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Friday, December 21, 2007

Today's GAO Publications

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

Budget Issues: Accrual Budgeting Useful in Certain Areas but Does Not Provide Sufficient Information for Reporting on Our Nation's Longer-Term Fiscal Challenge.
GAO-08-206, December 20.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-206
Highlights - http://www.gao.gov/highlights/d08206high.pdf

Veterans' Benefits: Improved Operational Controls and Management Data Would Enhance VBA's Disability Reevaluation Process.
GAO-08-75, December 6.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-75
Highlights - http://www.gao.gov/highlights/d0875high.pdf

Navy ready to launch ERP system

The Navy Enterprise Resource Planning program, which includes financial management, project management and other key business applications, is about to go live after about three years of development.

The Naval Air Systems Command (Navair) in Patuxent River, Md., with 15,000 users, will be first to use the system. After that, the Navy will turn on the ERP system next year at five Space and Naval Warfare Systems Command (Spawar) locations with 10,000 users. The rollout will reach 88,000 users by 2013, officials said.

The initial release, which utilizes the SAP for Public Sector product, includes financial management, procurement and acquisition management, project management and workforce management functionality.

The validation of the system included more than 21,000 test scripts and nearly 53 million data conversions in six testing cycles, Gardiner said. The company included Navair personnel in testing the system.

The Navy’s achievement also is a big change from previous ERP attempts. The Government Accountability Office said in a September 2005 report that the service invested more than $1 billion since 1998 in ERP pilots and had not achieved marked business process improvements.

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Thursday, December 20, 2007

FederalNewsRadio - Ask the CFO - Michael Kane (NNSA)

National Nuclear Security Administration

Michael Kane - Associate Administrator for Management and Administration

Breaking down barriers. That type of talk is all the rage among tech-savvy government officials. Only Kane, winner of a Meritorious Presidential Rank award, says now financial officers are getting into the act using increased transparency to eliminate redundancy across agency lines. Kane says while this save money it also means putting a greater burden on financial officers to adopt business manager-type skills to ensure there are no hiccups along the way, something which could have far-ranging implications for the way we look at careers in government. He also talks about NNSA's recruiting efforts and the impact merging NNSA's physical and IT security functions will have on the agency's finances.

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FederalNewsRadio - Ask the CFO - David Walker (GAO)

Government Accountability Office

David Walker - Comptroller General

Walker paints a stark picture of the nation's fiscal health, warning that if the government was a private sector company the recently released 2007 Financial Report of the United States would have "our stock dropping and there would be talk about whether the company's management and directors needed a major shake-up." He says what is needed is a return to strict budget controls, the development of key national indicators and more of an effort to translate complex financial statistics into plain, old English. He also weighs in on how the fiscal crisis ranks with terrorism as far as threats go and on what all this means for government CFOs.

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Today's GAO Publication

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

Centers for Medicare and Medicaid Services: Internal Control Deficiencies Resulted in Millions of Dollars of Questionable Contract Payments.
GAO-08-54, November 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-54
Highlights - http://www.gao.gov/highlights/d0854high.pdf

Tuesday, December 18, 2007

GAO says government failed yet another financial audit

For the 11th straight year, the federal government failed its financial audit, GAO announced Monday, in a widely anticipated finding that Comptroller General David Walker used to underscore the government's troubled fiscal health.

"If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up" Walker said this afternoon in a speech at the National Press Club.

Just before his address, GAO issued a statement saying it could not express an opinion on the government's fiscal 2007 consolidated financial statements, mostly due to the Defense Department's financial management problems. In an announcement this morning, the agency also pointed to the government's failure to account for intergovernmental activity and balances between agencies and federal agencies' "ineffective process for preparing consolidated financial statements."

But Walker pointed to some positives. For the first time, his agency gave an unqualified opinion on the government's "Statement of Social Insurance," which deals with the most expensive programs, such as Social Security, Medicare, railroad retirement and black lung healthcare. Walker used his speech to reiterate the themes of his "Fiscal Wake-Up Tour," through which he has warned that rising healthcare costs and baby boomer retirements will cause an unmanageable increase in debt burdens.

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Monday, December 17, 2007

GAO: Some Progress on U.S. Government's Financial Statements But Significant Problems Remain

Serious Material Weaknesses Affecting Financial Systems, Fundamental Recordkeeping, and Financial Reporting

WASHINGTON (December 17, 2007) - For the 11th year in a row, the U.S. Government Accountability Office (GAO) was prevented from expressing an opinion on the consolidated financial statements of the U.S. government--other than the Statement of Social Insurance--because of serious material weaknesses affecting financial systems, fundamental recordkeeping, and financial reporting.

David M. Walker, the Comptroller General of the United States and head of GAO, did note some progress in this year's audit. This year GAO expressed an unqualified opinion on the fiscal year 2007 Statement of Social Insurance, which includes the Social Security, Medicare, Railroad Retirement, and Black Lung programs. This is significant because the statement covers some of the largest numbers in the federal government--tens of trillions of present-value dollars associated with future social insurance expenditures.

Overall, however, Walker was not satisfied. In a speech today at the National Press Club, he said, "If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up." Walker urged greater transparency and accountability over the federal government's operations, financial condition, and fiscal outlook.

Despite improvements in financial management since the U.S. government began preparing consolidated financial statements more than a decade ago, three major impediments prevent the U.S. government from obtaining a clean opinion: (1) serious financial management problems at the Department of Defense, (2) the federal government's inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government's ineffective process for preparing the consolidated financial statements.

"Until the problems outlined in our audit report are adequately addressed, they will continue to have adverse implications for the federal government and American taxpayers," Walker said in a letter to the President and Congress.

"The federal government's fiscal exposures totaled approximately $53 trillion as of September 30, 2007, up more than $2 trillion from September 30, 2006, and an increase of more than $32 trillion from about $20 trillion as of September 30, 2000," Walker said. "This translates into a current burden of about $175,000 per American or approximately $455,000 per American household."

The fiscal year 2007 Financial Report of the United States Government, which includes financial information from the 24 major federal departments and agencies and GAO's audit report, is being released today by the Treasury Department. It is also available on GAO's web site at http://www.gao.gov/financial.html

For more information, contact GAO's Office of Public Affairs at (202) 512-4800.

Today's GAO Publications

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

Department of Veterans Affairs: Actions Needed to Strengthen VA's Foreclosed Property Management Contractor Oversight.
GAO-08-60, November 15
http://www.gao.gov/cgi-bin/getrpt?GAO-08-60
Highlights - http://www.gao.gov/highlights/d0860high.pdf

Tax Compliance: Federal Grant and Direct Assistance Recipients Who Abuse the Federal Tax System.
GAO-08-31, November 16
http://www.gao.gov/cgi-bin/getrpt?GAO-08-31
Highlights - http://www.gao.gov/highlights/d0831high.pdf

Friday, December 14, 2007

Today's GAO Publication

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

DOD Travel Improper Payments: Fiscal Year 2006 Reporting Was Incomplete and Planned Improvement Efforts Face Challenges.
GAO-08-16, December 14
http://www.gao.gov/cgi-bin/getrpt?GAO-08-16
Highlights - http://www.gao.gov/highlights/d0816high.pdf

FederalNewsRadio - Ask the CFO - Thomas Bellamy (PC)

US Peace Corps

Thomas Bellamy - Deputy Chief Financial Officer

An unqualified audit opinion with no material weaknesses for FY 2007 certainly is reason to celebrate at the Peace Corps. Bellamy says what makes the achievement even more gratifying is that it came sooner than expected. Still, he says it was not easy. Getting the unqualified opinion required the financial managers to work ever more closely with posts across the world to ensure they had the necessary documentation as well as the right amount of flexibility so that funds did not go unused. Bellamy says the process also benefited from strong leadership at all levels, a focus on fiscal responsibility through strong customer service and a solid relationship with the Peace Corps Inspector General.

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Thursday, December 13, 2007

Federal spending database defies doubters

The Office of Management and Budget initially doubted the need for or the possibility of developing a single, online, publicly accessible database with all contracts, grants, loans and other transactions. But after Sens. Tom Coburn (R-Okla.) and Barack Obama (D-Ill.) shepherded the Federal Funding Accountability and Transparency Act through Congress and it became law, administration officials rethought the possible.

And now 15 months later, that database is reality. OMB today officially launched the first version of USASpending.gov, more than two weeks before the congressionally mandated Jan. 1 deadline.

“This is an example of what can happen when Congress and the executive branch have a shared goal and Congress holds the executive branch accountable,” said Robert Shea, OMB’s associate director of administration and government performance and the lead in developing the FederalSpending.gov Web site, at the launch briefing in Washington. “We saw what could be done when OMBWatch launched their version and we partnered with them.”

In fact, the administration bought OMBWatch’s software for about $600,000 and developed the entire database for less than $1 million. This doesn’t count the hundreds of hours agencies put toward collecting, formatting and uploading data on all these transactions. Agencies spent more than $400 billion on contracts in fiscal 2006 and $2.8 trillion across all categories.

USASpending.gov is similar to the recently updated version of the OMBWatch site. Users of the federal site can search by name, place of performance, agency, product or service category or the top 100 recipients governmentwide. The agency searches are limited to top 10 contracts, top five congressional districts, and products or services.

Shea said the first iteration of the federal spending database includes all transactions after there was some concern it would provide only contracts and grants.

Coburn said at the launch that the database was a “herculean task,” and does more than create transparency. He said it continues to ensure we have a free society.

“The only thing that enables us to have a free society is transparency,” he said. “It will make the government more efficient through its accounting and financial management.”

Coburn added that he was pleased OMB beat the deadline because so many times Congress passes legislation and the implementation never comes on time.

Rep. Tom Davis (R-Va.), one of the main House sponsors of the bill, said in a statement today that the launch of USASpending.gov was a watershed moment for government accountability.

“Today’s an important day for all of us who believe sunshine is the best disinfectant,” Davis said. “We included an ambitious time frame; we knew it would be difficult. I congratulate all of those who rose to the occasion and met this challenge” two weeks ahead of schedule.

-Jason Miller, FCW.com

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Federal Finance Skills Must Catch up on Transformation

When pundits predict a retirement-driven government brain drain, it’s folks like Mary Mitchell they have in mind.

Mitchell, a 32-year veteran of federal service, will retire Jan. 3, 2008 from the General Services Administration. The FCW account of her plans made the magazine’s most-viewed story list, beating out a You-Tube video of GSA Administrator Lurita Doan on Halloween, dressed as a witch, riding the agency’s hallways aboard a Sedgeway.

Currently GSA’s deputy associate Administrator for the Office of Technology Strategy, Mitchell has been focusing on the financial services line of business and, in a larger sense, the changing skills requirements of the federal financial function.

Financial types “have not been there in program decisions until now. The main focus has been on transaction processing and reporting,” she says.

But that’s changing.

As the mechanical functions of financial management go towards shared service providers, those in the CFO community “must be a party at the table making good business decisions.” Mitchell says she believes the integration of finance with agency budget and program goals requires transformation of the financial skills set. That transformation that has already occurred in IT as data processing was outsourced and CIOs became strategists.

-FedInsider.com

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Today's GAO Publications

LETTER REPORT
Organizational Transformation: Implementing Chief Operating Officer/Chief Management Officer Positions in Federal Agencies.
GAO-08-34, November 1
http://www.gao.gov/cgi-bin/getrpt?GAO-08-34
Highlights - http://www.gao.gov/highlights/d0834high.pdf

TESTIMONY
Organizational Transformation: Implementing Chief Operating Officer/Chief Management Officer Positions in Federal Agencies.
GAO-08-322T, December 13 http://www.gao.gov/cgi-bin/getrpt?GAO-08-322T
Highlights - http://www.gao.gov/highlights/d08322thigh.pdf

Wednesday, December 12, 2007

Today's GAO Publication

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

Smithsonian Institution: Status of Efforts to Address a Range of Funding and Governance Challenges, by Mark L. Goldstein, director, physical infrastructure issues, before the Senate Committee on Rules and Administration.
GAO-08-250T, December 12.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-250T
Highlights - http://www.gao.gov/highlights/d08250thigh.pdf

Comptroller General to Speak at National Press Club

WASHINGTON (Dec. 12, 2007) - On Monday, December 17, the same day the annual financial report of the U.S. government is due to be released, David M. Walker, Comptroller General of the United States and head of the Government Accountability Office (GAO), will speak at the National Press Club as part of its newsmaker luncheon series. His remarks, entitled "A Call for Stewardship," outline the need for increased fiscal discipline and for greater attention to be placed on a number of large and growing sustainability challenges facing the United States.

GAO will also release a new report on December 17 that discusses various tools and techniques, such as key national indicators and fiscal future commissions, to help policymakers meet these challenges and capitalize on related opportunities. Mr. Walker will also address this report.

In light of the government's latest financial report and the GAO's new stewardship report, Walker will discuss the government's overall financial condition and the increasing fiscal burdens facing the nation.

He will also discuss what needs to be done to turn things around.

The audience will include leaders from public, private and not-for-profit sectors as well as working journalists. NPR and C-SPAN are expected to air Walker's remarks.

Lunch will be served at 12:30 p.m. in the ballroom, followed by Walker's speech and a question-and-answer session.

The public is invited to attend. For ticket reservations, please visit http://press.org/speakers/luncheonspeakers.cfm or contact the Press Club at (202) 662-7539.

The National Press Club is located at 14th and F Streets, NW, one block west of Metro Center. For additional information, please contact GAO's Office of Public Affairs at (202) 512-4800.

Monday, December 10, 2007

U.S. Department of Labor Earns 11th Consecutive 'Clean' Audit Opinion on Annual Financial Statements

WASHINGTON, Dec. 10 /PRNewswire-USNewswire/ -- Secretary of Labor Elaine L. Chao announced that the U.S. Department of Labor has received an unqualified, or "clean," audit opinion, on its fiscal year 2007 financial statements, marking the department's 11th consecutive annual clean audit opinion.

"This department has demonstrated a commitment to responsible stewardship of taxpayers' dollars and adherence to the fundamentals of sound financial management," said Secretary Chao. "This 11th consecutive clean audit and the department's continued leadership in meeting and exceeding the goals of the President's Management Agenda are a legacy which everyone at the Department of Labor can be proud of."

A clean audit opinion provides independent confirmation that the department's financial statements are presented fairly and in conformity with generally accepted accounting principles. Accurate and timely financial information improves the Labor Department's accountability to Americans and allows the department to make informed operational, budget and policy decisions.

"The clean audit opinion ensures that we have the timely, accurate and reliable information needed to manage our programs efficiently and effectively," said Lisa D. Fiely, the Labor Department's acting chief financial officer.

The Office of the Chief Financial Officer leads the department's financial management and fiscal integrity effort. For more information,visit the office's Web site at http://www.dol.gov/ocfo.

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Today's GAO Publications

The Government Accountability Office (GAO) today released the following reports and correspondence:

Improper Payments: Weaknesses in USAID's and NASA's Implementation of the Improper Payments Information Act and Recovery Auditing.
GAO-08-77, November 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-77
Highlights - http://www.gao.gov/highlights/d0877high.pdf

Responses to Posthearing Questions Related to Improving Single Audit Quality.
GAO-08-318R, December 7.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-318R

Focus on financial management pays off at DHS unit

Three years after severe financial management problems forced a hiring freeze and spending restrictions that jeopardized its operations, leaders at Immigration and Customs Enforcement can claim significant progress in overcoming weaknesses in the way it manages money, according to an independent audit of the Homeland Security Department's fiscal 2007 financial statements. ICE is part of Homeland Security.

While DHS remains unable to garner an audit opinion, due in large part to continuing finance and accounting problems at the Coast Guard and the Federal Emergency Management Agency, auditing firm KPMG found that ICE had remedied several material weaknesses noted in earlier audits of the bureau's financial statements.

ICE Chief Financial Officer Alexander Keenan attributed much of the bureau's success to support from top management and to his predecessor, Debra Bond, its first CFO. Bond and ICE Director Julie Myers, who appointed Bond to a permanent position (she had been acting CFO prior to Myers' appointment) just days after taking office herself in January 2006, crafted a multiyear plan to improve financial reporting at the $5 billion investigative agency.

"Having financial integrity is important for an agency in terms of garnering the support of Congress," Myers said. Also, because ICE performs financial management services for other agencies within Homeland Security, it had a responsibility to resolve problems. ICE received substantial help from the Office of the Inspector General at Homeland Security, Myers added.

The benefits of addressing material weaknesses have been significant, she said: In 2007, ICE was able to fully spend its appropriation, unlike previous years, when the bureau left some funds untouched because it didn't have enough confidence in the accuracy of its bookkeeping to avoid overspending. "That has really made a tangible difference," Myers said. "It also has given program directors a much higher level of confidence in terms of what the CFO is doing and how they're helping them manage money."

Of eight material weaknesses identified by auditors, Keenan said the most significant was that ICE's fund balance did not match Treasury's fund balance. Fixing that, which the agency was able to do in 2006, had a trickle- down effect and allowed ICE to fix several other weaknesses, he said.

Another related weakness -- budgetary accounting -- will be harder to address on a sustained basis. While fixing the fund balance with Treasury required changing processes at ICE's three finance centers, fixing budgetary accounting weaknesses will require changing processes and behavior at dozens of field offices. For example, if a field office contracts for a service, but that service ends up costing less than originally estimated, then the records must reflect that change in obligation.

ICE reaped substantial benefits this year by doing all invoice processing for the Federal Protective Service at the ICE finance center in Burlington, Vt. Previously, invoices were processed at 11 FPS regional offices. In 2008, ICE expects to consolidate the rest of the agency's invoice processing in Burlington as well.

- Katherine McIntire Peters, GovExec.com

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Thursday, December 06, 2007

FederalNewsRadio - Ask the CFO - Lyons Gray (EPA)

Environmental Protection Agency

Lyons Gray - Chief Financial Officer

There is green, as in money, and there is green, as in environmentally friendly. At the EPA the two are no longer that different. Gray says it starts with powering up and that all the energy that is required to run the department comes from green sources. He says this type of green thinking also factors into the business decisions at EPA, whether it is consolidation or its one-stop shop for relocating employees, called eRelocate. Gray says this lead-by-example approach is serious from top to bottom, whether it means making sure that the office of the chief financial office and the department's IT staff are joined at the hip or being better about turning off lights that are not being used. Finally, Gray talks about making his office more of a resource by making sure that the financial metrics are communicated in English.

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Friday, November 30, 2007

FEATURES Running the Light

It's been six years and 23 score cards since President George W. Bush declared a grand program of his own, a management agenda for federal agencies. Has he made good on it? Government Executive applied the administration's own stoplight ratings, and overall, the agenda came in at yellow - "mixed results" in President's Management Agenda parlance.

The administration gives its efforts, or those of the agencies, better marks. Agencies have improved from predominantly red marks at the score card's inception in August 2001 to a slight majority of green on the last quarterly ratings for fiscal 2007. "While agencies have shown great progress in implementing these requirements, there remains a lot of work to be done," said Clay Johnson, Office of Management and Budget deputy director for management, upon release of the latest score card on Nov. 5. Eight days later, Bush issued an executive order lending additional structure to his effort to improve agencies' performance. The order requires agency heads to set clear annual goals, lay out plans for achieving them, and designate "performance improvement officers" to assess and report publicly on progress. A Performance Improvement Council will be established within OMB.

To support our assessments, we provide greater detail than do the administration's quarterly evaluations. We base our human capital yellow ranking, for example, on subratings for key Bush efforts such as pay for performance, recruitment and retention, and technology, as well as a score for labor relations.

We assess broad indicators of financial performance and also evaluate the administration's lines of business initiative, in which financial management figures prominently. We treat the famous, or infamous, depending on your vantage point, Program Assessment Rating Tool within a broader examination of performance improvement and its effect on budgeting.

We judge the ratings that follow to be tough but fair. And we invite you to make your own appraisal of the President's Management Agenda online here.

- Brittany Ballenstedt, Robert Brodsky, Gautham Nagesh, Elizabeth Newell and Alyssa Rosenberg, GovExec.com

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Today's GAO Publication

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

"DOD Transformation Challenges and Opportunities," by David M. Walker, comptroller general of the United States, before the Department of Defense FY 2008 Managers' Internal Control Program Conference, in Washington, DC.
GAO-08-323CG, November 29.
http://www.gao.gov/cghome/d08323cg.pdf

Thursday, November 29, 2007

FederalNewsRadio - Ask the CFO - John Vonglis (USAF)

US Air Force

John Vonglis - Principal Deputy Assistant Secretary, Financial Management and Comptroller

To be successful, the modern air force needs its planes to be nimble in the air and its financial officers to be nimble on the ground. Vonglis says that need, emphasized by operations in Bosnia, Afghanistan and Iraq, has been one of the driving forces behind what he calls perhaps the biggest change in financial management at the Air Force since the move from cash to checks - the move to the new Financial Services Center at Ellsworth AFB. But Vonglis says that endeavor was more than consolidation from work being done at 93 locations to one. Rather, he says it is part of the bigger push behind Air Force Smart Operations for the 21st Century.

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Monday, November 26, 2007

NASA Inspector General: Audit of the National Aeronautics and Space Administration's Fiscal Year 2007 Financial Statements

Date Released: Monday, November 26, 2007
Source: NASA Office of Inspector General

Full Report

15 Nov 2007
TO: AdministratorChief Financial Officer
FROM: Inspector General
SUBJECT: Audit of the National Aeronautics and Space Administration's Fiscal Year 2007 Financial Statements (Report No. IG-08-001)

Under the Chief Financial Officers Act of 1990, NASA's financial statements are to be audited in accordance with generally accepted government auditing standards. The Office of Inspector General contracted with the independent certified public accounting firm Ernst & Young LLP (E&Y) to audit NASA's financial statements in accordance with Government Auditing Standards and Office of Management and Budget's Bulletin No. 07-04, Audit Requirements for Federal Financial Statements.

In the Report of Independent Auditors (Enclosure 1), E&Y disclaimed an opinion on NASA's financial statements for the fiscal years ended September 30, 2007 and 2006. The disclaimer resulted from NASA's inability to provide E&Y auditable financial statements and sufficient evidence to support the financial statements throughout the fiscal year and at year-end.

The E&Y Report on Internal Control (Enclosure 2) includes two significant deficiencies, which are considered to be material weaknesses. Material weaknesses were found in NASA's controls for (1) financial systems, analyses, and oversight used to prepare the financial statements, and (2) assuring that property, plant, and equipment and materials are presented fairly in the financial statements. These material weaknesses have been reported for several years.

The E&Y Report on Compliance with Laws and Regulations (Enclosure 3) identifies several instances in which NASA's financial management systems did not substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA). For example, the report notes that certain subsidiary systems, including property, are not integrated with the Core Financial module and are not complemented by sufficient manual preventative and detect type controls.

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Thursday, November 22, 2007

FederalNewsRadio - Ask the CFO - George Schutter (PC)

US Peace Corps

George Schutter - Chief Financial Officer

Keeping the books can be a challenge when you are in 73 countries at once. Schutter says having an integrated planning and budgeting system in place makes all the difference in the world. He says the Peace Corps system has matured to the point where financial information can be seen almost in real-time, making it easier to adjust on the fly. An added benefit is that the system has allowed the Peace Corps to make financial accountability part of the mission, from IT folks at headquarters to posts half a world away. As a result, Schutter says after years of audit disclaimers and a qualified audit opinion last year, the Peace Corps is set to go after its first unqualified audit opinion. Another key challenge at the Peace Corps -- finding the best way to measure results. It's one thing to measure "output" from the efforts of the Peace Corps and its volunteers. It's another to measure the impact on the communities that have been helped.

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Tuesday, November 20, 2007

Agencies continue to make strides in financial management

All major agencies met financial reporting deadlines for the third year in a row, completing the audit process within 45 days of Sept. 30, the end of fiscal year, the Office of Management and Budget reported Monday. The audit results show continued improvement in financial management and accounting, OMB officials said.

The deadline for submitting complete financial reports was shortened to 45 days from 150 days in 2001. Clay Johnson, deputy director for management at OMB, said Monday that revising the deadline forced agencies to improve their financial management year-round.

In addition, agencies are gradually improving their overall financial management. Nineteen of the 24 major federal agencies received clean audits for fiscal year 2007, one more than last year. And the number of governmentwide material weaknesses dropped to 39 from 41 last year, for a 35 percent decrease in material weaknesses since 2001.

Material weaknesses are management or accounting deficiencies deemed by auditors to be significant enough to note in the final report. Danny Werfel, acting controller for OMB's Office of Federal Financial Management, said the decline in material weaknesses was particularly noteworthy in light of recent changes to government audit guidelines.

Thirteen agencies received clean audits with no material weaknesses noted. Five of them -- the Justice, Interior, and Energy departments, the Small Business Administration and the U.S. Agency for International Development -- did not meet that mark last year.

Werfel said agencies also are working hard to report on and eliminate improper payments, which can mean anything from an incorrect amount or recipient to a payment for an unallowable service to insufficient documentation to prove a payment was proper. This year, 13 more programs took part in improper payment reporting; almost 86 percent of high-risk programs reported on improper payments this year, up from 81 percent last year. Werfel said publication of improper payments not only identifies problem areas but motivates agencies to address themquickly.

The government's largest spender by far, the Defense Department, continued to come up short in the area of financial management. Johnson said the department did not receive a clean audit, and likely won't for years to come, because it has chosen to make thorough reform a higher priority than a clean audit.

-Elizabeth Newell, GovExec.com

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Monday, November 19, 2007

OMB: Agencies improve finance reporting

More agencies are producing reliable financial information with fewer major accounting problems than last year, the Office of Management and Budget said today in an initial assessment of fiscal 2007 year-end financial statements.

Of 24 major agencies, 19 received a clean opinion for their fiscal 2007 report, one more than last year, said Danny Werfel, OMB’s acting controller. Agencies must file their Performance and Accountability reports and financial statements by Nov. 15.

Five more agencies joined the ranks of those having not only a clean audit, meaning the agency’s data is valid and trustworthy, but also no major weaknesses. They were the Energy, Interior and Justice departments; the Small Business Administration; and the U.S. Agency for International Development. A total of 13 agencies have accomplished this since 2001, he said.

Agencies reduced the overall number of major weaknesses by two to 39, a 35 percent decrease since 2001. Agencies have continued to fix flaws even as accounting standards organizations have lowered the threshold for what constitutes a material weakness, Werfel said.

For the third consecutive year, all agencies met the accelerated deadline to submit their financial audits 45 days after the end of the fiscal year, Sept. 30. The federal government has a quicker turnaround for its annual report than the private sector. Corporate filers have 60 days to do so. It used to take agencies five months, but OMB accelerated the process in 2001. “When you have a short turnaround to take all the transactions you participated in and all the money that’s moved in and out of the agency in the year and put it in a set of financial statements that’s going to pass scrutiny, answer all the questions and tie up loose ends within 45 days, it drives you to be very diligent with your finances and your accounting every day of the fiscal year rather than thinking you’ll have time at the end of the year to do that,” Werfel said.

Agencies also reduced improper payments even in existing programs under scrutiny, and added 13 more programs to be evaluated for risk of error rates for incorrect benefits and grants, he said. Agencies now report improper-payment measurements for 86 percent of all high-risk outlays, up from 81 percent last year. The error rate for the first programs to be measured for errors in 2004 has declined to 3.1 percent from 3.9 percent, a $7.9 billion reduction in improper payments. The 13 programs added this year, including the Medicaid Fee-for-Service program, pushed the error rate up to 3.5 percent with $54.9 billion in outlays under scrutiny for errors, he said.

-FCW.com

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Today's GAO Publication

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

Financial Audit: Securities and Exchange Commission's Financial Statements for Fiscal Years 2007 and 2006.
GAO-08-167, November 16
http://www.gao.gov/cgi-bin/getrpt?GAO-08-167
Highlights - http://www.gao.gov/highlights/d08167high.pdf

Friday, November 16, 2007

GSA's Mitchell to retire

When Mary Mitchell came to the General Services Administration eight years ago, she told her boss at the time, Marty Wagner, that she would retire in June 2007. She was six months off her prediction.

Mitchell announced earlier this week that she will retire Jan. 3 after 32 years as a federal employee.

She said she stayed the extra time because she wanted to ensure that the foundation for the Financial Management Line of Business (FM LOB) initiative was in place.

Mitchell has been a leader in the e-government and federal financial management arena. She is FM LOB’s program manager and the Financial Systems Integration Office’s executive. She is also deputy associate administrator of the Office of Technology Strategy in GSA’s Office of Governmentwide Policy.

In her last six weeks, Mitchell said she will focus on ensuring that the FM LOB initiative will continue to move forward after she leaves.

-Jason Miller, FCW.com
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Bush orders agencies to appoint 'performance improvement officers'

President Bush has issued an executive order requiring heads of federal agencies to set clear annual goals, lay out specific plans for achieving them, and designate "performance improvement officers" to assess progress toward meeting the goals and report on it to the public.

With the order, issued Tuesday and detailed at a press briefing today, the Bush administration hopes to establish a lasting legacy for its management improvement agenda.

The performance improvement officers will be required to oversee agencies' "strategic plans, annual performance plans and annual performance reports as required by law," the order states. The officers also will review the goals of agency programs to determine if they are "sufficiently aggressive toward full achievement of the purposes of the program," and "realistic in light of authority and resources assigned to the specified agency personnel."

Robert Shea, OMB's associate director for management, said the position of performance improvement officer could be assigned to a career employee in order to establish continuity through the next administration, although a final decision has not been made. If a political appointee is named to the role, Shea said, there must be a career official in place that is capable of carrying on the initiative during the next administration.

The order stipulates only that the officer should be a "member of the Senior Executive Service or equivalent service."

The order, which OMB hopes to fully implement by the end of 2008, also mandates the creation of a Performance Improvement Council, chaired by Johnson and including all performance improvement officers and other relevant agency officials.

The impetus for the executive order, Johnson said, was a meeting last year in which President Bush explained that his goal was not only for agencies to earn high grades on his administration's management score card -- which uses a stoplight system of green, yellow or red ratings to assess performance -- but for federal officials to use these tools to "make sure agencies are working better."

The order would formalize many of the administration's performance improvement efforts, some of which have been carried out informally for the past several years, and would build upon initiatives such as the Program Assessment Rating Tool.

-Robert Brodsky, GovExec.com
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Thursday, November 15, 2007

Today's GAO Publication

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

U.S. Government Accountability Office: Performance and Accountability Report, Fiscal Year 2007.
GAO-08-1SP, November 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1SP

FederalNewsRadio - Ask the CFO - Dave Nicholson (TSA)

Transportation Security Administration

Dave Nicholson - Assistant Administrator for Finance and Administration and Chief Financial Officer

It has been a bit of a bumpy flight for the TSA, going from 16 employees to more than 60,000 in a matter of months. Nicholson says that type of quick growth combined with the high profile responsibilities of keeping the skies safe makes it imperative to keep track of the details, something TSA did not do well at its inception. However, he says like many start-ups in the private sector, the maturation process at TSA has resulted in better systems, procedures and flexibility to take on and support the mission. Still, Nicholson says the crux of his job is to keep up with the operational planners and know what they are thinking so he and his staff can best advise them on making the most of the funds at hand.

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Wednesday, November 14, 2007

GSA Awarded Unqualified 'Clean' Opinion for FY 2007

WASHINGTON, Nov. 14 /PRNewswire-USNewswire/ -- The U.S. GeneralServices Administration has earned an unqualified "clean" opinion on its FY2007 Performance and Accountability Report (PAR), GSA Administrator LuritaDoan announced today.

"The clean opinion and performance report is important on many levels,"Doan said. "It reflects GSA's dedication to financial managementexcellence. It is also a credit to our employees and openly demonstrates toour agency customers and the American taxpayer that accountability andtransparency are integral to all GSA business and financial transactions."

Kathleen Turco, GSA's Chief Financial Officer, said the clean opinion"means that our Federal customers can trust that GSA has the financialintegrity and appropriate controls in place to properly manage theirfunds."

Moreover, Turco said, "The clean opinion directly supports GSA's newcommitment to excellence in the business of government and affirms theagency's mission to offer and deliver services and commodities as neededand at the best price to its customers."

GSA's business activities during 2007 show an overall improvedfinancial position, demonstrating that a major internal reorganization, arenewed focus on superior customer service and several new businessinitiatives are beginning to pay important dividends. Highlights of GSA's2007 financial success include: breaking even on financial operations,GSA's commercial schedules program is showing an all time high growth of2.2 percent, and Global Supply increasing 5.5 percent mainly from businesswith the Department of Defense.

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Friday, November 09, 2007

Today's GAO Publication

The Government Accountability Office (GAO) today released the following reports, testimony, and correspondence:

Financial Audit: IRS's Fiscal Years 2007 and 2006 Financial Statement Audits.
GAO-08-166, November 9
http://www.gao.gov/cgi-bin/getrpt?GAO-08-166
Highlights - http://www.gao.gov/highlights/d08166high.pdf

Thursday, November 08, 2007

FederalNewsRadio - Ask the CFO - David Fisher (BTA)

Business Transformation Agency

David Fisher - Director

The old saying goes, an army travels on its stomach. That may still be true, but at the Department of Defense, the belief is that to be successful, the military must be supported by a streamlined and transparent business process. Breaking down cultural barriers and putting that enterprise architecture into place is where David Fisher and the Business Transformation Agency comes in. Fisher says over the past two years, the BTA has been working to find the right balance between centralization and decentralization for its business practices. The effort has resulted in a small set of critical and standardized data elements. As a result, the Defense Department now has access to more financial information in a timely and automated fashion. Once the process is completed, Fisher says it will give key decision makers access to critical information that will contribute to the warfighting effort. Fisher says the immediate challenge is to come up with the right sort of performance metrics to help determine how well the process is proceeding.

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Delayed Conversation

The feds don’t spend much time hashing out mutual problems with states and localities. It’s time they started.

What do you call it when eight federal officials and eight state and local leaders convene voluntarily to discuss intergovernmental fiscal affairs? Well, if you’ve watched the downward trajectory that has characterized intergovernmentalism in Washington over the past decade or so, you might call it a minor miracle.

But last month, that’s just what happened. A 16-member panel whose leaders included Danny Werfel, acting director of the U.S. Office of Management and Budget, and Martin Benison, the Massachusetts state controller, sat down to develop plans for a new standing group that will focus on how the three levels of government might work more rationally through the broad range of intergovernmental fiscal issues that leave state and local officials alternatively exasperated, confused and, on some days, entertaining notions of open rebellion.

The effort, which is being called the “Partnership for Intergovernmental Management and Accountability,” is being jointly sponsored by the Association of Government Accountants and the Chief Financial Officers Council, a group made up of the top fiscal officials from the 24 largest federal agencies.

The partnership has a wide range of issues and activities it might tackle, from serving as a forum for sharing best practices in fiscal management to working through proposed rules and regulations for specific federal grants and transfer programs.

The partnership emerged out of what might seem an unlikely issue: the Bush administration’s concern about “improper payments” that the feds might have made to states and localities. Relmond Van Daniker, the executive director of the Association of Government Accountants, didn’t think the prospect of federal liens against states and localities due to perceived overpayments was a very practical investment of federal time or energy. “That just wasn’t going to work,” says Van Daniker. “What we really need is to get states, locals and feds talking to one another again.”

The partnership does have one important thing going for it: Those who are represented by AGA and the CFO Council clearly are getting tired of all the confusion and conflict when it comes to intergovernmental fiscal affairs. This potentially powerful source of grassroots and high-level discontent just might hold the new partnership together.

-Jonathan Walters, Governing.com
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Wednesday, November 07, 2007

Today's GAO Publication

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

Financial Audit: Bureau of the Public Debt's Fiscal Years 2007 and 2006 Schedules of Federal Debt.
GAO-08-168, November 7
http://www.gao.gov/cgi-bin/getrpt?GAO-08-168
Highlights - http://www.gao.gov/highlights/d08168high.pdf

Tuesday, November 06, 2007

Most agencies see downgrades in e-gov progress ratings

The majority of federal agencies have not met a deadline for developing data breach notification policies, causing all but five of them to see downgrades in e-government progress in the latest President's Management Agenda score card issued by the Bush administration.

A May 22 Office of Management and Budget directive ordered agencies to develop and implement data breach notification policies for personal information in the government's possession within 120 days. The agencies were instructed to meet privacy and security requirements, such as reducing the use of Social Security numbers and beefing up encryption.

Agencies that did not complete all the requirements identified in the memo received a downgrade in their e-government progress on the fourth-quarter PMA score card, released Monday. Twenty-one of the 25 agencies rated received downgrades in e-gov progress.

The other four PMA initiatives -- performance management, competitive sourcing, human capital and financial performance -- showed significantly less movement in grades for both current status and progress. No agency changed its status in the financial performance or performance management categories and only the General Services Administration changed its human capital status, improving from yellow to green.

-Elizabeth Newell, GovExec.com
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Monday, November 05, 2007

Commentary: CFOs must identify financial risks, goals

It has been 17 years since President George H.W. Bush signed the Chief Financial Officers (CFO) Act into law.

The act’s first objective was to instill financial management disciplines in all federal agencies — sound accounting of assets and liabilities, accurate tracking of receipts and payments, and strong controls to reduce government error and waste.

To meet this objective, the act required agencies to annually publish audited financial statements and established the position of agency CFO to lead these efforts.

Reliable and timely financial statements are not easy to produce in the federal environment.

Agency assets and expenditures are enormous in scale. Financial activity can take place in thousands of localities in the U.S. and internationally. Unique program requirements often result in diverse and complex financial transactions.

Thus, as the act envisioned, an agency must have rigorous financial management disciplines in place in order to timely and reliably report on financial activities.

The federal CFO has come a long way in meeting this objective. Before the act, financial statement reporting in the government was nonexistent. By the mid-1990s, only a few agencies were able to produce financial statements that achieved a passing score or “clean opinion” from independent auditors. And up until a few years ago, most agencies took as long as five months after the end of the fiscal year to publish their financial statements.

Today, all major agencies issue their financial statements within 45 days of fiscal year end and a majority of agencies, representing more than 75 percent of all federal expenditures, achieve a “clean opinion.”

But the CFO Act has loftier objectives than the production of clean financial statements. They are:
  • Transparency — effective reporting of agency finances to the public, including information on the sustainability of government operations and a user-friendly presentation of the cost effectiveness of government programs.
  • Targeted internal controls — policies and procedures that mitigate the most significant areas of financial risk in the organization.
  • Decision support — personnel at all levels in the organization with financial information to manage risk and drive better program results.

The role of the federal CFO must evolve and expand beyond being the “preparer” of financial statements to meet these objectives.

The CFO must be positioned to identify critical financial risks and business goals for the organizations. The CFO must be empowered to implement data strategies that inform on those risks and goals. And the CFO must lead efforts within the agency to improve the relevance and readability of public accountability reports.

What steps are necessary to ensure that the CFO’s role evolves as the act envisioned? How do we maintain focus on financial statement reporting while dedicating CFO energies in new areas?

How can CFOs improve the return on investment of current financial management activities?
Representatives from the federal CFO and audit communities have come together under a project called “Smarter Accountability” to sort through these issues and define a clear path forward for the federal CFO.

In doing so, the Smarter Accountability group will not take our eyes off the ball of timely and reliable financial statement reporting. It is the foundation for every possible achievement that lies ahead and significant work in this area remains.

However, 17 years after the CFO Act was signed into law, the time is right to determine how the federal CFO can meet the broader objectives of the act.

We look forward to working with the entire federal financial community to achieve this important goal.

-Danny Werfel, OMB, Published on FederalTimes.com
Danny Werfel is acting controller at the Office of Management and Budget.

Thursday, November 01, 2007

FedCFO.com Milestone - 1000 Posts

FedCFO.com achieved an impressive milestone today in posting the 1000th article associated with Federal financial management and the concerns of the Federal CFO community.

Since its inception in January 2005, FedCFO.com has become an important aggregator of information from the public domain pertaining to Federal financial management from sources such as: Government Accountability Office (GAO), Office of Management and Budget (OMB), Financial Systems Integration Office (FSIO), U.S. Chief Financial Officer's Council (CFOC), U.S. Treasury, Association of Government Accountants (AGA), American Society of Military Comptrollers (ASMC), Federal Financial Managers Council (FFMC), Federal Accounting Standards Advisory Board (FASAB), Governmental Accounting Standards Board (GASB), American Association for Budget and Program Analysis (AABPA), Federal Computer Week, Federal News Radio, Government Computer News, Federal Times, Government Executive, Washington Technology, CFO Magazine, Washington Post, and many more.

In addition, FedCFO.com provides a custom Google search engine for Federal financial management topics to help its users find specific topical information while excluding the extraneous data that is included with standard web searches.

FederalNewsRadio - Ask the CFO - Michael Kane (NNSA)

National Nuclear Security Administration

Michael Kane - Associate Administrator for Management and Administration

Breaking down barriers. That type of talk is all the rage among tech-savvy government officials. Only Kane, winner of a Meritorious Presidential Rank award, says now financial officers are getting into the act, using increased transparency to eliminate redundancy across agency lines. Kane says while this save money it also means putting a greater burden on financial officers to adopt business manager-type skills to ensure there are no hiccups along the way, something which could have far-ranging implications for the way we look at careers in government. He also talks about NNSA's recruiting efforts and the impact merging NNSA's physical and IT security functions will have on the agency's finances.

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Wednesday, October 31, 2007

Today's GAO Publications

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

Business Systems Modernization: Air Force Needs to Fully Define Policies and Procedures for Institutionally Managing Investments.
GAO-08-52, October 31.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-52
Highlights - http://www.gao.gov/highlights/d0852high.pdf

Business Systems Modernization: Department of the Navy Needs to Establish Management Structure and Fully Define Policies and Procedures for Institutionally Managing Investments.
GAO-08-53, October 31.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-53
Highlights - http://www.gao.gov/highlights/d0853high.pdf

Inspectors General: Limitations of IG Oversight at the Department of State, by David M. Walker, comptroller general of the United States, before the Subcommittee on International Organizations, Human Rights, and Oversight, House Committee on Foreign Affairs.
GAO-08-135T, October 31.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-135T
Highlights - http://www.gao.gov/highlights/d08135thigh.pdf

Tuesday, October 30, 2007

DHS names first deputy undersecretary for management

Elaine Duke has been named the first deputy undersecretary for management at the Homeland Security Department, DHS announced today.

In the new role, she will be responsible for daily oversight of DHS’ budget, appropriations, expenditure of funds, procurement, human resources, information technology systems, and facilities and property management.

Duke had been the agency’s chief procurement officer, managing $14 billion in DHS contracts and $11 billion in financial assistance programs.

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Friday, October 26, 2007

Today's GAO Publication

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

Single Audit Quality: Actions Needed to Address Persistent Audit Quality Problems.
GAO-08-213T, October 25
http://www.gao.gov/cgi-bin/getrpt?GAO-08-213T
Highlights - http://www.gao.gov/highlights/d08213thigh.pdf

Thursday, October 25, 2007

FederalNewsRadio - Ask the CFO - Carla Burzyk (USGS)

US Geological Survey

Carla Burzyk - Director, Office of Budget and Performance

USGS might not be the first agency to come to mind when you think about the fires ravaging California or the drought plaguing the Southeast but these natural events do have an impact on its budget. Burzyk says events such as these may force USGS scientists to shift gears or go into the field to collect vital data. While those sorts of contingencies are taken into account, she says there is only so much flexibility that can be built into the process and that there is, at times, a need to ask Congress for supplemental appropriations. Burzyk says that makes it all the more important to make sure the financial books are in order.

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Friday, October 19, 2007

GSA to award contract for evaluating financial shared-services providers

The General Services Administration will likely release in early 2008 a request for proposals to test and evaluate the capabilities of commercial shared-services providers, said Mary Mitchell, program manager for the Financial Management LIne of Business and executive director at GSA’s Financial Systems Integration Office.

GSA will use the testing strategies to assure that shared-services providers are capable of implementing financial management systems successfully and that the systems meet core and agency-defined requirements under the FM LOB consolidation initiative. Mitchell anticipates that GSA will publish the RFP during the first three months of next year. GSA has received comments on an information request and is analyzing those now, she said.

The long-term objective of FM LOB is to standardize core financial business processes and financial data. Agencies will adopt standard business processes as they migrate to new financial management systems.

Under FM LOB, agencies will compete their financial management systems among private and federal shared-services providers, which will provide information technology hosting, application management and system implementation services to agencies, according to GSA and Office of Management and Budget policy. Each shared-services provider will provide those services to multiple agencies using a common application to reduce the duplicative approaches currently used.

-Mary Mosquera, FCW.com
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Today's GAO Publication

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

Department of Homeland Security: Challenges in Implementing the Improper Payments Information Act and Recovering Improper Payments.
GAO-07-913, September 19.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-913
Highlights - http://www.gao.gov/highlights/d07913high.pdf

SES Position in DOT’s Pipeline and Hazardous Materials Safety Administration

The Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation is currently advertising a senior level position, Associate Administrator for Finance, Budget and Performance Integration/Chief Financial Officer (CFO).

http://jobsearch.usajobs.opm.gov/getjob.asp?JobID=63045346&brd=3876&AVSDM-200

Thursday, October 18, 2007

Defense comptroller: Financial management better than perceived

Defense Comptroller Tina W. Jonas on Wednesday defended her department's progress in improving financial management, despite the fact the Defense Department and military services have never been able to produce the kind of financial reporting statements required by law.

"We know where our money is. We track our money. We send accounting reports to Congress and we tell them by appropriation and line item where the money went and what it went for," Jonas said at a breakfast in Washington sponsored by the Association of Government Accountants.

The ability to produce annual consolidated financial statements, as required by the 1990 Chief Financial Officers Act, has been the holy grail for federal finance and accounting staff, and agencies have in some cases gone to extraordinary lengths to garner clean audit opinions from independent accounting firms. But the Homeland Security and Defense departments have yet to be able to produce the statements.

In the case of Homeland Security, the four-year-old department is still struggling to merge multiple entities with separate finance and accounting systems and procedures.

For Defense, which accounts for more than half of discretionary spending, the problems are far more complex. Every year, Defense disburses $424 billion, processes 145 million pay transactions, 14 million commercial invoices and 57 million general ledger transactions.

Reconciling those activities into a single financial statement has proved impossible, and Jonas, unlike her predecessors, won't predict when that will happen.

Achieving a clean audit is important, Jonas said, but resolving other issues, such as material weaknesses, is even more important. She said that in 2001, auditors identified 71 material weaknesses; today there are 19, which the department expects to eliminate in 2008.

While a clean audit means that an agency has solid internal controls, which are necessary to prevent fraud, a clean opinion is important. But a clean opinion, however, does not mean department managers have the tools or information they need to make better financial decisions.

-Kathrine McIntire Peters, GovExec.com
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FederalNewsRadio - Ask the CFO - Ed Dolan (USMS)

US Marshals Service

Ed Dolan - Comptroller and Chief Financial Officer

When Ed Dolan started at the Justice Department his first assignment involved a yellow pad and an adding machine with tape rolling down to the floor. Now, those same processes can be done in a blink of an eye. But finding ways to keep up with technology, from a financial point of view, was not easy. Dolan says there was an understanding early on that the Marshals Service could not go it alone. And he says despite being able to work within the Justice Department framework, the task is not going to get any easier, putting a premium on resource management. He also talks about how the Marshals Service was able to take on and overcome personnel management issues that threatened the agency's financial footing when he first came to the job.

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Wednesday, October 17, 2007

Today's GAO Publication

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

Defense Business Transformation: A Full-time Chief Management Officer with a Term Appointment Is Needed at DOD to Maintain Continuity of Effort and Achieve Sustainable Success, by David M. Walker, comptroller general of the United States, before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, Senate Committee on Homeland Security and Governmental Affairs.
GAO-08-132T, October 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-132T
Highlights - http://www.gao.gov/highlights/d08132thigh.pdf

2007 GCN Award: CMS team develops a centralized accounting system to get a handle on an eighth of the federal budget

WHAT: Healthcare Integrated General Ledger Accounting System at the Centers for Medicare and Medicaid Services in the Health and Human Services Department.

MISSION: Administer Medicare and provide federal oversight of state Medicaid programs.

CHALLENGE: A combination of manual procedures and incompatible computerized accounting systems at several dozen regional Medicare contractors led to nonstandard billing, payments and reporting.

SOLUTION: Planned since the late 1990s, starting in 2005 and through this year, HIGLAS, an Oracle 11i-based accounting system, is online with 10 contractors. More contractors will get the system by the end of 2011.

IMPACT: There are far fewer errors, faster claims processing and reduced interest charges, which helps CMS determine the difference between accounts payable and receivable. COST: $853 million is the projected total; $527 million had been spent through fiscal 2007.

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Senators question Defense's attempts to improve management

Defense Department officials Tuesday defended their plans for improving management of their financial and business systems against charges from members of a Senate Homeland Security and Governmental Affairs subcommittee that their efforts are slow and insufficient.

"I am not sure large quantities of change have occurred," said Sen. Tom Coburn, R-Okla., who pressed Pentagon officials to commit to more frequent consultation with the Federal Financial Management Subcommittee and the Government Accountability Office.

At issue is billions of dollars the department spends each year on separate business and financial systems. Defense since 1990 has been attempting to modernize thousands of unique accounting and information systems that limit its ability to track many of its costs.

The department has a large component, the Business Transformation Agency, dedicated to steps such as combining software systems and applying the Lean Six Sigma business improvement methodology across the department.

Defense Comptroller David Patterson testified that by 2009 the Pentagon expects to earn clean audit opinions on 39 percent of its assets, up from almost none in the 1990s. Patterson said that is a significant achievement for what he called "the largest and most complex organization in the world."

Subcommittee members faulted especially Pentagon officials' resistance to congressional pressure to create a full-time, high-level chief management officer to push through changes.

The fiscal 2008 defense authorization bill would require the Pentagon create a full-time chief management officer reporting to Deputy Defense Secretary Gordon England. The official would have a fixed term allowing him or her to stay on beyond the current administration.

The Pentagon has resisted that effort, arguing that England fills a CMO role and adding a position would create unneeded bureaucracy.

-Dan Friedman, GovExec.com
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Tuesday, October 16, 2007

Senators seek compromise bill to boost IG independence

As a CIA plan to investigate its inspector general draws congressional fire, a group of senators is working to quickly complete a compromise version of a bill to increase the independence of agency watchdogs.

Senate Homeland Security and Governmental Affairs Chairman Joseph Lieberman, I-Conn., and ranking member Susan Collins, R-Maine, along with Sen. Claire McCaskill, D-Mo., and possibly Sen. Tom Coburn, R-Okla., plan in coming weeks to jointly file an IG bill that responds to White House objections to a bill previously introduced by McCaskill, according to staffers.

The new bill will not include a provision that allows IGs to send their budgets directly to Congress, aides said. That provision was in McCaskill's original bill to address concerns that some agency heads have tried to control IGs through budget cuts.

But in a Statement of Administration Policy that threatened a veto of the House bill, the White House and Office of Management and Budget said the language infringed on executive control of budget requests.

McCaskill aides said the bill will still protect independence by requiring that agency budgets note the difference between IG budget requests and the one granted. It will likely also contain language requiring that IGs inform Congress if a budget cut hampers their ability to function.

Committee members are also working on expanding the reasons for which IGs can be fired, in an effort to address White House concerns that a provision on firing would make it too hard to remove IGs even for good reason. The House bill passed with amendments that make similar changes to those planned for the Senate measure.

The statement of policy also objected to language codifying an IG council that now exists under executive orders. But the House did not address that concern and staffers said the new Senate bill will not.

-Dan Friedman, GovExec.com
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Friday, October 12, 2007

CFOs, IGs share best practices for financial reports

Agency chief financial officers and inspectors general have developed a set of best practices to share for coordinating the preparation and audit of annual federal financial statements. A key point is to start early.

The CFO Council and the President’s Council on Integrity and Efficiency produced the guide to promote clear expectations defined early and often, continuous communication and a shared commitment to improve agency financial management.

An agency CFO prepares the financial statement according to federal accounting principles and also evaluates the use of internal controls to assure financial management under the Office of Management and Budget’s Circular A-123. The IG audits the financial statement to give an opinion about its reliability based on the management of risk of its internal controls, states the report, posted Oct. 1.

Agencies must submit their audited financial statements and Performance and Accountability Reports (PARs) by Nov. 15 to OMB, the Treasury Department and the Government Accountability Office.

The CFO and IG organizations recommend that agencies start early with planning discussions in January and field work beginning in March to avoid herculean catch-up near the end of the federal fiscal year. Agencies should develop draft financial statements and PARs by Sept. 30, the groups said.

-Mary Mosquera, FCW.com

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FederalNewsRadio - Ask the CFO - Sheila Conley (HHS)

Department of Health and Human Services

Sheila Conley - Deputy Assistant Secretary for Finance and Deputy Chief Financial Officer

In the case of HHS, big might be an understatement. Conley says the department trails only the Department of Defense when it comes to net costs in government. And if you're looking for a fair comparison in the private sector, good luck. Conley says even the biggest of the Fortune 500 pale in comparison. Only, thanks to A-123, she says the department has changed the way everyone stays in touch, going from quarterly meetings to monthly meetings with a Risk Management and Financial Oversight Board, which includes members of the department's most senior leadership. She says, as a result, it has been easier to identify best practices within the various agencies and apply them department-wide. Conley also talks about improvements in the oversight of Medicare and Medicade, and about going from red to yellow on improper payments on the PMA scorecard.

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Wednesday, October 10, 2007

SAP makes a grab for Business Objects

SAP will acquire Business Objects for $6 billion (4.8 billion euros) in a move that will enable it to offer organizations more advanced business intelligence and decision-making solutions. The companies expect to close the deal in the first quarter of 2008.

Walldorf, Germany-based SAP is a leading supplier of business software, such as customer relationship management, enterprise resource planning and supply change management applications, with more than 41,200 customers in some 120 countries.

Business Objects, headquartered in Paris, France, is a provider of business intelligence software with solutions spanning the information discovery and delivery, information management, analysis and performance management categories for more than 44,000 customers worldwide.

The acquisition will allow SAP to significantly increase its revenues from new products, including addressing the growing demands of business users, company officials said.

Both companies count numerous U.S. federal, state and local government agencies as customers. For example, SAP software has been deployed by the Defense Logistics Agency, National Geospatial Intelligence Agency, Naval Supply System Command, North Carolina and Erie County, N.Y.

Meanwhile, Business Objects has provided data warehouse and business intelligence solutions to the Defense Department, performance management software to the Environmental Protection Agency and a data warehouse support system to Wisconsin’s Department of Health Services.

Business Objects will operate as a stand-alone business within the SAP Group. Business Objects customers will continue to benefit from open, broad and integrated business intelligence solutions — independent of databases and applications — while also gaining the advantage of application alignment for business analytics, officials from both companies said.

Tuesday, October 09, 2007

Commentary: CFOs bogged down by unnecessary paperwork

More than 100 federal financial executives and managers took part in the annual survey of federal government chief financial officers, conducted by the Association of Government Accountants and Grant Thornton LLP. The survey looked at balancing competing priorities, barriers to progress and the Office of Management and Budget’s (OMB) Financial Management Line of Business initiative.

This year’s survey also turned the tables and let financial managers evaluate their evaluators — OMB, the Government Accountability Office, inspectors general and congressional committees. The evaluators seem to be taking note. OMB’s Danny Werfel mentioned the results of the CFO survey in a presentation to AGA’s Washington Chapter last month.

Generally, we found that resources are not balanced between meeting compliance requirements and adding value to program decision-making and that more consideration should be given to risk mitigation. Many respondents said the benefits of compliance do not justify the costs. Clearly, according to the survey, CFO resources are stretched too thin.

Complying with outside mandates is not the only strain on CFOs. Transaction processing and stewardship of public funds take up a significant amount of CFO time and nearly half of all resources. By contrast, strategic decision-making takes up only about one-fifth of a CFO’s time, according to the survey. I see a troubling trend.

Perhaps compliance information could be presented more efficiently as part of the Performance and Accountability Report, and the time saved could be put toward reducing risk elsewhere.

Taking a risk-based approach to oversight could ease the burden on the financial community so it can concentrate more on cost management, strategic decision-making, analysis and improving the government’s financial operations. It may be time to push for compliance requirements that support strategic decision-making. A CFO can become a much more valuable member of the team by providing data that program managers can use to improve day-to-day operations.

- RELMOND P. VAN DANIKER, FederalTimes.com

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Relmond P. Van Daniker, DBA, CPA, has been executive director of Association of Government Accountants since October 2003. Prior to that, he spent 30 years as the executive director of the National Association of State Auditors, Comptrollers and Treasurers and as a professor of accountancy at the University of Kentucky.

Friday, October 05, 2007

Today's GAO Publications

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

Financial Audit Manual, Volume I. (Audit Methodology) (Exposure draft.)
GAO-08-81G, October 2007.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-81G

Financial Audit Manual, Volume II. (Audit Tools) (Exposure draft.)
GAO-08-82G, October 2007.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-82G

Thursday, October 04, 2007

FederalNewsRadio - Ask the CFO - Steve Isakowitz (DOE)

Department of Energy

Steve Isakowitz - Chief Financial Officer

It may not be the traditional path for a Chief Financial Officer but Isakowitz says his background in aerospace engineering has served him well, allowing him to understand the diverse, technical mission areas supported by the department's budget. He says that practical scientific knowledge also helps up front in evaluating the risks of large, all or nothing projects. Finally, he says being able to understand the financial and scientific aspects of the department's mission pays off in other critical ways, especially since research is something which does not always lend itself to be measured simply or easily.

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Wednesday, October 03, 2007

Today's GAO Publications

The Government Accountability Office (GAO) today released the following reports and presentations:

Premium Class Travel: Internal Control Weaknesses Governmentwide Led to Improper and Abusive Use of Premium Class Travel.
GAO-07-1268, September 28.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1268
Highlights - http://www.gao.gov/highlights/d071268high.pdf

"An Accountability Update from Washington," by David M. Walker, comptroller general of the United States, before AICPA's peer review program conference, in Atlanta, Georgia.
GAO-08-149CG, October 1. [slides]
http://www.gao.gov/cghome/d08149cg.pdf

"Fiscal Stewardship in the 21st Century," by David M. Walker, comptroller general of the United States, before the Commerce Club, in Atlanta, Georgia.
GAO-08-150CG, October 1. [slides]
http://www.gao.gov/cghome/d08150cg.pdf

Contractor tax provision forces agencies to change financial systems

A provision in a tax law passed last year would require agencies to revamp financial management systems unless federal contractors are successful in convincing Congress to repeal the provision.

Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) requires federal, state and local government agencies to begin in 2011 withholding a tax of 3 percent of all payments of $100 million or more to government contractors. The 3 percent withholding would raise an estimated $7 billion between 2011 and 2015.

Congress added the provision to the law to make it more difficult for contractors to avoid paying income taxes, said Chris Braddock, director of procurement policy at the U.S. Chamber of Commerce's economic policy division. The provision has ties back to a 2004 Government Accountability Office report that found, after reviewing Defense Department and Internal Revenue Service records, that more than 27,000 Defense contractors owed about $3 billion in unpaid taxes as of Sept. 30, 2002. Congress acted quickly to find ways to collect the unpaid taxes.

Those opposed to the rule say it will require agencies to dip into already tight IT budgets to reprogram financial management systems to keep track of the 3 percent tax. Rules and contracts will need to be modified to address the withholding requirement, which could cause a number of logistical problems, said Andrea Wuebker, a spokeswoman for the Office of Management and Budget.

The IRS is developing regulations to implement the rule. But individual agencies will be required to comply, which means IT managers must consider what they have to do to revamp financial management systems. How much agencies will have to reprogram their systems will most likely vary, depending on the applications the agencies use and how easily they can be customized.

Sen. Larry Craig, R-Idaho, is leading efforts to repeal the provision. "Section 511 will . . . impose significant administrative costs on the federal, state and local governments," Craig said in a statement in March. "Congress never debated the merits of an expanded withholding requirement -- as a revenue-raiser or as a way to narrow the tax gap -- in a committee or on either chamber's floor. If it had, Congress would have realized that it does neither of these things well."

-Jill Aitoro, GovExec.com

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Senator to press for better financial, property management

Few in Congress have as much opportunity as Sen. Tom Carper, D-Del., to fix government inefficiency, mismanagement and waste. That’s because he chairs the Senate panel that oversees government management and efficiency.

Since becoming chairman of the Senate Homeland Security and Governmental Affairs subcommittee on federal financial management, government information, federal services and international security in January, Carper has held many hearings. They’ve examined the 2010 census, government information technology and postal reform.

His subcommittee’s work this year isn’t done, he says. Before the December holiday break, he intends to hold hearings on federal property management, electronic health records for federal employees and the Defense Department’s financial records system.

Carper discussed his plans with Federal Times staff writer Amy Doolittle on Sept. 24.

Read excerpts of the interview here.

-Amy Doolittle, FederalTimes.com

Tuesday, October 02, 2007

Accenture, AF activate new financial system

Accenture Ltd. and Air Force officials have tested and launched a new enterprisewide accounting and fiscal management system for the Air Force.

The new system is the first step in replacing several older financial systems and is intended to help the Air Force manage its operations more efficiently and at a lower cost, Accenture said in a news release.

The first phase of Spiral 1 of the Defense Enterprise Accounting and Management System (DEAMS) replaces the commitment accounting functions currently provided by the Air Force’s Automated Business Services System.

The company expects to finish the second phase of the project, which will complete the Spiral 1 implementation, later this year. Future releases will improve processes for cost accounting, purchase requests, accounts payable and disbursement, financial obligations, collections and customer billing.

DEAMS 1 is based on Oracle e-business commercial software. The 554th Electronic System Group at Wright-Patterson Air Force Base near Dayton, Ohio, is responsible for program development. Scott Air Force Base, near Belleville, Ill., is tasked with the implementation because of its role as headquarters for the Air Mobility Command, U.S. Transportation Command and Air Force Communications Agency.

The new financial management system is an attempt to bring positive lessons learned from private-sector business transformation to the Defense Department, Accenture said.

-William Walsh, Washington Technology.com

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White House threatens to veto bill on IG independence

The White House on Monday threatened to veto legislation designed to enhance the independence of inspectors general, saying it treads too far on the president's constitutional prerogatives.

A Statement of Administration Policy said language in the legislation permitting the president to remove inspectors only for cause "raises grave constitutional concerns" by impinging on the president's responsibility to supervise the executive branch officers.

The administration also strongly opposes provisions allowing inspectors general to submit their budget requests directly to Congress. And the administration objects to provisions establishing an independent Council of the Inspectors General on Integrity and Efficiency, saying a similar body exists and codification of such a council "would impede the president's ability to react swiftly and effectively to problems with IGs or with the council itself."

-GovExec.com

Monday, October 01, 2007

Today's GAO Publication

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

Social Security Administration: Policies and Procedures Were in Place over MMA Spending, but Some Instances of Noncompliance Occurred.
GAO-07-986, August 31
http://www.gao.gov/cgi-bin/getrpt?GAO-07-986
Highlights - http://www.gao.gov/highlights/d07986high.pdf

FMLOB Quarterly Newsletter

FMLOB wants to keep you informed of our progress on key projects. This is our second quarterly newsletter which highlights the current activity on each of our workstreams. We hope you will find the articles included in our third FMLOB Quarterly Newsletter (PDF) both interesting and informative as we attempt to keep you updated on the recent events and achievements of the Financial Management Line of Business.

(Word)

Critics not satisfied by naming of Pentagon management chief

As the Senate weighs legislation requiring the Pentagon to create the position of chief management officer, Defense Secretary Robert Gates has added the job to Deputy Defense Secretary Gordon England's portfolio. But the unilateral move has not quieted the department's critics.

Gate's action "does not address the longer term needs that the Government Accountability Office and others have identified," Comptroller General David Walker told CongressDaily Thursday.

In a Sept. 18 directive, Gates expanded England's official role to include "serving as the chief management officer of the Department of Defense." The directive requires England to oversee the Pentagon's push to overhaul its business operations, through steps such as combining hundreds of separate accounting systems and improving the procurement process.

The move came as the Senate resumed consideration of the fiscal 2008 defense authorization bill, which includes language mandating the creation of a CMO.

The language also requires other bureaucratic changes, including the addition of a deputy chief management officer in the department, below England. It also would force the Army, Air Force and Navy to designate their respective undersecretaries as chief management officers.

Outside groups -- including GAO, the Defense Business Board, the Institute for Defense Analysis and the Center for Strategic and International Studies -- have in recent years issued a host of reports arguing the Pentagon needs a full-time, high-level CMO with enough time and power to push through changes in the department's financial systems, supply chain, information technology, weapons acquisition system and other areas.

The congressional auditing agency has repeatedly argued that, under the current structure, senior Pentagon officials are too busy and not on the job long enough to get the department's programs off the high-risk list.

Defense officials, including England, have said adding a management chief beneath him would create an unneeded bureaucratic layer. Although a response from the Pentagon was not available at press time, Gates' directive is consistent with the department's position that England already functions as a CMO.

-Dan Friedman, GovExec.com
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Friday, September 28, 2007

Today's GAO Publication

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

U.S.-China Economic and Security Review Commission: Actions Needed to Improve Controls over Key Management Functions.
GAO-07-1128, September 28.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1128
Highlights - http://www.gao.gov/highlights/d071128high.pdf

FCC Releases Financial System Modernization RFQ

Request for Quotation (RFQ) Number RFQ07000021 for the Federal Communications Commission (FCC) Core Financial System Replacement (CFSR)

The Chief Financial Officer (CFO) and the Chief Information Officer (CIO) of the Federal Communications Commission are overseeing the acquisition phase of the Core Financial System Replacement (CFSR) project. FCC’s current financial systems environment is primarily comprised of a suite of CGI Federal solutions hosted by the Department of the Interior’s National Business Center (DOI-NBC), including the mainframe Federal Financial System (FFS) for core financials and the client-server Momentum Financials product for cost accounting (Budget Execution and Management System (BEAMS)). The FCC also operates the Revenue & Accounting Management Information System (RAMIS), based on Digital Systems Group’s (DSG’s) commercial off-the-shelf (COTS) financial system, for receivable, billing and collection activities.

This initiative will be conducted in compliance with all applicable financial systems regulations and guidance. Of particular applicability is the OMB’s Competition Framework for Financial Management Line of Business (FMLoB) Migrations (May 22, 2006) and the Financial Systems Integration Office (FSIO) migration planning guidance.

Please email the Contracting Officer (CO) at Anthony.Wimbush@fcc.gov with any questions regarding this RFQ by 5:00pm Eastern Time on October 9, 2007.

Proposals are due no later than 5:00pm Eastern Time on November 9, 2007.

Get the RFP Here

Thursday, September 27, 2007

FederalNewsRadio - Ask the CFO - Mark Carney (CFTC)

Commodity Futures Trading Commission (CFTC)

Mark Carney - Chief Financial Officer

The commodities futures market impacts what you pay for a loaf of bread, how much you pay at the pump and even the interest on your kid's college loan. And the number of contracts traded on the market has essentially tripled since 1976. Only, the CFTC's budget allows for fewer full-time employees now than it did then. As a result, Carney says his office has been taking a close look at where the agency's money is spent and whether the results justify the expenditures. The CFTC has also moved to a new financial management system, part of a process that helped it become one of eleven agencies to win the 2007 Certificate of Excellence in Accountability Reporting (CEAR) from the Association of Government Accountants.

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OMB SES Position Posted

ISSUE DATE: September 25, 2007
CLOSING DATE: October 9, 2007

ANNOUNCEMENT NUMBER:
OMB-07-85-VM

Title, Series & Grade:
DEPUTY ASSISTANT DIRECTOR FOR MANAGEMENT - ES-0301
($111,676 - $168,000)

Vacancy Location:
Office of Management and Budget
Management/Performance and Personnel Policy
Washington, DC 20503

WHERE TO APPLY:
Completed form(s) must faxed to:
Executive Office of the President
Office of Administration
Human Resources Management Division
(202) 395-1194/1262

Applications will also be accepted electronically. Please submit your application to eopjobs@oa.eop.gov.

@FedCFO