Guidelines floated for financial management consolidation

"The General Services Administration and the Office of Management and Budget are seeking input on draft guidelines designed to sort out unanswered questions about streamlining financial management systems across government.

The effort is part of the OMB-initiated lines of business project, aimed at moving agencies' back-office information technology systems in several areas, including financial management, to a handful of designated federal entities or private sector providers. The concept is that shared-service providers could present more efficient alternatives to in-house systems.

The proposed guidance, released earlier this week, is intended to help agencies find the most suitable service provider.

In keeping with information provided to lawmakers in April, OMB officials said in a May 22 memorandum that competition will be critical to agencies' selection processes. "

FederalNewsRadio - Ask the CFO - Maureen Wylie (NOAA)

"The Chief Financial Officer (CFO) serves as the principal financial manager for an organization whose appropriated resources approach nearly $4 billion and whose recorded capital asset value exceeds $5 billion. The CFO's Office has the responsibility under the CFO Act to provide the leadership necessary for NOAA to obtain a yearly-unqualified opinion in the audit of its consolidated financial statements. The areas under the direction of the CFO are the Budget and Finance Offices.

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Financial Management Line of Business Seeks Comments on Guidance

"The U.S. General Services Administration's Financial Systems Integration Office (FSIO) seeks comments on the Financial Management Line of Business (FMLoB) Migration Planning Guidance, posted on http://www.fsio.gov.

Comments are due June 12 on the guidance, which is part of a plan to implement the Federal FMLoB, a President's Management Agenda initiative to help agencies improve the cost, quality, and performance of financial management systems, by fostering efficiencies in federal financial systems and operations.

The guidance is devised to help agencies make good decisions on whether to migrate to a shared service provider, under the FMLoB initiative, which aims to enable agencies to leverage shared services and to implement government- wide reforms to improved financial management services government-wide."

OMB releases financial-management guidance

"The Office of Management and Budget released updated guidance to clarify a roadmap for agencies moving to the financial management Line of Business. It includes a competitive framework, template for migration project plan, change management best practices and a menu of services that financial-management shared-service providers can deliver.

The Migration Planning Guidance, dated May 22, aims to answer procedural questions and provide insight when agencies conduct competitions for financial-management services from a public or private shared-service provider. The guidance is the first product related to OMB projects outlined in a December memo to encourage more transparency and standardization in federal financial-management systems and operations.

The guidance documents also contain draft performance measures, which should help agencies evaluate the various alternatives for financial-management systems and operations, said OMB controller Linda Combs. A template for a service-level agreement is designed to smooth agencies' transition to a shared-service provider.

A later version of the guidance will provide a template for a sample request for proposals when foundation sections of the guidance are finalized, said Mary Mitchell, the General Services Administration's deputy associate administrator for e-government and technology. She is also the executive of the Financial Systems Integration Office, which is coordinating with OMB on the guidance, and the FMLOB project manager.

'This public draft addresses many of the agency comments we received, especially those related to clarity and on the tools provided. A number of suggestions, especially those that are policy-related, continue to be under review and consideration,' she said in the guidance.

OMB and the FSIO will accept comments regarding the exposure draft version of the guidance through June 12. "

Financial Management: Elevating CFOs: Count the ways

"Federal CFOs and their colleagues from Congress, the executive branch and private industry are seeking ways to make government realize the role of a CFO is more than just writing financial reports and counting beans.

Despite the passage of 'alphabet soup' laws such as GPRA, the Government Performance and Results Act, agencies still are far from making accurate, reliable accounting a priority, Mike Hettinger, staff director of the House Government Reform Subcommittee on Government Management, Finance and Accountability, told a recent panel discussion in Washington.

'There's a host of underlying feeder systems that are not generating data that is timely, accurate and reliable,' he said. 'We're still plugging some not-reliable data into the same systems.'

Performance-based budgeting, a method of presenting program performance data alongside budget amounts, is another way that CFOs can elevate their role. The ultimate goal is to improve budget decision-making by linking funding choices directly to program results. "

Imperfect Assurance

"With Circular A-123 deadlines just weeks away, more than a few federal agencies are struggling to satisfy the Office of Management and Budget's version of the Sarbanes-Oxley Act.

There is little debate over the need for reliable financial reports - or for ensuring the integrity of the information on which they are based, which is A-123's intent.
The challenge is getting managers accustomed to policy, program and procurement rules to infuse what seem like accounting disciplines into their operating units. It's a cultural as much as a business challenge. And as usual, the issue hinges on whether federal workers have been given the training and manpower needed to get the job done. "

Defense business modernization agency wins support (5/23/06)

"The Defense Department's efforts to modernize its business systems recently have attracted recognition and support from some lawmakers, despite proposed budget cuts for the Business Transformation Agency, where those efforts now reside.

The House Armed Services Terrorism Subcommittee cut $341 million from various Defense IT programs in the fiscal 2007 defense authorization bill, including a 15 percent cut in research and development funds for the BTA.

But two House Democrats protested and are pushing to get the funding restored when the bill goes into House-Senate negotiations. While the Armed Services Committee's May 5 report on the bill stated that 'too many of the department's IT programs are poorly managed,' and said the programs would benefit from 'a new way of doing business,' it praised the BTA and encouraged Defense Secretary Donald Rumsfeld to support the agency. "

SENATE SUBCOMMITTEE TO HOLD HEARING ON CONGRESS’ ROLE IN FEDERAL FINANCIAL MANAGEMENT

Today, the Senate Subcommittee on Federal Financial Management, Government Information, and International Security is planning to hold a hearing on the topic of “Congress’ Role in Federal Financial Management: Is it Efficient, Accountable, and Transparent in the Way it Appropriates Funds?” The hearing is intended to discuss Congress’ role and effectiveness in the federal budget process, and ways it can improve the management of federal funds.The hearing will be held in the Dirksen Senate Office Building, Room 342, at 2:30 p.m. For additional details, click on http://hsgac.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=358

FederalNewsRadio - Ask the CFO - Charles Johnson (HHS)

"Charles E. Johnson was appointed by President George W. Bush and confirmed by the United States Senate as Assistant Secretary for Budget, Technology, and Finance at the Department of Health and Human Services in 2005. He previously served in an appointed position as Chief Financial Officer of the Environmental Protection Agency.

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Oracle con-Fusion?

"GCN hadn't really caught up with Oracle Corp. since it finished consuming PeopleSoft, JD Edwards and, most recently, Siebel Systems - companies that may have developed the business systems you're either running now or thought you were migrating to in the near future. So after getting the state of affairs from Oracle senior VP of public sector Mark Johnson, we were interested in two main things: What's up with Project Fusion, Oracle's all-encompassing, services-oriented architecture; and what should agencies expect Oracle to do with the PeopleSoft, JD Edwards and Siebel applications?


Oracle, to its credit, wants to be all things to all people, but that raises some questions. Project Fusion is a large undertaking to create an SOA and a centralized data model that works across Oracle's stable of systems. So far, the focus has been on middleware and business process management, but in a couple of years, Oracle will release individual Fusion applications. What are those, exactly? They're 'the best of the best' from Oracle's homegrown and acquired solutions, Johnson said. 'Fusion is an upgrade.'


'Upgrade from which?' we asked. Whichever you've got. Oracle last month rolled out Applications Unlimited, the company's program to continue enhancing and supporting PeopleSoft, JD Edwards, Siebel and Oracle software beyond the 2008 launch of Fusion apps. In other words, Johnson said, PeopleSoft users could continue using PeopleSoft and getting updates (plus lifetime support) or they could 'upgrade' to Fusion. Over the next year, Oracle plans to release PeopleSoft Enterprise 9.0, JD Edwards EnterpriseOne 8.12, Siebel 8.0 and Oracle EBS 12. The product road map even includes EnterpriseOne 9.0 a couple of years out.

Our questions: Who decides what’s the “best of the best?” And how does Oracle decide where to focus its development efforts if one app is the best and another, well, isn’t? Johnson said Oracle has a Fusion strategic council that includes public-sector customers to help make these decisions, but admitted, “there will be differing viewpoints.” Get in your two cents now. "

Oracle(R) Applications Secure Federal Certification and Comply with the Federal Systems Integration Office (FSIO)

"Oracle today announced that the Oracle E-Business Suite 11i.10 and Oracle's PeopleSoft Enterprise 8.9 financial management applications passed the Federal Systems Integration Office (FSIO) incremental test to retain federal certification. FSIO certification tested software capabilities to meet requirements related to configuration and generation of the Partial 224 (P224) report in accordance with the Department of Treasury's Governmentwide Accounting and Reporting Modernization (GWA) Project. Oracle first passed the Federal Financial Management Systems Software (FMSS) certification test in 1996. Since that time, Oracle continually reinforces its longstanding commitment to the federal financial management user community by retaining full federal compliance for its financial management applications and maintaining Core Financial System Requirements certification. Over 100 federal government organizations run Oracle Applications."

OMB to spell out financial LOB process

If competition is the foundation of the Office of Management and Budget’s Financial Management Line of Business Consolidation initiative, the administration’s migration planning guidance will be the blueprint agencies need to really understand how to assemble it.

OMB later this month will release the guidance, accept public comment for about three weeks, and finalize it by the end of June, according to Mary Mitchell, the General Services Administration’s deputy associate administrator for e-government and technology. GSA is the FMLOB managing agency.

“We do view that this migration planning guidance is a living document, so ... we will republish as we gain experience,” she said.

The guidance includes an updated due diligence checklist, a service level agreement template, and information on compliance and accountability. It also will contain sample draft RFP language that is not part of the current guidance to assist agencies as they put out requests for proposals to the public and private sector, Mitchell said.

OMB has already sought comments from agencies and 12 vendors on at least parts of the draft and has been meeting with selected vendors over the past month to gain a better understanding of how competition would work.

“It (the migration planning guidance) applies to what the federal agency must comply with when acquiring support from a shared-services provider. OMB will work with each agency to ensure that it complies with the framework,” an OMB spokesman said.

OMB is shaping the initiative to encourage agencies to provide more transparency and standardization in financial management.

GAO seeks more effort from Defense on modernization

Over the past six months, the Defense Department has made incremental strides in transforming its legacy and duplicative business systems by releasing another business enterprise architecture version, updating its enterprise transition plan and issuing a report to Congress.

Still, additional steps are needed to ensure DOD complies with provisions in the 2005 National Defense Authorization Act. In a report released yesterday, the Government Accountability Office found that the DOD's business systems modernization initiative took strategic steps, since a November 2005 report, to address 29 prior recommendations made by GAO to strengthen the management of the modernization effort. GAO found that 16 of the 29 recommendations have been implemented and 13 are in the process of being implemented.

Collaboration gets DOD’s modernization on track

In just over a year, the Defense Department has made more progress on its business systems modernization project than it did in the past 10. Paul Brinkley, deputy undersecretary of Defense for business transformation, and his team in the Business Transformation Agency have been largely responsible for the turnaround. Under Brinkley, the BTA has put in place the necessary disciplines, such as an enterprise architecture, common data rules, data standards, a governance structure and business rules to perform transactions, that are not only paying dividends, but are getting their advances noticed across the federal government.

DOD no longer is focused on just reducing its business systems. The department is trying to get a better accounting of where the money’s going. The services and agencies currently spend more than $4.2 billion a year to maintain roughly 4,700 business systems. The goal also is to ensure that those systems are interoperable with the business enterprise architecture the department is building, officials have said.

Even the Government Accountability Office, which has put the project on its high-risk list for the past decade, has complimented DOD’s progress over the past 12 months.

With this experience behind him, Brinkley talked with GCN about DOD’s progress, the future of the program and what other agencies can learn from the department’s experiences.

‘Teeth and consequences’

Agencies warm to outsourcing, but also must understand the challenges that go with choice

While some agencies consider the move to centers of excellence under the Office of Management and Budget’s lines of business initiatives for human resources and financial management, others are finding the private sector a viable alternative.

The Small Business Administration, for example, was ahead of the game when, nearly three years ago, it turned over the back-office functions of its financial management system to Corio Inc. (since then bought by IBM Corp.). The move not only saved the agency money, it also freed SBA workers to focus on the agency’s mission.

“SBA’s entire focus is toward delivering mission-specific results, and hosting a data center for our financial management doesn’t really fit with that,” said Stephen Galvan, SBA’s chief of staff and chief operating officer.

Under the Lines of Business initiatives, OMB encourages agencies to sign up with agency centers of excellence or their private sector counterparts for back-office functions, such as human resources and financial management, that are common to all government agencies.

But the administration wants agencies to consider all options as they perform their due diligence.

Performance reports: Making them work at your agency

"How might performance reporting affect your agency? Do you think performance reporting is just the latest fad in financial management? It's not, and chances are it will affect you and your agency soon.

Historically governments have focused on creating budgets and sticking to them, in effect controlling cash flows. More recently, citizens and government leaders are starting to expect more from government than merely managing cash flow. Under pressure to not increase taxes and to provide more services, government leaders are eager to use resources more efficiently by getting the biggest bang for the buck.

Making decisions about the use of limited resources takes more than anecdotal evidence about what works and what doesn't. Personal preferences and opinions don�t cut it anymore; reliable, verifiable and timely information is expected. That's where performance reporting comes in. Performance-measurement systems make the link between financial and nonfinancial information by reporting on resources and results.

More managers are embracing performance management as a way to improve services. If they use meaningful and easy-to-understand performance measures, they are more likely to make decisions that maximize results. Additionally, the public can see how activities lead to results, and can start to grasp the implications of public policy and operating decisions. Once performance information becomes routine and reliable, citizens can become more engaged in their government. Elected officials will become more accountable for the effective and efficient use of taxpayer dollars and the results achieved - or not achieved. "

Improvements Needed in IRS's Internal Controls. GAO-06-543R

GAO releases a report recommending improvements in internal controls at IRS.
http://www.gao.gov/cgi-bin/getrpt?GAO-06-543R

FederalNewsRadio - Ask the CFO - Charles Christopherson (USDA)

"Charles Christopherson was confirmed as Chief Financial Officer of the United States Department of Agriculture (USDA) by the Senate on November 10, 2005. Under the Chief Financial Officer Act of 1990, he is responsible to “oversee all financial management activities relating to the programs and operations of the agency.” The Chief Financial Officer has direct management of approximately 1,500 of employees located at the Washington D.C headquarters and National Finance Center in New Orleans, LA.

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House subcommittee adds $1.8B for homeland security

"The House Homeland Security Appropriations Subcommittee on Thursday approved an fiscal 2007 spending bill for the Homeland Security Department that is $1.8 billion higher than current spending but withholds funds for several major department priorities and rejects for a second year in a row a proposed increase in airline passenger fees.

The bill sets discretionary spending at $32 billion, compared to the $31 billion requested by the Bush administration. Officials wanted to generate $1.3 billion by increasing a fee charged to airline passengers, but Homeland Security Appropriations Subcommittee Chairman Harold Rogers, R-Ky., said he wanted 'to send a message to the administration that this fee is dead on arrival.' He added that his panel is not hesitating to give the department 'spankings and punishment.'
Indeed, the spending bill withholds $1.3 billion in funding until the department gives Congress strategic plans and financial information for several programs and operations. For example, the bill withholds almost $500 million from the Science and Technology Directorate until the department 'provides an expenditure plan to back up its poor budget justification and improve its financial management systems.'"

Defense Travel System delayed for landing

"Budget cuts will stretch the deployment of the Defense Travel System into fiscal 2007 and indefinitely delay the rollout of one of its new features, the travel system's program director said May 3.

DTS, the Pentagon's end-to-end travel and financial management system, has had nearly $10 million cut from its budget since fiscal 2003, said Air Force Col. Brandy Johnson. Last year, Johnson said DTS would be available at 11,000 Defense Department sites by the end of fiscal 2006.

Johnson said DTS will be at most large bases, offices and other Defense facilities by October. But about 1,100 to 1,600 sites will still be without the system that is eventually expected to save $234 million of the military's yearly $8.8 billion travel costs.

Johnson said the delay is not cause for concern. "

A new report says the Pentagon's finances are in disarray

"The Defense Department's accounting practices are in such disarray that defense officials can't track how much equipment the military owns, where it all is or exactly how they spend defense dollars every year, according to a report Thursday by a nongovernmental group.

Since 1990, Congress has required government agencies to apply the same "financial discipline" as private companies, but the Pentagon hasn't yet balanced its books under acceptable accounting standards.

Much of the problem stems from the sheer size of the Defense Department and the extent of its activities. There are more than 1.2 million people in uniform. More than 20,000 people work at the Pentagon alone.

Lawrence J. Korb, who was a Pentagon official in the Reagan administration, said Defense Secretary Donald H. Rumsfeld has said he could save $20 billion a year alone by overhauling the Pentagon's procurement and business practices. "

Managers get advice on meeting new financial reporting requirement

"As a June 30 Office of Management and Budget deadline approaches for agencies to issue assurances of their internal controls over financial reporting, experts have different ideas on how to secure immediate and long-term compliance.

At a Tuesday breakfast for members of the federal financial community, government and industry panelists made various recommendations for meeting the deadline, which is set in OMB's Circular A-123. These ranged from implementing information technology systems to winning buy-in from top management.

Fiscal 2006 is the first year in which agencies covered by the 1990 Chief Financial Officers Act must provide assurances that the internal processes that feed into financial reports are accurate and effective. Agency heads will be required to note any significant or 'material' weaknesses in those controls and identify corrective actions.

The Circular A-123 rules are widely compared to the private sector's 2002 Sarbanes-Oxley Act accounting regulations, instituted in response to the WorldCom and Enron scandals. That law requires leaders of publicly traded companies to take responsibility for corporate financial statements. With a head start in complying with enhanced accounting rules, industry representatives offered advice to government managers. "

Postal Service fights overhaul bill's accounting language

"The Postal Service is contesting language in both the House and Senate versions of a postal overhaul bill the agency contends would damage its ability to compete with private companies such as UPS.

At issue is how the agency's general accounting practices will be determined once the overhaul legislation is enacted. Both versions say the Treasury secretary -- 'in consultation with' the Postal Service -- will recommend the accounting method the agency should use in pricing products such as overnight mail and parcel shipping that compete in an open market alongside UPS and FedEx.

Treasury's report, which would also include advice from a private accounting firm, would be submitted to the newly created Postal Regulatory Commission for final consideration. The provision was created to keep the Postal Service from subsidizing the costs of its competitive products with revenue from first-class mail.

According to one postal insider, creating separate funds for competitive products and first-class mail will keep the Postal Service from offering its products at a lower price than its competitors. "

Managers get advice on meeting new financial reporting requirement

"As a June 30 Office of Management and Budget deadline approaches for agencies to issue assurances of their internal controls over financial reporting, experts have different ideas on how to secure immediate and long-term compliance.

At a Tuesday breakfast for members of the federal financial community, government and industry panelists made various recommendations for meeting the deadline, which is set in OMB's Circular A-123. These ranged from implementing information technology systems to winning buy-in from top management.

Fiscal 2006 is the first year in which agencies covered by the 1990 Chief Financial Officers Act must provide assurances that the internal processes that feed into financial reports are accurate and effective. Agency heads will be required to note any significant or 'material' weaknesses in those controls and identify corrective actions. "

Government Agencies Ready To Adopt IT Initiatives

"As the federal workforce dwindles, agencies will look to the channel to drive forward IT initiatives laid out by federal mandates, said Karen Evans, the Office of Management and Budget's administrator of e-government and IT, during a keynote speech at last week's XChange Government Integrator event in Washington, D.C.

'I really feel integrators are in the best position right now,' Evans said Friday afternoon. ' [Agencies] will turn to the integrators more than [manufacturers] for the services needed in these programs.'

More specifically, as agencies move beyond the initial planning stages of their Lines of Business (LoB) initiatives to full implementation, requirements will go way beyond products. Required implementation for the initial six LoBs -- financial management, human-resources management, case management, grants management, federal-health architecture and information-system security -- is ready for adoption, with full cost savings and improved performance expected for 2007 and beyond.

With the necessary infrastructures largely in place, spending on these initiatives will remain level or even decrease with the transition to the next stage, from an expected $21.1 million in 2006 to $20.7 million in 2007. That decrease, however, will not transcend to services. Agencies will look to integrators for migrations, standards development and eventually long-term product management and support, Evans said."

Property of the U.S. government

"Agencies face significant changes in the way they manage property, and some have concerns that the limitations of available information technology and the prevalence of old-school thinking could cripple needed advances.

Agencies have until June 30 to submit their initial management assurance statements about internal controls for financial reporting to the Office of Management and Budget. Internal controls are only one facet of property management described in Executive Order No. 13327, issued in February 2004, in OMB Circular A-123 and other federal policies.

The changing needs of government create a challenge for federal property managers, said Joe Kull, director of financial management services in the federal practice of PricewaterhouseCoopers. Kull said changing work patterns, the rise of telework and the potential for an outbreak of a communicable disease have changed the government's real property needs.

Government also has done a poor job of managing property and maintaining records on it over time, he said. 'Many agencies never had written records.'"

Transportation RFP for financial-management support

"The Transportation Department is looking to the private sector for help with certain financial-management support functions.

In a recent notice, DOT said the winning bidder will provide a host of financial-management support services, including asset management, computer and financial-management systems hosting, telephony, network infrastructure and monitoring, and data center operations.

Responses are due May 31, and DOT hopes the winning bidder will start work by Aug. 1. The solicitation is limited to small [8a] businesses. "

E-gov scores drop

"Agencies need to emphasize the importance of e-government initiatives with Congress, said Clay Johnson, the Office of Management and Budget's deputy director for management.

On the Executive Branch Management Scorecard for the second quarter of fiscal 2006, nine agencies' scores were downgraded for their progress in instituting e-government initiatives.

OMB said Congress is partly to blame for the dropping grades, which reflect agencies' difficulty in getting congressional approval for the funding necessary to cover the costs of e-government services."

Financial controls in a crisis

"Americans have been concerned, and understandably so, about the government's response to hurricanes Katrina and Rita. At the federal, state and local levels, a few government entities came through with flying colors, but others - notably the Federal Emergency Management Agency - fell short of expectations. Although many factors contributed to this less-than-adequate overall performance, the lack of strong internal control, broadly defined, played a key role in many of the financial accountability problems identified so far. "

Karen Evans on OMB's Lines of Business initiatives

"Karen Evans, Office of Management and Budget administrator for e-government and IT, will be online [on GCN] Friday, May 5 from 10:30 a.m. to 11:30 a.m. ET to discuss the nine Lines of Business initiatives that the administration is pursuing. She will talk about the administration's expectations, upcoming milestones and how the LOB's will change the way the government does business. Follow the question-and-answer in real time "

Park Service to introduce new score card for parks

"The National Park Service is revising a score card management tool to set funding priorities for parks, and will introduce a new version within several weeks, agency officials said Thursday.

The revised score card will use 33 metrics to place individual parks into one of four 'buckets' based on efficiency and performance, according to an April Park Service memorandum obtained by the Washington, D.C.-based advocacy group Public Employees for Environmental Responsibility. "

FederalNewsRadio - Ask the CFO - Gwendolyn Sykes (NASA)

"Gwendolyn Sykes is the Chief Financial Officer for the National Aeronautics and Space Administration (NASA). Through her leadership, Ms. Sykes ensures the financial health of the organization, including responsibility for ensuring that NASA resources are effectively employed toward the achievement of NASA's strategic plan. She manages the organization's budget and financial operations, directs the preparation and submission of annual financial and budgetary reports, and coordinates Agency financial management activities with other federal agencies. She also is an active participant with other agency Chief Financial Officers in supporting implementation of the President's Management Agenda.

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SAP Introduces Human Capital Management Application for U.S. Federal Civilian Agencies

"SAP Public Services, Inc., a subsidiary of SAP America, Inc., today introduced a new solution designed to help federal agencies leverage best practices and processes for human capital management (HCM) amid increasing legislative requirements, policy changes and a growing percentage of the federal workforce moving into retirement. The new application, SAP HCM for U.S. Federal Government Organizations, streamlines and automates human resource (HR) job functions -- such as benefits administration, workforce planning, talent management and personnel action requests -- to help HR line of business professionals more effectively manage their core processes within federal civilian agencies. The announcement was made at the SAP Public Services Business Forum, being held today in Washington, D.C."