively supported and participated in the development of the Department's Unified Financial System, which will consolidate HHS' financial management structure by replacing five existing accounting systems, thus providing a more timely and coordinated view of critical financial management information. With respect to improving budget and performance integration, we continued to realign the work we do with our strategic goals and those of the Department, and to automate management processes across a wide spectrum of administrative activities within the Agency.

AHRQ management believes that financial accountability is the cornerstone of the "improved financial performance" initiative of the PMA. In FY 2004, AHRQ developed a risk assessment plan that looked at whether Agency grant, contract, and simplified acquisition activities are susceptible to improper payments and made substantial progress in instilling a culture of accountability toward the reduction of improper payments. In the coming year, our focus will be on enhancing our internal controls and financial management techniques to ensure a strong risk-management program. AHRQ also fully participated in the Department's "top-down" audit and contributed to HHS meeting the accelerated reporting requirements and earning a "clean" opinion on its financial statements.

In accordance with OMB's Program Assessment Rating Tool (PART) for the formal evaluation of Federal programs, we conducted a review of the Agency's pharmaceuticals outcome program. This review will facilitate the linking of high quality outcomes with associated program costs. Over the next few years, the Agency will concentrate on totally integrating the financial management of these programs with their performance.

As CFO, I remain committed to building on our financial management and program performance accomplishments to date. While we are pleased with the improvements made and successes realized during the past year, we know that we can achieve even more through investing in innovations that promote sound stewardship of our resources and effective leveraging of technology. Finally, we will continue to do our utmost to achieve more under the programs we manage, as well as emphasize the importance of a robust internal control program to meet our programmatic and fiscal responsibilities.

Kathie Kendrick
Chief Financial Officer
Agency for Healthcare Research and Quality

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