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Friday, March 30, 2007

Today's GAO Testimony

GAO released the following testimony:

Improper Payments: Agencies' Efforts to Address Improper Payment and Recovery Auditing Requirements Continue, by McCoy Williams, director, financial management and assurance, before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, Senate Committee on Homeland Security and Governmental Affairs.

GAO-07-635T, March 29. http://www.gao.gov/cgi-bin/getrpt?GAO-07-635T
Highlights - http://www.gao.gov/highlights/d07635thigh.pdf

HRLOB Releases FAQ Quide

The HR LOB Frequently Asked Questions (FAQs) provide high–level information on the HR LOB transformation effort. The HR LOB FAQs will be updated periodically to reflect the most current information.

HRLOB FAQs

Monday, March 26, 2007

OMB Receives Leadership Award for Improving Government Performance and Accountability

The Office of Management and Budget (OMB) was awarded the 2007 Organizational Leadership Award by the American Society of Public Administration (ASPA) in recognition of its Program Assessment Rating Tool (PART). Presented by ASPA’s Center for Accountability and Performance, the award recognizes outstanding approaches to performance measurement that have resulted in sustained improvements in government performance and accountability. The award was presented on Monday, March 26, 2007 during the ASPA Awards ceremony held in conjunction with its 68th Annual Conference.

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World's Collide

Enterprise resource planning and service-oriented architecture are coming together. Three of the major software vendors of ERP software are moving their own platforms to ones that support Web services.

Oracle Corp. is rolling out its Fusion platform, which updates the PeopleSoft HR software with Web services interfaces. Already, its Fusion Middleware allows users to build their own composites, or applications that reuse already-existing functionality in other programs, said Wayne Bobby, vice president for solutions for finance and administration at Oracle Federal.

Likewise, SAP AG, based in Waldorf, Germany, has migrated its MySAP ERP software to a new Web services-based platform called Netweaver.

It is now exposing all the core functionality as Web services. So far, more than 1,500 functions are available. “We are going to expose every single element of our solution as a Web service,” said David Ditzel, director of public services technology solutions for the company.

In a similar move, CGI Inc. of Montreal has migrated its federal ERP software, called Momentum, to a Java 2 Enterprise Edition-based platform, allowing developers to easily hook their own J2EE applications into CGI’s software, said Heidi Green, head of CGI's state and local ERP practice, based in Fairfax, Va.

ERP systems traditionally are known as large, monolithic applications that tend to be difficult to install, maintain and upgrade. SOA promises to make software more responsive, namely by making it easy to reconfigure to meet changing needs.

In many ways, the federal government has tried to simplify ERP deployment by breaking the job into smaller chunks. For instance, when the Social Security Administration wrote the business case for a new core financial-management system in 2001, it broke fiscal duties into discrete functionalities, following Clinger-Cohen Act tenets to mitigate risk, said Tom Bianco, who manages the Social Security Online Accounting and Reporting System.

SSA’s system uses components of the Oracle Federal Financials package, including the general ledger, accounts payable, accounts receivable and purchasing modules.

With Web services-based interfaces, the modular approach could now become more fine-grained, advocates said.

As the Organization for the Advancement of Structured Information Standards said last summer, the SOA Reference Model is “a paradigm for organizing and utilizing distributed capabilities that may be under the control of different ownership domains.”

By reusing capabilities, theorists say, organizations could make better use of available resources or meet changing needs more quickly.

- Jacob Jackson, WashingtonTechnology.com

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How financial reforms add up to better decisions

Housing and Urban Development Department officials distributing post-Sept. 11 recovery funds were the department’s first employees to receive e-mails containing real-time financial information on their program.

Other HUD officials are developing measures to evaluate the per-unit cost of different approaches for delivering housing.

Those initiatives may not seem extraordinary, but they are: They were made possible only by years of effort to automate and streamline accounting practices at department offices around the country. And HUD’s deputy chief financial officer, Jim Martin, said the department is still finding ways to translate its improved financial management into improved program management.

“We see opportunities to make these kinds of decisions throughout the department,” Martin said.

Across government, agencies have spent years overhauling their financial management practices. They are standardizing accounting practices, automating data collection, consolidating financial systems and struggling to obtain clean audits.

A key goal of the effort is giving managers accurate and current financial data with which to make decisions.

Senior financial officials at some agencies say that is starting to occur. And officials say they are closing in on the ability to give managers access to real-time and program-specific financial data on their desktops.

But good news is hardly the rule when it comes to federal finances. Viewed broadly, federal financial management is poor. For 10 straight years, the Government Accountability Office has declined to offer an opinion on the government’s overall finances due to inadequate accounting for cross-agency balances, problems preparing financial statements and other issues.

The finances of two of the largest agencies, the Defense and Homeland Security departments, are routinely described as tangled, opaque and years from being auditable. Last year, the financial management systems of 17 of the 24 agencies failed to comply with the 1996 Federal Financial Management Improvement Act. That number has barely budged since the act passed. And auditors cite ongoing problems including lack of accurate and timely data, poor procedures for reconciling funds and noncompliance with accounting standards.

The most frequently cited problem, however, is nonintegrated financial systems. For most of their histories, agencies and individual bureaus have used unique systems and standards to keep their books, developing cultures around their own procedures. With accounts effectively in different languages, financial managers must translate to share data. That process is slow, expensive and mistake-prone.

Progress on addressing that problem varies. Agencies such as the Social Security Administration, the National Science Foundation, the Environmental Protection Agency and the Labor, State and Commerce departments get good marks from OMB.

But bigger, decentralized agencies struggle.

But the books are improving. Agencies have been chipping away at accounting problems since the 1990 passage of the Chief Financial Officers Act, which created the CFO position and mandated annual financial reports. Under the president’s management agenda, launched in 2001, the Office of Management and Budget has pushed agencies to achieve clean audits, fix material weaknesses in financial controls and meet reporting deadlines, among other initiatives.

The pace of change accelerated recently. Under OMB’s Circular A-123, the government’s version of the Sarbanes-Oxley Act, agencies in fiscal 2006 began implementing new internal accounting controls. For the last two years, OMB has required CFOs to issue audited financial statements within 45 days of the fiscal year’s close, rather than the nearly five months it sometimes previously took.

In 2006, OMB also required all agencies upgrading their financial systems to consolidate their accounting, payments and recording systems with those of other agencies, either by using shared service providers under the so-called lines of business initiative or by becoming shared service providers themselves. To opt out, an agency must show it can operate its own system for less money and with less risk than it could through sharing services.

In connection with the financial management line of business, OMB is developing a common governmentwide accounting code, set to be issued next month. The agency is also issuing guidance for agencies to standardize processes for funds control, accounts payable, accounts receivable and financial reporting to the Treasury Department.

But OMB officials warn against making compliance an end in itself, noting that to achieve top ratings on the initiatives that make up the financial management portion of the president’s management agenda, agencies must show that they are using financial information to guide decisions.

Good accounting is no longer just the financial managers’ job. Success requires help from all managers with budget oversight, CFOs stress.

“If they are running their own program, we want them implementing [financial management guidelines],” said Justice Department Assistant Attorney General for Administration Lee Lofthus.

Most agencies in recent years have made financial management, along with other PMA-related goals, a part of the performance plans of senior executives. But financial managers at many agencies say the shift is broader.

The Education Department is “driving down from the secretary’s office” the message that internal controls are not just the Office of the Chief Financial Officer’s responsibility, said Danny Harris, deputy CFO at Education. “It is program managers and contract officers. That is a big change.”

Managers are increasingly required to document financial procedures, ensure that internal controls are in place, and integrate budget and performance goals.

- Daniel Friedman, FederalTimes.com

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Philip McKinney: Leading by going against the grain

When Philip McKinney arrived at the federal judiciary system from the Interior Department in 1995, it was as if he had stepped back in time. The way the federal system’s 94 courts accounted for money, it might as well have been 1795. And for the most part, people accepted the anachronism.

“It was all manual,” said George Schafer, chief financial officer at the Administrative Office of the U.S. Courts, referring to financial systems that reflected 200 years of judiciary tradition and policies.

The challenge for McKinney, the judiciary system’s chief accounting officer, was persuading 94 highly independent courts to jettison an antiquated system and embrace change. A dozen years later, the judiciary’s financial-management system has been modernized, standardized and automated. McKinney succeeded in areas in which others had failed, in large part because he established a process for changing a culture that had been stubbornly resisting change.

On his arrival, McKinney found that financial-management practices varied widely in the federal judiciary. One large court was using a typewriter to issue as many as 300 checks daily that were worth millions of dollars. Elsewhere, money collected at an intake counter was placed in a cigar box. Another large court had developed a financial-management system by color-coding spreadsheets with Magic Markers.

However, the courts weren’t eager to do things differently, and McKinney had no authority to compel them to change. He could only persuade them. “The judges run the judiciary. They don’t have to do what they don’t think is necessary,” said McKinney, whose task was made more difficult by a series of failed attempts to overhaul the courts’ financial management. “This was the last effort that was going to be tolerated.”

The system’s modernization, McKinney determined, would have to be an inside job.

“It was important that I learn the culture and hierarchy and the formal lines of authority and the informal lines,” McKinney said. “I sought out key respected staff in the judiciary…and worked with them and their financial people to paint the vision.”

A critical part of that vision was to adopt commercial applications and forgo developing customized software, an approach that had failed in the past. Involving key staff members in that decision helped McKinney secure an endorsement of his plan from the primary policy-making body of the U.S. Courts, the Judicial Conference.

“Getting that endorsement brought a lot of credibility to the project,” he said.

McKinney had a methodology for smoothing the courts’ transition to the new financial-management system. Critical staff members at each court attended a mandatory weeklong class to review the implementation process, technology issues and change management. After returning home, participants assessed the readiness of their courts, which had to be certified for transition before implementation could begin.

The initiative came to be known as the Financial Accounting System for Tomorrow, or FAST. However, the implementation was anything but, skeptics said.

To further facilitate the transition, McKinney created a mentoring program. Courts that had adopted the new system helped other courts get up to speed. Establishing such a peer network brought instant credibility that McKinney said he lacked. “Nobody trusts anybody from Washington,” D.C., he said.

- John Pulley, FCW.com

Wednesday, March 21, 2007

David Walker Testimony to the US House of Representatives

Testimony before the Subcommittee on Government Management, Organization, and Procurement, Committee on Oversight and Government Reform, House of Representatives, March 20, 2007.

11th Annual Greater Washington Technology CFO Awards

Brought to you by 11th Annual Greater Washington Technology CFO Awards


Presented by the Northern Virginia Technology Council and the Technology Council of Maryland; with participation by the Washington DC Technology Council.

Is your CFO extraordinary? Nominate him or her for one of the following award categories:

  • Community Service Award
  • Public Company CFO
  • Private Company CFO
  • (NEW) Phoenix Award (for Public Sector CFOs)
Nomination is easy online at: www.nvtc.org

Tuesday, March 20, 2007

OMB, FSIO propose first financial standard process

The Office of Management and Budget and the Financial Systems Integration Office (FSIO) are asking for comments on a proposed standard process that would prevent agencies from spending or obligating more funds than their budgets allow.

The draft of the standard for funds control, released last week, outlines a common approach for agencies on how to request funds, research and resolve if the request conforms with agency appropriations and verify the steps throughout the process.

FSIO will accept public and private comments on the draft until April 7.

The proposed document is the first step toward standardizing business processes across government. With standard processes, agencies will perform core financial management tasks the same way across government.

Standard business processes are part of the Financial Management Line of Business consolidation initiative, along with agencies moving management of their financial systems to shared service providers and a common government accounting code.

FSIO, part of the General Services Administration, will propose standards over time for sequenced activities in core business processes, business rules, and data elements and definitions, such as for information in a purchase order. In the future, FSIO will produce standard business processes for management of payments made and received and financial reports.

In another document, FSIO updated its policy that directs how agencies are to test financial systems for compliance with federal financial management system requirements. The update reflects experience with actual test practices over the last five years, the goal to use resources more effectively and efficiently and the elimination of the arbitrary three-year test cycle. Instead, FSIO will require testing only when there is a business need.


- Mary Mosquera, FCW.com

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Defense Logistics Agency Launches Financial Document Workflow Electronic Document Management Service

MECHANICSBURG, Pa., March 19 /PRNewswire-USNewswire/ --
A new direction for financial document creation in the Defense Logistics Agency has been launched.

Sarah Myers, a financial analyst at the headquarters of the Document Automation & Production Service, submitted the first production Military Interdepartmental Purchase Request into the new Financial Document Workflow electronic document management service. Myers sent the MIPR for review and approval by Greg Shank, director, DAPS Financial Operations Division.

DAPS is the developer and first user of the service. The Defense Distribution Center will be the next. Both are DLA field activities with worldwide facilities.

DAPS is the document solutions provider for the Department of Defense and serves as a catalyst to move the DOD toward the use of online documents such as with the Financial Document Workflow service.

DAPS developed the Financial Document Workflow service in response to the DLA Financial Operations directorate's request for a system capable of creating, routing through workflow, approving, storing, and managing financial documents. As it rolls out across the DLA enterprise, it will allow users to process MIPRs, service orders, and other financial documents in a uniform, auditable manner, in some cases without requiring any external handling.

Productivity, consistency and "audit-ability" are the keywords being associated with FDW. Default values based upon the user and his or her activity, tailored dropdowns allowing data to be selected rather than coded, and workflow where each step in the approval process is recorded ensure the creation and processing of a document in minimal time. MIPR creation time is less than five minutes, while capabilities to generate amendments and create documents similar to prior ones enable even faster turnaround. Multiple users can view the same documents simultaneously. The ability to upload related documents into the repository also facilitates productivity.

In its initial implementation, a financial feeder interface with the Defense Business Management System means that workflow for DLA's field activities can include automated transaction submission. DAPS conceived FDW with DLA's Business Systems Modernization in mind. The FDW statement of work includes an interface with BSM in its current phase. To that end, FDW is participating in the Enterprise Operational Accounting System gap analysis currently underway. FDW has also been certified by the DOD Financial Management Investment Review Board within the Business Management Modernization Program.

In its rollout this calendar year FDW is planned for use across all DLA financial operations activities. It is also currently capable of including users across the DOD and may be opened for use by selected commercial customers in a future phase.

Read the entire Press Release...

Thursday, March 15, 2007

Management agenda will set a course beyond Bush administration, OMB official predicts

The president’s management agenda will continue into the next administration because career employees support it, Clay Johnson, the Office of Management and Budget’s deputy director for management, told federal financial managers at a March 13 conference.

“The next administration is going to come in — Republican or Democrat — and once again the career staff is going to lead the way,” Johnson said. “The career staff is going to say ‘OK, sit down and let us tell you how to run this place. Here’s how we hold ourselves accountable.’

“I believe it’s you, the career staff, in every agency that gets some of this [institutionalized] for every agency,” he added. “The real reason it will continue is that it’s good for you and it’s good for your agencies.”

The president’s management agenda is an OMB-led effort to encourage a series of initiatives — financial performance, competitive sourcing, e-government, human capital management and budget-performance integration. While the PMA is accepted, it is far from universally popular with managers. Johnson’s pitch appeared aimed at converting managers into advocates for the effort.

He also called for Congress to fund management reforms. “It costs money to get good data,” he said. “It costs money to eliminate improper payments.”

Johnson spoke at a Washington conference on financial management hosted by General Service Administration’s Financial Systems Integration Office.

Government Accountability Office Comptroller General David Walker used a subsequent speech to deliver his well-honed talking points on the need to cut federal spending and deficits.

Walker said GAO is preparing to work with congressional allies to introduce legislation to increase financial reporting by the executive branch. One step would be requiring the White House to regularly submit longer-range budgets such as a 40-year plan. That would address shortfalls created by relying on five- and 10-year projections, Walker said.

Walker called for periodic “fiscal sustainability reports,” and said GAO hopes to produce annual, easy-to-read, reports on the government’s fiscal position.

Walker also said agencies need better metrics on how well programs perform. “For the most part, the government has no idea which ones are working,” he said.

-Daniel Friedman, FederalTimes.com

GSA to seek commercial financial management providers

The General Services Administration will release a request for proposals in June for commercial shared-service providers to supply financial management, according to Danny Harris, the Education Department’s deputy chief financial officer.

GSA’s Financial Systems Integration Office (FSIO) will select a small number of vendors from which agencies can choose to provide services under the Financial Management Line of Business consolidation initiative.

The commercial providers will join four agencies that are delivering financial management shared services: the Treasury Department’s Bureau of Public Debt, the Interior Department’s National Business Center, the Transportation Department and GSA.

The Office of Management and Budget has directed that agencies migrate their core financial services to providers when they upgrade their financial management systems.

Large agencies have been hesitant to outsource their complex systems and processes. After one large agency makes the move with minimum risk, others will follow, Harris said March 13 at the annual Federal Financial Management Conference sponsored by FSIO.

“The initiative is making progress, but I don’t think we’ll get the speed we need until a large agency validates the value proposition,” Harris said. He is also team leader of the CFO Council’s Financial Systems Oversight Team.

The Environmental Protection Agency last month awarded CGI Federal of Fairfax, Va., an $84 million contract as its shared-services provider for the agency’s Financial System Modernization Project. The EPA’s 10-year award is the first for a large system procurement conducted by a major agency under the line of business.

-Mary Mosquera, FCW.com

Today's GAO Presentation

"Improving Performance, Transparency, and Accountability in the Federal Government" by David M. Walker, comptroller general of the United States, before the Federal Financial Management Conference, in Washington, D.C.

GAO-07-603CG, March 13. [slides]
http://www.gao.gov/cghome/d07603cg.pdf

Financial management honors go to NSF, HUD executives

Two government senior finance executives were honored today at the Federal Financial Management Conference in Washington, D.C., for spearheading financial management innovations at their agencies.

Thomas Cooley, chief financial officer at the National Science Foundation, and James Martin, deputy chief financial officer at the Department of Housing and Urban Development, received Donald L. Scantlebury Memorial Awards for exceptional and sustained leadership in financial management improvement.

About 1,000 federal and private-sector managers attended the event, sponsored annually by the General Services Administration’s Financial Systems Integration Office.

Presenting the awards, Jeffrey Steinhoff, managing director of financial management and assurance at the Government Accountability Office, said Cooley is “widely recognized for achieving synergistic business and program operations, enabling NSF to serve as a government role model of excellence in financial management.”

He noted that NSF was the first agency to reach green status in financial management on the President’s Management Agenda score card.

“NSF stands at the forefront of financial management excellence, thanks to Tom Cooley,” Steinhoff said.

“Wherever I turn…in the federal government, I find people who are willing to put their noses to the grindstone and help out,” Cooley said. “I find that a real testament to what it means to be a federal employee.”

Under Martin’s leadership, HUD “received seven consecutive clean audit opinions, vigorously attacked a range of financial reporting and internal control weaknesses that had plagued HUD in earlier years, and placed [the agency] on a path of continuous improvement,” Steinhoff said.

With Martin leading the charge, HUD also reduced its total improper payments in five years by 60 percent, he said. In fiscal 2005, the effort helped free $1.9 billion and let HUD assist 250,000 additional households, Steinhoff said.

“This is where financial management is bringing home a very clear result that we can all be proud,” he said.

Martin credited his fellow HUD employees with improving the agency’s financial performance. “It’s almost embarrassing to be singled out for something that so many HUD staff have worked to achieve,” he said.

-Richard Walker, FCW.com

Thursday, March 08, 2007

Is Grants.gov in the FastLane?

Grants.gov, the U.S. government's central grants portal, has emerged as an important tool for the U.S. research community. Grants.gov is a repository for information on all federal grant-funding programs, and an increasing number of agencies now require applicants to use Grants.gov's standard online application forms and to apply through Grants.gov. The goal is to create a single, consistent infrastructure for applying for federal grants.

But for years--in some cases as long as a decade--National Science Foundation-funded researchers have been using NSF's FastLane system to apply for and manage NSF grants. The addition of Grants.gov means that many researchers and research administrators now contend with two federal online grant application systems. And although it's not an ideal situation, researchers and research administrators say they can live with it.

Grants.gov is a result of the U.S. government's early initiatives in electronic government. In 1999, Congress passed the Federal Financial Assistance Management Improvement Act (also known as Public Law 106-107), which required the federal government to simplify the way it managed its grant programs. The law called on agencies to apply electronic technology to make the process of applying for federal grants simpler and more uniform.

Grants.gov, which launched in 2002, was the law's most visible consequence. Behind the scenes, Grants.gov is a consortium of 26 grant-offering agencies (including NSF) that contribute funds, and sometimes staff, to keep the site operational. For people seeking grants, Grants.gov is the go-to Web site for federal-government-wide grant announcements and applications. In November 2003, the Office of Management and Budget began requiring agencies to post their funding announcements on Grants.gov, and within 2 years, the vast majority had complied. From June 2005 through August 2006, NSF posted all 259 of its funding announcements--about $7 billion worth--on Grants.gov.

In operation since 1995, NSF's FastLane allows the NSF community to apply for grants, review proposals, and manage grant-related financial matters. For the vast majority of its opportunities, NSF offers applicants the choice of Grants.gov or FastLane for submitting applications. NSF has taken steps to encourage and enable the use of Grants.gov; in the past 2 years, NSF has reserved a few programs for applications using Grants.gov alone and written a comprehensive 62-page manual for submitting grant applications through Grants.gov.

Despite these efforts, NSF grant applicants have voted with their feet--or maybe fingers makes for a better metaphor. NSF's annual report on compliance with Public Law 106-107 shows that from June 2005 through August 2006, NSF received 705 proposals via Grants.gov, just 1.3% of the more than 55,000 proposals NSF received. The rest were submitted using FastLane.

George Strawn, chief information officer at NSF, says that NSF and research institutions have a long-term stake in FastLane. "We started working on it 20 years ago [and] basically finished with FastLane by the year 2000," Strawn says. Moreover, "we enticed our community to learn FastLane 12 years ago." Strawn calls FastLane "the pathfinder for Grants.gov."

Grants.gov and NSF still need to resolve some issues, Strawn says, such as handling proposals from multiple organizations, for which NSF still requires FastLane. Nonetheless, he believes that eventually there will be a common electronic grants application system. "I can envision the day when Grants.gov will be fully implemented and fully working and will be the standard solution," Strawn says. NSF is also coordinating with Grants.gov and other agencies on what the government calls the Grants Management Line of Business, an initiative to improve all grants-related business processes. Thanks in part to its long experience with FastLane, NSF is a senior partner.

-Alan Kotok, Sciencemag.org

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Oracle’s $3B acquisition of Hyperion: 'A rough road ahead?'

Oracle’s planned purchase of Hyperion may result in software that allows government customers to more easily merge their strategic plans with their operational data, though industry observers also worry about integration issues with the acquisition.

Hyperion CEO Godfrey Sullivan noted in a press release that the field of performance management is converging with that of business intelligence. Folding Hyperion software into Oracle’s Business Intelligence suite would offer customers the ability to align operational data with their strategic goals.

In the government space, performance management software is often used by agencies to track how well departments are meeting the President’s Management Agenda. Such software could also be used to see how an agency is meeting its goals. According to Hyperion’s Web site, the Army Recruiting Command has used the Hyperion Performance Suite to produce reports and executive summaries. The Agriculture Department’s Farm Service Agency also has used that software to prepare financial reports and budgets, according to Hyperion’s site.

While Hyperion users who run Oracle middleware and enterprise resource planning tools may enjoy greater interoperability in the years to come, those that use non-Oracle platforms may experience “a rough road ahead,” speculated Alyssa Farrell, SAS’ government industry marketing manager. SAS also features performance management functionality within its own SAS 9 software.

“We don’t know if Oracle will continue to develop Hyperion software or if it will attempt to transfer the functionality to Oracle’s own solutions suite,” she said.

-Joab Jackson, WashingtonTechnology.com

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Tuesday, March 06, 2007

Commerce to seek small biz to aid financials upgrade

The Commerce Department would like to hire a small business to be a prime contractor for the agency’s Financial Management Modernization Project.

Commerce has already begun to consolidate bureau applications and servers. It plans to follow the goals of the Financial Management Line of Business, including ensuring strong internal controls for accounting integrity, standardizing systems, business processes and data elements and providing seamless data exchange between the Commerce and other agencies.

According to a recent notice on the Federal Business Opportunities Web site, Commerce is considering using a contractor to develop a comprehensive strategy and road map to analyze options for financial management support. The road map will provide the architecture around standardizing and consolidating the department's business processes, administrative systems and technologies, user interaction and usability, data centers, security and integration components.

This analysis will include an assessment of capabilities to be a shared-service provider for technology hosting and administration, application management, business process services and system implementation services as outlined in the Financial Management LOB Migration Planning Guidance.

Commerce would require a contractor to continue current system maintenance support and migration support until its future state, including all design, architecture, integration, and deployment activities as well as sustaining this future state, such as continual business improvements.

The department anticipates developing requirements, performance measures, inspection and acceptance procedures, as well as other areas of a request for proposal. The agency expects to conduct a presolicitation conference in May. Responses are due Friday, March 9.

- Mary Mosquera, FCW.com

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DHS to Manage and Improve IT Operations

Paul A. Schneider, U.S. Department of Homeland Security Under Secretary For Management, testified before the U.S. House of Representatives Committee on Homeland Security Subcommittee on Management, Investigations, and Oversight. The following is the portion of his testimony regarding aspects of Federal financial management.

The DHS CIO and Chief Financial Officer (CFO) are working through the Internal Controls Assessment Project to bring information security policy and actions to the Federal Information Security Management Act (FISMA) standards.

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OMB analyzing architecture of agency business lines

The Office of Management and Budget is reviewing agency enterprise architectures with a keen eye toward how the blueprints will change mission-critical business lines.

Dick Burk, OMB’s chief architect, said today that his office has been meeting weekly with agency chief architects to have them focus on specific business segments, and to get the owner of that business line to sign off on the architecture.

Burk said 25 of 26 agencies submitted their enterprise architectures for review, and OMB will have them analyzed by early April. With 93 percent of all development, modernization and enhancement funding going toward mission-critical systems, OMB thought segment architecture would be a valuable tool to improve the use of enterprise architecture, he said.

For the most part, agencies dove into their mission-critical business architecture segments. Burk said a few agency enterprise architectures were not mature enough to analyze, so those chief architects at those agencies focused on business services such as financial management or procurement, while others were focused on getting their IT infrastructure in place before moving into mission-critical areas.

OMB asked agencies to drill down only into one segment, but at least six did two, Burk said.

“Now they have experience in doing this and can do more in the future,” he said. “The whole idea is to get into their core business areas.”

-Jason Miller, FCW.com

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Today's GAO Presentation and Testimony

Presentation:

"GAO's Initiatives to Improve Performance, Transparency, and Accountability in the Federal Government" by David M. Walker, comptroller general of the United States, at a senior level coordination meeting between GAO and the Congressional Research Service, in Washington.

GAO-07-569CG, March 2.
[slides]http://www.gao.gov/cghome/d07569cg.pdf

Testimony:

Federal Financial Management:
Critical Accountability and Fiscal Stewardship Challenges Facing Our Nation, 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-07-542T, March 1.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-542T
Highlights - http://www.gao.gov/highlights/d07542thigh.pdf

Saturday, March 03, 2007

Senators explore federal finances at sparsely attended hearing

Lawmakers at a Thursday hearing on federal financial management engaged in thoughtful discussion with top administration and accountability officials, but poor turnout -- with only two senators present -- suggests grim prospects for advancement on long-standing issues.

Sen. Tom Carper, D-Del., chaired the hearing and traded time with freshman Sen. Claire McCaskill, D-Mo., an auditor by training who has shown a strong interest in federal accountability issues.

The senators quizzed witnesses David M. Walker, comptroller general of the Government Accountability Office, and Linda Combs, the Office of Management and Budget's controller, on a range of issues that could come before the Senate Homeland Security and Governmental Affairs subcommittee on financial management during the coming year.

McCaskill said she was shocked to learn, since arriving in Washington, that agencies regularly fail financial audits and are not held to account. Five major agencies representing more than $500 billion in spending -- the Defense, Energy, Homeland Security and State departments, and NASA -- received disclaimers of opinion on their fiscal 2006 audits. Defense, the highest-budgeted offender, has repeatedly backed off timelines to put its books in order.

She also expressed outrage at the lack of consequences when agencies violate the Anti-Deficiency Act, which prohibits spending in excess of appropriations, saying her office had not found a single instance in which a violation has led to someone being fired or fined. "It seems to me we haven't deterred much," she said.

Walker agreed that agencies' failure to enforce the act is a problem, but laid part of the blame at lawmakers' feet. He said effective financial management must include incentives for officials to "do the right thing," transparency to verify that they do, and accountability in case they don't. "One of the reasons that DoD has had the problems it has, is that Congress hasn't held them accountable," Walker told the senators.

-Jenny Mandel, GovExec.com

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Friday, March 02, 2007

OMB: Agencies slowly improving financial management

Agencies are still struggling with major financial management problems that make it difficult to produce accurate year-end reports on their programs, but the Office of Management and Budget sees potential for further improvements.

The most significant of these problems are weaknesses in financial reporting, financial systems and security, according to OMB.

Still, individual agencies have made improvements; an increasing numbers of agencies are producing clean audits, meaning data for their financial statements is accurate and timely, said Linda Combs, OMB controller. Agencies have also reduced their improper payments, such as inaccurate benefits payments.

OMB hopes to see further improvement in financial management from a joint effort it has begun with chief financial officers and the inspector general community to determine how to report financial statements in a more cost-effective manner.

The CFO Council and the President’s Council on Integrity and Efficiency will look for best practices that agencies can share, Combs said at a hearing March 1 held by the Senate Homeland Security and Government Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security.

The two organizations will determine if agencies are sharing the right information, if the data is timely and in the right format to make decisions and if there is an appropriate amount of audit scrutiny.

OMB has directed agencies to reform their financial management as part of the President’s Management Agenda. Agencies are to improve, strengthen and monitor their financial systems, internal controls, payments accuracy, property management, grants management and financial reporting, Combs said.

Even as some agencies have taken steps to improve their financial management, the Government Accountability Office is unable to provide an audit opinion on the federal government’s consolidated financial statement.

This situation is due to longstanding and pervasive financial management problems at the Defense Department, the government’s inability to adequately account for and reconcile accounting between agencies and the government’s ineffective process for preparing its financial statements, said Comptroller General David Walker.

Financial management systems must be modernized to provide the complete range of information needed for accountability, performance reporting and making decisions, he said.

Last year, the financial statements of the Defense, Homeland Security, Energy and Transportation departments and NASA failed their audits because their financial information was unreliable, Walker said.

-Mary Mosquera, FCW.com

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Linda Combs Testimony to the US Senate

Testimony before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security and the Senate Committee on Homeland Security and Government Affairs, March 1, 2007.

Thursday, March 01, 2007

Oracle Buys Enterprise Performance Management Leader Hyperion

REDWOOD SHORES, Calif., 01-MAR-2007 04:20 AM Oracle today announced that it has agreed to buy Hyperion Solutions Corporation (Nasdaq: HYSL), a leading global provider of performance management software solutions, through a cash tender offer for $52.00 per share, or approximately $3.3 billion.

"The acquisition of Hyperion makes Oracle the category leader in the high growth enterprise performance management market," said Oracle CEO Larry Ellison. "Hyperion's EPM software coupled with Oracle's Business Intelligence (BI) tools and analytic applications form an end-to-end performance management system that includes planning, budgeting, consolidation, operational analytics and compliance reporting. "

"Requirements for Performance Management and Business Intelligence solutions are increasingly converging," said Hyperion Chief Executive Officer Godfrey Sullivan. "Given the critical need for managers across the enterprise to align operational decisions with strategy, now is the right time for Hyperion to combine with a strategic partner like Oracle to deliver the first, integrated end-to-end Enterprise Performance Management System."

The transaction is subject to customary conditions and is expected to close in April 2007. More information is available at http://www.oracle.com/hyperion.

Comptroller General of the United States David M. Walker, CPA, to be Featured on CBS's 60 Minutes, Sunday, March 4, 7 p.m. ET/PT

U.S. Comptroller General of the United States David Walker, a member of AGA's Washington, D.C. Chapter, talks to 60 Minutes correspondent Steve Kroft this Sunday, March 4, at 7 p.m. ET/PT.

Army tries to restore GFEBS funding

To help it move forward with its program to bring sound financial management and accountability through its General Fund Enterprise Business System, Army officials must ask Congress for permission to replace funding cut from the program’s fiscal 2007 budget.

GFEBS is the Army’s initiative to consolidate and reform its financial management systems through an integrated architecture using modified SAP software. The Army is looking to replace 87 financial systems with GFEBS, bringing long-awaited efficiency and integration. About 79,000 Army employees and contractors will use the new system to manage the Army’s annual budget of $110 billion.

But Congress cut the GFEBS budget by $115.7 million, leaving only $21 million in funding for fiscal 2007. The Army has asked congressional committee staff members for permission to restore some of the lost funding by using money from other areas of the budget. The Army wants to increase funding for research, development, testing and evaluation by $56.3 million through a reprogramming action, said Cherie Smith, GFEBS project director.

This is a crucial year for GFEBS. It plans to distribute Release 1.2, which involves deploying the system to the Department of the Army Headquarters, the Defense Finance and Accounting Service and the Army Installation Management Command. Release 1.1 was limited to a testing center at Fort Jackson, S.C.

The Army will be able to achieve the elusive clean audit when GFEBS is fully deployed, officials said. But that won’t be possible until the end of the system’s deployment, scheduled for late 2010.

“This is our opportunity to take a large number of legacy financial systems…and bring them together into a single, integrated financial system,” said Nelson Ford, assistant secretary of the Army for financial management and comptroller, at the opening of GFEBS’ new facility in Alexandria, Va.

GFEBS is the core piece of the Single Army Financial Enterprise. The Army is also working with the Business Transformation Agency to ensure GFEBS is designed to comply with DOD’s Business Enterprise Architecture.

President Bush's fiscal 2008 budget, released Feb. 5, seeks $53.6 million for GFEBS.


-Josh Rogin, FCW.com

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FEMA urged to improve grants management

The Federal Emergency Management Agency and the Homeland Security Department's emergency preparedness division need to improve oversight and management of grants, lawmakers told agency officials Wednesday.

The calls for improvement come about a month before FEMA is slated to receive more responsibility for distributing grants. Matt Jadacki, DHS deputy inspector general for disaster assistance oversight, said FEMA "historically has had significant problems tracking, monitoring and closing mission assignments."

"FEMA faces a significant challenge in management/oversight of its disaster assistance grant program as well as the DHS grants programs that will become a part of FEMA on April 1," Jadacki told members at a joint hearing held by the House Homeland Security Subcommittee on Emergency Communications, Preparedness and Response, and the Subcommittee on Management, Investigations and Oversight.

He said about 2,700 grants, worth about $8.7 billion, have been executed for Hurricane Katrina alone. The DHS inspector general continues to conduct reviews of those grants, he said.

-Jonathan Marino, GovExec.com

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How HUD got off 'high-risk' list

Information technology that lets officials use risk-based monitoring, as well as new statutory authority to match names against an employment database, helped the Housing and Urban Development Department to escape a high-risk designation this year for the first time since 1994.

In January, the Government Accountability Office released its latest report on federal programs at high risk for fraud, waste, abuse and mismanagement. In what Comptroller General David Walker called a "historic achievement," HUD's programs for rental housing assistance and single-family mortgage assistance fell from the list to erase the agency entirely from the rolls.

Jim Martin, HUD's deputy chief financial officer, explained in an interview that most of the problems in the rental assistance programs stemmed from improper payments. Together, those programs disburse about $27 billion per year to 4.8 million households across the country, he said, collectively making them HUD's largest program area. The programs are income-sensitive, so they are vulnerable to errors where beneficiary data is inaccurate or out of date.

In late 2004, Congress granted HUD the right to draw on a Health and Human Services Department database on new hiring, Martin said. "To date, Congress has selectively chosen which programs get the authority to use that internal control tool, and which don't," he said.

For HUD, which already was authorized by beneficiary release forms to verify employment information, the ability to check against the HHS database eliminated the large administrative burden of calling individual employers. "It actually gives a degree of dignity to the beneficiaries, because they don't need to tell their employer they're getting a HUD subsidy," Martin said.

To get the single-family mortgage insurance program off the list, HUD instituted new strategies for risk-based monitoring of borrower credit and participating appraisers.

HUD works with about 11,000 lenders who process more than a million mortgages annually on behalf of the department. "If you deal with that large of a vendor population. . . you have to do a lot more [monitoring] in an automated fashion," said HUD CFO John Cox. "By monitoring them electronically, using algorithms to figure out where those risks are, it works."

At GAO's urging, the department improved the factors used to predict loan defaults and developed a process to regularly test other variables that could improve its risk modeling, according to a GAO report on the improvements.

Cox, who previously has worked at technology companies, said he's been impressed with how the department uses IT. He said one of his missions has been to get more money for the department's technology budget.

In that, as in other aspects of the risk remediation plans, top-level support has been key, he said. Evaluations for the President's Management Agenda quarterly score card have required HUD to update its progress on getting off the high-risk list. "Being part of the PMA certainly puts it out there, [because] every quarter you have to report on it," Cox said.

He also credits the agency's cooperative relationship with its reviewers. "Typically auditors will be evasive," claiming they'll know progress when they see it but refusing to identify the measures, the CFO said. But clear direction from GAO and HUD's inspector general helped the agency past being, as GAO's Walker put it recently, "the face of the high-risk list."

Cox said he expects that dramatic progress will give the agency credibility in upcoming congressional debate on how to modernize HUD's Federal Housing Administration, which handles mortgage insurance. "With those changes in the legislation, yes, there will be areas of increased risk, and there are questions of [whether] FHA can manage that risk," he said. "And we say 'yes.' "

-Jenny Mandel, GovExec.com

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An Inside Look at Financial Management Line of Business - Slides and Archived Audio Available Online

GCN InSight eSeminar “An Inside Look at Financial Management Line of Business” with Dr. Danny Harris, deputy chief financial officer with the Education Department-Financial Systems Integration Office's Oversight Transformation Team, and GCN assistant managing editor for news Jason Miller.

For a copy of the eSeminar slide show, click here:
http://event.on24.com/event/36/88/6/rt/1/documents/slidepdf/fmlob_gcn_web_seminar_22706.pdf

An Inside Look at Financial Management Line of Business

The original event was broadcast on:
Date: Tuesday, February 27, 2007
Time: 10:00 AM EST
Duration: 60-minutes

http://w.on24.com/r.htm?e=36886&s=1&k=6D80EEAD622DD15A9A6CC75BD2D0F2C4
You can view the event archive at the link provided above.

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