OMB: Competition key to consolidating financial systems

"Public-private competitions will become compulsory for federal agencies outsourcing their financial management systems under the Bush administration's lines of business initiative, the Office of Management and Budget said this week in a response to questions from a lawmaker.

OMB is leading an effort to shut down agencies' back-office information technology systems and move the work to a handful of designated federal entities or the private sector. Financial management systems are one such targeted area; others include human resources systems and cybersecurity.

Private sector competition for agency IT work is an important way of keeping prices low and service satisfactory at cross-government service centers, OMB has said. In written responses to questions asked by Rep. Todd Platts, R-Pa., during a March 15 House Government Reform Subcommittee on Government Management, Finance and Accountability hearing, OMB said that competition must occur according to the dictates of Circular A-76, which governs the administration's competitive sourcing initiative to open thousands of federal jobs considered commercial in nature to bids from contractors.

OMB plans on releasing agency draft planning and implementation guidance for public comment May 12; Government Executive obtained a preliminary version.

The General Services Administration, which is the lead agency managing the financial management line of business, already has released those documents to 12 selected private sector companies. GSA invited some companies that had responded to an initial request for information on financial management OMB released in 2004 to submit preliminary comments on advance copies of the guidance. "

DHS explores options for enterprise financials

"The Homeland Security Department will decide in the next few months whether it will use existing legacy systems to establish an enterprisewide financial management system, a DHS procurement official said Thursday.

'We've paused and are looking at internal systems - legacy systems - that could be used, and in the next couple of months, a decision will be made about what to do,' said Elaine Duke, DHS' chief procurement officer. She spoke yesterday at Federal Sources Inc.'s 21st Annual Federal Outlook Conference in McLean, Va.

The initiative would replace the department's Electronically Managing Enterprise Resources for Government Efficiency and Effectiveness program, known as eMerge2. DHS cancelled eMerge2 last December after deeming it too risky and unfeasible.

DHS originally awarded a blanket purchase agreement worth up to $229 million to BearingPoint Inc. in September 2004 to acquire and implement the eMerge2 system that would combine all its disparate financial systems into one departmentwide financial management system. By the time it stopped the project, DHS had spent $18.3 million, including $9.4 million for eMerge2's initial phase and $8.9 million under a task order that originally was worth $20 million.

On March 29, a joint hearing of subcommittees from the House Government Reform and Homeland Security Committees examined possible reasons that eMerge2 failed and discussed the steps DHS would take to consolidate its financial systems.

DHS has about $48.4 million available for the program this fiscal year. DHS officials have asked for another $18 million in the fiscal 2007 budget to use for their substitute plan, if it receives internal approval."

SEC Beefing Up Internal Reporting in Response to GAO Audits

"The Securities and Exchange Commission (SEC), the agency charged with overseeing the financial reporting of public companies, is 'redoubling' its efforts to shore up major deficiencies in its own financial reporting procedures and internal controls that were uncovered in an audit by the Government Accountability Office.

SEC Chairman Christopher Cox has further told the GAO that his agency will “fully resolve the material weaknesses” uncovered by an audit in fiscal year 2004 and largely unresolved by the time his agency was audited again in fiscal 2005, according to a letter from Jeanette M. Franzel, the GAO’s director financial management and assurance

Steps being taken by the SEC, according to Franzel’s letter, include: adding “resources and expertise” to the SEC’s financial management office, creating a set of written procedures governing financial reporting processes and related internal controls, and establishing a Financial Management Oversight Committee to provide an executive level review of the SEC’s financial statements and regularly review its accounting policies and internal controls. That committee is scheduled to start work in the second quarter."

Bleak IT forecast has bright spots

"Despite an overall bleak outlook for federal growth in information technology spending in the next few years, there are some bright spots, said Ray Bjorklund, senior vice president and chief knowledge officer at Federal Sources Inc.

Some specific agencies and projects should remain lucrative, and new federal initiatives such as the lines of business will provide new ways to approach opportunities.
Successful companies will be those that migrate or morph to adapt, he told an audience at FSI's annual Market Outlook Conference today.

FSI projects the top individual projects for fiscal '07 to be:

The Defense Department's Business Transformation Agency, $215.9 million.

The Agriculture Department's Financial Management Modernization Initiative, $52.7 million.

The Interior Department-National Business Center's Center of Excellence for the Financial Management Line of Business, $49.1 million. "

Administration looks to 2008 budget

"Congress will soon launch into the fiscal 2007 appropriations season to debate how many federal dollars should go to what program. The Bush administration, however, is already looking ahead to the fiscal 2008 budget proposal.

Clay Johnson, deputy director for management at the Office of Management and Budget, issued a memo April 25 to guide agencies as they consider their funding requests for the president's fiscal 2008 budget proposal, which will be released in early 2007.

The president's policy agenda seeks to promote economic growth and create jobs while winning the war on terror and protecting U.S. citizens, according to the memo.
Johnson said agencies should use the President's Management Agenda, Budget and Performance Initiative and the Program Assessment Rating Tool.

The memo directs agencies to take a close look at the 2006 and 2007 budget proposals, which list programs the administration recommends for termination or reduction. Cutting or ending a program's funding will reduce spending, according to the memo."

FederalNewsRadio - Ask the CFO - Lyons Gray (EPA)

"The Office of the Chief Financial Officer

Mission:
Under the supervision of the Chief Financial Officer (CFO), is responsible for developing, managing, and supporting a goals-based management system for the Agency that involves strategic planning and accountability for environmental, fiscal, and managerial results; Agency-wide budget, resources management and financial management functions including program analysis and annual planning, budget formulation, preparation and execution; controls and systems for payroll and disbursements.

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Bush names Education CFO

"President Bush intends to nominate Lawrence Warder of Irving, Texas, to be chief financial officer at the Education Department. The White House yesterday sent his nomination to the Senate for confirmation.

Warder will replace Jack Martin, who left Education in December to return to the private sector.

Warder most recently was global director of operations for Deloitte Consulting. Throughout his more than 30 years with the company, Warder served in senior management positions in their London, New York, Dallas and Detroit offices.

He received his bachelor's degree from the University of Akron in Akron, Ohio, and his master's degree from Kent State University in Kent, Ohio. "

OMB wants compliance with LOBs e-gov in budget submissions

"The Office of Management and Budget reminded agencies that they must demonstrate how they are implementing the administration's Lines of Business Consolidation Initiative in their fiscal 2008 budget proposals.

In a memo, acting OMB director Clay Johnson III said agencies should follow closely the President's Management Agenda and other White House initiatives as they prepare their budget submissions.

'Your proposals should be justified by performance evaluation and cost analysis,' Johnson wrote. 'They should also reflect your agency's intent to participate in and implement the governmentwide lines of business.'

Johnson also said that agencies must ensure that their CIOs have reviewed and approved their budget proposals in the areas of e-government and IT.

Johnson sent the memo as a guidance for agencies as they prepare to submit their budget proposals to the administration by Sept. 11.

He told the agencies that they should use the President's Management Agenda and OMB's Program Rating Assessment Tool 'to identify ways your agency can meet its goals in the most efficient manner.' "

XRBL holds future promise for A-123 internal controls

"Federal financial and IT executives risk falling behind their commercial-sector counterparts by being slow to develop the use of Extensible Business Reporting Language (XRBL) in their financial-reporting systems, a panel of federal financial experts said at the Interagency Resource Management Conference here this week.

XBRL is generating growing interest as a tool for improving internal financial and business reporting controls, said Labor Department CFO Sam Mok. He lamented how departments using the same enterprise software packages still cannot share financial information. 'Putting XBRL on top of those systems would give us better access to financial information and share best practices,' he said.

The metatagging language, which describes and validates common business data, is still evolving said Dr. Sridhar Ramamoorti, partner, National Corporate Governance Group, Grant Thornton LLP and Chairman, Academy for Government Accountability. But aside from a handful of financial-regulatory agencies, such as the Federal Deposit Insurance Corp., commercial financial managers are moving much faster than is the case in government in trying to implement the language, he said.

With the Office of Management and Budget's June 30 deadline looming to implement A-123 internal controls over financial reports, financial officers could use all the help they can get. While XBRL is likely to take years to fully mature, it offers a promising tool for financial officers, Ramamoorti said. "

Tangled Lines of Business

"The Office of Management and Budget is pulling the plug on computer systems that agencies use to support administrative work. Under its 'lines of business' initiative, only a handful will remain to serve all of government. But despite OMB's determination that a few public and private administrative service centers displace the current array of disparate agency systems, its initiative could be tripped up in a tangle. Federally run fee-for-service operations have a troubled history. Government often is stymied by large-scale information technology projects. And OMB has yet to work out important details concerning public-private price competition and the treatment of unhappy customers.

In March 2004, the budget office first called together representatives from across government to examine administrative functions common to all agencies. Among the targeted areas were human resources, financial management and the processing of federal grant applications. The technology underpinning these lines of business was ripe for centralization and consolidation, OMB believed.

'The current way we do business is not getting the results that we need,' says Karen Evans, OMB administrator for e-government and IT, and the guiding influence behind the lines of business initiative."

Stephen Galvan on SBA's outsourcing of financial management services

"Stephen Galvan, Small Business Administration chief of staff and chief operating officer, will be online Wednesday, April 26, at 11 a.m. to answer questions about SBA's decision to outsource elements of its financial management services to the private sector. Galvan will be available to talk about efficiencies SBA has seen from this move and how it has resulted in letting the agency employees focus more on their core mission. "

GAO: Treasury's report system falls short

"The Treasury Department's Governmentwide Financial Report System (GFRS) is a good idea, but the department isn't developing it well, a Government Accountability Office report found.

According to a report released April 21, GAO found that Treasury has yet to develop a concept of operations defining the system's performance or to create a project plan and schedule for it. The department has yet to justify the project in its Capital Asset Plan and Business Case, as required by the Office of Management and Budget. Finally, GAO found that Treasury has failed to build in the necessary processes to manage the GFRS project, leading to problems using the system.

The oversight agency's report recommends that the department work on those areas. Treasury's commissioner for financial management service, Richard Gregg, agreed with the recommendations and said the department is putting them into practice.

GFRS' purpose is to link information directly from agencies' audited financial statements to amounts reported in consolidated financial statements. Once in place, the system will ease auditing of the statements, GAO said."

Cadenas to step up at VA

"Pedro Cadenas Jr. has been designated acting deputy assistant secretary for information and technology at the Department of Veterans Affairs, according to a memo signed by Robert McFarland, who will leave his position as the VA's chief information officer April 28."

HUD's move to a center of excellence for human resources sets a template for other agencies to follow

"On the surface, it seemed an easy decision for officials at the Department of Housing and Urban Development: Migrate to a shared-services provider for human resources instead of spending $15 million to $18 million over a six-year period to build their own system.

The reasons were obvious. Considering time required to implement a new system, its total cost and the unspoken pressure from the Office of Management and Budget to use shared services, it clearly made more sense to outsource instead of going ahead with the PeopleSoft HR system they were six months into. But as many agencies will find out over the next few years, it's not that simple. No matter how many times you draw the line down the middle of the paper and list the pros on one side, cons on the other - and fill up the pros side - the path from paper to reality is full of hidden pitfalls.

But with OMB expecting more agencies to migrate over the next few years to shared-services providers - otherwise known as centers of excellence - for HR and financial management, HUD's successful migration to the Treasury Department's HR Connect presents a valuable case study. "

Getting a Grip on Business Processes - -

"Any government agency that hasn't yet seriously considered business-process management (BPM) must step up those efforts now, or fall dangerously behind, as the industry and it's solutions undergo drastic changes and make astonishing advances in the coming year and beyond.

The integration of systems and workflow solutions, the merging of suppliers and the addition of business intelligence and collaboration applications are reshaping BPM's potential and simultaneously generating considerable challenges for government agencies.

BPM has been defined as the automation and coordination of the assets and tasks that comprise an organization's business processes. According to Forrester Research, a market research firm in Cambridge, Mass., BPM can be incorporated by agencies in any of the following forms: application integration; enterprise business applications; pure-play BPM solutions; enterprise content management software; and application platforms.

Though many federal organizations are just getting started with BPM, there are a number of projects afoot -- and more expected -- with some agencies automating administrative processes to comply with an alphabet soup of regulations, while others look to streamline and improve financial or citizen-facing processes.

For instance, the Justice Department has committed to the Unified Financial Management System, for $200 million, and is evaluating Momentum Financials, an enterprise resource planning application from CGI-AMS, part of Montreal-based CGI Group Inc. The Department of Homeland Security, meanwhile, has embarked on Electronically Managing Enterprise Resources for Government Effectiveness and Efficiency, the Emerge2 project, which takes aim at melding financial operations for the department's 22 agencies over two-and-a-half years, at a cost of nearly $50 million.

Hyperion's Upstream Purchase For Quality

"Hyperion Solutions agreed to purchase partner Upstream Software, a Rochester, Mich.-based maker of workflow software to track the movement of financial information from sources to reports.

'With a lack of confidence in financial data leading to increased business risk, solving the financial data quality problem is a top enterprise priority,' Hyperion said in a statement.

GAO: Internal Control Weaknesses in Federal Financials

"The Government Accountability Office is making a dozen new recommendations to address the compilation and reporting weaknesses that the agency identified during its audit of the 2005 fiscal year federal government financials.

For the past nine years, the GAO has refused to vouch for the accuracy and completeness of the government's financial statements.

In a report issued last week, the Office of Management and Budget said that it generally agreed with the findings of the GAO, while the Treasury stated that it concurs with 11 of the recommendations and offered a proposal for the final recommendation that should address the problem.

The GAO said that the weaknesses in the financial statement impair the ability to gauge whether the government is in conformity with generally accepted accounting principles . "

Agriculture Department makes progress on IT consolidation

"The Agriculture Department's information technology executives are embracing shared services initiatives and outsourcing in an attempt to save money and eliminate redundancies across the agency of 100,000-plus employees.

By participating in 22 of the 26 presidential e-government initiatives and eight of nine Office of Management and Budget 'lines of business,' the department is making significant contributions to shared services initiatives, the IT executives said. The lines of business projects are an OMB-led effort to consolidate and centralize federal IT systems, including those for financial management and human resources. "

Labor and State performance reports earn top ratings

"The Labor, State and Transportation departments earned top spots in an independent organization's rankings of the quality of agencies' 2005 annual performance reports, and Treasury jumped up significantly.

George Mason University's Mercatus Center released its seventh Annual Performance Report Scorecard on Tuesday, rating and ranking agencies on the transparency, public benefits and leadership evidenced in their performance and accountability reports. The ratings measure the quality of the reports, rather than agencies' success at meeting the goals outlined in them.

David Walker, comptroller general and head of the Government Accountability Office, presented the score card at Tuesday's event. 'We owe it to taxpayers to provide transparency for what they get for their tax dollars,' he said.

The 24 agencies included under the Chief Financial Officers Act have produced performance and accountability reports each year since 1999, when a reporting requirement in the 1993 Government Performance and Results Act first took effect, and Mercatus has issued its score card on those reports every year.

The score card awards agencies up to 60 points, spread across 12 criteria designed to evaluate the performance reports for how accessible, readable and usable they are; their delineation of program outcomes and costs; and the extent to which leadership is demonstrated by justifying agency performance and making links between programs, goals and policies. "

OMB, GSA thinking big with geospatial, budget LOBs

"For businesses that want a chance to help the government shape how it formulates and executes budgets and uses geospatial information in the future, this is your opportunity.

Office of Management and Budget and General Services Administration officials urged those in the private sector and in state and local government to respond boldly and creatively to two of the administration’s most recent Lines of Business—geospatial and budget formulation.

These new LOBs are “not solely about technology, it’s about changing the way the government performs these functions,” said Tim Young, associate administrator of e-government and IT.

Young and a host of OMB, GSA, and other government officials held two practioners’ days in Washington yesterday on the recent requests for information for the geospatial and budget formulation and execution Lines of Business. The government will hold another workshop today on the IT infrastructure LOB, also in Washington.

All three new LOBs were proposed in the president’s fiscal 2007 budget request earlier this year.

The budget LOB would give agencies a more coordinated approach to producing the budget, exchanging data, enhancing budget and performance integration, and promoting collaboration on these activities."

FederalNewsRadio - Ask the CFO - Greg Walter (NHTSA)

"NHTSA'S MISSION:
Save lives, prevent injuries and reduce economic costs due to road traffic crashes, through education, research, safety standards and enforcement activity. "

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Bush Picks Portman as Budget Director

"President Bush today selected U.S. Trade Representative Rob Portman to be the new director of the Office of Management and Budget, moving quickly to revamp his team now that his new chief of staff is in place.

Portman, subject to Senate confirmation, will replace Joshua B. Bolten, who started his new post as White House chief of staff on Friday afternoon and used his first full day on the job Monday to signal plans for a broader shakeup of the president's politically wounded operation."

Bush nominates veteran procurement official for OMB spot

"President Bush on Monday announced that he intends to nominate Paul Denett, a veteran contracting official, to become the next federal procurement chief. "

Federal Transition Framework to help agencies organize cross-agency initiatives

"Agencies are drowning in the alphabet soup of cross-agency initiatives - from IPv6 to HSPD-12 to LOBs to e-government - trying to figure out how they fit in with their overall missions.

For the past four years, the Office of Management and Budget has pushed and prodded CIOs and their staffs to complete their enterprise architectures to show how their systems fit together, what technologies are being used and how the agency plans to improve their missions using new technology.

But somewhere amid the flood of administration mandates, the ability to combine them into their EAs either was lost or just didn't develop.

To solve the problem, OMB's Federal Enterprise Architecture Program Management Office for the first time asked agencies to submit their transition plans for one cross-agency initiative - the move to IP version 6 - with their latest EA transition plan. Agencies submitted their latest versions of their modernization blueprints Feb. 28 and OMB finished evaluating them under assessment Version 2.0 March 31.

'Instead of doing them as one-offs, agencies incorporated the IPv6 transition plans into the plans they were already developing,' said Richard Burk, OMB's chief architect, at an EA conference in Washington earlier this month sponsored by the Digital Government Institute. 'This was very successful. Agencies just did one strategy in multiple parts. You can make sure people are talking and understanding what is going on. We want to reduce the burden on the agencies.'

Burk said IPv6 was a tryout and OMB plans to expand the approach to other cross-agency initiatives. "

STATES, FEDS MUST COOPERATE TO REDUCE IMPROPER PAYMENTS

"The federal government must work with states to establish mechanisms that will reduce the amount of improper payments.

According to a recent Government Accountability Office investigation, improper federal payments exceeded $38 billion in FY 2005. Overall, state-administered programs and other nonfederal entities receive more than $400 million in federal funds annually.

The Improper Payments Information Act of 2002, a part of the President's Management Agenda, forms the foundation of current fiscal reporting requirements for federal agencies. The reporting requirements for states receiving federal funds vary among agencies and programs.

'Measuring improper payments and designing and implementing actions to reduce or eliminate them are not simple tasks, particularly for grant programs that rely on quality administration efforts at the state level,' said McCoy Williams, GAO's director for Financial Management and Assurance, in a letter addressed to Rep. Todd Platts, R-Penn.

Platts chairs the Subcommittee on Government Management, Finance and Accountability.

In the 76-page letter, Williams also stressed the necessity for strengthening payment reporting."

Accounting and Logistics Costs an Impediment to Supply Chain Effectiveness

"The responsiveness required to keep the inbound supply chain flowing with materials and products and to keep store shelves filled is demanding. SCM requires reducing costs, increasing inventory velocity and compressing cycle time; and these three may not be compatible or consistent.

Doing all this-and doing it well-takes creativity and management skill. However there is a factor that limits the design, development and implementation of such supply chains. That factor is accounting and how it recognizes and treats logistics costs. Accounting is an impediment for logistics whether for supply chain management, both international and domestic, for lean and for outsourcing.

These differences make it difficult to develop meaningful performance metrics for supply chain management that are recognized in the board room and that are aligned with the company strategic plan. Financial metrics, while commonly used, have limited application to supply chain management performance improvement."

BPM Convergence

"Three letter acronyms have long been the hallmark of the software marketing wars, as providers looked to establish a beachhead by first defining a new critical business or technical arena, then proudly asserting their preeminence in that field.

The domain of planning and analytics has been fertile ground for the growth of terms for things businesses cannot live without. BPM, CPM, KPI, BSC -- the list is long. Despite an explosion of new terms and associated positioning, there is a set of very real trends at work, pushed forward by both business needs and advancing technology, that is driving both software providers and their corporate customers into the next generation. The trends are rooted in integration, and the need for integration is bringing about a harmonic convergence that has never before been seen in the business performance management (BPM) industry. "

Accounting change could spur postal reform effort

"A proposal requiring all private and public entities to include pension costs in their annual financial reports 'heightens the urgency to get postal reform done,' according to a source close to the legislation lodged in a House-Senate conference.

The Financial Accounting Standards Board proposal requires all abiding firms, including the U.S. Postal Service, to report post-retirement benefit costs in its annual budget. Currently, the Postal Service reports its pension costs on a year-to-year basis, rather than accounting for the entire sum on an accrual basis.

Under the proposed FASB rule, the Postal Service would report a projected $60 billion for retiree health benefits, according to Gene Del Polito, president of the Association for Postal Commerce, a group representing direct mailers. The agency also would have to submit a plan detailing how it would pay for the reported costs. To generate that money, Del Polito said the Postal Service would have to raise its rates."

GSA releases RFI for Budget Formulation Line of Business

"The General Services Administration has released the final request for information for Budget Formulation under the three new Lines of Businesses Consolidation initiative - three business days before the industry day.

The RFI, for which responses are due May 5, follows two other similar requests for IT Infrastructure and Geospatial GSA released last week. OMB announced the new LOBs in the fiscal 2007 budget request in February.

'The objective [of the LOB] is to identify opportunities for common solutions, automated tools and other approaches to enhance the efficiency and effectiveness of federal agency and central budget processes,' the RFI said. "

FederalNewsRadio - Ask the CFO - Donald Hammond (Treasury)

"Don Hammond was appointed Fiscal Assistant Secretary, a career position, on September 27, 1998, after serving as the Deputy Fiscal Assistant Secretary since July 1996. In his position, he provides policy oversight over the activities of the Financial Management Service and the Bureau of the Public Debt in conducting the fiscal affairs of the federal government. The office also serves as the Treasury's liaison with the Federal Reserve System in its role as the government's fiscal agent. The scope of his responsibilities includes management of the government's cash flow, improving government financial management, the execution of the government's financing activities and the operation of government-wide financial accounting and reporting systems including the preparation of the Consolidated Financial Statements of the United States. In addition, Mr. Hammond is a statutory member of the Government-wide CFO Council, represents Treasury on the JFMIP Steering Committee and represents the Secretary on the Trust Fund Boards for the National Archives and Library of Congress.

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GCN InSight eSeminar - SOA at HUD

"Join HUD Chief Information Officer Lisa Schlosser and GCN Chief Technology Editor Brad Grimes on April 19 for a one-hour discussion of service-oriented architecture.

After Ms. Schlosser's online presentation, there will be an in-depth question-and-answer session moderated by Mr. Grimes. The entire eSeminar will be made available in an online archive for your review.

Event DetailsDate: April 19, 2006Time: 2 p.m. Eastern / 11 a.m. PacificDuration: 1 Hour"

GAO seeks data on commercial budget software

"The Government Accountability Office is asking industry for information about commercial software that could assist legislative agencies in formulating annual personnel budget requests to Congress.

In a recent notice, congressional watchdog agency GAO said it is seeking products that let users develop base-level program estimates of employee compensation, benefits and personnel-related costs.

The programs should also let the user record explanations and assumptions that support human capital management, financial-management, budget formulation, workforce planning and payroll processing systems. "

OMB: Agencies met March cost management deadline

All federal agencies met a recent deadline for starting independent reviews of their plans to implement a financial management tool for information technology projects, an Office of Management and Budget spokesman said Tuesday.

Agencies had until March 31 to begin reviews of their plans to implement earned value management, a technique for tracking a project's progress against its planned performance, cost and schedule. The strategy also requires agencies to evaluate risks that might derail performance plans, and develop risk mitigation strategies.

All agencies reported meeting the deadline, said an OMB official who asked to remain anonymous, though some discovered through the review process that their plans required additional work to ensure achievable goals and a clearly defined performance baseline in the areas targeted by the system under development.

New DOT CIO named

"Industry veteran Dan Mintz has been appointed chief information officer of the Transportation Department. Mintz, currently working at Sun Microsystems, will join DOT on May 1.

Mintz has been director of government compliance programs at Sun for more than a decade. He is responsible for managing security, legal and regulatory compliance for the company's U.S. government business. Mintz has held various leadership positions in consulting and worked for companies such as Lockheed Martin.

Mintz received a bachelor's degree in information systems and a master's degree in international management from the University of Maryland.

Dan Matthews, DOT's former CIO, took a private-sector job in December 2005. His deputy, Jackie Patillo, has been serving as acting CIO."

EEOC signs new financial management outsourcing pact

"The Equal Employment Opportunity Commission announced a new interagency agreement for financial management services with the Interior Department's National Business Center on Tuesday.

The agreement, which was finalized Friday, is worth $11.7 million over six and a half years. That total includes about $1.9 million for conversion to the new system, which should be completed by Sept. 30, 2007, and about $1.9 million in annual costs. Help desk support, accounting operations and systems management also are included in the deal. Interior's business center will use CGI Group Inc.'s Momentum Enterprise Solution package.

The center competed for EEOC's business against two other centers of excellence for financial management, one at the Transportation Department and another at the Treasury Department. The General Services Administration, which also hosts a financial management center of excellence, did not submit a bid. Jeffrey Smith, EEOC's chief financial officer, said the competition was based on technical offerings and price, and Interior's center prevailed partly because it had a track record of providing high-quality service.

Report Details Disability Overpayments

"The Social Security Administration's disability program loses billions of dollars through overpayments and payments to ineligible beneficiaries, the agency's Office of Inspector General found in a report issued this week.

The report, requested by Senate Finance Committee Chairman Charles Grassley, R-Iowa, estimated overpayments of $5.1 billion identified between October 2003 and November 2005. The SSA discovered $1.9 billion through normal reviews but failed to detect the other $3.2 billion.

There were also estimated annual benefits of $9.1 billion made to ineligible beneficiaries, of which $7 billion was stopped by normal processes but $2.1 billion was not detected."

Governments cut costs grow savings managing wealth

"In the search for better, cheaper, more efficient government services, some states and municipalities are turning to asset management, an IT concept that offers an enterprise view of an organization's holdings.

State and local governments are following in the footsteps of the private sector, which for years has used asset management systems to drive savings and manage large volumes of resources, both technical and nontechnical.

Without a single IT system to track a government's complete inventory of assets - from computers, servers and systems to vehicle fleets, land and buildings - the threat of overlooking and under-reporting assets is high, industry experts said.

An asset management system, linked to other state IT systems such as enterprise resource planning, lets a state administer all of its holdings governmentwide. Often, asset management is done ahead of an IT consolidation or outsourcing project, as the state and IT contractor grapple with cataloging holdings of various agencies that need to be incorporated into one system. This lets the state save tens of millions of dollars. "

Progress cutting improper payments may be overstated (4/6/06)

"Erroneous payments by federal agencies decreased in 2005, largely because of reductions in mistaken Medicare payments. But that drop primarily reflects improvements in record-keeping, government auditors said at a Wednesday hearing.

A review of fiscal 2005 data reported to the Office of Management and Budget shows that agencies are making progress in identifying improper payments, defined as those made mistakenly to ineligible applicants, or as a result of fraud or other error.

The reported governmentwide reduction of almost $7 billion in improper payments -- a 16 percent drop over the previous year's level -- was driven mainly by a $9.6 billion decrease in the Medicare program, said McCoy Williams, director of financial management and assurance at GAO. "

FederalNewsRadio - Ask the CFO - Janice Lambert (IRS)

"Lambert came to the IRS as Deputy CFO in June 2004 from the Department of Treasury, where she served as Director of Budget. In that capacity, she was responsible for overseeing the formulation and execution of Treasury's $13 billion budget and providing leadership and guidance to Treasury's 13 bureaus and organizations on the development and implementation of performance-based metrics and budgets.

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OMB's Clay Johnson predicts e-government's future

"By the time the Bush administration is out of office in 2008, all the 25 original E-Government initiatives should be fully implemented.

That is one White House's goals for the President's Management Agenda over its last 2 1/2 years, according to Clay Johnson, the Office of Management and Budget's deputy director for management.

'We have demonstrated we can do these things over the past few years, so we have to continue to focus on performance,' Johnson said earlier this week at the 8th annual Government Performance Summit in Washington sponsored by The Performance Institute of Arlington, Va. 'We have the ability to set targets and move to them. We couldn't do that 10 years ago.'

Additionally, Johnson said he expects the public to be using 80 percent to 90 percent of the 25 Quicksilver projects to their full capabilities by 2008.

He also said agencies will fully implement all nine of OMB's Lines of Business Consolidation initiatives - budget formulation, case management, federal health architecture, financial management, human resources management, geospatial, grants management, IT infrastructure and IT security - and demonstrate high level of services for lower costs.

Besides e-government, the administration expects that Congress will pass some sort of civil service modernization, including pay-for-performance, for every agency, and that at least 22 Chief Financial Officer Act agencies will have unqualified financial audits. He also said the administration expects to continue to show savings through competitive sourcing competitions, where agencies compete inherently commercial positions with the private sector. "

OMB program assessments viewed as flawed budget tool

"The Bush administration's annual evaluations of federal programs are good for improving management, but problematic for budgeting because they fail to take into account congressional intent and can be politicized in ways that can harm the review process, a legislative staffer said Tuesday.

The reviews, conducted each year with the Program Assessment Rating Tool questionnaire, are a valuable management tool, as 75 percent to 80 percent of the recommendations made are management-related, said Mike Hettinger, staff director for the House Government Reform Subcommittee on Government Management, Finance and Accountability, at a conference hosted by the Performance Institute, an Arlington, Va.-based think tank. "

Transcript of remarks by Agriculture Secretary Mike Johanns At the Government Performance Summit Washington D.C. - April 4, 2006

"Sometimes it may seem as though the ships we are steering within the federal government are just too massive, too complicated, to set a new course. Again I submit to you that the President has given us not only the toolbox, but he's given us five key tools in the form of initiatives that help us to become real difference-makers.

They are: strategic management of human capital; competitive sourcing; improving financial management, budget and performance integration; and expanding electronic government.

These initiatives have helped us to make a real and very tangible difference at the USDA. Notice that I didn't say it's been an easy process; it's not. But I suspect there were easier roads you could have followed than one that led you to this room today. But on the other hand, I will also share with you, that the rewards have been very great. "

Agencies push toward portfolio management for lines of businesses

"As agencies prepare their fiscal 2008 budget submissions, the Office of Management and Budget is expecting fewer business cases and more use of portfolio management, according to one federal CIO.

Lisa Schlosser, Housing and Urban Development Department IT chieftain, said the consolidation of business cases into lines of business portfolios is one of a handful of trends that are emerging in agencies.

'We had 13 systems for single-family mortgages that all had their own business cases, and we merged them into one last year,' Schlosser said yesterday at the Performance Institute's 8th Annual Government Performance Summit in Washington. 'More and more, we have to ask what businesses align with the technology within the line of business. OMB will be looking for more of that.'

Schlosser said the impetus to use portfolio management may not be entirely new, but the push by OMB to spend more money on mission-critical systems and less on infrastructure applications is making it more important. "

DHS looks for new financial management plan

"After scrapping a multimillion-dollar initiative for an enterprise financial management system in December 2005, Homeland Security Department officials are trying to develop an alternative plan by this summer.

Eugene Schied, the department's acting chief financial officer, told lawmakers last week that the department is considering several options to replace the failed Electronically Managing Enterprise Resources for Government Efficiency and Effectiveness (EMERGE2) initiative.

At a March 29 joint hearing of subcommittees from the Government Reform and Homeland Security committees, Schied said DHS will not invite new bids for EMERGE2.
DHS allowed several agencies, including Customs and Border Protection and the Coast Guard, to upgrade resource management systems while the EMERGE2 project was in development. Schied said those systems have matured.

In the Coast Guard’s case, the agency became a service provider to the Transportation Security Administration, which shifted its management system from the Transportation Department last year. The Office of Management and Budget’s Financial Management Line of Business Center of Excellence offered alternatives, too, he added, all of which makes the original EMERGE2 vision less applicable.

The department expects to present a new plan to its Investment Review Board by May or June, he said."

FederalNewsRadio - Ask the CFO - John Vonglis (U.S. Air Force)

"John G. Vonglis is the acting Assistant Secretary of the Air Force for Financial Management and Comptroller, Headquarters U.S. Air Force, Washington, D.C. He is the principal adviser to the Secretary of the Air Force, Chief of Staff and other senior Air Force officials for budgetary and fiscal matters. With nearly 700,000 military and civilian personnel and a budget of more than $124 billion, he serves as the Air Force's chief financial officer responsible for providing the financial management and analytical services necessary for the effective and efficient use of Air Force resources.

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Senate confirms Thorson as new SBA inspector general

"The Senate Friday unanimously confirmed Eric Thorson to serve as the Small Business Administration's inspector general.

Thorson, nominated for the post by President Bush last June, currently serves as senior adviser for Investigative Operations and Agency Planning at the Office of Personnel Management.

Prior to joining OPM, Thorson held top staffing posts in the Senate, including chief investigator for the Senate's permanent subcommittee on investigations. "

OMB sidelines two rules on interagency transactions

"The Office of Management and Budget temporarily set aside two business rules related to how agencies make payments and conduct transactions with each other because the rules caused unintended confusion.

Under the temporary waiver, agencies will not make advance payments for service orders from other agencies unless required by law. Also, agencies may provide advance payments for goods only if the order exceeds $1 million or if the law requires it, said Clay Johnson, OMB deputy director for management, in a memo this week.

The Chief Financial Officers' Council is reviewing and may recommend expanding the Business Rules for Intragovernmental Transactions, which provide standard processing and recording of transactions between agencies, he said. The business rules aim to help agencies better track the money they spend among each other.

Accounting for transactions between agencies has been a major weakness across government. "

The Power of Metrics: Predictive Analytics: Branching Out with Decision Trees

"As more and more organizations integrate their disparate data sources into 'one single source of truth' by leveraging integrated enterprise resource planning (ERP) systems, operational data stores (ODS), data warehouses and federated solutions, it becomes quickly apparent that the anticipated big-bang ROI never materializes. Campaign management applications, supply chain management systems and financial management suites are often layered on top to provide effective environments for the storage, access, semi-analysis and visualization of data. Scorecards and dashboards also provide significant insight into the health of an organization by tracking key performance indicators (KPIs). In reality, however, this is only the first step in understanding, quantifying and managing the business. Much work and effort still needs to be invested in understanding the business drivers and their critical success factors. Predictive analytics with its portfolio of statistical and data mining models can play a significant role in identifying and understanding the critical business drivers and root causes that facilitate realization of the big-bang ROI."

A challenging new system

"While the Homeland Security Department's eMerge2 financial system has taken a new direction in recent months, our need and our vision remain the same: Equip Homeland Security managers and leaders with the critical resource management information necessary to improve decision-making and to improve service delivery and efficiency.

The initial eMerge2 strategy to develop a new financial system was based in part on a 2003 assessment that concluded the mission support systems being inherited by the new department had limitations. Specifically, each of the systems examined failed to meet all mandatory requirements promulgated by the Joint Financial Management Improvement Program, the government's financial standards setting board. Based on this study's finding, and the fact that there were a number of new or transferred organizations that had no resource management systems, the decision was made to develop a new, integrated suite of resource management systems that would serve as a platform for the entire department. "