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Thursday, December 28, 2006

Rep. Platts honored for role in improving federal financial management

Rep. Todd Platts, R-Pa., has been named the 2007 recipient of the Distinguished Federal Leadership Award.

The honor is given annually by the Association of Government Accountants, an organization of finance professionals working in federal, state and local governments, the private sector and academia.

The award recognizes elected or appointed federal officials who exemplify and promote excellence in government management. Awardees must have demonstrated leadership in enhancing financial management through legislation, regulations, practices, policies and systems.
Platts is the outgoing chairman of the House subcommittee on government management, finance and accountability. According to information from the subcommittee, he held 59 hearings during the 108th and 109th congressional sessions.

Oversight topics included government-wide accounting, systems issues, debt collection and internal financial controls.

Platts’ interest in improving internal controls isn’t new.

In 2004, he helped craft the Department of Homeland Security Financial Accountability Act and shepherded it through Congress. The law marked the first time an agency was required to have its internal controls audited.

The award will be presented by AGA representatives at the organization’s national leadership conference in February.

-Aimee Curl, FederalTimes.com

Friday, December 22, 2006

Multiple DHS agencies may have violated funding law

Auditor KPMG warned the Homeland Security Department of multiple potential violations of a fiscal law barring agencies from spending money in excess of appropriations, according to a new report from the department's inspector general.

The report, released Wednesday, identified two DHS agencies as having possibly violated the Anti-Deficiency Act, though it did not describe the violations.

Transportation Security Administration managers "concluded that a violation of the Anti-Deficiency Act may have occurred in fiscal years prior to 2006," the IG said, and DHS' Federal Law Enforcement Training Center "initiated a review of the classification of certain liabilities, recorded in their accounting records, that may identify a violation of the [act]." The report did not specify a time frame in which the alleged violations may have occurred.

Earlier this week, Government Executive reported that Immigration and Customs Enforcement bureau officials expressed concern in an internal memorandum that the agency had violated the Anti-Deficiency Act by providing the U.S. Customs and Border Protection bureau, also within DHS, with non-reimbursed detainee transportation services.

DHS as a whole, and four agencies within the department, have financial reporting problems so significant that there's insufficient data to determine how far their problems reach, KPMG told the inspector general's office.

The DHS Office of Financial Management, the Coast Guard, TSA, the Federal Emergency Management Agency and ICE "were unable to provide sufficient evidence to support account balances," DHS Inspector General Richard Skinner told Michael Chertoff, the department's secretary, in a letter that accompanied the report.

The inspectors credited ICE for achieving the "greatest improvement in financial management and reporting" over fiscal 2006, but stated that the agency "has not completely resolved its internal control problems."

In his letter to Chertoff, the IG wrote that Coast Guard officials "acknowledged to the auditors that long-standing procedural, control, personnel and cultural issues existed" and that "progress has been slow" to resolve management and reporting issues.

The department's chief financial officer, David Norquist, responded to Skinner with a letter acknowledging "continued and serious challenges." Norquist said the department will soon publish plans for corrective actions.

-Jonathan Marino, GovExec.com


Thursday, December 21, 2006

EEOC gets third consecutive 'unqualified opinion' on annual financial statements

The US Equal Employment Opportunity Commission (EEOC) has earned an unqualified opinion on its 2006 financial statements, the third straight year in which independent auditors have performed an extensive examination of the EEOC's financial records and reported a clean fiscal bill of health for the federal agency.

The audit report is a focus of the EEOC's Performance and Accountability Report (PAR) which the agency has released for Fiscal Year 2006, which ended on September 30. The auditor's judgment signifies that they have performed an extensive examination of the EEOC's financial records and have no reservations regarding the accuracy and fairness of its presentation, as well as the application of generally accepted accounting principles.

The PAR, which is required by the Office of Management and Budget for most federal agencies, highlights the EEOC's efforts to be more customer-centered and results-oriented in accordance with the Presidents Management Agenda.

"I am pleased that the Commission has received an unqualified opinion for the third consecutive year from independent auditors," said EEOC Chair Naomi C. Earp. "This clean fiscal bill of health is another benchmark in our efforts to move forward in the financial management of the agency. I commend the effort of our dedicated staff on these exemplary results."

The EEOC is required to prepare and submit audited financial statements by the Accountability of Tax Dollars Act of 2002, which was signed into law by President Bush on November 7, 2002. Additionally, the Improved Financial Performance component of the Presidents Management Agenda also requires federal agencies to obtain and sustain clean audit opinions in their financial statements.

The EEOC's Chief Financial Officer, Jeffrey A. Smith, said, "In Fiscal Year 2006, guided by an examination and update of our Strategic Plan, the EEOC continued its focus on accountability and results through improved performance metrics, budget planning and sound financial management. We look forward to continuing this record of excellence in Fiscal Year 2007."

IG outlines Homeland Security Department management challenges

Disaster response, acquisition management and financial management remain major challenges for the Homeland Security Department, according to the department’s independent watchdog.

In a report released Dec. 20, Inspector General Richard Skinner writes that almost four years after the government’s largest reorganization in a half-century, the department “still has much to do to establish a cohesive, efficient and effective organization.”

For the fourth straight year, DHS could not obtain an opinion on its financial statements in 2006, due to component agencies’ inability to produce enough support for their stated financial positions. In September, the department’s new chief financial officer, David Norquist, suspended efforts to merge the eight financial systems in the department, calling the effort too disruptive.

Auditors have identified material weaknesses in areas like budgetary accounting and undelivered orders at DHS agencies, particularly at the Coast Guard and Immigration and Customs Enforcement. The components have corrective action plans for those problems, but a separate report by auditor KPMG LLP calls many of those plans insufficient and behind schedule.

-Daniel Friedman, Federal Times.com


Tuesday, December 19, 2006

Federal financial report reveals ongoing reliability gaps

Agencies continue to struggle with major weaknesses in financial reporting in the first year that they have had to account for internal controls, the Treasury Department said in its fiscal 2006 Financial Report of the U.S. Government.

All major agencies improved financial management by meeting the accelerated Nov. 15 deadline for their financial reports and complied with new requirements to report on their assessment of internal controls over financial reporting under Office of Management and Budget’s Circular A-123.

Of the major agencies, 18 received clean audit opinions this year, while auditors said the information from five agencies was unreliable. These were the Defense, Energy, Homeland Security and State departments, and NASA. The Transportation Department earned a qualified opinion because it had serious weaknesses.

The next scorecard, rating agency performance under the President’s Management Agenda for the period ending Dec. 31, will reflect findings from the government’s financial report, the report said. For example, several agency audit opinions and internal controls declined during the 2006 fiscal year.

OMB will work with the Chief Financial Officers Council over the coming year to identify potential areas for more guidance and to share best practices that agencies found helpful, the report said. OMB also will continue to incorporate key milestones from agencies’ plans for this year’s assessment into the improved financial performance category of the PMA scorecard to ensure that agencies meet their goals.

“Federal agencies continue to show their resolve to implement rigorous corrective action plans to reduce material process, systems and control weakness,” said the report released Friday.

Improved financial business practices, management systems and reporting tools assist agencies in the timeliness, accuracy and reliability of financial information, which better accounts for their use of federal dollars.

Another agency challenge is implementing certified financial management systems successfully. The Financial Management Line of Business will help agencies meet federal standards through use of shared services. Many FMLOB initiatives are under way, including standardizing financial processes across government, promoting the use of shared-services providers to support many customers and increasing transparency by establishing performance measure to evaluate results.

OMB in the fall issued guidance for agencies to migrate to shared-services providers and a draft of standard governmentwide accounting classifications.

In an accompanying report, the Government Accountability Office said that a significant number of material weaknesses related to financial systems, recordkeeping and financial reporting, and that incomplete documentation continued to prevent it from giving an opinion on the government’s consolidated financial statement, as has been the case since 1997. Major problems include the government’s inability to:
  • Determine Defense Department property, equipment and inventories
  • Support major portions of operations cost, especially at DOD
  • Account for and reconcile transactions between agencies
  • Provide adequate systems and personnel to address the magnitude of fiscal 2006 financial reporting challenges, including further development of Treasury’s Governmentwide
  • Financial Report System.

-Mary Mosquera, GCN.com


Internal memo raises concerns about DHS funds transfer

The Immigration and Customs Enforcement bureau may have violated federal funding regulations when it transferred employees and funds to U.S. Customs and Border Protection, its sister agency in the Homeland Security Department, for a detainee transportation program, according to an internal ICE document obtained by Government Executive.

A February 2006 memorandum from ICE field managers to Julie Myers, the head of the bureau, and John Torres, then-acting director of ICE's Office of Detention and Removal Operations, expressed concern that the agency broke the law in its haste to provide CBP's Border Patrol with the transportation services. An ICE official testified last month that the bureau shifted $50 million worth of resources, including employees, to CBP in fiscal 2006 for the services.

"Legally, there is a concern... that ICE [employees who] provide transportation services to CBP without reimbursement for such services is an improper augmentation of CBP's appropriations," the Feb. 2 memorandum stated. "Nonreimbursable details constitute an improper augmentation of the receiving agency's appropriations and conflict with the principles of federal appropriations law."

The ICE document cited a federal law stating: "Appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law."

A staffer for the House Appropriations Committee, provided with the documents Government Executive obtained, said "a reasonable reading" of the February memo would lead to the conclusion that ICE's fund switch violated the Anti-Deficiency Act.

In testimony on Nov. 27, 2006, as part of an arbitration case in which ICE was involved, an ICE official stated that the agency transferred the $50 million to CBP's Border Patrol for detainee transports, but said he did not know doing so violated federal appropriations law.

The House Appropriations Committee source said the funding switch could result in sanctions against ICE or the Homeland Security Department. The source said there's a possibility CBP might end up having to reimburse ICE for the resources used.

-Jonathan Marino, GovExec.com


Monday, December 18, 2006

CGI to Upgrade GSA System

The General Services Administration has hired CGI Group of Fairfax to upgrade the financial management system that it uses internally and provides to other agencies.

Under an $18 million, four-year contract, CGI Group will implement the company's Momentum 6.1 financial management software and move it to servers at the company's data center.

The center will also provide storage for the GSA's database of financial information and information from 40 agency customers to which GSA provides financial-management services.

The agency implemented Momentum in late 2001 and early 2002, replacing a 30-year-old system.

-Jason Miller, WashintonPost.com


Saturday, December 16, 2006

Attorney General Gonzales Announces Appointment of Lee Lofthus as Assistant Attorney General for Administration

WASHINGTON, Dec. 15 /U.S. Newswire/ -- Attorney General Alberto R. Gonzales today announced the appointment of Lee Lofthus as Assistant Attorney General for Administration. Lofthus has served in an acting capacity since June 1, 2006, following the resignation of former Assistant Attorney General for Administration, Dr. Paul Corts.

"Lee has demonstrated that he is an exceptional manager, advisor and leader," said Attorney General Gonzales. "We are extremely fortunate that, with his breadth of experience and commitment to the Department of Justice, he will continue to serve in this important role."

Under the leadership of the Assistant Attorney General for Administration, the Justice Management Division (JMD) serves as the management arm of the Department of Justice, advising the Attorney General and Deputy Attorney General on various issues related to the operation of the Department. The Assistant Attorney General for Administration serves as the Department's Chief Financial Officer, and his responsibilities include Department-wide financial reporting, budget formulation and execution, accounting operations, asset forfeiture fund operational support, procurement and debt management support.

Lofthus also oversees facilities management, human resources, business services and planning. He is a key executive liaison with the congressional Appropriations Subcommittees on appropriations matters. Lofthus is also responsible for key financial initiatives in the President's Management Agenda, and the issuance of the Department's public financial statements.

Lofthus has served in several financial management positions with the Department of Justice for more than 20 years. He joined the Department in 1982 and since that time, has held senior management positions overseeing financial operations, financial policy, reporting and systems. Prior to his appointment as Acting Assistant Attorney General, Lofthus served as the Principal Deputy Assistant Attorney General/Controller of JMD. He also served as the Department's Deputy Chief Financial Officer. Prior to becoming Controller, he was the Director of the Finance Staff. Earlier in his career, he served as the Chief of the Finance Branch for the Federal Bureau of Prisons.

Lofthus received his M.B.A. in 1982 from The American University in Washington, D.C., with a concentration in financial management.

Friday, December 15, 2006

Government fails 10th consecutive audit

As anticipated, the federal government flunked its audit for fiscal 2006, with $797 billion, or 53 percent, of its reported assets and an additional $790 billion, or 27 percent, of net costs, on the balance sheets of five agencies that could not be fully audited.

This marks the 10th year in a row in which the government's consolidated audit statement received a judgment of "no comment" from auditors. The Defense, State and Homeland Security departments, as well as NASA, received disclaimers on their 2006 audits. The Energy Department, which was only partially auditable due to a disclaimer in 2005, earned a qualified opinion -- a step up from no opinion but still short of a clean bill of health.

Contributing to the problems at those agencies is the difficulty of valuing some of the complex, one-of-a-kind systems they own. After new accounting rules for property went into effect in 2003, about $325.1 billion in military equipment appeared on the books for the first time, according to a Treasury Department analysis.

In fiscal 2006, the government's total reported assets increased $48.6 billion, to $1.5 trillion.

As it did last year, the Government Accountability Office cited three major shortcomings: financial management problems at the Defense Department, an inability to account for and to reconcile balances that cross agency lines, and an ineffective process for preparing financial statements.

The consolidated report also showed that the Transportation Department and Smithsonian earned qualified opinions on their audits, indicating significant problems.


Statement by Treasury Secretary Henry M. Paulson on Resignation of Don Hammond

Washington, DC– Treasury Secretary Henry M. Paulson issued the following statement on the resignation of Treasury Fiscal Assistant Secretary Don Hammond:"Don Hammond's 23-year career at the Treasury Department has been marked by integrity, collegiality, and total dedication to the American people. Don is a public servant in the best sense of the term, always putting the needs of the public first. His efforts have made the Department more responsive to public needs and more efficient in meeting its responsibilities.

"As Fiscal Assistant Secretary for the past nine years, Don has been the key player in managing the government's cash flow and overseeing financial management activities. And his role as liaison with the Federal Reserve has no doubt prepared Don well for his next position.

"Don's deep knowledge of American financial operations and his cheerfulness in carrying out his duties have made him a valued and much-admired colleague. I wish Don all the best as he starts the next chapter in his distinguished public service career."

Source:Dept. Treasury

Wednesday, December 13, 2006

Fiscal mess awaits new defense chief

Gates inherits 'worst-managed' federal agency

Iraq isn't the only pressing issue Robert Gates will face when he becomes the 22nd U.S. defense secretary on Monday.

High on his list of priorities will likely be the enormous task of cleaning up the Pentagon's tangled finances, which outside auditors lambaste as so chaotic that no one knows how much money is being spent on defense at any given time.

At Gates' confirmation hearing last week, Sen. Elizabeth Dole, R-N.C., told him that the White House's Office of Management and Budget believes the Pentagon's financial management systems are in such a mess "that independent auditors still cannot certify the accuracy of the financial statements." Gates said he was not familiar with the full extent of the problems and would study them.

Sen. Carl Levin, D-Mich., incoming chairman of the Senate Armed Services Committee, which has responsibility for overseeing Pentagon spending, told reporters recently that he will make oversight of financial management a top priority "to make sure that the American people are getting a proper return on their tax dollars and that Pentagon activities are proper, lawful and transparent."

-Eric Rosenberg, Hearst Newspapers


Monday, December 11, 2006

Waxman revamps Government Reform Committee

Incoming chairman Henry Waxman, D-Calif., has announced he will reorganize the House Government Reform Committee for the next Congress.

The new structure will shrink the number of subcommittees from seven to five:

  • National security and international relations.
  • Domestic policy, including the Office of National Drug Control.
  • Federal work force, post office and the District of Columbia.
  • Government management, organization and procurement, including property and intergovernmental relations.
  • Information policy, census and the National Archives.

There are no longer separate subcommittees for energy and resources, and regulatory affairs.

“My goal is to consolidate the jurisdictions of some of the subcommittees so that the jurisdiction of each subcommittee will have broad appeal and will engage the attention of the subcommittee members,” Waxman said in a statement.

He also noted that he had discussed the matter with current committee chairman Rep. Tom Davis, R-Va., “as I intend to do when important issues come before the committee next year.”
Davis yesterday was elected ranking member of the new Congress’ Government Reform Committee by his Republican colleagues.

“Even in the minority, I’m optimistic about building on our record of reform, serious oversight and good government,” Davis said in a statement.

-Aimee Curl, FederalTimes.com

Strategic retreat - OPM cancels contract after requirements test fails

The agreement between the Office of Personnel Management and the Bureau of Public Debt’s Administrative Resource Center to cancel their relationship under the financial-management Line of Business initiative is not a story of another failed government contract.

Just the opposite. It could prove to be a breakthrough in federal project management and a valuable lesson for other agencies.

OPM determined that ARC could not fully meet its requirements and decided to recompete the contract instead of spending millions of dollars to force the proverbial square peg into a round hole.

“Both organizations came to the understanding that, with the Bureau of Public Debt’s configuration of Oracle, it would be better for us to look at an alternative source,” said OPM chief financial officer Clarence Crawford. “This was just part of our due diligence. We saw issues, we talked to them and looked at alternatives.”

Developing an RFP

OPM will now hold a competition between other federal shared-services providers and the private sector, Crawford said. The agency is working with the Office of Management and Budget to develop a request for proposals. Crawford would not give a timetable for releasing the RFP.

OPM in August 2005 became the first large agency to sign with a shared-services provider. In the 14 months since they signed a contract, OPM has spent about $400,000 developing the requirements and conducting pilots with ARC, Crawford said.

OMB officials and others applauded the decision not to move forward. And some observers say it is a validation of OMB’s insistence that agencies fully compete financial-management services instead of just looking at the public-sector providers’ skills and choosing one.

An industry source said the Housing and Urban Development Department wanted to move to the Federal Aviation Administration for financial management, but OMB forced a competition. HUD issued an RFP Oct. 31 to integrate its accounting and financial-management functions by moving core legacy systems to Oracle’s PeopleSoft suite of financial-management applications. Proposals are due Jan. 8.

Karen Evans, OMB’s administrator for e-government and IT, said this is an example of good IT management.

Other agencies—the Labor Department, for instance—have gone down a similar path where their requirements were clearer, Evans said.

The Environmental Protection Agency, which is expected to make an award before Dec. 31, has been evaluating proposals since March to ensure it has its requirements right.

“As the model matures, we will see better and better procurements,” Evans said. OPM officials still were defining their requirements after making the decision to hire ARC.

And it was during their requirements phase that both agencies realized there might be a problem, said Michelle Yanok, ARC’s director of franchise services. ARC’s other clients include the National Archives and Records Administration, the Mint and the Executive Office of the President.

Giselle Jones, OPM’s director of financial systems modernization, said the agencies conducted about 15 sessions in April and May, looking at functions such as procurement, requisition, posting to the general ledger, accounts receivable and reimburseable funds.

ARC’s Oracle Federal Financial System 11i did not meet OPM’s needs for reimbursables, meaning OPM would need a customized application. Crawford said a customized interface would be too costly because of development and maintenance costs.


-Jason Miller, GCN.com

Thursday, December 07, 2006

Today's GAO Presentation

The Government Accountability Office (GAO) today released the following presentation by the Comptroller General.

"Modernizing Accountability Organizations in Times of Fiscal Constraint" by David M. Walker, Comptroller General of the United States, before the National Intergovernmental Audit Forum, in Silver Spring, Maryland.

GAO-07-251CG, December 1, 2006.

Wednesday, December 06, 2006

Gates to continue Rumsfeld-style transformation

Defense Secretary-designate Robert Gates shares Donald Rumsfeld’s vision of military transformation, centered around a lighter, more mobile force that uses technology. Also, the nominee will continue DOD’s financial system and pay reforms and examine the role of contractors serving the government.

At today’s Senate Armed Services Committee hearing, Gates avoided most questions on DOD management while senators praised his record and tried to elicit his views on Iraq strategy.

But in a 65-page questionnaire released at the hearing, Gates provided insight into his plans for solving some of DOD’s biggest problems, which include modernizing the force during wartime, dealing with an increasingly constrained budget environment, and reforming the way the department spends money and manages people.

“Transformation holds the promise to ensure that our military forces are more agile and lethal when confronting the enemies of this new century,” he wrote. “I am also committed to the continuing changes in the business process that the department has implemented to support that force.”

- Josh Rogin, FCW.com


Officials debate threshold for reporting payment errors

Two top management officials sparred Tuesday over how deeply agencies should dig to unearth mistaken payments, as lawmakers sought input during a hearing on possible updates to the 2002 Improper Payments Information Act.

David M. Walker, head of the Government Accountability Office, repeated arguments detailed in a report last month that Office of Management and Budget guidance for how agencies should analyze and report on their improper payments is not strict enough. Improper payments are defined as those made mistakenly to ineligible recipients, or as a result of fraud or other error.

Clay Johnson, OMB's deputy director for management, countered that the sheer size of the problem requires the use of some cost-benefit analysis to determine the level of mistakes worth tracking and justifies a reporting threshold that GAO has criticized as too high.

The debate primarily centers on whether OMB guidance on implementing the erroneous payment act leaves an inappropriately large loophole. Agencies are required to annually assess programs that are at high risk for significant improper payments; OMB guidance defines "significant" as payments that both exceed $10 million annually and represent more than 2.5 percent of a program's budget.

Johnson defended OMB's decision to limit reporting, saying the legislation was based on risk assessment, rather than a review of every program. He said OMB has to take into account the expected costs and benefits of agencies' efforts to comply. For example, he said, federal payroll expenses of hundreds of billions of dollars represent "virtually no risk," and should not be examined.

Walker countered that Defense payroll expenses were included in GAO's list of government activities with a high risk of problems. Coburn said payroll should be examined through an improper payments lens, noting that agencies do not monitor federal employee absenteeism that occurs outside of allowed vacation and sick time.

But Johnson held his ground, saying that reducing improper payments in the federal payroll should be "a really, really low priority." The two officials also cited other payments that could be considered improper payments but are not: Walker noted that billions of dollars are paid to contractors annually in unmerited awards and incentives, while Johnson cited billions of dollars in unearned raises to employees.

Subcommittee ranking member Sen. Tom Carper, D-Del., urged the two officials to present their recommendations for how the improper payments law should be revised.

-Jenny Mandel, GovExec.com


Tuesday, December 05, 2006

Today's GAO Testimony

The Government Accountability Office (GAO) today released the following testimony:

Improper Payments:
Incomplete Reporting under the Improper Payments Information Act Masks the Extent of the Problem, by David M.Walker, comptroller general of the United States, before the Subcommittee on Federal Financial Management, Government Information, and International Security, Senate Committee on Homeland Security and Governmental Affairs.
GAO-07-254T, December 5.
Highlights - http://www.gao.gov/highlights/d07254thigh.pdf

State’s ERP project inspires public value approach

Pennsylvania system used as a case study to assess impact of IT on citizen services

An enterprise resource planning project in Pennsylvania may inspire future government technology initiatives that deliver what some university researchers call a public return on investment.

The state’s Integrated Enterprise System, which spans 53 agencies, was one of five case studies highlighted as part of a research project at the State University of New York at Albany. That effort, led by the school’s Center for Technology in Government with funding and guidance from software vendor SAP, focuses on the public value of information technology as opposed to traditional ROI measures. CTG and SAP officials unveiled the case study and an accompanying white paper in October.

The paper outlines a nonproprietary methodology for assessing the impact of an IT project on public domain stakeholders. The methodology targets specific measures that document public value. Examples of public value include boosting financial management efficiency, which was the case in Pennsylvania.

The state’s project helped shape that methodology, which other agencies will soon use to guide projects, said Russ LeFevre, director of public-sector solutions marketing at SAP.

CTG interviewed Pennsylvania officials and those at the four other case study locations. The lessons learned derived from the case studies drove the development of the methodology, LeFevre said.

CTG’s Pennsylvania case study shows how public value can accrue over time.

The Integrated Enterprise System has generated public value through enhanced efficiency in agencies that perform core administrative functions, CTG’s Pennsylvania case study states. The study specifically reported that the system’s electronic paycheck distribution feature — the state previously mailed paychecks — saved the state $500,000. The report also cited other benefits, such as faster distribution of 2005 income tax forms.

Such investment returns are indirect, according to the CTG public ROI methodology, because they don’t directly affect citizens. But they do improve “the value of government itself from the perspective of citizens,” CTG said.

-John Moore, FCW.com


New EVM contract standard issued by NASA

An interim rule to apply earned-value management to NASA’s major acquisition contracts and to those worth at least $20 million has been issued by the agency.

Under the new rule published earlier this month in the Federal Register:

  • NASA will require EVM in all development and production contracts and subcontracts worth $20 million or more; major acquisition contracts valued at less than $20 million will follow the EVM guidelines outlined in the compliance standard already created by the Office of Management and Budget.
  • Contracts and subcontracts valued at $50 million or more must have the EVM clause formally validated and accepted by the government.
  • For contracts and subcontracts worth less than $20 million and not classified as major acquisitions, EVM application is not required, and implementation will be left up to the discretion of the program manager.
  • Contracts for nondevelopmental engineering support services, steady state operations, basic and applied research, and routine services are not required to include EVM.
Contractors must document that their EVM systems comply with the ANSI/Electronic Industries Alliance-748 EVM standard. Also, contractors must describe how they expect to follow the EVM and how they will evaluate their compliance with the EVM system in the contract.

NASA is accepting comments on the interim rule through Jan. 12.

-Kerri Hostetler, WashingtonTechnology.com

GSA chief at odds with agency auditors

A move by the head of the General Services Administration to slash a proposed budget increase for the agency's inspector general office threatens to undermine the independence of the agency's investigative arm, the IG's office and congressional sources charged Monday.

A recommendation from GSA Administrator Lurita Doan that the agency's inspector general perform only half of proposed fiscal 2007 audits is "just an extraordinary effort to reduce serious scrutiny of the agency," said Robert Samuels, a spokesman for the IG's office.

Doan refused to grant the IG office's full fiscal 2008 budget request, critics said. The GSA chief cut a request for a 30 percent increase down to 7 percent.

-David Perera, GovExec.com


Monday, December 04, 2006

David Norquist - Protecting the homeland and its tax dollars

David Norquist’s friends had mixed reactions after he was tapped to be the Homeland Security Department’s new chief financial officer earlier this year.

“Half the people said congratulations,” Norquist said. “The other half said, ‘Why would you do that?’ “

Indeed, Norquist’s job has its share of challenges. Not only does he oversee the department’s $35 billion budget, he has the responsibility for straightening out its many problem-plagued financial management systems.

Some systems are so bad that several agencies and offices within the department — such as the Coast Guard and Norquist’s own office — have been left incapable of accurately tracking the money they spend, the department’s inspector general has reported.

Homeland Security in 2005 tried to consolidate its eight financial management systems into one called eMerge2. That effort foundered after the department invested $18 million, leaving many senior officials questioning whether a departmentwide system was the right approach. So in early 2007, Norquist may begin migrating some agencies with troubled financial management systems to other well-performing systems — either elsewhere in the department or outside the department.

The problems don’t stop there. Many of Homeland Security’s financial management offices are understaffed, and the department has been criticized for having lax purchase card rules.
In an Oct. 6 interview, Norquist did not appear daunted by the tasks before him.

“There are two things I care passionately about,” Norquist said. “One is protecting the country, the other is protecting taxpayers’ dollars, and there are very few jobs where you get to do both.”

Norquist came to Washington in 1989 as GS-9 budget analyst for the Army after graduating from the University of Michigan. He got an early taste of how crunching numbers could let him help his nation in 1990, when he came up with a streamlined way of assembling the Defense Department’s intelligence budget that eliminated an information technology support contract with an annual cost of $1 million.

“I was making $24,000 a year, and someone said, ‘You just saved the taxpayers $1 million a year,’” Norquist said. “I thought, ‘I could do this for a living. This is cool.’”

Norquist is preparing a plan to solve the department’s financial management problems with specific deadlines. And the department has just begun a new mentorship program that he hopes will mold young employees into future financial managers.

READ MORE, including Q&A with David Norquist

- Stephen Losey, FederalTimes.com

Saturday, December 02, 2006

Private-sector shared-services providers must be FISMA-compliant

Karen Evans has a message for industry about being a shared-services provider to the government for human resources or financial management services: She doesn’t care what you call yourself—center of excellence or shared-services provider or whatever—but don’t bother jumping into the scrum if you don’t comply with the Federal Information Security Management Act.

While it is obvious that agencies have to comply with the computer security mandate, Evans, the Office of Management and Budget’s administrator for e-government and IT, said there have been a lot of questions about exactly what being FISMA compliant means.

“Vendors’ shared-services providers need to have their systems certified and accredited under the FISMA guidelines,” said Evans after speaking at an event on the Financial Management Line of Business in Washington sponsored by IBM Corp. and SAP of America Inc. of Newton Square, Pa. “Agencies and their inspector[s] general need to check to make sure contractors have met FISMA.”

But, she added, it is incumbent on agency officials to ask vendors for the documentation that proves FISMA compliance. Evans said it also will show how much “residual risk” the systems have.

Evans said the foundation for the lines of business have been laid, and now it is a matter of moving to them. She said that while the focus has been on larger departments, the smaller agencies have benefited most from the shared-services provider concept.

“The service centers help small agencies accelerate … [their] compliance with financial-management requirements,” Evans said.

Evans also pointed to the Interior Department’s recent launch of its new financial management system as a good example of a public-private partnership. Interior partnered with IBM to implement its Financial Business Modernization System at two bureaus last month.

“I was there when it came up live, and it was a noneventful event, which is what we like,” she said. “We got to see the policies operationalized, and that was exciting.”

-Jason Miller, GCN.com

Friday, December 01, 2006

FederalNewsRadio - Federal Financial Report - DHS

In its short history, financial management hasn't been one of the Department of Homeland Security's fortes. But a bright spot may be emerging at the border. Federal Computer Week reports, Immigration and Customs Enforcement's new financial action plan is garnering praise from a panel that, just a year ago, was slamming ICE for staff losses and poor planning. The panel now says, if DHS supplements the plan with good technology, Customs will be positioned to take Homeland Security's finances forward, as a whole.

Line of business will outlast administrations

The Financial Management Line of Business will survive through the two years left in President Bush's administration and into the next president’s term, although it may get a new name, a panel of experts said today.

Karen Evans, administrator for e-government and information technology at the Office of Management and Budget, said Bush wants the initiatives in his management agenda institutionalized before he leaves office, and she added that officials cannot slow down in doing that.

“Actually, what he asked us to do was speed it up,” Evans said in a speech at a breakfast hosted by IBM and software provider SAP Public Services. The President's Management Agenda, Evans said, is intended to improve government services while saving tax dollars.

A panel of financial management experts agreed that the push to move toward the line of business will be too difficult to reverse whether the next president is a Democrat or Republican.

John Sindelar, deputy administrator of the General Services Administration's policy office and a panelist at the breakfast, said the number of agencies moving to shared-services providers or centers of excellence in the next two years will make it “hard to reverse history.”

Although it is renamed from administration to administration, the framework is proven and its momentum will be irreversible, said Jonathan Breul, a partner at IBM’s business consulting services. It is changing how the government does business and transforming agencies, he said.

The line of business -- and the overall management agenda -- has roots in the Clinton administration, Breul said. “This is not all cooked up by President Bush," he added.

Sindelar said now lawmakers must buy into the lines of business initiatives if Congress can understand that they streamline government and save taxpayers’ money. Then they can take the initiatives home to their constituents, he said.

-Mathew Weigelt, FCW.com

Thursday, November 30, 2006

FederalNewsRadio - Federal Financial Report - Bad Accounting

You know you have a problem when an agency's bad accounting is called into question. According to Government Executive, eight agencies reported no improper payments in fiscal 2005, including the Department of Homeland Security. But Congress has held hearings on about $1 billion in improper FEMA hurricane payments, and that's DHS. GAO auditors also found, governmentwide improper payment estimates omitted information on ten major programs. Nine programs that were reported used faulty methods to reach their numbers.

FederalNewsRadio - Ask the CIO - Stephen Warren (FTC)

As Chief Information Officer of the Information and Technology Management Office of the FTC, Stephen Warren ensures that antitrust and consumer protection missions, and administrative and management support functions of FTC are supported.
  • Protecting the consumer from hackers -- and how the FTC helps consumers help themselves
  • The FTC and VoIP -- how the FTC makes sure it's conversations are secure
  • Why the FTC doesn't buy the latest gadgets and gizmos

Listen with Windows Media Player

FederalNewsRadio - Ask the CFO - Paul Brinkley (BTA)

Mr. Brinkley was appointed Deputy Under Secretary of Defense for Business Transformation in January, 2006. In this role, Mr. Brinkley leads business management modernization for the Department of Defense, working across the Military Services & Defense Agencies to drive rapid transformation of business processes & systems to ensure improved support to the warfighter and improved financial accountability. In partnership with the Deputy Under Secretary of Defense for Financial Management, Mr. Brinkley also oversees the Business Transformation Agency, a new organization accountable for delivery of common systems and processes supporting logistics, acquisition, finance, and personnel activity across the DOD.
  • Eliminating the gap at the top
  • Breaking through the layers of cultural barriers
  • Understanding the "brick wall" -- budgeting around the constraints unique to a successful military
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BTA names Fisher acting director

David Fisher has been named acting director for the Defense Department’s Business Transformation Agency.

One year after the BTA was established, Paul Brinkley and Thomas Modly — who had been serving jointly as directors — announced an organizational restructuring, placing Fisher at the helm of the business oversight agency until a permanent director is hired. Fisher has formerly worked as DOD’s lead for transformation planning and performance. Before joining the Defense Department, Fisher was a managing director with BearingPoint.

In a November memo, Brinkley and Modly estimated that the process to hire a permanent director could take several more months. They also realigned the Priority Projects directorate to report directly to Army Maj. Gen. Carlos “Butch” Pair, BTA’s Defense business systems acquisition executive.

In addition to Fisher, Brinkley and Modly named Radha Sekar as assistant deputy chief financial officer in the Office of the Undersecretary of Defense. In that position, Sekar will serve as the “functional sponsor” of several initiatives, including the Business Enterprise Information Systems (BEIS), Intragovernmental Value Added Network (IVAN) and Strategic Resource Decision System (SRDS) programs. Cindy Beck will become the BTA lead for the BEIS, IVAN and SRDS initiatives.

BTA was established last fall to centrally manage 18 of DOD’s largest departmentwide business programs.

-Dawn S. Onley, WashingtonTechnology.com

Wednesday, November 29, 2006

FederalNewsRadio - Federal Financial Report - FMLOB

The Bureau of the Public Debt is one of four agencies qualified to be shared service centers in financial management. But the Office of Management and Budget has ended its own effort to develop a financial management system for the agency. Federal Computer Week reports OMB will conduct a public/private competition to acquire a new system, under Financial Management Line of Business guidelines. The competition might not begin, however, until the fourth quarter of 2007.

Pentagon expects business transformation to go on under new secretary

Defense Department business transformation efforts may be mostly unaffected by the Pentagon’s change in leadership, according to an official helping oversee the transition.

Thomas Modly, deputy undersecretary of Defense for financial management, has been tapped to lead the transition support team if Robert Gates is confirmed as secretary. With Gates likely to focus on more prominent issues, efforts to standardize business systems and improve financial management will probably continue uninterrupted, Modly said Nov. 28 at the annual North American Logistics Conference.

Modly oversees the Defense Business Transformation Agency, which was created to coordinate the transformation. Efforts include assuring that business system investments are made as part of an enterprise transition plan and improving the availability of departmental information.

Modly said the difficulty of quickly learning what occurs in the department was brought home by one of Defense Secretary Donald Rumsfeld’s “snowflake” memos, named for their frequency and tendency to drift to lower levels.

“I just don’t get a good sense for where all the money goes in the department,” Rumsfeld wrote, according to Modly.

While the secretary sees high-level budget information on spending for departments, he does not get detail on how much goes into “buckets” like personnel or aircraft, Modly said. Providing that breakout took 50 people weeks, he noted.

“Our ability to understand the state of the department is very limited,” Modly said.

The Government Accountability Office and Defense Business Board, an advisory group of private industry executives, have said the Defense Department’s transformation efforts have improved in recent years, but would benefit from high-level coordination by a strong chief management officer.

Modly, however, said Deputy Secretary Gordon England already fills that role.

“He’s willing to drop a hammer on people when they don’t cooperate,” Modly said.

-DANIEL FRIEDMAN, FederalTimes.com

FedCFO Charity Considerations

As the time of year has arrived for many people to consider their charitable giving options, I would like to call your attention to two charities of importance. Each has a section 501(c)(3) status under the Internal Revenue Code. Both provide a high return to society from your donation.

The Holly Davidson Fund for Lymphoma Research
Lombardi Comprehensive Cancer Center
Attn: Office of Advancement
3300 Whitehaven St., NW
Suite 4000
Washington, DC 20007

"Holly's Fund" was established to support the lymphoma cancer research efforts at the Lombardi Comprehensive Cancer Center at Georgetown University Hospital. Many research programs' successes hinge on the ability to sustain funding through the project lifecycle. Holly's Fund provides sustainment funding to several Lymphoma research projects ongoing at Lombardi. Additionally, the "Holly Award" is a distinguishment bestowed upon the nurses and staff of the Lombardi Center who are nominated by the Lombardi Center patients and their families as outstanding caregivers. The "Holly Award" silver holly leaf is proudly worn on the uniforms of many exceptional Lombardi staff members.

Yellow Ribbon Fund
Make a Donation Online or, by mail at:
Yellow Ribbon Fund
7200 Wisconsin Avenue, Suite 310
Bethesda, Maryland 20814

Every day, our wounded servicemen and women return from combat, many to long-term rehabilitation at Walter Reed Army Medical Center and Bethesda Naval Hospital. Beginning in late 2004, over 500 individuals and businesses in the Washington Metropolitan Area donated funds to help these service members and their families. In February, 2005, the Yellow Ribbon Fund was created specifically to welcome them into our community through community volunteers--friends who care.

Yellow Ribbon Fund meets two needs:

  • helping the families of soldiers as well as marines, especially those in long term care at Walter Reed Hospital and Bethesda Naval Hospital, and
  • helping all injured servicemen and women to make the transition from military to civilian life.

OPM drops effort to shift financial management to Treasury bureau

A much-touted effort to move the Office of Personnel Management's back-end financial management operations to the Bureau of Public Debt's Administrative Resource Center has collapsed.

In an announcement released last week, OPM officials said they will conduct a public-private competition to determine the best place for the agency's financial management and procurement operations. The contest will take place by the fourth quarter of fiscal 2007, which begins July 1.

As part of a consolidation effort known as the lines of business initiative, the Office of Management and Budget generally requires agencies that want to change or upgrade their financial management systems to move either to an agency-run shared service provider or to a qualified private sector provider. OPM's competition will be held according to financial management lines of business guidelines released in September.

The competition will result in the selection of a public or private sector shared service center that has experience operating technology that is certified by the General Services Administration's Financial System Integration Office.

OPM selected the Treasury Department's Bureau of Public Debt -- which is on a list of OMB-approved shared service providers -- to run its financial management systems in August 2005.

The transition was scheduled to be complete in 2007, but last week's OPM announcement stated that the effort to "implement a tailored solution" was canceled.

With 5,000 employees, OPM would have been one of the largest agencies to turn to a government shared-service center for its financial management needs.

Peter Hollenbach, a spokesman for the Bureau of Public Debt, said the decision for OPM to fulfill its financial management needs elsewhere was mutual. The bureau's administrative resource center, located in Parkersburg, W.Va., currently provides service to 63 small government agencies and employs about 500 people.

-Daniel Pulliam, GovExec.com


Tuesday, November 28, 2006

FederalNewsRadio - Federal Financial Report - PMA Scores

The Office of Management and Budget has been busy directing traffic with those red, yellow and green President's Management Agenda scores. But the Government Accountability Office thinks OMB could do a better job when it comes to the financial management portion of the scorecard. Federal Computer Week reports the GAO is recommending OMB more methodically document what's behind the decisions that determine those scores. As of September 30th, eight of 24 agencies have green financial management.

Auditors cite progress on SBA management challenges

The Small Business Administration made significant progress in boosting oversight of two lending programs in fiscal 2006 and improved its financial reporting and information technology security, according to a report from the agency's inspector general.

The IG's summary of the top 10 management challenges SBA faces in fiscal 2007 listed recent progress in nine of the 10 areas identified, though four areas had seen slippage over the past year as well. Overseers analyzed agency action on a series of specific recommendations in each area, rating the agency on progress.

The report noted significant progress in financial management and reporting, and said remaining goals have been clarified to underline the need for procedures and policies that ensure accurate, timely financial reports.

The report also recognized advances in several IT areas, including security program controls and access controls. But auditors noted that the resources available to maintain systems, manage IT security and security training, and provide technical support are "below what is generally necessary for an entity the size of SBA." They said resource shortages drain an already weak IT security program, and promised that additional audit work would spotlight the area.

-Jenny Mandel, GovExec.com


Monday, November 27, 2006

FederalNewsRadio - Federal Financial Report - CGAC

A big step toward getting the entire government's books to make sense. The Office of Management and Budget has released a draft of a common, governmentwide accounting classification structure. Government Computer News reports it'll eventually be incorporated into core financial management systems, so that when an agency makes upgrades or moves to a shared-services provider, the new software can be configured accordingly. Comments on the draft are due in mid-January for a discussion session a month later.

Report: Security agency needs better financial management

The Homeland Security Department's largest investigative agency needs to improve its invoice management and make a variety of other financial management enhancements, according to a report from a congressionally chartered nonprofit organization.

The report, released last week by the National Academy of Public Administration, criticized the Immigration and Customs Enforcement agency's Federal Protective Service in particular. FPS, responsible for helping secure thousands of federal facilities across the country, faces a budget shortfall recently estimated to be as high as $60 million.

"Stability, understanding and adequate oversight should be highlighted as the immediate financial management objectives for FPS," the report stated, adding that "according to the majority of those interviewed, FPS is the most difficult program to service."

NAPA called for a better analysis of FPS expenses and revenues and said "service level changes or fee modification" will be needed to remedy the financial problems. The report said "hundreds of vendors" working for the agency have "varying degrees of financial sophistication to support and understand."

The NAPA report was not the first to call for changes in how FPS collects funds; multiple sources confirmed that the protective service has trouble getting timely payments. Agency sources, who spoke under the condition of anonymity, said the service may have to increase fees by as much as 60 percent to make up for shortfalls. The agency has already pulled its officers from some federal buildings at off-peak hours, multiple sources confirmed.

The Homeland Security Department's largest investigative agency needs to improve its invoice management and make a variety of other financial management enhancements, according to a report from a congressionally chartered nonprofit organization.
The report, released last week by the National Academy of Public Administration, criticized the Immigration and Customs Enforcement agency's Federal Protective Service in particular. FPS, responsible for helping secure thousands of federal facilities across the country, faces a budget shortfall recently estimated to be as high as $60 million.

"Stability, understanding and adequate oversight should be highlighted as the immediate financial management objectives for FPS," the report stated, adding that "according to the majority of those interviewed, FPS is the most difficult program to service."

NAPA called for a better analysis of FPS expenses and revenues and said "service level changes or fee modification" will be needed to remedy the financial problems. The report said "hundreds of vendors" working for the agency have "varying degrees of financial sophistication to support and understand."

The NAPA report was not the first to call for changes in how FPS collects funds; multiple sources confirmed that the protective service has trouble getting timely payments. Agency sources, who spoke under the condition of anonymity, said the service may have to increase fees by as much as 60 percent to make up for shortfalls. The agency has already pulled its officers from some federal buildings at off-peak hours, multiple sources confirmed.

-Jonathan Marino, GovExec.com


Data management master class

Master Data Management, or MDM, is touted as the silver bullet for ridding companies of inconsistent and untrustworthy business data. But does its real value lie in being an enabler of SOA?

MDM isn't new by any means. So why do proponents think it will fare better than past approaches? There are several reasons. First, MDM works by establishing master data rather than by focusing on operational (transactional) data. Second, MDM is an active approach to managing the entire information lifecycle, allowing companies to define new data, monitor exceptions as the data changes and rationalise and synchronise data as it is updated.

Last, and perhaps most promising of all, is that MDM takes a services-based approach that is in line with modern service-oriented architecture (SOA) initiatives. In other words, it treats data as another enterprise service in an SOA. Some refer to it as the 'fourth layer' of an IT architecture that sits between data and the business logic and presentation layers.

Master data management has gained prominence in recent years because of a highly fragmented application landscape caused by lines of business applications optimised for specific functions or departments. Having these multiple ERP and CRM instances and home-grown IT systems creates data silos that make it difficult for a business to get a single authoritative source against which all other data is compared, or, in MDM parlance, a 'golden record'.

"The problem stems from the fact that companies don't have all their business data in one place," notes Cliff Longman, chief technology officer at data warehousing and MDM firm Kalido.

Longman ultimately blames a lack of strategic thinking about data as one of the root causes of the problem. "Companies didn't treat data as an asset," he says. "There was no holistic discipline or training for managing it like financial assets." For instance, financial accounts software supports a consolidation process for a unified chart of accounts, mapped to multiple financial systems for integrated reporting and performance management. So why aren't other types of business data treated with the same level of respect?

Clearly having a shared and flexible IT architecture that works with consistent, accurate and up-to-date master data is vital. For that reason many point to MDM as a seminal development for IT setting the goal of moving towards SOA.

The MDM approach seems to sit nicely with how SOAs are supposed to work - ie by decoupling master data from business applications. The real promise of SOA is that you don't need to know in advance which applications will be talking to each other. But with that paradigm it's critical to first agree on common data definitions.

Longman argues that one can't have SOA without having an enterprise data service. "MDM inherently creates that data service component within an enterprise SOA, actively synchronising clean and consistent data to applications as an on-demand service," he says.

- Madan Sheina , CBRonline.com


GSA's closed financial books... and an appology

This morning on Federal News Radio, GSA CFO Kathleen M. Turco was on talking about how the agency's fiscal 2006 financial statements earned an unqualified, or “clean,” audit from independent auditors PricewaterhouseCoopers. You can hear Turco in Windows Media Format here.

This is no small step -- for any agency. But it is a particularly significant step for GSA, which has been struggling.

A clean audit, however, does not address the real questions about GSA's financial situation: What is GSA's financial health? For most of this year, FCW has been working to have GSA make its financial data public. We are interested in not only seeing its annual reports. What matters is the real data that provides an indication of GSA's financial health.

-Chris Dorobek, FCW Insider Blog


Auditors question agency estimates on payment errors

Reporting on erroneous program payments is fraught with gaps and federal agencies almost certainly underestimate how much they misspend, according to a new report.

Government Accountability Office auditors who reviewed agencies' fiscal 2005 reports under the 2002 Improper Payments Information Act -- which covers payments made mistakenly to ineligible recipients or as a result of fraud or other error -- found that some large high-risk programs had been excluded from reporting. Some financially troubled agencies reported few or no risk-susceptible programs, GAO found.

Auditors said 18 agencies together estimated $38 billion in improper payments in 57 programs and activities. But the Homeland Security Department, General Services Administration and NASA were among eight reporting they had no programs susceptible to improper payments, the auditors' report (GAO-07-92) stated.

Homeland Security has never received a clean audit opinion on its financial statements, and House Government Reform Committee hearings over the past year have sought to work through 10 major recurring problems in the agency's accounting processes. GAO reviewers noted that in the DHS fiscal 2005 audit, the agency was cited for noncompliance with its statutory improper payment obligations, primarily because of inadequate risk assessments.

In addition to nonreporting agencies, GAO noted that the fiscal 2005 improper payment estimates did not include information for 10 major programs with more than $234 billion in spending -- among them Medicaid, the Agriculture Department's school lunch and breakfast programs and the Temporary Assistance for Needy Families program. Those 10 programs, for which the statute explicitly requires reports, have adopted target reporting dates ranging from 2007 to 2010. Three did not inform GAO of any target reporting date.

GAO auditors also found that nine programs with $389 million in improper payment estimates had not used proper methods to reach those numbers. They said appropriate statistical sampling methods would likely have found higher erroneous payments, noting that the program costs together were more than $58 billion.

Auditors recommended that Congress amend the statute to clarify how agencies should identify programs susceptible to significant improper payments. Such a change would almost certainly increase the number of programs subject to estimation and remediation planning.

They also recommended that OMB develop more explicit guidance for agencies' risk assessments and improper payment reporting, enforce existing guidance on how to estimate payments in a statistically valid way, gather additional information on payments that are made according to existing laws but later found to be improper and require agencies to justify their decisions not to conduct recovery audits to recoup erroneous payments.

OMB generally agreed with the recommendations, and emphasized progress made in reporting since the improper payments law went into effect. OMB justified the decision to use some statistically unsound methodologies while programs develop more solid ones, and said the threshold criteria for improper payment tracking has changed to reduce the chances of missing high-risk programs.

-Jenny Mandel, GovExec.com


Friday, November 24, 2006

FederalNewsRadio - Federal Financial Report - 1990 CFO Act

All 24 agencies under the 1990 Chief Financial Officers Act met the November 15th deadline to submit their financial audits. Government Executive reports the Office of Management and Budget gave 18 of those agencies unqualified opinions, meaning their books are reliable. Five agencies, Defense, Energy, Homeland Security, State and NASA, got disclaimers, meaning their statements couldn't be evaluated. Transportation received a qualified opinion, meaning its accounting was satisfactory except for one particular problem.

GAO: DOD business practices risky

WASHINGTON, Nov. 24 (UPI) -- One of the most important tasks in the next session of U.S. Congress is to oversee the Pentagon's business operations, the Government Accountability Office said.

The GAO has identified 26 federal programs or activities that are at risk for waste, fraud and abuse because of lax oversight. Eight of them are in the Defense Department and six are programs for which the DOD bears some responsibility.

The high-risk areas include DOD's overall management approach to business transformation, business systems modernization, financial management, the personnel security clearance process, supply chain management, support infrastructure management, weapon systems acquisition, and contract management, according to the report.



Thursday, November 23, 2006

FederalNewsRadio - Ask the CFO - Richard Greco (Navy)

Richard Greco, Assistant Secretary of the Navy for Financial Management and Comptroller

Richard Greco, Jr. was nominated by President George W. Bush to serve as The Assistant Secretary of the Navy (Financial Management and Comptroller) on September 10, 2004 and was confirmed by the Senate one month later. In his capacity Secretary Greco is the chief financial officer of the Department of the Navy and is responsible for directing and managing the Department's financial activities, including the preparation, justification, and execution of a $126 billion budget; all financial policy, comptroller, accounting, audit, treasury, fiscal, legal, reporting, and Congressional relations functions; and recruiting, training, and leading a financial management workforce of 9,000 people. He also serves on the Department's many governance boards, including the executive steering group of the United States Naval Academy and the Acquisition Integrity Board. For exceptionally distinguished service, the Secretary of the Navy bestowed on Mr. Greco the Distinguished Public Service Award, the Department of the Navy's highest civilian honor.
  • Running the equivalent of the 7th largest corporation in the world based on revenues
  • Measuring performance ahead of time as opposed to after the fact
  • Making the internet a tool to communicate not just with the public but with your employees

Listen with Windows Media Player

Panel praises management turn-around at DHS agency

Following well-publicized woes that crested in 2005, a National Academy of Public Administration panel said a financial action plan published earlier this year for U.S. Immigration and Customs Enforcement (ICE) is a major step toward establishing stability and soundness at the bureau.

As long as the Homeland Security Department supplements this plan with the development of a new strategic focus to complement its tactical attention to financial integrity, the panel said, “ICE should be well positioned to lead DHS forward financially.”

That’s a far cry from what was being said about ICE just a year ago. The NAPA panel listed a series of events — loss of staff, leadership change within DHS, an unfamiliar financial system, changing expectations from DHS, and others — that it said merged to create “substantial and adverse financial issues in 2005.”

In a report it published last year, the Government Accountability Office said a major information technology modernization program for ICE had been put at risk because the bureau had done minimal planning and management.

It had also redirected funding and employees for the program to other competing priorities and had not made the necessary investments in program management capabilities, GAO said.

“ICE has too much transactional activity, information flow, accounting requirements and analysis to manage without the aid of user friendly and effective technology,” the panel said. “ICE will not be able to achieve major financial systems and IT improvements until DHS develops a more explicit IT strategic plan or framework from which to operate.”

The panel recommended that ICE explicitly make technology part of the financial action plan. It also said ICE officials should work with DHS to identify the needs of ICE, the department and its stakeholders and develop alternative approaches to meet ICE’s technology needs if DHS guidelines are not available.

“If adequate IT systems are not available in the mid-term, and certainly long-term, the gains of the past will be lost as the workload will exceed staff’s ability to perform, analyze and manage ICE financial demands,” it said.

-Brian Robinson, FCW.com


Wednesday, November 22, 2006

GSA replaces career leader of policy office with political appointee

The chief of the General Services Administration has replaced the acting head of the agency's Office of Governmentwide Policy -- a 33-year career federal employee -- with a political appointee.

GSA Administrator Lurita Doan selected Kevin Messner to serve as the policy office's acting associate administrator, replacing John Sindelar, who has headed it with the same title since December 2005. Messner will also continue in his role as associate administrator for the Office of Congressional and Intergovernmental Affairs, a position he has held since June 2006.

Neither of Messner's jobs are subject to Senate confirmation, and officials in acting positions do not have to be approved by the White House's Presidential Personnel Office. This is the first time the office has been headed by a political appointee, according to GSA.

A GSA spokeswoman said that Doan made the decision to name a political appointee because of the office's involvement with the President's Management Agenda initiatives. The five main items on the agenda are personnel reform, improved financial management, electronic government, opening work not considered core to government to contractors and use of program performance information to inform budget decisions.

The Office of Governmentwide Policy was created in December 1995 as a means of consolidating GSA's policy functions. It has authority to set policies in the areas of personal and real property, travel and transportation, information technology, regulatory information and use of federal advisory committees.

Sindelar has played an instrumental role in launching and implementing the Bush administration's e-government and lines of business initiatives, which are part of the President's Management Agenda. The e-government effort is designed in part to make government services more accessible to citizens online, and the lines of business initiative is aimed at consolidating back-end technology systems across government, in areas such as financial management and human resources.

-Daniel Pulliam, GovExec.com


OMB must sell e-gov to new 'in' party

Uncertainty hangs over how House Democrats will deal with ongoing IT issues

If the White House couldn’t sell e-government to its own party on the Hill, what chance will officials have now that the Democrats control Congress?

Actually, according to industry observers and former government officials, it could be a pretty good chance. But the window of opportunity could be small, and open for only a short time.

“It all depends on how much [the Democrats] want to play ball with the White House,” said Robert Atkinson, president of the Information Technology and Innovation Foundation of Washington. “I could see them being more supportive of e-government. ... Democrats have a stronger stake in making government work, they’re the party of government, and they want it to work.”

For its part, OMB is optimistic. “Both sides of the aisle share our goal of improving program performance and agency management,” said OMB spokeswoman Andrea Wuebker. “We will continue to work with Democrats and Republicans to achieve this goal through the implementation of the President’s Management Agenda.”

At this point, though, it is unclear whether the Democratic takeover of Congress will be a blessing or a curse for OMB’s e-government agenda.

Also due to change is the oversight of OMB’s Financial Management Line of Business initiative, currently under Rep. Todd Platts (R-Ohio), chairman of the Government Reform Subcommittee on Government Management, Finance and Accountability. The ranking member of the subcommittee is Edolphus Towns (D-N.Y.).

- Rob Thormeyer, GCN.com


But Atkinson and others say OMB has to demonstrate—now more than ever—that e-government programs will truly result in the efficiencies and cost savings they project.

If not, agencies, with the end of the Bush administration looming, could dig in and wait for the next White House to pursue its management agenda, experts say.

OPM searches for financial management providers

The Office of Personnel Management has ended an effort to develop financial management and procurement systems with the Bureau of the Public Debt and will conduct a public/private competition to acquire them, according to an OPM announcement issued Nov. 21.

The agency is looking for software, integration, hosting and application management services for the systems. OPM will conduct the competition according to Financial Management Line-of-Business guidelines. It may be the fourth quarter of fiscal 2007 before the agency begins the competitions, however.

Through the competition, OPM will choose a shared service center, either in an agency or the private sector. OPM needs to enhance the agency's ability to generate accurate and up-to-date financial information, to prepare for future upgrades and to implement enhancements certified by the General Services Administration's Financial Systems Integration Office.

The Office of Management and Budget named the Bureau of the Public Debt as one of four agencies qualified to become a shared service center in financial management. OPM officials did not offer any additional explanation for ending the joint effort.

- Michael Hardy, FCW.com

USCG Seeks Accounting Division Chief


Supervisory Accountant GS-0510-15
Department of Homeland Security (DHS) / US Coast Guard (USCG)
Vacancy Announcement: 06-1288R-HQVS-D2
Salary Range $107,521.00 - $139,774.00

The Incumbent serves as a Division Chief. In this capacity, leads and serves as the senior technical expert for numerous Coast Guard wide initiatives. Provides managerial direction to professional accounting and support personnel and service-wide coordination to program and field personnel engaged in the development of input for external audit/review activities as they relate to the CFO Act audit of the Coast Guard's financial statements. The selectee must attain a Secret clearance, and undergo pre/post-appointment random drug testing. EOE.

For additional information, call (202) 475-5271 or to apply please visit our website at http://www.uscg.mil/hq/cgpc/cpm/jobs/vacancy.htm

U.S. Citizenship required.

Tuesday, November 21, 2006

OPM cancels work on financial management system

The Office of Personnel Management has canceled a year-old contract with the Treasury Department to upgrade its financial management and procurement systems. It will put the project up for bids again next year.

OPM selected Treasury’s Administrative Resource Center in August 2005, rejecting bids from other federal shared service centers and the private sector. At the time, OPM said it selected Treasury’s center because OPM’s financial management system could be married easily to Treasury’s Oracle financial system.

But in a Nov. 20 press release, OPM announced it will hold a public-private competition by next summer to migrate its financial management and procurement systems to a new shared service center, public or private. The winning contractor must have demonstrated experience with commercial off-the-shelf software that is certified by the General Services Administration’s Financial Systems Integration Office (FSIO) and must be able to leverage its expertise and other resources to achieve the best value for the agency, OPM said.

The need to implement recent FSIO enhancements, facilitate future upgrades and support, and generate timely and accurate financial information drove OPM’s decision to move to another shared service center, OPM said.

-Tim Kauffman, FederalTimes.com


The President’s Management Agenda scorecard has been a valuable tool in helping agencies improve their financial management, according to a recent Government Accountability Office investigation.

The PMA scorecard consists of five governmentwide areas -- human capital, competitive sourcing, improving financial performance, e-government and budget and performance integration -- and nine agency-specific goals. Each quarter, the Office of Management and Budget grades agencies in these areas via a three-color ranking system. “Green” equals success, while “yellow” indicates mixed results and “red” symbolizes unsatisfactory results.

“The scorecard process has clearly been a catalyst to improve financial management and to encourage agency managers to use financial data to enhance decision making as envisioned under the CFO Act;” however, “better documenting the key decisions would strengthen what is already a useful internal management tool by helping ensure consistency and continuity in the process and would enhance the value of the process to external users,” said GAO in its report.

Seven of the nine goals, GAO found “are objective and verifiable using publicly available information.” The two remaining goals, however, “are more subjective and require OMB to make judgments about whether agencies currently produce accurate and timely financial information that is used by management to inform decision making and drive results in key areas of operations” and if agencies “have acceptable plans (which are referred to as “Green plans”) to continuously expand the routine use of financial data in decision making in additional areas of operations.”

The 29-page report can be found at http://www.gao.gov/new.items/d0795.pdf.


GAO: OMB can improve score card process

The Office of Management and Budget could improve the way it grades agencies on financial management, according to a report from the Government Accountability Office.

OMB generally does a good job, according to the report, but GAO suggests establishing a process to more methodically document the basis for important decisions and judgments made in determining scores. GAO also recommends that OMB give receipts to agencies for approved green plans, which earn agencies a top score on the three-tiered President’s Management Agenda quarterly score card.

A green score means an agency is applying its initiatives as planned. Yellow shows a need for adjustments to achieve the objectives in a timely manner and red means an initiative is in jeopardy.

The score card evaluates agencies in five areas of the management agenda: workforce, competitive sourcing, financial performance, e-government, and budget and performance integration.

As of Sept. 30, eight agencies earned green scores for financial performance. However, 16 agencies earn the red. No agencies improved or backslid from their June 30 scores, according to the score card.

OMB has a reasonable process for assessing scores for financial management, the GAO report states. Seven of nine criteria are objective and verifiable from publicly available information. Two however are more subjective, relying on the judgments of OMB officials. The criteria are based on whether agencies can produce accurate financial information for managers to inform decision-making in key operations and whether agencies have plans to continue expansion of the data’s routine use, according to the report.

OMB Controller Linda Combs wrote in a letter to GAO that OMB already is improving the review process. It is developing a tracking system for green plans and summaries for all green plan initiatives. The initiatives clarify what initiatives are approved and how they meet green plan criteria, according to the GAO report.

-Matthew Weigelt, FCW.com

GAO: DOD needs chief management officer

The Defense Department needs a chief management officer (CMO) to coordinate its business transformation efforts and provide long-term leadership, according to the Government Accountability Office.

DOD needs an official who has authority, experience and tenure to drive change and be accountable for results, the GAO said.

Without such an official, “reconciling competing priorities will be difficult and could impede DOD’s progress in its transformation efforts,” Comptroller General David Walker testified before the Senate Readiness and Management Support Subcommittee on Nov. 16.


-Josh Rogin, FCW.com

U.S. Coast Guard (USCG) Seeks Deputy CFO


Vacancy Announcement: CG-SES-07-01
Salary Range: $109,808 - $165,200

The Deputy CFO of the USCG serves as the primary advisor to the CFO in the areas on budget formulation; budget execution; financial management and policy; financial systems; financial and cost reporting: as well as evaluation and corrective actions relating to audit recommendations. The Deputy CFO also serves as the Deputy to the Assistant Commandant. The selectee must attain a Top Secret clearance, and undergo pre/post-appointment random drug testing. EOE.

For additional information, call (202) 475-5274 or to apply please visit our website at http://www.uscg.mil/hq/cgpc/cpm/jobs/vacancy.htm.

U.S. Citizenship required.

Monday, November 20, 2006

FSIO Common Government-wide Accounting Classification (CGAC) Structure Exposure Draft Released

The Financial Systems Integration Office (FSIO) posted an exposure draft of the Common Government-wide Accounting Classification (CGAC) Structure on its website, http://www.fsio.gov/fsio/fsiodata/.

Please send your comments by January 17, 2007 in writing to fsio@gsa.gov, using the comment template provided on the webpage.

If you have any questions, please contact Dale Miller,
202-219-0543 or email dale.miller@gsa.gov

OMB proposes accounting standards

The Office of Management and Budget today released a draft of a common governmentwide accounting classification structure. It is among initiatives designed to standardize business processes and data elements in support of the Financial Management Line of Business.

The Financial Systems Integration Office in the General Services Administration, which coordinates with OMB on guidance related to the Financial Management Line of Business, expects that the draft will help promote broad understanding of data elements and help agencies standardize accounting codes internally.

The common accounting classification structure will eventually be incorporated in requirements for core financial management systems so that software products will be configured to support the structure, the draft said.

An agency will likely adopt the finalized structure when it implements a new financial management system, makes major upgrades to an existing certified system or moves to a shared-services provider. Adoption of the common accounting classification structure will be mandatory.

The common accounting classification structure establishes a standard way to classify the financial effects of government business activities. It includes data elements needed for internal and external reporting, and provides flexibility for specific agency needs. Standardization aims to reduce the cost and improve the accuracy of data that financial management systems produce.

Although a number of standards already exist, they provide latitude for each agency to develop its own classification structure. As a result, classification structures vary by agency and sometimes within agencies.

The proposed standard classification structure identifies and defines the elements, names them where appropriate, promotes consistent use and establishes a uniform structure for capturing them.

Comments are due Jan. 17, and a discussion session is set for February.

GAO lauds OMB effort to improve government’s financial performance

The Office of Management and Budget should better document its reasons for giving agencies green ratings on its financial performance scorecard, according to the Government Accountability Office.

Overall, GAO praised OMB’s effort in a Nov. 16 report: “The Improved Financial Management Performance Initiative scorecard process has clearly been a catalyst to improve financial management and to encourage agency managers to use financial data to enhance decision making.”

In interviews, agency officials generally said the process made top officials focus on financial management, according to GAO.

But the auditing agency noted that, to award green ratings, OMB must make subjective judgments about how effectively agencies produce financial data and use the data to make decisions. And OMB officials do not thoroughly document how they reach those judgments or track agency documents used in the process.

More documentation would ensure consistency and allow others to learn from the process, GAO said.

In a letter responding to the report, OMB Controller Linda Combs agreed with the recommendations. She said OMB already is developing a tracking system for agency documents. It is also preparing summaries of approved agency plans to show how they meet OMB’s criteria.
Improved financial performance is one of five governmentwide management-reform initiatives that OMB evaluates under the president’s management agenda, launched in 2001 to improve agencies’ efficiency. Other initiatives are competitive sourcing, strategic management of human capital, expanded electronic government, and budget and performance integration. OMB gives agencies ratings of red, for unsatisfactory; yellow, for mixed results; and green, for success.

The report notes that OMB initially refused to give GAO access to agency documents used in the scoring process, because it considered the documents “deliberative and predecisional.” Officials relented after seeing a draft GAO report describing that limitation. But OMB still did not give GAO access to its written comments on agency plans or e-mails and other communications relating to scoring decisions.


Government Agencies In Compliance for 2nd Consecutive Year

AccountingWEB.com - Nov-20-2006 - The Office of Management and Budget (OMB) reports that for fiscal 2006, eighteen of 24 agencies received clean audits. GovExec.com reports that all 24 agencies required by the 1990 Chief Financial Officers (CFO) Act also closed their books within 45 days of the end of the fiscal year for the second year in a row.


USNRC seeks Sr. Systems Accountant for Rockville, Maryland.

Senior staff member and lead advisor to management during analysis of business processes and development of financial IT systems.

Bachelor's Accounting or related w/exp. in operation, development, and management of automated financial system.

Apply. Ref. #OCFO/DFM-2007-0001.
Deadline: 12/11/06. EOE-M/F/D/V. U.S. citizenship.

Sunday, November 19, 2006

Interior reaches financial management modernization milestone

Two Interior Department bureaus have begun using an updated financial and business management system (FBMS), part of what department officials have called a challenging effort to eventually consolidate more than 80 unique financial systems into one.

The Minerals Management Service and Office of Service Mining started using the system Nov. 16. Interior officials have said they hope to extend the system to the Bureau of Land Management next year and throughout the department by 2010.

FBMS is an enterprise resource planning system designed for work including budgeting, financial management and acquisition.

“The [system] will help the department become more efficient and customer-friendly,” Tom Weimer, Interior’s assistant secretary for policy, management and budget said in a news release.

Consolidating redundant financial systems is a component of the President’s Management Agenda, an Office of Management and Budget effort to save money by combining back-office functions.

But Interior’s decentralization makes extending FBMS difficult, department officials have said. Interior has a wide variety of systems and limited bandwidth between geographically dispersed offices.

The project fell behind schedule due to problems with contractor BearingPoint. Interior removed the company in 2005 and has awarded the work to IBM Global Business Services.

Friday, November 17, 2006

Most agencies get clean audits, but big problems persist

Eighteen agencies received clean audit opinions for fiscal 2006, and for the second year in a row all 24 major agencies met a deadline to close their books within 45 days of the end of the fiscal year, the Office of Management and Budget announced Thursday.

The 24 agencies named in the 1990 Chief Financial Officers Act had a Nov. 15 deadline to submit the results of their annual financial audits along with annual Performance and Accountability reports. Eighteen of those received unqualified opinions, indicting that auditors were satisfied that the agencies' financial statements were reliable.

Auditors returned disclaimers of opinion, reflecting such major problems in an agency's accounting that its financial statement could not be evaluated, to the Defense, Energy, Homeland Security and State departments, and NASA.

The Transportation Department earned a qualified opinion, meaning auditors identified a particular problem, but were otherwise satisfied with the accounting.

Even among agencies judged well, auditors identified problems to be addressed. Some were in the area of internal controls, the processes that guard against fraud and error, which agencies for the first time were required to test and report on. The requirement is in OMB's Circular A-123.

Rep. Todd Platts, R-Pa., who has pressed agencies to address their financial management problems from his seat as chairman of the House Government Reform Subcommittee on Management, Finance and Accountability, lauded agencies for meeting the demanding 45-day reporting deadline.

"With this focus on internal controls ... I expect to see some of the longstanding financial management issues resolved over time," Platts said. The subcommittee has worked closely with DHS, in particular, over the past year to make progress on recurring financial management problems.

The audit results announced this week are likely to change for some agencies, as chief financial officers work with their auditors to resolve questions in the fiscal 2006 books and arrive at a final result. An October Government Accountability Office report found that 11 agencies restated the results of their fiscal 2003 audits; nine of those agencies initially received unqualified opinions.

In the study, GAO concluded that agencies and OMB were not fully transparent in how they restated financial results. They didn't always indicate which results had changed or the causes or results of those adjustments. It was not immediately clear how many agencies took the 2006 audit as an opportunity to restate past results, because of delays in agencies' release of their reports.