Better business documentation could take years to become habit, OMB says

Less than a month before the deadline for agencies to prove their key business processes and controls are on the up and up, the question isn’t “How did it go?” but “How is it going?”

“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.

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