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Tuesday, October 31, 2006
Friday, October 27, 2006
“It’s going to take time. We knew this. This first year was going to be a learning experience. We expected to find out where the potholes are,” said Danny Werfel, deputy controller in the Office of Management and Budget’s Federal Financial Management Office. He was addressing federal managers and business consultants at an Oct. 26 conference sponsored by consulting firm INPUTof Reston, Va.
In order to comply with OMB’s Circular A-123, departments must thoroughly document their key business processes and controls — everything from ensuring that payments match invoices to proving that their accounting staffs correctly log liabilities into their books. As with the 2002 Sarbanes-Oxley Act regulations affecting the private sector, the hope here is that better documentation will highlight trouble spots early on and improve overall financial management.
Final assurance statements on the circular are due to OMB by Nov. 15. Werfel said it’s going to take some time to determine how agencies fared.
Successful agencies have treated the task as more than just a “check-the-box, paper exercise,” Werfel said. “It must be integrated with other financial management processes.”
After a year of A-123, agencies have learned that employee buy-in must reach beyond chief financial officers, into the program staff. They’ve also learned it’s best to start with documenting a limited number of processes rather than everything at once.
“I heard one CFO say three years, and I think that’s about right,” said Paul Konka, who leads A-123 efforts at the Health and Human Services Department’s Centers for Medicare and Medicaid Services. “The first year is a learning experience. The second year, you’re taking advantage of what you’ve learned. By the third year, you’ve hit your stride.”
Housing and Urban Development Department CFO John Cox said he agreed with the three-year estimate. He also seconded the idea that the effort must reach beyond the CFO’s office.
“You mention internal controls to a program manager and they slip into a coma. But you must tell them, it’s about improving the program and improving the flow of information that we get for your program,” Cox said. “It’s about giving program managers better information about how they spend taxpayer money.”
Though the deadline for fiscal 2006 still looms, both Konka and Cox are already pressing on with ideas to expand future efforts.
At a forum organized by Reston, Va.-based market analysis firm INPUT, government officials shared early lessons learned from the first year of implementing new financial reporting standards contained in the Office of Management and Budget's Circular A-123, the rulebook for financial management accountability and controls.
Paul Konka, director of debt referral and oversight at the Centers for Medicare and Medicaid Services, said his experience with implementing the new rules demonstrated the value of relying on other audit and reporting procedures to jump-start compliance. The first deadline under the revised Circular A-123 was in June, and required that agency managers attest to the effectiveness of their processes for financial reporting.
Konka and John Cox, chief financial officer at the Housing and Urban Development Department, agreed that, based on their experiences, agencies might overcome the early challenges of implementing Circular A-123 by their third time through the annual process, but Konka stressed that education will be an enduring part of the equation. He said building acceptance of the process with program managers was an important part of compliance for CMS, because those managers interact with the auditors.
The rules, which were instituted as the government's version of the private sector's 2002 Sarbanes-Oxley Act in response to several accounting scandals, differ from that law in that they pin less accountability on top officials, Cox said. Private sector CFOs can lose their bonuses and even their jobs based on Sarbanes-Oxley violations, he said, while consequences are not spelled out for government officials.
But he said government has its own limitations that do not apply in the private sector. For example, he said, many internal controls rely on information technology and might require new IT systems, but annual budget cycles make it difficult to plan and execute the kind of multiyear budgets that IT often requires.
Cox said he has found ways to use A-123 to reform internal procedures. For example, he learned that some parts of HUD far exceed the minimum requirement of three levels of approval for travel expenses. When new technology solutions streamline the tracking process, those additional layers of review and approval will be eliminated.
Thursday, October 26, 2006
- CIO's and IT security: what's happening and what needs to happen
- HSPD 12: there's a deadline coming up -- but no need to panic
- What IPv6 can do for CIO's
Review of the Financial Statement Audit of the White House Commission on the National Moment of Remembrance for Fiscal Year 2005 and Status of GAO Audit Recommendations.
GAO-07-61R, October 26.
Wednesday, October 25, 2006
The current Congress addressed security at U.S. borders, ports and chemical plants and reorganized the Federal Emergency Management Agency. But a biennial authorization bill would allow for sharper oversight and a more comprehensive approach, wrote Mackenzie Eaglen, senior policy analyst, and research assistant Laura Keith.
“A biennial bill would allow the authorization committees to exercise much-needed oversight of the DHS, to address the many homeland security issues that have not been covered in individual pieces of legislation, and to avoid reactive stand-alone legislation inevitably proposed in response to the latest threat and directed at ever-changing security concerns,” the report states.
The authors acknowledged, however, that structural roadblocks exist within Congress, which have stymied comprehensive authorization bills to date. In the House, authorizing jurisdiction is primarily under the Homeland Security Committee, but also is shared by the departments of Judiciary, Transportation and Energy.
The award recognizes financial professionals in federal, state and local government as well as the private sector. Federal employees are eligible to win in two categories.
• The Distinguished Federal Leadership Award recognizes individuals in the legislative or executive branches who have made outstanding contributions to enhancing government financial management.
• The Elmer Staats Award recognizes the achievements of federal professionals who throughout their careers have served as role models for others and who have consistently exhibited the highest personal and professional standards.
The report, developed from interviews with federal and industry officials, made 16 recommendations on federal financial management. A single, integrated statute should be developed to unify rules, NAPA said.
By the authors' count, 25 different laws and circulars govern how agencies should manage their finances. "A collection of bits and pieces of statutes, circulars, bulletins and memoranda form the guidance for federal financial management," the report said.
"There is no sense of the relative importance of any of these components," the authors wrote, saying the fragmentation makes it particularly difficult for new government financial executives to set policies and carry out day-to-day financial management operations.
Rep. Todd Platts, R-Pa., chairman of the House Government Reform Management, Finance and Accountability Subcommittee, requested the study. Tabetha Mueller, a spokeswoman for the subcommittee, said the recommendation to consolidate rules is reflected in legislation currently being developed by the committee. The measure would centralize existing financial management rules, stripping out expired provisions and making reporting requirements more consistent.
Mueller said the committee has worked slowly on the measure, mindful that some rules need more flexibility than a statute would allow, and that some consistency and consolidation work is also under way on federal accounting standards through the Office of Management and Budget and the General Services Administration. That work is being completed in connection with the financial management lines of business initiative to consolidate back-end technology systems.
NAPA also recommended enhancing the role of inspectors general in financial management.
Legislation introduced by Platts and enacted in 2004 to address financial management problems at the Homeland Security Department resulted in an expanded role for the DHS inspector general, and the NAPA report urged other agencies to adopt a similar model to take full advantage of that in-house resource.
In addition, the report contained several recommendations on agencies' budget formulation and tracking. Agencies have spent "hundreds of millions of dollars" during the past several years to upgrade their information technology for accounting systems, the authors said. But similar investments in the parallel budget systems have not taken place and are much needed, they said.
Tuesday, October 24, 2006
Leiss, a former Office of Federal Financial Management official, began his new job in early October following about 14 months as CIO of the Commodity Futures Trading Commission.
“This is an agency that is twice the size of CFTC and twice its budget. … It is more responsibility,” he said. “I also spent 12 years working in the Office of the Comptroller of the Currency, which has a similar mission to OTS.”
Office of the Comptroller of the Currency regulates the nation’s banks, while the Office of Thrift Supervision regulates the nation’s savings and loan institutions.
Leiss will take over for Tim Ward, who held the CIO and chief financial officer position for the last four years. Ward will remain CFO.
Leiss said one of his top priorities will be to migrate OTS to a payroll provider.
“This is a very well run agency,” he said. “What is unique here is the pragmatism to get work done quickly. This agency is in touch with their customers’ needs by an order of magnitude that dwarfs other agencies.”
Leiss, who has been in government for more than 25 years, received his MBA from Stanford University, holds a master’s in systems engineering from the University of California, Los Angeles, and a bachelor’s in aerospace and mechanical engineering from the University of Pittsburgh.
- Budgeting not just for tomorrow but for the generations to come
- Measuring results case by case, mission by mission, country by country
- The importance of paying to "be there"
As a result of both the Chief Financial Officer Act and the Government Performance and Results Act, agencies have been required to produce two annual reports — one detailing financial performance and the other analyzing agency and program performance — since the early 1990s. The Reports Consolidation Act, approved in 2000, combined these documents into the comprehensive Performance and Accountability Report (PAR) agencies write today.
The purpose of the report is to share performance information with Congress, state and local governments, and taxpayers. While the report may be useful to oversight agencies like the Office of Management and Budget and Government Accountability Office, as well as other stakeholders, the general public gets little use out of it the survey found.
The Association of Government Accountants and PricewaterhouseCoopers asked 100 managers from 26 agencies and a smattering of private organizations about their experience with Performance and Accountability Reports. The results, published Oct. 20 in a report titled, “PAR: The report we hate to love,” found that 50 percent of the respondents use the report twice a year or less often and more than 80 percent use it only for reference.
“The irony is that the PAR is seen as a reference document and used by overseers such as OMB and GAO and by congressional members and staff, who already have much of the information included in the PAR,” according to the report. “In its current form, the PAR seems to have little, if any, value communicating to the public information about the government’s operating and financial performance.”
Virtually everyone surveyed said the report should be streamlined and published only in a “highlights” or “summary” version, but that the full report should be available online — “after some serious scrubbing,” one respondent suggested.
Other recommendations include: publishing reports in various styles and substance for different audiences; keeping the report succinct, simple and in “plain English”; and focusing on performance both operational and financial, rather than on the financial statements for a given agency.
Monday, October 23, 2006
While the Office of Management and Budget and the Grants Line of Business Consolidation Initiative executive boards decide on the final list of consortia providers, a working group of financial-management and grants experts are starting to develop a high-level architecture to see where the two functions intersect.
“Our fate is somewhat tied together,” said Mary Mitchell, FM LOB’s program manager, at a recent event on the Lines of Business sponsored by the Armed Forces Communications and Electronics Association’s Bethesda, Md., chapter. “We are working with the Grants LOB to identify touch points to a standard interface. We will work on data standardization and standardized business processes in 2007.”
The working group will prioritize the interfaces that both functions use, she added. In the meantime, the grants executive board has whittled the number of agency proposals to become additional consortia members from eight to three. OMB now will decide on the final consortia providers to go with the Education and Health and Human Services departments and the National Science Foundation, which the administration named last February.
OMB is expected to name the new consortia leads when the president submits his fiscal 2008 budget to Congress in February.
Sources said there is a push by some to have all eight agencies become consortia members, which still would reduce the number of grant systems to 11 from about 100.
Charles Havekost, Grants LOB program manager and HHS CIO, said he would not comment on the number of proposals submitted to OMB, but said the agencies who want to be consortia members demonstrated over the past year that they could be good cross-service providers.
While OMB decides on the next set of consortia providers, agencies are figuring out which one would fit their needs best and are preparing migration plans to the shared-services centers.
At least one consortia member and two other agencies are not waiting for the Grants and FM LOBs to figure things out.
HHS has connected its grant system with its financial system, which runs Oracle Federal Financials, Havekost said.
Meanwhile, the State Department and the Agency for International Development are working on a system to pull grant data into the shared financial system, CGI-AMS Momentum.
Grice Mulligan, director of federal solutions for Infoterra Inc. of Arlington, Va., whose software package, Grantium, is being used by USAID and State, said the agencies are about a month away from releasing the final design notes on how the data will flow from one system to the other.
“State and USAID could not wait for high-level guidance to come out,” he said. “We are trying to ensure what we embark upon is something that complies with all the modern technology standards, Joint Financial Management Improvement Program rules and other relevant guidance and standards.”
Ensuring data transfers from grants systems to financial apps is fairly straightforward, experts say. Mulligan said the data fields and the relationships between them are well-known, which will make it easier.
Because some "chief" positions are relatively new, agencies still are figuring out where they fit and what titles they should hold. So compiling the data for the Chiefs Directory required weeks of work by Bruce Brownson and his team at KnowWho, specialists in VIP data compilation. The directory will be regularly updated and refreshed online.
Congress and the White House want chiefs in key administrative posts because there's virtue in accountability. All handle large management initiatives and sign off on actions with wide-reaching impact for government's business leaders and their staffs. Peer behind massive personnel system changes, consolidation and sharing of administrative services, implementation of broad-scope security and information sharing initiatives and financial management improvements, and you'll find C titleholders.
Friday, October 20, 2006
For many years, GSA was able to hold money for agencies in cases in which they had money earmarked for projects but could not spend it by the end of the fiscal year. But concerns about the abuse of this system led to a crackdown by government auditors after fiscal 2005, with millions of agencies' "parked" dollars being returned to the Treasury Department.
But Doan said it's a legitimate option for GSA to offer.
GSA has a different mandate than other agencies, she said at a Northern Virginia Technology Council Titans Breakfast Series meeting. “We’re allowed to handle multiyear money. Somehow or another, we started waffling in the past, but that’s got to end,” Doan said.
She said holding money beyond Sept. 30 is an advantage of GSA that brings “true value to the federal government and the business community.”
After her speech, Doan said she still is strategizing how to address the issue. But she intends to increase attention to it in the fiscal 2007 legislative agenda.
OMB recently asked agencies to start documenting the savings associated with their participation in IT-related efforts such as the Bush administration's e-government projects and lines of business initiatives to consolidate back-end systems in areas such as financial management.
"The intent is to provide the agencies with incentives," said Karen Evans, administrator of OMB's Office of E-Government and Information Technology, at a conference. "[If] you get greater efficiency in your IT operations, it allows you to do other mission ... activities."
Agency responses to OMB's request to document savings were due by Sept. 30. Evans did not say whether all agencies have responded.
She emphasized the distinction between savings and cost avoidance, and noted that it is only possible to apply savings toward other mission-related technology activities. Cost avoidance is when agencies find ways to perform more work for the same budget.
Thursday, October 19, 2006
- Keeping everything (even laptops) secure at the Department of Labor
- HSPD 12: a deadline approaches -- but the Department of Labor is ready
- Looking ahead when it comes to IT security
The academy’s “discussions with financial managers suggested that many view the world of financial management as a collection of disjoined sectors rather than a single, coherent community,” states the report, “Moving from Scorekeeper to Strategic Partner: Improving Financial Management in the Federal Government.”
But finances play a major role in areas that overlap agencies, such as planning and audits. The report states that no major additional legal requirements are needed. Instead, it recommends streamlining existing statutes and improving the integration of several Office of Management and Budget circulars.
“This step would go a long way toward integrating the various disciplines of financial management,” the report states.
The academy made 16 recommendations for improving federal financial management, including enhancing recruiting and using inspectors general to assist agency decision-makers, according to the report.
Rep. Todd Platts (R-Pa.), chairman of the House Government Reform Committee’s Government Management, Finance and Accountability Subcommittee, had asked the academy to examine the issue with a focus on areas such as long-term objectives, burdensome requirements and useful financial data.
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Wednesday, October 18, 2006
"Modernizing Accounting and Auditing Standards for the 21st Century" before the Florida Institute of CPAs, University of Florida.
GAO-07-124CG, October 6, 2006 [Slides]
The survey asked government members of the Federal Real Property Association, which includes managers from eight agencies, about their progress in determining whether federal property is being used effectively or is in excess of agency needs — an initiative on the president’s management agenda.
Sixty-four percent cited “financial resources to do the work,” as the single biggest challenge to getting the job done — up from 32 percent when managers were asked the same question in 2005.
Having information available to make asset management decisions is also an issue, managers said.
“The real property database is completely unreliable. Financial systems are not well-linked to inventory data,” one manager wrote.
Tuesday, October 17, 2006
Anthony S. "Buddy" Piszel, 51, chief financial officer of Health Net Inc., will assume that role at Freddie Mac next month. He will replace Martin F. Baumann, who left Freddie Mac in March. Freddie's president and chief operating officer, Eugene M. McQuade, has been doing the finance job since Baumann resigned.
Before joining the California managed-care company in 2004, Piszel spent more than a decade at Prudential Financial Inc. Earlier in his career, he was an auditor with the accounting firm Deloitte & Touche and a fellow at the Financial Accounting Standards Board, which makes accounting rules.
Freddie Mac remains unable to perform one of the basic functions of a public company: reporting quarterly financial results on a timely basis. It plans to get back on track next year, spokesman Michael Cosgrove said. The McLean company has said its internal controls have significant weaknesses.
Because Freddie Mac was chartered by the government, it was not required to comply with many of the SEC regulations that govern other publicly traded companies. However, before the accounting scandal derailed its efforts, the company had pledged to submit to those requirements.
Baumann, who joined Freddie Mac in 2003 and was soon promoted to chief financial officer, was an expert in accounting policies, Cosgrove said. Having corrected past financial results, Freddie Mac needed a chief financial officer with extensive experience dealing with controls and technology, Cosgrove said.
Monday, October 16, 2006
The report, released by the Office of Management and Budget, reviewed the government's efforts to meet the goals laid out in the President's Management Agenda. It is a supplement to the administration's quarterly score cards assessing agency management accomplishments.
OMB Deputy Director for Management Clay Johnson said this year's focus on success stories reflected President Bush's interest in knowing how improvements in agencies' ratings translate into program enhancements.
The report described an administration goal of saving $50 billion annually through enhancements to performance and efficiency, and highlighted examples of programs that have reported improvements.
The council also noted that a consolidation of financial management systems at the State Department and U.S. Agency for International Development is projected to save $20 million over 10 years.
Bush said getting results from money spent is what the administration wants.
“[I]t’s important to set clear goals and to set priorities for the dollars we spend,” Bush said in a speech to a small pool of reporters. “And once a goal is set, a goal that everyone can understand, it’s important to make sure we measure to determine whether or not we’re achieving the results.”
Bush held the PMC meeting as the Office of Management and Budget plans to release the annual results from the fiscal 2006 President’s Management Agenda scorecard.
OMB has been pushing improvements agencies are making because of the PMA over the past week. It released a PMA fact sheet earlier this week, in part to convince critics, especially on Capitol Hill, that agency management is improving and should be supported.
OMB posted the PMA report this afternoon.
The report finds that in 2006, 73 percent of the programs are focusing on and achieving goals, up from 46 percent in 2003.
Agencies have eliminated $7.8 billion in improper payments and disposed of $3.5 billion in unneeded property, the report adds.
The White House also contends improved IT management is saving money. For instance, the report says the Energy Department will save $450 million over seven years with its modernized IT infrastructure, and the Health and Human Services Department will save almost $11 million by consolidating payroll systems.
“[W]hen we find wasteful spending, we work to eliminate it,” Bush said. “When we find a program that is making a significant difference, we work to enhance it.”
Signing GSA Order ADM 5440.591, Administrator Doan completed the agency's process in bringing about the reorganization of the agency's former Federal Technology and Federal Supply Services.
This act authorizes the FAS reorganization and establishes a new, single GSA fund -- the Acquisition Services Fund. Today's official implementation of FAS enables GSA to provide improved customer service and focus; greater career opportunities for employees; greater business flexibility for acquisition solutions; enhanced financial management and accountability; increased efficiencies; greater standardization within FAS and with external industry partners, while allowing for more innovation; and better support of the President's Management Agenda.
GSA is a centralized, federal procurement, property management, policy development and information provision agency, created by Congress to improve government efficiency and help federal agencies better serve the public. In this role, GSA acquires products and services on behalf of federal agencies; plays a key role in developing and implementing government-wide policies; provides services and solutions for the office operations of more than one million federal workers; and encourages a citizen-centric relationship with government by providing a single "point of entry" to the information and services citizens need in a timeframe they can appreciate. This allows citizens to receive accurate, timely and consistent answers and information, and helps federal agencies better respond to citizen inquiries.
Friday, October 13, 2006
He said this experience prepared him for what would soon happen in Congress: passage of the 1993 Government Performance and Results Act, which institutionalized the idea of holding federal agencies accountable for achieving results.
Today, after building a reputation for guiding the State Department’s Bureau of Educational and Cultural Affairs to high marks on the latest iteration of performance measurement — the Bush administration’s Program Assessment Rating Tool, or PART — Kniker’s helping other agencies achieve and demonstrate success.
He’s the new performance measurement guru at the Treasury Department’s Federal Consulting Group, which provides everything from strategic planning to executive coaching services to agencies governmentwide.
Thursday, October 12, 2006
- Modernizing IT infrastructure and upgrading databases has progressed -- and the CPSC is looking past FY 2007
- Security awareness is a big concern when it comes to teleworkers and those working in remote locations -- but the CPSC is making sure all employees are aware of the risks.
- Preparing for IPv6 is a big project -- but the CPSC is already ahead of the game
The success of the project was due to her “amazing team” and “our CFO, who let me do stuff,” said Snow, chief of financial systems at Coast Guard headquarters in Washington.
The USCG chief financial officer, Robert Horowitz, said letting Snow “do stuff” was a business decision.
“I provided Ms. Snow this latitude because her proposed course of action would deliver to the Coast Guard a user-friendly and technologically advanced financial-systems solution at lowest possible cost,” he said. “We have a very good relationship with the Homeland Security Department and our development contractor that allowed Ms. Snow to pursue this initiative under constrained timelines. We have been quite pleased with her success.”
The first pieces of the integrated suite were the core accounting system, Oracle Corp.’s Oracle Federal Financials, Finance and Procurement Desktop for simplified acquisition, funds management and field accounting, followed by the Contract Information Management System for contract writing.
Rather than proprietary Web brokers or middleware to integrate applications, CAS uses open-standard Web services, which let disparate applications integrate in real time.
“Many in the technology sector still consider a services-oriented architecture and integration using Web services to be a technology vision,” said Ray Muslimani, president of Coast Guard integrator Global Computer Enterprises Inc. of Reston, Va.
Snow shrugs off the praise. “At the time, there was $10 billion invested throughout the industry in SOA,” she said. “And this is the private sector, where profit is the bottom line. I could guess things were going that way.”
The Coast Guard is realizing residual profits from the move, Snow said. The Office of Management and Budget’s introduction, post-CAS implementation, of its Federal Enterprise Architecture program calls for agencies to migrate to SOA.
“We’re already compliant, ahead of the game,” Snow said.
HRSA works to fill in the health care gaps for people who live outside the economic and medical mainstream. The agency uses its $6.6 billion annual budget (FY 2006) to expand access to quality health care for all Americans through an array of grants to state and local governments, health care providers and health professions training programs.
As senior advisor to the administrator of HRSA, Mr. Smith assists in all aspects of agency management, including budget oversight, policy development, and program administration.
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The grants management initiative strives to streamline federal grant-making programs. Rather than operate independent systems, the theory is that the 26 agencies that issue grants could use a shared service that would reduce costs and improve service.
Boyd was hired two years ago and quickly took charge of the situation. As a new manager, she reinvigorated the Grants Management Line of Business.
Tim Young, associate administrator for e-government and IT at OMB, said Boyd helped construct a framework for the grants initiative by clarifying its goals. She built mutual trust among agency task force members and focused on improving federal grants management through IT.
When Oracle acquired PeopleSoft Inc. of Pleasanton, Calif., for $10.3 billion in January 2005, it inherited its liability under the GSA contract. Former PeopleSoft employee James Hicks told government officials that PeopleSoft did not give federal buyers discounts for purchases of multiple goods and services that commercial customers received. The false pricing is alleged to have taken place over a period of eight and one-half years.
The settlement is the largest payment ever obtained by the United States in a civil settlement under the False Claims Act involving the GSA’s multiple-award schedule program, the Justice Department said Tuesday in a printed statement.
The False Claims Act is a federal law that imposes liabilities for damages and fines for knowingly submitting to the federal government a false or fraudulent claim for payment.
Those with insider knowledge of false claims in government spending programs can receive a percentage of the settlement. Hicks will receive $17.7 million, the Justice Department said.
The U.S. Attorney’s Office for the District of Maryland and GSA’s Inspector General Office investigated the allegations along with the Justice Department. The lawsuit alleged that PeopleSoft gave GSA inaccurate pricing disclosures and incomplete information about the sales of software licenses and related maintenance services.
As a result, the federal agencies that made purchases under the contract overpaid PeopleSoft for software and related maintenance services between March 17, 1997, and Sept. 30, 2005, the Justice Department said.
Wednesday, October 11, 2006
When President Bush signed the Federal Funding Accountability and Transparency Act into law last month, he promised that a newly created database would boost federal agencies' "accountability and reduce incentives for wasteful spending."
But federal agencies—the majority of which have continually failed audits—have had a hard time proving their accountability to taxpayers. Many of the 24 CFO Act agencies have consistently performed below par when it comes to being able to "produce reliable, useful, and timely financial information," according to the Government Accountability Office's annual report on the progress of the Federal Financial Management Improvement Act of 1996.
Ten years after the law's inception, 75 percent of the U.S. agencies are not complying with at least one of FFMIA's requirements, including meeting federal financial management systems and accounting standards.
The Accountability and Transparency Act's website is a searchable database that will break down all the grants, loans, awards, contracts, and purchase orders received by agencies by 2008. Linda Combs, the controller for the U.S. Office of Management and Budget, which is responsible for making sure federal agencies comply with the act, told CFO.com they are on track to meeting the act's requirements by January 2008.
As for complying with FFMIA, however, progress has been static. For fiscal year 1997, 20 agencies' systems were not in "substantial compliance" with one or more of FFMIA requirements, compared to 18 last year. Auditors for the Department of Homeland Security, which was added to the list of CFO Act agencies in 2004, reported that DHS's financial management systems did not comply with any of the requirements.
Other agencies gave various reasons for falling behind in 2005. They included implementing a new accounting system (Department of Energy) and having internal control weaknesses over financial reporting (General Services Administration).
The good news is that 19 agencies have received unqualified opinions on their 2005 audits, and that number has held pretty much steady since 2000. But other improvements have been slow in coming. For instance, the GAO noted in its report, "Improvements Under Way but Serious Financial Systems Problems Persist," that while the number of agencies that restated their financial statements is down from previous years, having seven that did so indicates "a continuing lack of improvement in the underlying agency financial statements."
The agencies' lack of accuracy and timeliness in their financial reporting is often blamed on the lack of integration of their financial systems. Auditors for 13 of the 18 agencies that did not comply with FFMIA in FY05 reported that integration was a problem. In fact, Coast Guard officials had to manually review three general ledger systems to integrate data, resulting in DHS getting a very late start on preparing a consolidated financial statement and inviting errors and inconsistencies into the statement that later had to be corrected.
Some agencies are also at risk for restatements because they don't do enough during the year to keep their books up to date. For example, auditors for the Department of Health and Human Services reported that monthly reports that attempt to reconcile its general ledger with the Treasury department's records were outdated.
GFEBS is designed to help the Army standardize and streamline its financial business processes and provide continuous access to accurate, reliable and timely information across the service.
The new system is based on off-the-shelf software from SAP, Accenture said.
A technology demonstration at Fort Jackson in July proved GFEBS’ ability to meet the information requirements needed to operate and support the management of Real Property Inventory, part of the Army’s general fund. It also indicated that the system could perform real property inventory effectively as a single solution, although that is just one of the functions the system is designed to do when fully implemented.
GFEBS will manage the Army’s general fund, providing information to more than 79,000 users in more than 200 locations worldwide and giving Army decision-makers real-time data on the full range of financial and budgetary matters.
The GFEBS project, which began in July 2005, is slated for a 10-year global deployment and operations schedule. When completed, it will replace several Army systems, including the Standard Army Finance System and the Standard Operation and Maintenance Army Research and Development System.
Tuesday, October 10, 2006
The business of government isn’t business—it’s records. People entrust vital records, legal records, historical records and other records to federal, state and local bodies. These government agencies must keep as many records as any business, while simultaneously providing public access and satisfying numerous regulations. Records management systems are needed to help acquire, categorize, store, query, recall and dispose of records quickly and efficiently.
“Government has had records managers forever; automated systems are different, but the basic concepts remain the same,” said Barry Murphy, senior analyst with Forrester Research of Cambridge, Mass.
In fact, there are many records management features to consider when deploying new systems—whether your agency is looking for a standalone solution or records management as part of another system, such as financial management or enterprise resource planning.
One year after its formation, the Defense Department’s Business Transformation Agency (BTA) is eager to prove that it can produce results. DOD created the agency in October 2005 to coordinate departmentwide business system modernization efforts.
Demonstrating results will be easier in 2007 as BTA integrates common data standards into its activities, said Paul Brinkley, deputy undersecretary of Defense for business transformation. For example, the agency expects to speed its adoption of industry data standards for supply chain transactions, which will give DOD greater control of its materiel management activities, he said.
The goal is to create a business culture that resembles the private sector’s, Brinkley said.
The agency achieved more than 80 percent of the milestones in its 2005 enterprise transition plan, said Thomas Modly, deputy undersecretary of Defense for financial management. BTA officials want to build on those results and add projects and responsibilities in fiscal 2007, Modly said during a recent briefing on the agency’s new business enterprise architecture and enterprise transition plans for DOD.
Those plans describe the department’s approach to business transformation and define the priorities that DOD will use to manage major information systems and transform human resources, materiel supply, property management, weapons system development and financial management programs.
Friday, October 06, 2006
The Federal Government's auditor has raised new concerns about how certain federal agencies have restated previously issued financial statements. The Government Accountability Office said in a new report that all nine agencies it recently reviewed "could have greatly enhanced the adequacy, effectiveness, and timeliness of their restatement disclosures to users."
The GAO added that similar transparency issues existed with the associated audit reports regarding disclosure of all the essential information that would clearly explain the restatements. As a result, the GAO made 11 recommendations to the Office of Management and Budget "to further improve the restatement guidance" available to agencies’ management and the agencies' respective auditors. The auditor said the OMB agreed to take GAO’s recommendations under advisement.
"GAO reiterates its concern that it is critical for OMB to timely provide additional restatement guidance," it said in the report. Among other issues, the auditor said it would like federal agencies to better label the certain restated columns of data, and to improve footnote disclosures and the Management Discussion and Analysis section of their financial reports.
The report noted that the agencies did not report material misstatements, and potential material misstatements, to auditors or financial statement users in a timely fashion. "The primary contributing factor for the restatement disclosure issues that GAO identified was insufficient guidance available at the time to both the agencies' management and their respective auditors for disclosure of the restatements and the timeliness of such disclosures," it noted.
GAO also commented that the OMB needs to timely provide additional, though complementary, restatement guidance to both the agencies' management and their respective auditors.
The auditor noted that during fiscal 2005, at least seven of the 24 Chief Financial Officers Act agencies restated certain fiscal year 2004 financial statements to correct misstatements. In addition, 11 CFO Act agencies had restatements for fiscal year 2003. Nine of those 11 received unqualified opinions on their originally issued fiscal year 2003 financial statements.
Location: Schaumburg, Ill.
Event: AGA's Second Annual Performance Management Conference
Sponsor: The Association of Government Accountants
Description: This conference brings together state and local government managers to share in educational sessions, networking and recognition of state and local government entities that have been honored with AGA's Certificate of Achievement in SEA Reporting.
With the theme "Integrating Measurement with Management: Making the Connection," and offering 14 CPE hours, the PMC is an excellent learning and networking opportunity for performance and accountability professionals. Create your own curriculum through a combination of both general sessions and concurrent sessions. Make a connection with those defining and preparing SEA Reports, and those who can assist you in preparing your own.
Topics include: using performance information to improve management; engaging citizens to establish goals and measures in the community; assisting officials to integrate performance information; and comparing benchmarks.
Contact Information: Julie Cupp, CMP firstname.lastname@example.org 800-242-7211
Web site: http://www.agacgfm.org/pmc
Thursday, October 05, 2006
- The Department of Agriculture is in the process of converting their email and messaging systems. Seems IM is the wave of the future at the USDA!
- Enterprize-wide consolidation is tough -- and it'll take two to three years -- but it will save money in the long run.
- Looking ahead to FY 2007 and FY 2008 -- how the USDA will make sure it doesn't have too much on its plate.
Financial Audit: Restated Financial Statements:
Agencies' Management and Auditor Disclosures of Causes and Effects and Timely Communication to Users.
GAO-07-91, October 5.
The conference report accompanying the final version of the fiscal 2007 Homeland Security spending bill (H.R. 5441), passed by the House and Senate late Friday night and signed by President Bush Wednesday, instructs DHS Secretary Michael Chertoff and Office of Management and Budget officials to detail "the extent and cause of any budgetary shortfall" at FPS for the just-ended fiscal year in a report submitted by Nov. 1. The report also must address "how [DHS] will fix FPS financial, procurement and accounting processes and policies," and must be updated by April 30, 2007.
In an e-mail to employees Wednesday afternoon, and obtained by The Atlanta Journal-Constitution, CDC financial management office Director John Tibbs said he will be moving to a new job as chief management official in the agency's Office of Workforce and Career Development.
The financial management office handles accounting for the agency's annual budget of about $8.4 billion.
"While I have spent my CDC career at FMO, this affords me the opportunity to gain programmatic experience and be part of a larger management transition plan," Tibbs said in the e-mail. He did not respond to a request for an interview.
Effective on Monday, Bill Nichols will become director of CDC's financial management office. Nichols previously was head of the agency's procurement and grants office.
CDC spokesman Tom Skinner said Tibbs' job change is simply one of several recent "job rotations" among top management officials in an effort to strengthen and grow leadership. The moves are happening now because Oct. 1 is the start of the fiscal year.
When asked whether the federal investigation of CDC payments to vendors or the report critical of Tibbs' office played any role in his move, Skinner said: "To allude that any one particular issue or another led to the rotations really minimizes what we're trying to accomplish here."
"What we're trying to accomplish is strengthening management and business innovations across all of CDC," he said.
In a statement, CDC Chief Operating Officer Bill Gimson said: "John Tibbs is the best budget person in the department, and this move is a normal part of his career development, just as it is with all of the others involved in this move."
In an e-mail to CDC staff Wednesday evening, Gimson said Tibbs' move is one of several that will bring various managers' skills and talents to new parts of CDC.
READ MORE ...
- Lessons form the Medicare Prescription Drug Improvement and Modernization Act
- Cracking down on improper payments
- Rolling out the largest Oracle Federal Financial application on the planet
Tim Hill is the Centers for Medicare & Medicaid Services' (CMS') Chief Financial Officer (CFO) and the Director of the Office of Financial Management (OFM). As CMS's senior financial management executive, he is accountable and responsible for planning, directing, analyzing and coordinating the agency's comprehensive financial management functions, including the release of CMS's Annual Financial Report, as well as the program integrity of Medicare and Medicaid. Prior to becoming the CFO, Tim served as the Deputy Director of the Office of Financial Management. He also served as both the Director and Deputy Director of the Program Integrity Group, in OFM, overseeing CMS' efforts to protect and strengthen the Medicare Trust Funds. Before joining CMS, Tim served in the Executive Office of the President. He was the Deputy Branch Chief for the Health Financing Branch at the Office of Management and Budget where he supported the Administration's policy and budget development process. Mr. Hill has a Master's degree in Public Affairs from the University of Connecticut and a Bachelor of Science degree from Northeastern University.
Wednesday, October 04, 2006
By working collaboratively with grantees and lawmakers, and sharing best practices among themselves, managers can enhance the effectiveness of grant programs and stretch resources, the report (GAO-06-1046) stated.
The use of performance accountability measures has increased significantly in program management over the past several years, in part due to the 1993 Government Performance and Results Act and the development of the Bush administration's Program Assessment Rating Tool, GAO reviewers said. But they found that the use of performance metrics and goals has not grown to the same extent among federal grant programs.
The study examined four places that do use performance metrics -- the Health and Human Services Department's office handling child support payments; an Education Department office that administers grants for career and technical education; a Massachusetts Division of Medical Assistance program to manage mental health and substance abuse programs; and an Ontario, Canada-based realty management contract.
GAO reviewers found that methods of establishing accountability can be financial or nonfinancial, and based on rewards or penalties. For example, a financial mechanism could entail rewarding good performance with a one-time bonus or increased funding. A nonfinancial method might involve rewarding programs with greater operational flexibility or by altering a program's oversight or reporting burden. The report even suggested that public recognition alone could be a productive incentive.
The search tool gathers federal contract data from the Federal Procurement Data System and information on federal assistance such as grants, direct payments and loans from the Federal Assistance Award Data System. It resembles a system required under the Federal Funding Accountability and Transparency Act. That measure, which President Bush signed into law last week, drew bipartisan support fueled by the backing of an army of bloggers.
The system previewed Tuesday was developed by Washington, D.C.-based OMB Watch. It will be formally launched next Tuesday at www.FedSpending.org.
The system was developed over six months for less than $100,000, according to the group, and is intended to function as a benchmark for the newly mandated government system, as well as a public resource. The government system is slated to receive $9 million in its first two years and $2 million annually thereafter for maintenance, and is subject to requirements for how data must be presented that could make it harder to implement.
The FedSpending.org search tool provides separate tabs for queries on federal contracts and grants. In the contractor panel, users can choose among search options grouped into the broad categories of contractor, place of performance or contracting agency, with additional options for competition type and the item purchased. By clicking on the menu items, users can call up tables, generated in real time from the contracts database, of companies, states, districts or other data fields.
Tuesday, October 03, 2006
Oracle's PeopleSoft Enterprise Financial Management and PeopleSoft Internal Controls Enforcer help companies gain visibility into business-critical information, strengthen financial discipline, manage governance and compliance requirements, implement project management practices and realize efficiencies by automating and standardizing key business processes. The latest release has been enhanced to extend the value of current PeopleSoft investments using next generation technologies, deliver best-in-class business processes and drive a superior ownership experience.
Oracle's PeopleSoft Enterprise Financial Management 9 includes new capabilities enabled by innovative technologies -- including an expansion of Web services, integration with Oracle Fusion Middleware including Oracle Business Process Execution Language (BPEL) Process Manager, and Oracle XML Publisher -- to help customers maximize existing software investments.
In the latest release, Oracle continues to deliver comprehensive support for all financial, project management, asset lifecycle management business processes, as well as new functionality for the staffing industry.
New enhancements have been made in the following areas:
-- Compliance -- Expanded support for International Financial ReportingStandards (IFRS), functionality for Partial 224 Incremental Requirementsfor federal government customers and enhanced reporting capabilities,including extensive reports, facilitate financial statement certification and external auditor assessment.
-- Grants Management -- PeopleSoft Enterprise Financial Management 9 includes out-of-the-box integration with http://www.grants.gov for organizationsto obtain and view their opportunities list, preview grant applicationsonline, electronically submit applications via XML-based Web services,review submitted applications and check application status.