ASMC PDI is Back!

PDI 2014 - Achieving New Heights | Managing Change
May 28-30, 2014 - Seattle, WA

PDI 2014, the premier training event hosted by the American Society of Military Comptrollers, will be held at the Washington State Convention Center in Seattle on May 28–30.

The National Professional Development Institute (PDI) is the premier training event of the American Society of Military Comptrollers. Resource managers in the Department of Defense and US Coast Guard converge for a three day event whose objective is to enhance the skills and abilities that personnel in the financial and resource management community must possess to meet the challenges of today's defense financial manager.

​In addition to the more than 21 CPE credits available to attendees, the PDI provides a forum for attendees to network with leadership, peers, vendors and clients. This event is also the showcase for those individuals and teams who have been recognized for excellence by ASMC.

​ASMC home

Lessons from 25 years at the Treasury Department

David A. Lebryk has held numerous positions at the Department of the Treasury since 1989. In 2012, he was named the first commissioner of the Bureau of the Fiscal Service when the Financial Management Service and the Bureau of the Public Debt were consolidated. Lebryk spoke about his experiences at the Treasury with Tom Fox, a guest writer for On Leadership and vice president for leadership and innovation at the nonprofit Partnership for Public Service. Fox also heads up their Center for Government Leadership.

- Tom Fox, WashingtonPost.com
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AGA National Office Seeks Executive Director

AGA seeks a dynamic Executive Director (ED) to succeed Relmond Van Daniker, DBA, who retires Sept. 30. The ED serves as the Chief Executive Officer of our 15,000-member professional association serving all levels of government, academia and the private sector. Salary and benefits commensurate with experience. 

View the full job announcement. 

Applications due: April 7

Budget proposal fleshes out OMB's management agenda

More than six months after President Barack Obama announced his second-term management agenda, the Office of Management and Budget is putting some specifics behind it.

As part of the fiscal 2015 budget request sent to Congress Tuesday, the administration described initiatives around improving customer service at the IRS and the Social Security Administration. OMB also plans to fund and launch a civilian property realignment board and to include more funding for the National Science Foundation and the National Institute of Standards and Technology to make federally funded data more widely available.

OMB said it will also launch new and improved employee training programs and three pilot programs to enhance how agencies hire employees.

"The agenda is focused on delivering a 21st century government that is more effective, efficient and supportive of economic growth," said Beth Cobert, OMB's deputy director for management, Tuesday during a teleconference with reporters.

Cobert said the management agenda is focused on four themes:

• Effectiveness — delivering better, faster, smarter services to citizens and businesses.
• Efficiency — increasing quality and value in the government's core administrative functions.
• Economic growth — opening government funded data and research to the public to spur innovation and economic growth.
• People and culture — unlocking the full potential of the federal workforce and building the workforce the government needs for the future.

- Jason Miller, FederalNewsRadio.com
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Watchdog: Government Still Has Big Financial Management Problems

The usefulness of the government’s consolidated financial statements, though improved in recent years, remains hampered by “material weaknesses,” primarily at the departments of Defense and Health and Human Services, that prevent auditors from rendering an audit opinion, the Government Accountability Office reported.

In its mandatory audit of the government’s fiscal 2013 and fiscal 2012 consolidated financial statements released Thursday, the congressional watchdog pointed to three issues affecting the government’s estimate of its assets, liabilities and costs that urgently need improvement. They include “serious financial management problems” at the Defense Department; a governmentwide inability to adequately account for and reconcile intragovernmental activity and balances between federal entities; and an “ineffective process” for preparing the consolidated financial statements.

GAO noted that the Pentagon accounts for about 33 percent of the government’s total assets and about 16 percent of fiscal 2013 spending, but the agency has been given a “disclaimer of opinion” on its consolidated financial statements. Similarly, uncertainties in the growth rate of Medicare and Social Security, which account for 68.8 percent of the value of future expenditures in excess of future revenue, are responsible for HHS’ disclaimer of opinion.

Further crimping the government’s broader ability to get a grip on finances is an inability to determine the full extent of improper payments and actions to prevent them; unresolved information security control deficiencies; and effective management of tax collection activities, GAO said.

-Charles S. Clark, GovExec.com
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HUD's Danzig heading to OMB to lead performance office

Lisa Danzig is joining the Office of Management and Budget as its associate director for personnel and performance.

An OMB official confirmed Danzig is coming to the agency from the Department of Housing and Urban Development where she was the director of strategic planning and management since 2012. She recently moved out the director's role and into a special adviser's position. Henry Hensley now is the acting director in HUD's office, according to its website.

The official didn't say when Danzig would start at OMB.

Danzig replaces Shelley Metzenbaum, who left the administration in May and now is the president of the Volcker Alliance, an organization to help rebuild trust in government.

Dustin Brown has been the acting associate director since Metzenbaum left.

At OMB, Danzig will oversee the day-to-day operations of the administration's performance management initiative, including the cross-agency priority goals and the agency-by-agency establishment of high priority goals.

During her time at HUD, Danzig helped further the use of performance data to make decisions through the HUDStat program. Under HUDStat, senior officials (reviewed performance data and make decisions to improve or change key mission programs.

In fact, Performance.gov uses a HUD example to illustrate data-driven reviews.

Danzig also worked for the City of New York's Department of Housing, Preservation and Development as the assistant commissioner of the Strategic Planning Group. Additionally she spent two years in the private sector working for management consulting firm Katzenbach Partners.

-Jason Miller, FederalNewsRadio.com
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Werfel resigns from OMB

Danny Werfel, an influential player in efforts to improve federal financial management, and who also ran the IRS for much of last year, has resigned from his post as Office of Management and Budget controller and left federal service, an OMB spokesman confirmed.

Werfel stepped down effective Dec. 31, Frank Benenati said in an email. His low-key departure was not announced at the time and President Obama has not yet nominated a replacement for the Senate-confirmed position. In the meantime, Deputy Controller Norman Dong is serving as interim controller. Werfel, a career federal employee who had been controller since October 2009, could not be reached for comment.

Werfel was closely involved in the White House’s campaign to reduce improper federal payments and helped create the Treasury Department’s Office of Financial Innovation and Transformation, which seeks to move agencies toward more use of shared financial management services. Last May, Obama tapped him to temporarily lead the IRS after the previous acting commissioner left amid an uproar over an inspector general’s finding that the agency used “inappropriate criteria” for evaluating conservative groups seeking tax-exempt status.

While Werfel had been expected to stay as acting IRS commissioner only through the end of the fiscal year in September, he served until last month, when John Koskinen was confirmed as the agency’s permanent head.

Werfel, who regularly represented OMB at congressional hearings, also enjoyed cordial relationships with lawmakers of both parties.

-Sean Reilly, FederalTimes.com
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OMB and COFAR Offer Webinar: Uniform Grant Guidance Training—Supercircular

January 27, 2014 Webinar

The Office of Management and Budget (OMB) and the Council on Financial Assistance Reform (COFAR) will conduct a full-day webinar on the major grant reform “Supercircular” on Monday, January 27. The guidance, which was published as a final rule on December 26, 2013 deals with Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Register here for the webinar and to get on a mailing list for future announcements and training on the “Superciruclar.” The webinar will be conducted from 9 a.m. – 4:30 p.m. This is an opportunity for AGA members to not only get their questions answered, but contribute to the body of knowledge that will be developed, through an official Frequently Asked Questions (FAQ) document that OMB is developing to assist with implementation. Questions should be submitted to cofar@omb.eop.gov. https://cfo.gov/cofar Email: cofar@omb.eop.gov

2014 AGA Federal Financial Systems Summary and Links to Presentations

Pinpointing how to address challenges through leadership for future success takes center stage

By: Joseph Davis, Marketing & Communications Manager, AGA

It’s no secret the last year has been a tough one — fiscally and otherwise — for the federal government and its supporting agencies, which highlights the tough conditions government financial managers in particular, have had to endure. Though they produce constraints, budgetary and resource limitations also create opportunities for innovation and leadership.

Addressing challenges and paving a way for the road ahead was the center of attention as nearly 400 government and private sector financial managers took part in AGA’s 2014 Federal Financial Systems Summit (FSS) last week.

“Because of fiscal constraints, we have to do everything we can to focus on ‘mission’ and leadership,” said Norman Dong, Interim Controller, Office of Management and Budget (OMB), during a panel discussion centered on, “The Vision and Roadmap for Federal Financial Management and Systems.” He stressed that with the help of shared services — which remained at the forefront of this year’s FSS — OMB, as well as other government agencies, can focus on business outcomes rather than a “check-the-box approach” to financial management processes.

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READ THE EXECUTIVE REPORT HERE...

OMB Releases Federal Grant Reform Guidance

OMB and the Council on Financial Assistance Reform (COFAR) are pleased to inform you that today the Federal Register will file for online public inspection reforms to OMB Guidance entitled "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards." The guidance will be published in the December 26th edition of the Federal Register.

Please join us on Friday, December 20, 2013, at 11:45 a.m. for a COFAR webcast on the new guidance. Please visit www.cfo.gov/cofar for more information and to register for the webcast. Questions may be submitted to COFAR@omb.eop.gov.

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Financial management and freedom of choice

At a time when governments are increasingly looking to private-sector solutions to improve efficiency and solve complex challenges, the Treasury Department appears to be headed in the opposite direction when it comes to shared services, with potentially disastrous results.

In April, the CIO Council published the Federal Shared Services Implementation Guide, which establishes a strategy for moving agencies to shared-services environments for business areas such as budget formulation, human resources and, notably, financial management. Charged by the Obama administration with developing an implementation strategy, Treasury's Office of Financial Innovation and Transformation (FIT) developed a plan to streamline and consolidate financial management systems by tapping federal shared service providers (FSSPs) almost exclusively.

Although consolidation might be a good idea, major concerns exist about the viability of the chosen approach.

Representatives from the Software and Information Industry Association and its member companies met with Office of Management and Budget and FIT officials to understand how their effort would improve upon previous attempts, such as the Lines of Business initiative, which ultimately failed in 2006. So far, however, those conversations have led to more questions than answers, particularly concerning the role of commercial providers in the new shared-services arrangement.

Consolidation is a noble goal but not when it flies in the face of efficiency and rationality.

In fact, OMB and Treasury recently announced plans to "assign" all agencies to an existing FSSP, deviating from the April memo and leaving commercial providers completely out of the picture. That action makes little sense in theory and is not feasible in practice. It fails to recognize the complexity of the current federal financial management system environment.

Today only a handful of the agencies covered by the Chief Financial Officers Act receive their core financial management services from an FSSP, and most of those agencies are themselves FSSPs. Even Treasury, which is implementing the initiative and has its own shared-services center, does not host the core financial management systems of three of its largest bureaus. Presumably, those bureaus were deemed too large or complex to use Treasury’s center or another FSSP.

Most agencies are running their own financial management systems powered by commercial software, and those systems largely work as intended. And we know that commercial software has the right capabilities because even the FSSPs use commercial software as their backbone.

By virtue of their size, large federal agencies cannot simply pick up their financial systems and move them to an FSSP. If the Department of Homeland Security or Defense Department tried, the provider would be completely overwhelmed by the complexity and number of financial transactions generated on a daily basis. The cost of migration would far outweigh any projected cost savings.

Consolidation is a noble goal but not when it flies in the face of efficiency and rationality. The administration needs to wake up to the fact that an agency like DHS, with a $40 billion budget and 22 component agencies, is already operating at such a large and complex scale that moving it to a new FSSP would be an unwieldy, expensive mess.

Instead, the administration should take a step back and focus on its original objectives of boosting efficiency and saving money. To start, officials must determine whether there is any evidence that we are currently wasting significant money on our financial management systems. And because commercial software powers the federal government's financial systems -- even the FSSPs -- the private sector must be included in the reform process.

Ultimately, agencies need the freedom to choose the financial management solution that is best for them. They should not be bullied into switching to an FSSP that likely won't meet their needs.

-Mike Hettinger, FCW.com
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Viewpoint: A meaningful management agenda for CFOs

The Association of Government Accountants and Grant Thornton recently released their annual Federal Chief Financial Officer Survey. It explains how President Obama challenged his Cabinet to develop a new management agenda. This would entail a new CFO management agenda, part of which is suggested in the survey. Actually, the CFOs are in a position and capable of fulfilling a more meaningful management agenda.

First, however, one matter should be addressed. The survey states that “transparency and accountability are key elements in the Administration’s management agenda.” It then states that few program managers see value in audits. I would add that probably a few financial managers do not see value in financial audits. This is a real contradiction due, in part, to the fact that, based on their experience, many CFOs do not appreciate the importance of audited financial statements.

In every sector but the federal government, audited financial statements have been accepted as the norm. They are taken as a given, expressly to demonstrate accountability and the existence of reliable financial data. One could argue that financial audits in government are even more important because governments are spending money taken involuntarily from others. It is time to stop the debate about the value of audited financial statements. Clean audit opinions represent the basic blocking and tackling necessary for effective organizations.

The survey also says: “Effective program performance is an agency’s very reason for being, so this remains at the heart of the New CFO Management Agenda” and “More often than not, federal CFOs are charged with overseeing the entire performance management of the agency as a way to ensure that the organization’s results are measured and maximized.” But it also says that “almost two-thirds of CFOs interviewed do not believe that the recently passed Government Performance and Results Act (GPRA) Modernization Act has had an impact on their agency.” This dichotomy signifies what the CFO management agenda should be.

Many CFOs also have the performance improvement portfolio. Even if the CFO does not have the performance improvement officer designation, he or she can be a catalyst for advancement of sound performance management activities. As CFOs quoted in the survey stated: “Program offices pay more attention when it comes directly from the CFO, who controls the budget” and “CFOs can validate costs and cost savings.”

The first CFO Council, established in 1992 by the CFO Act, developed a vision for CFOs. It believed the CFO position should focus on more than processing financial transactions and assuring compliance. It postulated that better CFOs would be advisers to senior management; establish partnerships with program managers; and be major players in improving the management of resources. At the risk of generalizing, this expanded role is no longer universally fulfilled.

I propose that the CFO management agenda entail giving CFOs a proactive role in determining, improving and assuring program performance. Doing so would not require more time, only a change in perspective and approach. The Government Performance and Results Act, as amended, already requires the detail work of defining performance measures, determining and reporting performance results, and using performance information to drive performance improvement.

Therefore, CFOs should move beyond a silo whose primary objectives are reducing administrative costs and processing data that assure auditable financial statements. The CFO management agenda should involve CFOs in:

■ Working with their agency’s program managers to establish meaningful outcome and output measures for all programs.

■ Establishing and maintaining the systems that enable performance data to be collected for all measures.

■ Using the data to drive performance improvement, i.e., the already-defined role for the PIO.

■ Complementing the use of Performance.gov to demonstrate accountability for performance results with the use of Agency Financial Reports/Performance and Accountability Reports to show the relationship between performance results and the financial resources expended to achieve those results.

There is another element that should be included in the CFO management agenda. The ability to continue to deliver services in the face of shrinking budgets will require that programs be as cost-effective as possible.

Many CFOs have the budget development function in their agencies. As budget officers, they should demand that program managers specify the costs of producing the outputs for each program in order that preference can be given to the most cost-effective alternatives. I suspect that many program managers cannot provide that information. Hence, another element for the agenda is that CFOs, as the accounting officers, should build the cost accounting systems with which those costs can be ascertained and the budget officers’ requests be met.

None of these pieces for a new CFO management agenda are short-term. Nor will they furnish the low-hanging fruit that makes for good press releases. But they are the kind of CFO management agenda items that can produce major, meaningful and long-lasting results.

-Hal Steinberg, FederalTimes.com
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Hal Steinberg is technical director for the Association of Government Accountants’ Certificate of Excellence in Accountability Reporting program. He previously was acting controller and deputy controller of the Office of Federal Financial Management and associate director for management in the Office of Management and Budget.

Agencies can’t always tell who’s dead and who’s not, so benefit checks keep coming

The U.S. government has a problem with dead people. For one thing, it pays them way too much money.

In the past few years, Social Security paid $133 million to beneficiaries who were deceased. The federal employee retirement system paid more than $400 million to retirees who had passed away. And an aid program spent $3.9 million in federal money to pay heating and air-conditioning bills for more than 11,000 of the dead.

These mistakes are part of a surprising glitch at the heart of the federal bureaucracy. Because of a jury-rigged and outdated system meant to track deaths, the government has trouble determining exactly which Americans are deceased.

As a result, Washington is bedeviled by both the living dead and the dead living.

The task of tracking deaths for the federal bureaucracy is an enormous one; about 2.5 million Americans die each year. Federal officials say the vast majority of these cases are handled correctly: The death is recorded. Government money is no longer sent to that person.

But not always. In fact, glitches in the system have paid more than $700 million to the dead, according to government audits performed since 2008.

The trouble with dead people often begins with something called the Death Master File, which is kept by the Social Security Administration. Every day new reports are added, provided by relatives, funeral homes and the state agencies that issue official death certificates.

The list contains 90 million reports.

The problem is that not all of them are correct.

Now, after years of inattention, President Obama and two senators have laid out ideas to improve the system. In his 2014 budget, Obama requested $22 million to improve the death reports that come in from states by upgrading their systems to transmit faster and more accurate data.

In the Senate, Carper and Sen. Tom Coburn (R-Okla.) have written a bill that would require all federal agencies to check the Death Master File before paying benefits. It would also give all agencies access to the full file, not just the partial one. And it would require new efforts to make sure the data in the file are accurate.

-David A. Fahrenthold, WashingtonPost.comREAD MORE...

Interior takes financial management system to an enterprise cloud

The Interior Department’s Financial and Business Management System is being migrated to an enterprise cloud run by Virtustream, the company reported.  

FBMS provides the administrative backbone to support DOI’s financial transactions, acquisitions, travel, grants and subsidies, and property and fleet management functions across 60 offices. When fully deployed, it will replace and/or integrate 160 of Interior's 162 legacy business systems and subsystems, according to the agency website.

Virtustream, a provider of cloud software and services, is working with prime contractor Unisys to move the financial management system, which is based on SAP software, to its Virginia-based data center, which complies with security guidelines stipulated by the Federal Information Systems Management Act (FISMA).

SAP application hosting is the first project Interior officials and contractors are tackling as the department expedites its move to the cloud. In August, Interior awarded a set of contracts valued at up to $10 billion to 10 vendors in a bid to transform overall IT capabilities. 

Interior expects to save $100 million each year from 2016 to 2020 by moving applications to the cloud. 

Virtustream is SAP-certified in both cloud and hosting services. The company is currently going through the process to get security accreditation for its enterprise cloud under the federal government’s Federal Risk and Authorization Management Program, said Kevin Dattolico, chief sales officer for Virtustream.

-Rutrell Yasin, GCN.com
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AGA Executive Reports Address Shared Service and Improper Payment Reduction Strategies

AGA released two reports identifying specific steps that all levels of government can take to get more for their money, promote program excellence and reduce improper payments. The papers summarize two special sessions conducted this summer during AGA's training event in Dallas.

One session examined lessons learned by governments at the forefront of implementing shared service arrangements; the other explored the feasibility of developing a common strategy to reduce improper payments across all levels of government.

The reports, entitled, "Envisioning and Realizing the Promises of Shared Services," and "Reducing Improper Payments through Collaboration," are available in AGA's Thought Leadership Library.

The sessions revealed that shared services can be used to accomplish critical government objectives, including efforts to mitigate improper payments. AGA Executive Director Relmond P. Van Daniker explained that a number of federal databases are actually shared services that help states mitigate improper payments by improving their ability to determine program eligibility and payment amounts.

For example, "the National Directory of New Hires maintained by the U.S. Department of Health and Human Services, helps states mitigate improper payments," Van Daniker said. "The national directory allows state agencies to match new hires, reported by employers, with individuals owing child support. It further helps state agencies reduce unlawful or erroneous public assistance payments, including payments for welfare, Supplemental Nutrition Assistance Program (formerly food stamps) and Medicaid payments."

In a similar vein, the Treasury Offset Program (TOP) is a shared service that collects delinquent debts owed to federal agencies or states. Jeffrey Schramek, U.S. Department of the Treasury(Treasury), spoke during each session, alluded to the success of TOP. Under TOP, federal agencies and states can offset delinquent debts - including overpayments -against appropriate federal and state payments. "TOP's successful state program recovered more than $3 billion for the states, alone, in 2012," said Schramek.

Arizona Comptroller, Clark Partridge, co-chair of AGA's Intergovernmental Partnership, highlighted how AGA's intergovernmental ToolKits and guides help to reduce improper payments. During the session on improper payments, Partridge identified the Intergovernmental Partnership's Cooperative Audit Resolution and Oversight Initiative guide as an excellent resource to reduce improper payments by determining the underlying cause of audit findings. AGA's ToolKits and guides are available online and are free to use.

Cooperation, and the ability to agree on a shared mission, is fundamental to developing successful shared-service arrangements, according to Dan Murrin, Partner, Ernst & Young (EY). EY sponsored the session on shared services and Murrin moderated the session on improper payments.

Murrin said that governments can be more successful in mitigating improper payments by working together. 

"Governments can develop shared systems that help verify eligibility and payment amounts," Murrin said. "There are opportunities to establish regional eligibility systems and to develop 21st-century cooperative arrangements that leverage investments made by governments." Murrin added that the use of shared services provides opportunities to standardize processes and improve governments' ability to work together in preventing improper payments.

Richard Gregg, Treasury's Fiscal Assistant Secretary, issued a challenge to government financial officials while closing the session on shared services, "The benefits of shared services are too large for us to ignore as a government." Gregg further stated, "To realize the cost savings and the better flow of information that can be derived from shared services, the government accountability community must develop the courage to act and make a commitment to change."

According to Van Daniker, AGA will build on information contained in the reports to forge alliances among officials at all levels of government in an effort to improve government performance and increase accountability.

From 500 to 70, OMB reduces number of financial system requirements

The Office of Management and Budget actually canceled a financial management circular earlier this month.

Circular A-127 no longer governs agency financial management systems. Instead, OMB rolled a small set of these old requirements into the new Appendix D of Circular A- 123 back in September.

OMB said Appendix D went into effect Oct. 1 and therefore rescinded all previously issued versions of Circular A-127 from Dec. 19, 1984; July 23, 1993; June 10, 1999; Dec. 1, 2004; and Jan. 9, 2009.

Norman Dong, the acting controller at OMB, said the goal of the rescission of A- 127 and the new Appendix D is to improve the quality, utility and the reliability of federal financial information.

The new guidance features only 70 requirements that OMB hopes will drive agencies toward outcomes such as reporting timely financial data or eliminating waste, fraud and abuse.

Dong said Appendix D now focuses on ways agencies can gauge how well they are in meeting the requirements of the Federal Financial Management Improvement Act (FFMIA), such as the number of and nature of material weaknesses and audit opinion from the inspector general or third party analysis. Formerly A-127, and now Appendix D, help agencies implement FFMIA.

Another major change with Appendix D is the focus on shared services. OMB has strongly encouraged agencies to move to federal shared service providers for financial management when appropriate, but some of the requirements under A-123 made it more difficult.

Dong said one example of this change in approach to financial management happened when a service provider and customer agency initially had discussions about hosting the system and identified more than 700 gaps between how the customer and provider were doing business. But, he said, when they shifted the conversation away from how they were doing business and focused on what needs to be achieved, the number of differences dropped dramatically.

OMB eventually will fold Appendix D into the rewrite of Circular A-123, governing the internal controls of agency financial management.

Dong said the goal is to rationalize and harmonize OMB's guidance on federal financial management. He said it's important to make sure the requirements are reasonable and rationale.

OMB announced in February it would lead an effort to do the first major grants policy rewrite in years.

Dong said OMB will release the A-123 update in the coming months. He said OMB is conferring with agencies on a number of different aspects of the rewrite, including the improper payments requirements.

In addition to the A-123 update, OMB released a new bulletin on Oct. 21, giving agencies an updated set of minimum standards for their financial audits.

OMB made 26 changes to the 67-page document around areas such as reporting, written representation from management and the scope of the audit.

-Jason Miller, FederalNewsRadio.com
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DHS CFO Sherry heading to the IRS

Peggy Sherry is taking her management skills to a new agency.

The Homeland Security Department's CFO is heading to the IRS, the agency confirms.

Sherry will be the deputy commissioner for operations support, replacing Beth Tucker, who retired at the end of September.

Sherry will join the IRS Nov. 4 after spending more than six years at DHS.

In her new role, Sherry will direct IRS' support functions, including the CFO, human capital office, information technology, privacy and agencywide shared services.

The deputy commissioner is one of the top two positions at the IRS under the service's commissioner.

She becomes the fourth senior official to join the agency this year. Werfel became the acting commissioner in May after the scandal involving the IRS improperly singling out conservative groups for special scrutiny.

-Jason Miller, FederalNewsRadio.com
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OMB updates financial reporting rules

What: Appendix D to Circular No. A-123, Compliance with the Federal Financial Management Improvement Act of 1996

Why: Federal agencies are getting new flexibility in modernizing their financial management systems, per a Sept. 20 memo from Sylvia Burwell, director of the Office of Management and Budget.

The new framework changes the way agencies comply with the Federal Financial Management Improvement Act (FFMIA), to eliminate some restrictions on technology products and phase out a testing and certification program for the deployment of financial management software, while paving the way for the use of shared services across agencies. The OMB has also established a set of common goals for financial management across all federal agencies. The memo also charges the Treasury Department with developing requirements for federal financial management systems.

-Adam Mazmanian, FCW.com
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AGA's Financial Management Standards Board (FMSB) Seeks Input on New Reporting Framework

FMSB seeks input on the development of a new reporting framework targeting executive and legislative decision-makers. 

Comments due by December 1st.

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GCN Names Danny Werfel Government Executive of the Year

GOVERNMENT EXECUTIVE OF THE YEAR
Werfel championed technology's problem-solving power

With newly minted degrees in law and public policy in the late 1990s, Danny Werfel might not have seemed an obvious choice as a passionate advocate of using technology to solve the ills of government. By the time he became controller of the Office of Management and Budget in 2009, however, he was a leading force for the application of technology in federal financial management.

-Brian Robinson, GCN.com
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Morin paints challenging way ahead for Air Force's audit readiness

The Air Force is facing an ever increasing likelihood that it will not get its financial house in order by the first congressionally-mandated 2014 deadline.

By the end of this fiscal year, all of the Defense Department must be able to develop an auditable statement of budgetary resources.

But Jamie Morin, the Air Force's outgoing comptroller and President Barack Obama's nominee to be DoD's second director of the Cost Assessment and Program Evaluation (CAPE) office, told lawmakers Thursday the service would struggle to meet the 2014 deadline.

Morin said meeting the financial auditability deadlines remains an important priority for DoD and there has been real progress made over the last few years.

The Air Force's struggles are not new. Morin told lawmakers in 2011 that the Air Force's systems were among the biggest roadblocks it faces.

Lawmakers also pressed Jo Ann Rooney, the President's nominee to be the undersecretary of the Navy, on the service's ability to meet the congressional financial mandates.

Rooney said she didn't have details about the Navy's status in part because of the fiscal uncertainty that hasn't let the service hire skilled workers and plan accordingly.

Sen. John McCain (R-Ariz.) told Rooney to go back and figure out where the Navy stands on meeting the legal deadlines. He said if she doesn't know the answer, she isn't qualified to hold the undersecretary job.

With the first deadline now less than a year away, lawmakers will pay close attention to DoD's progress, and want consequences should they miss the 2017 deadline to have an auditable financial statement.

Several members of the Armed Services Committee co-sponsor the Audit the Pentagon Act of 2013, introduced by Sens. Tom Coburn (R-Okla.) and Joe Manchin (D-W.Va.). The bill states that if DoD fails to obtain a clean audit opinion by 2018, the military services would be barred from spending money to fund new major acquisition programs beyond what's known as "milestone B" — in essence, the actual engineering and manufacturing of new systems.

-Jason Miller, FederalNewsRadio.com
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AGA Publishes 2013 Federal CFO Survey Results

CFOs: Something's Gotta Give

Survey on federal financial executives shows struggle to achieve results in the face of increasing requirements and a demoralized workforce

Continuing to provide adequate services in the face of unprecedented across-the-board cuts; a declining, dispirited workforce; and growing financial and other management requirements is the top concern of federal Chief Financial Officers (CFOs), according to the 18th annual Federal CFO Survey conducted by the Association of Government Accountants (AGA) in partnership with Grant Thornton LLP.

CFOs crave a clear and consistent framework that helps them set priorities and accomplish goals important to their leadership. Unless a new, focused management agenda is put in place, CFOs fear they can't continue to meet growing requirements in the face of extraordinary challenges.

When asked about their greatest challenges, almost a third of financial executives interviewed and a quarter of those who responded on-line said the services they provide are at risk in the face of growing requirements and declining resources, including people. "Government needs to adjust expectations based on the funding it has. Government can do all the old jobs poorly, or it can do the new jobs well," noted AGA Executive Director, Relmond Van Daniker. He continued, "CFOs cited many serious short- and long-term challenges. However, they are in a position to lead their agencies and the government as a whole to sustainable solutions to these challenges."

Other findings of the survey illuminated the challenges facing CFOs. They met the data quality and reporting challenges of the Recovery Act, but they do not see lasting benefits from those transparency efforts. Internal control activities produce benefits, but their application appears focused on financial reporting rather than program performance. CFOs embraced major Administration initiatives like the Campaign to Cut Waste and Reducing Improper Payments, but because they have to implement the mother-of-all across the board cuts, more mature cost management is lacking.

AGA and Grant Thornton conducted in-person interviews with more than 100 U.S. federal financial leaders and senior leaders of oversight groups such as the Office of Management and Budget (OMB). Approximately half of these interviewees had job titles of CFO or Deputy CFO; others were direct reports or other financial executives. Almost 200 other federal financial leaders participated in an online survey. Both online and in-person survey instruments included closed and open-ended questions. AGA and Grant Thornton have conducted this survey annually since 1996.

The report is the product of AGA's Corporate Partner Advisory Group (CPAG) research project sponsored by Grant Thornton LLP. The project leader for this research report was Denise Lippuner, CPA.

READ THE REPORT HERE...

OMB Circular A-123, Appendix D Becomes Effective October 1, 2013

On September 20th, the interim final version of OMB Circular A-123, Appendix D, Compliance with the Federal Financial Management Improvement Act of 1996 (M-12-23) was released.  Appendix D, effective October 1, 2013, provides additional guidance and defines new requirements for Financial Management Systems determining compliance with the FFMIA.  Appendix D rescinds all previously issued versions of Circular A-127, Financial Management Systems.

Please see http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-23.pdf for OMB Circular A-123, Appendix D.

Financial system shared services still lacks governance model

Establishing a governance model for the latest Office of Management and Budget attempt to move federal financial managed systems onto a shared systems model remains an unfinished priority, officials said during a Sept. 25 panel.

OMB released in March a memo (.pdf) requiring agencies to use "with limited exceptions" a shared services solution when modernizing core accounting or mixed financial systems, with preference given to federal agencies designated as a shared service provider. The idea is that shared infrastructure for processes that can be standardized within and across agencies will reduce spending on financial systems, which currently consumes about $8.4 billion annually, said Elizabeth Angerman, director of the Office of Financial Innovation and Transformation within the Treasury Department. She spoke at an AFCEA-Bethesda morning event in Rockville, Md.

The concept is similar to the George W. Bush-era OMB's financial management line of business initiative, which also faced difficult governance questions that were never fully resolved; the FMLoB effort fell further behind when in its first term, the Obama administration de-emphasized Bush-era OMB policies.

"We don't have the governance structure set up, and that is a concern for our politicals--that they don't have a say, that it'll be some other secretary, and that secretary is five, six levels removed," said Myrian Myer, Labor Department associate deputy chief financial officer.

If the expectation is that agencies are (again) going to contract with each other for financial system services, "what are the rules, who gets a say, how is that going to work?" Myer said. "All those things need to be figured out, and they can be--but they haven't yet."

-David Perera, FierceGovernmentIT.com

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OMB gives agencies more control over financial management systems

Agencies are gaining more control over how to upgrade their financial management systems.

Instead of a strict set of rules around the technology requirements for federal systems, the Office of Management and Budget will rescind Circular A-127 that governs financial systems, and, through this memo, move and simplify those regulations into Appendix D of Circular A-123.

OMB Director Sylvia Burwell wrote in a memo to agency leaders that said, "The goal of this Appendix is to transform our compliance framework so that it will contribute to efforts to reduce the cost, risk, and complexity of financial system modernizations. The objective of this approach will be to provide additional flexibility for federal agencies to initiate smaller-scale financial modernizations as long as relevant financial management outcomes (e.g., clean audits, proper controls, timely reporting) are maintained."

In a nutshell, implementing the Federal Financial Management Improvement Act (FFMIA) has become arduous and ended up forcing agencies into costly financial management upgrades.

So now Appendix D is more streamlined. OMB reduced the number of requirements from more than 500 to about 60 that focus on outcome or output.

OMB began to dismantle FFMIA regulations over the last several years. The administration closed down the Federal Systems Integration Office (FSIO) in March 2011 and moved a lot of the oversight and standards work to the Treasury Department's Office of Financial Innovation and Transformation (OFIT).

-Jason Miller, FederalNewsRadio.com
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