COMMON GOVERNMENT-WIDE ACCOUNTING CLASSIFICATION (CGAC) STRUCTURE: EXPOSURE DRAFT

From the FMLOB Quarterly Newsletter:

The FMLoB released the Common Government-Wide Accounting Classification (CGAC) Structure Exposure Draft on November 17, 2006. The CGAC structure establishes a standard way to classify the financial effects of government business activities. It includes data elements needed for internal and external reporting and provides flexibility for agency mission-specific needs. The proposed standard CGAC structure identifies and defines the elements, names them where appropriate, promotes consistent use, and establishes a uniform structure for capturing them. The CGAC structure will promote a universal understanding of the elements used to classify transactions, provide a uniform framework as a starting point for agency classification structures, standardize accounting classification functionality in systems offered to the Federal government, and aid in the aggregation and comparison of data across the government.

The CGAC structure will eventually be incorporated into requirements for core financial management systems so that the structure will be embedded in standard software products.
An agency will likely adopt the finalized structure when it implements a new financial management system, makes major upgrades to an existing certified system, or moves to a shared service provider (SSP). Eventually, adoption of the CGAC structure will be mandatory. Figure I shows the adoption of standardization within the 24 Chief Financial Officer (CFO) Act
Agencies today, as analyzed through the CGAC Survey that was conducted in the Fall of 2006.

The central Federal financial management agencies, including the Office of Management and Budget (OMB) and the Department of the Treasury, have participated in the definition
of this common government-wide accounting classification structure. They are committed to making the changes needed to align their systems and processes to the new structure.
Facilitated sessions are planned in February 2007 to discuss comments on the Exposure Draft from the Federal financial management community before the final structure is adopted.
Once the CGAC structure is finalized, additional work will address implementation issues and planning.

The CGAC Exposure Draft can be found at the Financial Systems Integration Office (FSIO) web site (www.fsio.gov).