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Thursday, December 28, 2006

Rep. Platts honored for role in improving federal financial management

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

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

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

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

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

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

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

-Aimee Curl, FederalTimes.com

Friday, December 22, 2006

Multiple DHS agencies may have violated funding law

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

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

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

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

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

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

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

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

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

-Jonathan Marino, GovExec.com


Thursday, December 21, 2006

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

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

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

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

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

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

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

IG outlines Homeland Security Department management challenges

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

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

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

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

-Daniel Friedman, Federal Times.com


Tuesday, December 19, 2006

Federal financial report reveals ongoing reliability gaps

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

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

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

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

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

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

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

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

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

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

-Mary Mosquera, GCN.com


Internal memo raises concerns about DHS funds transfer

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

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

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

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

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

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

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

-Jonathan Marino, GovExec.com


Monday, December 18, 2006

CGI to Upgrade GSA System

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

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

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

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

-Jason Miller, WashintonPost.com


Saturday, December 16, 2006

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

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

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

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

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

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

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

Friday, December 15, 2006

Government fails 10th consecutive audit

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

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

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

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

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

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


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

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

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

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

Source:Dept. Treasury

Wednesday, December 13, 2006

Fiscal mess awaits new defense chief

Gates inherits 'worst-managed' federal agency

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

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

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

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

-Eric Rosenberg, Hearst Newspapers


Monday, December 11, 2006

Waxman revamps Government Reform Committee

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

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

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

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

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

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

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

-Aimee Curl, FederalTimes.com

Strategic retreat - OPM cancels contract after requirements test fails

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

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

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

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

Developing an RFP

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

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

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

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

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

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

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

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

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

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

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


-Jason Miller, GCN.com

Thursday, December 07, 2006

Today's GAO Presentation

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

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

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

Wednesday, December 06, 2006

Gates to continue Rumsfeld-style transformation

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

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

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

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

- Josh Rogin, FCW.com


Officials debate threshold for reporting payment errors

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

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

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

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

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

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

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

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

-Jenny Mandel, GovExec.com


Tuesday, December 05, 2006

Today's GAO Testimony

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

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

State’s ERP project inspires public value approach

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

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

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

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

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

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

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

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

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

-John Moore, FCW.com


New EVM contract standard issued by NASA

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

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

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

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

-Kerri Hostetler, WashingtonTechnology.com

GSA chief at odds with agency auditors

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

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

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

-David Perera, GovExec.com


Monday, December 04, 2006

David Norquist - Protecting the homeland and its tax dollars

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

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

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

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

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

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

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

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

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

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

READ MORE, including Q&A with David Norquist

- Stephen Losey, FederalTimes.com

Saturday, December 02, 2006

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

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

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

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

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

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

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

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

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

-Jason Miller, GCN.com

Friday, December 01, 2006

FederalNewsRadio - Federal Financial Report - DHS

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

Line of business will outlast administrations

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

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

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

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

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

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

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

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

-Mathew Weigelt, FCW.com