NASA Still Struggles with Accounting

SAN FRANCISCO — Although NASA failed for the seventh year in a row to receive a passing grade from independent auditors, the U.S. space agency has made significant progress in cleaning up its financial records, Elizabeth Robinson, NASA’s newly appointed chief financial officer, told members of the House Science and Technology Committee during a Dec. 3 hearing.

The major problem preventing auditors from Ernst & Young LLP from approving NASA’s books is the space agency’s difficulty in calculating the value of its two largest assets: the space shuttle and international space station, said Paul Martin, NASA’s new inspector general. That problem was serious enough to be deemed a material weakness because it made it impossible for auditors to determine whether information included in the space agency’s balance sheets was accurate, said Daniel Murrin, a partner in New York-based Ernst & Young.

Space agency officials have been trying to determine the value of NASA’s largest assets for years, a task complicated by the size and scope of the programs, changes in NASA’s financial systems, revised federal accounting rules and the hiring of new teams of auditors. “This tale has gone on for so many years and has so many twists and turns,” Robinson told the panel.

The issue is likely to be resolved in the near future, however, because the agency that issues guidance in this area, the Federal Accounting Standards Advisory Board, published new rules in October designed to assist federal agencies, including NASA, in calculating the cost of extremely large assets based on estimates. “The adoption of the new rule provides a unique opportunity for NASA to address the issue,” Murrin said.

In addition, the space shuttle and space station will become less prominent features of NASA’s financial accounts because the programs are nearing completion. At the end of 2009, those two programs comprised approximately 77 percent of the total value of NASA’s property, plants and equipment as well as 38 percent of the space agency’s total assets, Robinson said. Since the shuttle program is scheduled to conclude in 2010, and the space station is on a depreciation schedule that ends in 2016, NASA will not have to account for the cost of those assets much longer, she added.

Nevertheless, NASA’s financial managers are not waiting until the completion of the space station program to clear up their financial records. Instead, NASA officials testifying at the hearing were cautiously optimistic that they would be able to calculate the value of the shuttle and space station programs and obtain a clean bill of health from auditors in 2010.

Robinson also assured the committee that NASA will be better able to evaluate the cost of major assets because the space agency is better able to track financial data. “It is now standard practice in contracts to acquire the accounting information we need,” Robinson said. “Our contractors have felt the burden of giving us all of the data and have worked very closely with us to ensure it is the right data. … We feel like we are on a strong footing.”

Still, NASA financial managers have two other issues to tackle. The Ernst & Young auditors cited deficiencies in NASA’s ability to calculate its environmental liability as well as the space agency’s failure to comply with the Federal Financial Management Act of 1996.

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Today's GAO Publication

The Government Accountability Office (GAO) today released the following report related to federal financial management:



Financial Management Systems: DHS Faces Challenges to Successfully Consolidating Its Existing Disparate Systems.
GAO-10-76, December 4.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-76
Highlights - http://www.gao.gov/highlights/d1076high.pdf

HUD Seeks Deputy CFO

The following position is posted on USAJOBS:

Position: Deputy Chief Financial Officer
Grade: ES-0505-00/00
Office: Office of the Chief Financial Officer
OPEN PERIOD: Tuesday, November 24, 2009 to Tuesday, December 15, 2009

JOB SUMMARY:
The Department of Housing and Urban Development (HUD) is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and providing housing assistance for the homeless, elderly, people with disabilities, and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws.

This position is located in the Office of the Chief Financial Officer (OCFO). The OCFO establishes policies and standards to govern the development, maintenance, and operation of all financial management systems of the Department, including budget systems; accounting and related transaction systems; internal control systems; and financial reporting systems.

MAJOR DUTIES:
The Deputy Chief Financial Officer (CFO), under the broad policy and administrative direction of the CFO, directs, develops, administers, and evaluates budget, accounting, financial systems, and financial management services for the Department. As the ranking career departmental financial officer, the incumbent of this position also advises the CFO on budgeting, financial management, financial systems, accounting, the financial/audit status of programs, and administrative operations of the Department. The Deputy CFO develops and communicates budgetary guidance, financial management policies/procedures, and advises the CFO and top Departmental management on the requirements and implementation of the laws and regulations applicable to the incumbent's areas of responsibility. The Deputy CFO is responsible for preparing required financial reports to the President, Congress, the Office of Management and Budget, the Department of Treasury, and the Government Accountability Office. The incumbent represents the CFO at meetings and conferences within HUD, with other Federal agencies, and with representatives of the private sector on matters of interest to the CFO.

Review the position listing Here

IG Upgrades DHS Acquisition Management

The Department of Homeland Security (DHS) has improved management of its major management activities slightly over last year, making some progress in achieving its goals in acquisition management, according to a scorecard released Wednesday by the DHS inspector general (IG).

The scorecard found DHS making "moderate" progress in acquisition management, information technology management, and emergency management--indicating that DHS was meeting many of its goals in those areas but not quite achieving "substantial" success.

However, DHS is making only modest progress in grants management and financial management due to failing to meet many of its goals in those areas. The rating "modest" is one step below a rating of "limited" on the four-step scale used by the IG office to rate the categories in its report Major Management Challenges Facing the Department of Homeland Security.

Grants management and financial management were the weakest management areas for the department, the report found.

While FEMA made "moderate" progress in meeting the goals of successful disaster grants management, it made only "modest" progress in doing so for non-disaster grants.

For both, FEMA should exert more influence to implement improved oversight of subgrantees. But non-disaster grants management suffers from inconsistent and incomplete financial and program monitoring, the report found, partly because FEMA does not have enough grants management staffers to manage the programs.

Financial management at the department also remains weak, with the IG office granting a score of "modest" to the department's efforts. Both military and civilian financial systems at DHS face tremendous challenges.

The US Coast Guard has made little progress in tackling internal control weaknesses identified by an audit in fiscal 2008, the report said. Those weaknesses include a lack of an effective general ledger system and a lack of effective policies, procedures, and controls surrounding the financial reporting process.

While the Coast Guard plans to overcome many of these problems in future years, it lacked sufficient financial management personnel to resolve these issues in fiscal 2009, the report said.

With regard to its civilian financial systems, DHS has several internal control weaknesses in its financial reporting, particularly at FEMA and the Transportation Security Administration (TSA), the report said. Financial reporting actually deteriorated at US Customs and Border Protection (CBP) during fiscal 2009 as well, but problems at that agency are not as bad as problems at FEMA and TSA, the report characterized.

-Mickey McCarter, HSToday
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VA financial management system: FLITE delayed

The Veterans Affairs department has let the pilot program of a new asset management system slip by two months, just five months since the agency awarded the contract, according to a new report by the Government Accountability Office. GAO attributed the problems to inadequate staffing and poor program management.

In the report, GAO blamed General Dynamics, the contractor, for falling behind schedule.

The VA awarded the contract for the Strategic Asset Management system in April to General Dynamics in April. The system is one of two major components of VA's Financial and Logistics Integrated Technology Enterprise (FLITE), an effort to produce a department-wide integrated financial and asset management system. FLITE is one of the programs that the Office of Management and Budget has designated high risk.

The second component is the Integrated Financial Accounting System (IFAS). VA awarded a program management contract for IFAS to Booz-Allen Hamilton in March, and a pilot for that system is scheduled to begin in 2010.

The VA is the second largest federal agency, with 250,000 employees. The Veterans Health Administration operates 154 hospitals, 995 outpatient clinics, 135 community living centers, 49 residential rehab centers and 232 counseling centers. But it is plagued with inefficient and unstandardized business systems that require repeated manual entries, GAO said.

“VA has for over a decade been pursuing improvements in its business processes and replacement of its existing financial and asset management systems with an integrated financial management system,” GAO said.

The lack of an integrated financial management system has been recognized as a departmental weakness since 1991, and FLITE is the second attempt to provide one. Work on the earlier proposed Core Financial and Logistics System began in 1998 and was scheduled to be completed in 2006, but the agency dropped the program in 2004 when pilot projects revealed it would be unable to support the department’s needs.

Planning for FLITE began in 2005, with full operational implementation scheduled for 2014 at a cost of $608.7 million. As of September, the VA had spent about $91 million on the program.

The department picked the Maximo Enterprise Asset Management software suite from IBM as FLITE’s Strategic Asset Management (SAM) program, and General Dynamics IT was given the contract to implement at pilot in Milwaukee. By September, the contractor had not started 11 of 34 tasks, including a security assessment, and was behind schedule on 16 of the remaining 23 tasks, GAO said.

- William Jackson, GCN.com
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Federal shared services effort gets push from new executive forum

The Office of Management and Budget has said little publicly about the future of the Lines of Business initiatives that began under the previous administration.

So without specific direction, agencies are taking it upon themselves to implement these initiatives whether human resources, financial management or cybersecurity.

One new major effort is the Shared Services Forum made up of 20 agency executives with some support from industry collaborating and sharing best practices.

"It was a group of people who started talking about shared services, but [the efforts] were all over the map, and we were believers in shared services and believed there needs to be some structure to make it flourish because government can't afford to continue to have everyone build their own capabilities," says Jim Williams, the commissioner of the General Services Administration's Federal Acquisition Service.

This forum is not specific to a back office function, but instead the goal is to reach governmentwide implementation of all shared services.

Williams says the forum is developing recommendations for how to expand the use of and continue to institutionalize shared services as a concept across all agencies.

"We are making recommendations that look like cloud computing so that you can finally improve some of these services-procurement, personnel, all of the different things the government does," he says.

"We're thinking of something where there is broad access to these services, where every agency doesn't have to have their own, that it is somewhat like the government health care system where there is managed competition and not the Wild Wild West. There is a common lexicon, common measurements and common way to measure customer satisfaction."

The forum will submit their recommendations to the Office of Management and Budget's chief performance officer Jeffrey Zients. Williams says the forum members hoped to meet with Zients in November to discuss the recommendations.

Williams says some estimate that agencies can save 20-percent-to-30-percent by moving administrative services to shared service providers.

The forum also likely will recommend a dashboard to measure the impact of these services.
Williams says the forum didn't grow from the LOBs, but came to be from GSA, vendors and several agencies who provide shared services believing there is a need to collaborate and coordinate more effectively.

In fact, Williams says he prefers not to call these lines of business, but use the more common private sector term, shared services. He says there are some similarities, but the big difference is the maturity of the shared services approach.

Along with the forum, the Security LOB will issue two requests for proposals later this year for certification and accreditation services, and situational awareness and incident response services.

The Human Resources and Financial Management shared service efforts also are making progress by setting standards and determining how best to integrate existing systems.
Several other Lines of Business, including Grants and the Budget Formulation and Execution efforts, have been less active over the past year.

And the IT Infrastructure initiative is now about cloud computing as a means to consolidate desktops, networks and other infrastructure.

- Jason Miller, FederalNewsRadio.com
READ MORE or LISTEN HERE...

Recent DHS IG Reports

The following Inspector General Management Reports for U.S. Department of Homeland Security were recently published:

OIG-10-11 - Independent Auditor's Report on DHS' FY 2009 Financial Statements and Internal Control over Financial Reporting (PDF, 57 pages - 794 KB)

OIG-10-16 - Major Management Challenges Facing the Department of Homeland Security (PDF, 36 pages - 802 KB)

OIG-09-105 - CBP Needs to Improve the Monitoring of the Cash Collection Process (PDF, 21 pages - 1.24 MB)

OIG-09-104 - Audit of Application Controls for FEMA's Individual Assistance Payment Application (PDF, 23 pages - 867 KB)

Homeland Security Acquisition Manual (HSAM) (PDF, 399 pages - 6.33 MB) implements and supplements the Federal Acquisition Regulation and the Homeland Security Acquisition Regulation. Effective through HSAM Notice 09-03.

Recent GAO Publications

The Government Accountability Office (GAO) recently released the following reports and correspondence:

Information Technology: Actions Needed to Fully Establish Program Management Capability for VA's Financial and Logistics Initiative.
GAO-10-40, October 26.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-40
Highlights - http://www.gao.gov/highlights/d1040high.pdf

Recovery Act: Contract Oversight Activities of the Recovery Accountability and Transparency Board and Observations on Contract Spending in Selected States.
GAO-10-216R, November 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-216R

U.S. Government Accountability Office: Performance and Accountability Report, Fiscal Year 2009.
GAO-10-234SP, November 13, 2009
http://www.gao.gov/cgi-bin/getrpt?GAO-10-234SP

Budget Issues: Electronic Processing of Non-IRS Collections Has Increased but Better Understanding of Cost Structure Is Needed.
GAO-10-11, November 20.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-11
Highlights - http://www.gao.gov/highlights/d1011high.pdf

Indian Health Service: Updated Policies and Procedures and Increased Oversight Needed for Billings and Collections from Private Insurers.
GAO-10-42R, October 22.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-42R

Centers for Medicare and Medicaid Services: Deficiencies in Contract Management Internal Control Are Pervasive.
GAO-10-60, October 23.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-60
Highlights - http://www.gao.gov/highlights/d1060high.pdf

Federally Created Entities: An Overview of Key Attributes.
GAO-10-97, October 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-97
Highlights - http://www.gao.gov/highlights/d1097high.pdf

Government errors could mean big problems for contractors

Government errors could mean big problems for contractors

Contractors could face suspension, debarment or financial penalties if they fail to return and report an improper payment made by the government…even if the improper payment is the government’s fault.

That’s what an executive order meant to curb the government’s rate of erroneous payments will say, Peter Orszag, Office of Management and Budget director, told reporters during a Nov. 17 briefing on the value of improper payments made by the government in 2009.

In addition to penalizing contractors that fail to return improper payments, the pending executive order will curb improper payments by demanding agencies:

• Establish a Web site to disclose and track the total amount of improper payments on a program. The Web site will include error rates by agency and program, and an email address for the public to report suspected waste, fraud and abuse.
• Report on errors more than once a year (the current practice).
  Designate a Senate-confirmed official to be accountable for meeting improper payment reduction targets. If the agency misses targets two years in a row, the agency’s head, chief financial officer and inspector general must give OMB a plan describing why the agency failed to meet its goals and what it will do to meet targets going forward.
• Employ new management techniques, such as forensic auditing, to detect and prevent improper payments.
• Share data with other agencies about entities or individuals that received improper payments because they weren’t eligible for the benefits. This will prevent that entity or person from receiving improper payments from other programs.
• Establish plans to reduce program errors that do not interfere with payments to legitimate beneficiaries.
• Create incentives for states, agencies, and recipients to report payment errors.

Recent GAO Publications

The Government Accountability Office (GAO) recently released the following reports, correspondences and testimonies:

Recovery Act: Recipient Reported Jobs Data Provide Insight into Use of Recovery Act Funding, but Data Quality and Reporting Issues Need Attention.
GAO-10-223, November 19.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-223
Highlights - http://www.gao.gov/highlights/d10223high.pdf

Grant Monitoring: Department of Education Could Improve Its Processes with Greater Focus on Assessing Risks, Acquiring Financial Skills, and Sharing Information.
GAO-10-57, November 19.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-57
Highlights - http://www.gao.gov/highlights/d1057high.pdf

Financial Audit: Securities and Exchange Commission's Financial Statements for Fiscal Years 2009 and 2008.
GAO-10-250, November 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-250
Highlights - http://www.gao.gov/highlights/d10250high.pdf

Financial Audit: Federal Housing Finance Agency's Fiscal Year 2009 Financial Statements.
GAO-10-218, November 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-218
Highlights - http://www.gao.gov/highlights/d10218high.pdf

Financial Audit: IRS's Fiscal Years 2009 and 2008 Financial Statements.
GAO-10-176, November 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-176
Highlights - http://www.gao.gov/highlights/d10176high.pdf

Financial Audit: Bureau of the Public Debt's Fiscal Years 2009 and 2008 Schedules of Federal Debt.
GAO-10-88, November 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-88
Highlights - http://www.gao.gov/highlights/d1088high.pdf

U.S. Government Accountability Office: Performance and Accountability Report, Fiscal Year 2009.
GAO-10-234SP, November 13.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-234SP

Department of Veterans Affairs: Improvements Needed in Corrective Action Plans to Remediate Financial Reporting Material Weaknesses.
GAO-10-65, November 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-65
Highlights - http://www.gao.gov/highlights/d1065high.pdf

Millennium Challenge Corporation: MCC Has Addressed a Number of Implementation Challenges, but Needs to Improve Financial Controls and Infrastructure Planning.
GAO-10-52, November 6.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-52
Highlights - http://www.gao.gov/highlights/d1052high.pdf

U.S. Postal Service: Financial Challenges Continue, with Relatively Limited Results from Recent Revenue-Generation Efforts, by Phillip Herr, director, physical infrastructure issues, before the Subcommittee on Federal Workforce, Postal Service, and the District of Columbia, House Committee on Oversight and Government Reform.
GAO-10-191T, November 5.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-191T
Highlights - http://www.gao.gov/highlights/d10191thigh.pdf

Troubled Asset Relief Program: Continued Stewardship Needed as Treasury Develops Strategies for Managing and Divesting Financial Interests in Chrysler and GM.
GAO-10-151, November 2.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-151
Highlights - http://www.gao.gov/highlights/d10151high.pdf

Integrity Committee's Process to Address Allegations of Wrongdoing by Inspectors General.
GAO-10-63R, October 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-63R

Financial Management Systems: DHS Faces Challenges to Successfully Consolidate Its Existing Disparate Systems, by Kay L. Daly, director, financial management and assurance, and Nabajyoti Barkakati, Chief Technologist, Applied Research and Methods, Center for Technology and Engineering, before the Subcommittee on Management, Investigations, and Oversight, House Committee on Homeland Security.
GAO-10-210T, October 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-210T
Highlights - http://www.gao.gov/highlights/d10210thigh.pdf

"Maximizing DOD's Untapped Potential to Improve Business Performance," by Gene L. Dodaro, acting comptroller general of the United States, before the DOD Performance Breakthrough Convention, in Lansdowne, Virginia.
GAO-10-184CG, October 14, 2009.
http://www.gao.gov/cghome/d10184cg.pdf

U.S. Department of Agriculture: Internal Control Would Improve Accountability for Certain Centrally Provided (Greenbook) Programs.
GAO-10-82, October 20.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-82
Highlights - http://www.gao.gov/highlights/d1082high.pdf

U.S. Department of Agriculture: Charges to Agencies and Offices for Centrally Provided (Greenbook) Programs for Fiscal Years 1999 through 2009 (GAO-10-83SP), an E-supplement to GAO-10-82.
GAO-10-83SP, October 20.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-83SP

The Federal Government's Long-Term Fiscal Outlook: Fall 2009 Update.
GAO-10-137SP, October 15.http://www.gao.gov/cgi-bin/getrpt?GAO-10-137SP

Defense Management: Widespread DCAA Audit Problems Leave Billions of Taxpayer Dollars Vulnerable to Fraud, Waste, Abuse, and Mismanagement, by Gregory D. Kutz, managing director, forensic audits and special investigations, before the Defense Acquisition Reform Panel, House Committee on Armed Services.
GAO-10-163T, October 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-163T
Highlights - http://www.gao.gov/highlights/d10163thigh.pdf

VA Health Care: Ineffective Medical Center Controls Resulted in Inappropriate Billing and Collection Practices, by Kay L. Daly, director, financial management and assurance, before the Subcommittee on Health, House Committee on Veterans' Affairs.
GAO-10-152T, October 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-152T
Highlights - http://www.gao.gov/highlights/d10152thigh.pdf

"Troubled Asset Relief Program: GAO's Oversight Role," by Gene L. Dodaro, acting comptroller general of the United States, before the Federal Deposit Insurance Corporation's accounting and auditing conference, in Arlington, Virginia.
GAO-10-150CG, October 1, 2009
http://www.gao.gov/cghome/d10150cg.pdf

Information Security: Concerted Effort Needed to Improve Federal Performance Measures.
GAO-09-617, September 14.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-617
Highlights - http://www.gao.gov/highlights/d09617high.pdf

Contract Management: Extent of Federal Spending under Cost-Reimbursement Contracts Unclear and Key Controls Not Always Used.
GAO-09-921, September 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-921
Highlights - http://www.gao.gov/highlights/d09921high.pdf

Fire Grants: FEMA Has Met Most Requirements for Awarding Fire Grants, but Additional Actions Would Improve Its Grant Process.
GAO-10-64, October 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-64
Highlights - http://www.gao.gov/highlights/d1064high.pdf

Improper Payments: Progress Made but Challenges Remain in Estimating and Reducing Improper Payments, by Kay L. Daly, director, financial management and assurance, before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, Senate Committee on Homeland Security and Governmental Affairs.
GAO-09-628T, April 22, 2009.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-628T
Highlights - http://www.gao.gov/highlights/d09628thigh.pdf

Information Technology: Agencies Need to Improve the Implementation and Use of Earned Value Techniques to Help Manage Major System Acquisitions.
GAO-10-2, October 8.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-2
Highlights - http://www.gao.gov/highlights/d102high.pdf

Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed.
GAO-09-1016, September 23, 2009.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1016
Highlights - http://www.gao.gov/highlights/d091016high.pdf

Appropriations Decisions:

B-318426, District of Columbia Courts--Authority to Pay Settlements
and Judgments, November 2, 2009
http://www.gao.gov/decisions/appro/318426.htm

Reducing Improper Payments

Wednesday, November 18th, 2009 at 10:25 am
Peter R. Orszag, Director, OMB

Each year, taxpayers lose billions of dollars in wasteful improper payments by the federal government to individuals, organizations, and contractors. "Improper payments" is an umbrella term that covers a number of financial transactions — overpayments to individuals or firms is one example; benefit payments to ineligible program participants is another. In 2008, improper payments totaled $72 billion; in 2009, they totaled $98 billion — an increase driven by improved detection and the significant increase in federal outlays associated with the economic downturn. These errors and mistakes are unacceptable. Taxpayers deserve to know that their dollars are being spent wisely and effectively.

In response, the President, over the next week, will sign an executive order to rein in these improper payments so that the right people receive the right payment for the right reason. The response revolves around three categories of action: boosting transparency, holding agencies accountable, and creating strong incentives for compliance. In addition to the Executive Order, Congress is making efforts to reduce fraud, waste, and abuse through improper payments. We look forward to continuing to work with Congress, including Senators Carper and McCaskill and Congressman Patrick Murphy, on this important issue.

READ MORE...

DHS financial management systems in disarray, IG says

The Homeland Security Department still has fragmented financial management systems that can't share data effectively, according to the department's inspector general and the Government Accountability Office.

DHS is working on a departmentwide process, called Transformation and Systems Consolidation (TASC), that would integrate its financial systems, currently spread across 22 agencies. But Kay Daly, director of financial management and assurance issues at GAO, said the department hasn't even identified which business processes need to be integrated into TASC.

The DHS IG, meanwhile, says many of the department's existing financial systems suffer from security flaws and an inability to communicate. "Systems are fragmented, do not share data, and over the years they have developed security flaws," said James Taylor, the department's deputy inspector general, at an Oct. 29 hearing of the House Homeland Security subcommittee on management, investigations and oversight.

Problems also plague financial systems at many agencies within DHS. The Coast Guard, for example, doesn't have policies in place for patching and upgrading its systems, or for disaster recovery; the Federal Emergency Management Agency doesn't maintain audit logs, which could help it track down the source of an intrusion.

Peggy Sherry, the department's acting chief financial officer, said DHS has established a working group — composed of managers from headquarters and individual DHS agencies — to work on consolidating financial systems. Sherry said her office also is consulting other departments to find out how they manage financial systems.

The department is planning to buy a commercial off-the-shelf (COTS) software package to integrate its financial systems.

Sherry said DHS expects to sign a contract between January and March. It will likely be a cost-plus contract. Several lawmakers at the hearing urged the department to consider a fixed-price contract, but Sherry said that would make it more difficult to buy the necessary software.

Lawmakers seemed impatient with the department's longstanding inability to integrate its financial systems and its other management processes. GAO and the IG issued a number of reports on financial management at DHS over the last few years; and many of their recommendations still have yet to be implemented.

At the Coast Guard, for example, 21 of the 22 conclusions in the most recent IG report were repeated from a previous report. GAO says none of its recommendations for the department have been fully implemented.

-Gregg Carlstrom, FederalTimes.com
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Financial Management Systems: DHS Faces Challenges to Successfully Consolidate Its Existing Disparate Systems.
GAO-10-210T, October 29
http://www.gao.gov/cgi-bin/getrpt?GAO-10-210T
Highlights - http://www.gao.gov/highlights/d10210thigh.pdf

AGA Research Study Sees Benefits For Federal Governments Using Managerial Cost Accounting

Research examined managerial cost accounting practices within federal government agencies

Alexandria, VA (November 5, 2009) - A recently released research study conducted by the Association of Government Accountants (AGA), examined the status of managerial cost accounting (MCA) implementations within federal government agencies. The case studies depict entities at various stages of implementation, from one that has been in existence for more than thirty years, and other mature systems (more than ten years in existence) to some that have only just started (two years or less). The research publication, Managerial Cost Accounting in the Federal Government: Providing Useful Information for Decision Making, was released in October 2009.

Download the report (PDF)

FASAB Issues ED, New Standard on Property, Plant, Equipment

The Federal Accounting Standards Advisory Board (FASAB)has announced that the board is seeking input on the Exposure Draft (ED), Subsequent Events: Codification of Accounting and Financial Reporting Standards Contained in the AICPA Statements on Auditing Standards. The American Institute of Certified Public Accountants' (AICPA) Statements on Auditing Standards (SAS) AU section 560, Subsequent Events, includes accounting and financial reporting guidance that is not discussed in the authoritative literature that establishes accounting principles. The objective of this proposed Statement is to incorporate that guidance into the authoritative literature of the FASAB. The exposure draft requests comments by Dec. 28, 2009. The exposure draft and specific questions raised are available at the FASAB website.

In other FASAB news, FASAB issued Statement of Federal Financial Accounting Standards (SFFAS) 35, Estimating the Historical Cost of General Property, Plant, and Equipment --Amending Statements of Federal Financial Accounting Standards 6 and 23. SFFAS 35 amends SFFAS 6 and 23 to clarify that reasonable estimates of original transaction data historical cost may be used to value general property, plant, and equipment. More information can be found at http://www.fasab.gov

OMB wants better, faster, cheaper financial data

WILLIAMSBURG, Va. - The Obama administration has said little publicly about the assorted back office Lines of Business initiatives started under the Bush administration. Agencies and industry alike were left wondering what the plan was going forward, especially if consolidations with federal shared service providers still would be required.

At least for the financial management line of business, the Office of Management and Budget is offering some clarity.

Adam Goldberg, OMB's chief of the financial analysis and systems branch, says the LOB still is underway as it has been since 2003.

But OMB also has seen some additional potential improvements thanks to the Recovery Act.

"We have started to look at other opportunities where we could deliver financial management reforms probably a little earlier than we would be able to move all the agencies onto a consolidated financial system," says Goldberg at the 19th annual Executive Leadership Conference sponsored by IAC/ACT. "The direction we are going now is to continue with standardization and consolidation efforts and start to look at other solutions to deliver benefits to meet emerging needs like data and transparency reporting."

OMB believes the Recovery Act has shown that obtaining better and more accurate data more quickly is just the beginning.

"We want to look at other technology solutions to reduce the cost of transactions," he says. "We have to find ways to automate data from the time we get money from Congress until the time we spend it."

Goldberg adds that the Recovery Act has expanded who needs access to financial data.

"One of the things we are trying to do is understand how can we accelerate the capture and reporting of information and with Recovery Act and it's not just federal agencies that need to have access to the information to met reporting requirements, but we need to provide it out to state and localities and companies who are receiving monies under the Recovery Act to make sure they are able to fulfill the reporting requirements and make sure the numbers and reporting elements are in alignment with one another," he says.

Goldberg adds that OMB earlier in October issued the final set of standards so now agencies and industry have a complete set of financial management business process standards.

Along with these standards, agencies also received a common governmentwide accounting classification structure in 2008 to complete the updating of the federal financial management standards.

Goldberg says OMB now is leading an effort to make sure the common account classification structure and the business process standards align.

Goldberg adds that over the next six months OMB will finalize all the financial management information to ensure everything is aligned.

Vendor financial management system software providers eventually will have to meet the new standards.

As for the FM LOB, Goldberg says between 12 and 14 agencies have migrated to a shared service provider, including the Office of Personnel Management most recently.

-Jason Miller, WFED
READ MORE and LISTEN HERE

Obama nominates Scott Quehl for Department of Commerce CFO

THE WHITE HOUSE
Office of the Press Secretary

FOR IMMEDIATE RELEASE
October 15, 2009

President Obama Announces More Key Administration Posts

WASHINGTON - Today, President Barack Obama announced his intent to nominate the following individuals to key administration posts:

* Scott Quehl, Chief Financial Officer and Assistant Secretary of Commerce for Administration, Department of Commerce

Scott Quehl, Nominee for Chief Financial Officer and Assistant Secretary of Commerce for Administration, Department of Commerce

Scott Quehl is President of Quehl Advisors, LLC, and a Senior Managing Director at Public Resources Advisory Group, providing advice to state and local governments on capital market, budgeting, and management initiatives. Quehl served as Managing Director for Tax-Exempt Capital Markets at JPMorgan Securities, Inc. While a Managing Director at Public Financial Management, Inc., he served as a management and budget advisor to several local and state authorities. During his tenure at Public Financial Management, Quehl took a leave of absence to serve as acting, then permanent, Chief Financial Officer of the Metropolitan Police Department for the District of Columbia. In the Executive Office of the President of the United States, he served as a member of the Clinton Administration in the Office of Management & Budget, Office of Federal Financial Management. Before this, he served as The World Bank's Country Officer for the Dominican Republic in a consulting capacity, co-managed the development of Secondary Education Project for the Dominican Republic, and advised the Governments of Colombia and Bolivia on the decentralization of financial and management authority to sub-national governments. He also served as a Peace Corps Volunteer in Sabanagrande, Honduras. He has written articles and reports for The World Bank Group, Brookings Review, and Government Finance Review. Quehl holds a Master's in Government Administration from the University of Pennsylvania, Bachelor's in History and Political Science from Lawrence University, and held FINRA NASD Series 24, 63, and 7 licenses while at JPMorgan.

Better than the Heisman

Tuesday, October 13th, 2009 at 8:07 pm
Peter R. Orszag, Director OMB

Tonight, the Senate confirmed Danny Werfel as Controller, Office of Federal Financial Management (OFFM). This is great news for OMB, as Danny brings broad experience and financial acumen to the table. His skills will be tested, as there are serious challenges facing the federal government to improve transparency and drive better results for the American people.

I’ve written before about Danny’s essential role in implementing the President’s ambitious agenda through the transition as Acting Controller, and particularly his work in implementing — with unprecedented accountability and openness — the American Recovery and Reinvestment Act.

I look forward to his leadership in furthering President’s agenda and in our work going forward; he is, as he has been, vital to what we do.

I thank his wife, Beth, and their children, Sean and Molly, for sharing Danny with us. I join everyone at OMB in congratulating Danny and his family on his confirmation.

P.S. A point of clarification: OMB’s Danny Werfel is not to be confused with Danny Wuerffel, who won the 1996 Heisman trophy as quarterback at the University of Florida, last seen in Washington as a member of the ‘Skins in 2002.

PUBLISHERS NOTE: Congratulations, Danny - Well Deserved!!!
Are you sure you don't want to play QB on the weekends, as well?

OMB Memo: Fiscal Year 2009 Audited Financial Statement Reporting Deadline

M-10-04

The Federal financial management community plays a central role in providing transparency into the Government’s finances and initiating sound processes and controls that limit spending improprieties and other forms of error and waste. With the enactment of both the Emergency Economic Stabilization Act of 2008 (EESA) and the American Recovery and Reinvestment Act of 2009 (ARRA), this role has never been more critical. The success of these programs hinge, in large measure, on the ability to accurately account for economic recovery funds, report timely and reliable information on these funds to the public, and closely scrutinize transactions so that Federal funds are spent appropriately.

In addition to these efforts, Federal financial professionals, including auditors, currently are engaged in year-end activities to finalize and publish the annual financial statements of the Government. Audited financial statements are important for communicating the financial position and fiscal health of Federal agencies. The process of preparing the financial statements and having them audited requires significant planning, technical expertise, and hard work. While the statutory deadline for agency year-end financial statements is five months after the end of the fiscal year, Federal agencies and auditors, to their credit, have completed this process within 45 days after the end of the fiscal year for each of the last four years.

It is my expectation that Federal agencies will continue to meet this accelerated timetable, and I hereby request that Federal agencies treat 45 days after the end of the fiscal year as a deadline for submitting year-end financial statements. However, I also want to urge Federal agencies to evaluate whether resources are appropriately aligned to support diligence and thoroughness in the completion of year-end audited financial statements as well as the ongoing critical financial management and audit activities related to effective implementation of economic recovery programs. In making this determination, Federal agencies should collaborate closely with their Office of Inspector General. If you believe there is a risk that your agency cannot align these resources effectively within the time constraints of this accelerated deadline, I am requesting that you consult with the Office of Management and Budget (OMB) on whether an extension of the reporting deadline for audited financial statements will help to remediate this risk.

Recent GAO Publications

The Government Accountability Office (GAO) recently released the following reports, correspondence and testimony:

Understanding the Primary Components of the Annual Financial Report of the United States Government.
GAO-09-946SP, September 2009.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-946SP

Continuing Resolutions: Uncertainty Limited Management Options and Increased Workload in Selected Agencies.
GAO-09-879, September 24.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-879
Highlights - http://www.gao.gov/highlights/d09879high.pdf

Troubled Asset Relief Program: One Year Later, Actions Are Needed to Address Remaining Transparency and Accountability Challenges.
GAO-10-16, October 8.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-16
Highlights - http://www.gao.gov/highlights/d1016high.pdf

Troubled Asset Relief Program: Capital Purchase Program Transactions for October 28, 2008, through September 25, 2009, and Information on Financial Agency Agreements, Contracts, Blanket Purchase Agreements, and Interagency Agreements Awarded as of September 18, 2009 (GAO-10-24SP, October 2009), an e-supplement to GAO-10-16.
GAO-10-24SP, October 8.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-24SP

Federal Student Loans: Audits and Reviews of the Federal Family Education Loan and Federal Direct Loan Programs.
GAO-09-992R, September 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-992R

Fannie Mae and Freddie Mac: Analysis of Options for Revising the Housing Enterprises' Long-term Structures, by William B. Shear, director, financial markets and community investment, before the Senate Committee on Banking, Housing, and Urban Affairs.
GAO-10-144T, October 8.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-144T

Debt Management: Treasury Inflation Protected Securities Should Play a Heightened Role in Addressing Debt Management Challenges.
GAO-09-932, September 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-932
Highlights - http://www.gao.gov/highlights/d09932high.pdf

Alcohol and Tobacco Tax and Trade Bureau: Fiscal Year 2010 Proposed Licensing and Registration Fees Program.
GAO-09-1023R, September 28.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1023R

Federal Contracting: Observations on the Government's Contracting Data Systems, by William T. Woods, director, acquisition and sourcing management, before the Ad Hoc Subcommittee on Contracting Oversight, Senate Committee on Homeland Security and Governmental Affairs.
GAO-09-1032T, September 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1032T
Highlights - http://www.gao.gov/highlights/d091032thigh.pdf

Vocational Rehabilitation Funding Formula: Options for Improving Equity in State Grants and Considerations for Performance Incentives.
GAO-09-798, September 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-798
Highlights - http://www.gao.gov/highlights/d09798high.pdf

Financial Regulation: Recent Crisis Reaffirms the Need to Overhaul the U.S. Regulatory System, by Richard J. Hillman, managing director, financial markets and community investment, before the Senate Committee on Banking, Housing, and Urban Affairs.
GAO-09-1049T, September 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1049T

Appropriations Decisions:

B-318588, Department of the Army, Military Surface Deployment and
Distribution Command--Use of Appropriations for Bottled Water,
September 29, 2009
http://www.gao.gov/decisions/appro/318588.htm

Recent GAO Publications

The Government Accountability Office (GAO) recently released the following reports, correspondence and testimony:



Understanding the Primary Components of the Annual Financial Report of the United States Government.

GAO-09-946SP, September 2009.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-946SP



Troubled Asset Relief Program: One Year Later, Actions Are Needed to Address Remaining Transparency and Accountability Challenges.

GAO-10-16, October 8.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-16
Highlights - http://www.gao.gov/highlights/d1016high.pdf


Troubled Asset Relief Program: Capital Purchase Program Transactions for October 28, 2008, through September 25, 2009, and Information on Financial Agency Agreements, Contracts, Blanket Purchase Agreements, and Interagency Agreements Awarded as of September 18, 2009 (GAO-10-24SP, October 2009), an e-supplement to GAO-10-16.

GAO-10-24SP, October 8.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-24SP


Fannie Mae and Freddie Mac: Analysis of Options for Revising the Housing Enterprises' Long-term Structures, by William B. Shear, director, financial markets and community investment, before the Senate Committee on Banking, Housing, and Urban Affairs.

GAO-10-144T, October 8.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-144T



Continuing Resolutions: Uncertainty Limited Management Options and Increased Workload in Selected Agencies.

GAO-09-879, September 24.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-879
Highlights - http://www.gao.gov/highlights/d09879high.pdf



Federal Student Loans: Audits and Reviews of the Federal Family Education Loan and Federal Direct Loan Programs.

GAO-09-992R, September 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-992R


Debt Management: Treasury Inflation Protected Securities Should Play a Heightened Role in Addressing Debt Management Challenges.

GAO-09-932, September 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-932
Highlights - http://www.gao.gov/highlights/d09932high.pdf



Alcohol and Tobacco Tax and Trade Bureau: Fiscal Year 2010 Proposed Licensing and Registration Fees Program.

GAO-09-1023R, September 28.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1023R



Federal Contracting: Observations on the Government's Contracting Data Systems, by William T. Woods, director, acquisition and sourcing management, before the Ad Hoc Subcommittee on Contracting Oversight, Senate Committee on Homeland Security and Governmental Affairs.

GAO-09-1032T, September 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1032T
Highlights - http://www.gao.gov/highlights/d091032thigh.pdf



Vocational Rehabilitation Funding Formula: Options for Improving Equity in State Grants and Considerations for Performance Incentives.

GAO-09-798, September 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-798
Highlights - http://www.gao.gov/highlights/d09798high.pdf



Financial Regulation: Recent Crisis Reaffirms the Need to Overhaul the U.S. Regulatory System, by Richard J. Hillman, managing director, financial markets and community investment, before the Senate Committee on Banking, Housing, and Urban Affairs.

GAO-09-1049T, September 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-1049T



Appropriations Decisions:

B-318588, Department of the Army, Military Surface Deployment and
Distribution Command--Use of Appropriations for Bottled Water,
September 29, 2009
http://www.gao.gov/decisions/appro/318588.htm

Cost of 2010 census remains elusive, officials tell panel

Overseers of the 2010 census said on Wednesday that it is almost impossible to determine the total cost of the decennial count.

"At this point, it's just unknown" if the cost of the census will ultimately surpass the current estimate of $14.7 billion, Commerce Department Inspector General Todd Zinser told the Senate Homeland Security and Governmental Affairs Federal Financial Management Subcommittee, which oversees the count.

A GAO report released at the subcommittee's hearing showed that the first major operation conducted by census workers -- the "address canvassing" campaign to confirm millions of addresses nationwide -- went $88 million over budget, or 25 percent of costs.

Once expected to cost $11.5 billion, estimates of the funds required to conduct the count jumped last year after a failed effort to equip census workers with handheld computers.

Census Director Robert Groves, who took the reins of the bureau in July, acknowledged last month that the agency is revising its methods of cost modeling.

-Carrie Dann, GovExec.com
READ MORE...

GAO Issues Guide to Understanding U.S. Financial Report

The Government Accountability Office (GAO) has issued "Understanding the Primary Components of the Annual Financial Report of the United States Government." GAO says to goal of the guide is "to make available to every American a comprehensive overview of the federal government's finances."

Federal Stimulus-Monitoring Website Gets An Update

Since February, when the government launched a website to provide a window on the federal stimulus package, critics have been calling for a makeover. Now they have one. The site, unveiled today by the Recovery Accountability and Transparency Board, was revamped through the use of $9.5 million in stimulus funds. It provides easier-to-use tools, such as a ZIP Code search that shows stimulus projects in specific communities. The government also has set up a toll-free hot line (1-877-FWA-DESK) for reporting fraud, waste and abuse. "This is definitely a step in the right direction," said Craig Jennings, a policy analyst at OMB Watch, a nonprofit government watchdog group. Still, the Obama administration has a ways to go to complete transparency, Jennings said. The site, Recovery.gov, does not include complete data on recipients of stimulus money, and users face significant hurdles to accessing the information that is available. --Joe Markman, The Los Angeles Times
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Danny Werfel Approved by Senate Committee

The Senate Homeland Security and Governmental Affairs Committee unanimously approved the nomination of Danny Werfel to be Controller of the Office of Management and Budget's Office of Federal Financial Management. Committee chair Joe Lieberman, I-Conn. said that, as deputy controller and acting controller, Werfel "has demonstrated his commitment to improving the financial management of the federal agencies and is a well-qualified choice to lead OMB's efforts in this area." He said Werfel should be confirmed by the full Senate, and quickly.

-Elizabeth Newell, GovExec.com

AGA's FMSB Comments on GASB Proposal

AGA's Financial Management Standards Board (FMSB) has issued a comment letter to the Governmental Accounting Standards Board (GASB) on its exposure draft of a proposed statement on Accounting and Financial Reporting for Service Concession Arrangements