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Thursday, January 31, 2008

OMB: Give CFOs more responsibility

Now that they have achieved dramatic progress in financial reporting, agency chief financial officers must look beyond their traditional roles as data collectors. Agencies now produce financial statements in a short closing period and increasingly obtain clean audits with few or no major weaknesses, said Danny Werfel, acting controller at the Office of Management and Budget.

Last year, 19 agencies earned clean audits, meaning their financial data was accurate and reliable. Overall, the federal government halved its major accounting weaknesses to 39.

CFOs need a strategy for doing more with the financial data and integrating financial management more tightly with information systems and agency missions, he said. For example, chief executive officers should collaboratively identify the agency’s business goals and risks and work to add value and mitigate risks. CFOs could also turn to other parts of the organization to help reduce their workload in noncore responsibilities.

OMB and oversight agencies should reconsider what’s required of CFOs, including how to better align those requirements with internal controls for managing risk. CFOs could combine accounting and business intelligence software to help manage risk and accomplish agency objectives. For example, they could develop systems to track progress and benchmarks against which to measure their activities, he said.

CFOs also want to improve the usefulness of their financial reports for agency managers, Congress and the public.

CFOs have improved financial reporting despite challenges, Werfel said. For instance, they are overwhelmed with compliance activities for numerous regulations, such as the Federal Information Security Management Act and Circular A-123 on internal controls for financial reporting. CFOs are also responsible for collecting compliance data, but they don’t have the authority to compel program and division leaders to supply such data if they don’t report to the CFO. Many financial operations, such as transaction processing, are complex and decentralized, and resources are shrinking, Werfel said.

-Mary Mosquera, FCW.com

Today's GAO Publication

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

Congressional Directives: Selected Agencies' Processes for Responding to Funding Instructions.
GAO-08-209, January 31.
Highlights - http://www.gao.gov/highlights/d08209high.pdf

Understanding Similarities and Differences between Accrual and Cash Deficits: Update for Fiscal Year 2007.
GAO-08-410SP, January 31.

FederalNewsRadio - Ask the CFO - Karen Ratzow (USDA APHIS)

Animal and Plant Health Inspection Service (APHIS)

Karen Ratzow - Acting Chief of Budget and Program Analysis

Even if you have never heard of APHIS, chances are you are aware of the work the agency does. On the job 24/7, APHIS is charged with protecting the health of the country's agriculture, constantly on guard against pests and diseases. Additionally, APHIS is responsible for monitoring genetically engineered organisms and administering the Animal Welfare Act. Ratzow says while it has been tough for APHIS to compete for resources, the agency has been working internally to better align the budget to help take on the most pressing threats. She says one factor contributing to the agency's recent success in this area has been support from senior APHIS officials. She also says working groups at the mid-level manager level have been especially effective in keeping all APHIS programs on track.

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EPA, SSA get all greens on score card

The Environmental Protection Agency and the Social Security Administration joined the Labor Department as the only agencies to achieve green scores in all five areas of the President’s Management Agenda.

EPA improved its score in the human capital area, while SSA jumped from red to green in e-government in the latest score card, which the Office of Management and Budget released today.

Labor has been green in all five areas — human capital, competitive sourcing, financial performance, e-government and performance improvement — for nine of the past 10 score cards.

In the other areas of the President’s Management Agenda, Robert Shea, OMB’s associate director for management, said only 22 percent of agency programs now rate as ineffective under the performance improvement initiative.

He said every agency has designated a performance improvement officer, as required by an executive order issued in November 2007.

-Jason Miller, FCW.com

IG: DHS suffers from poor management

The Homeland Security Department continues to face major management challenges across the board, according to a new report from Richard Skinner, the department’s inspector general.

Even though DHS has improved management in some areas, it still needs to make additional improvements in acquisitions, finances, information technology and grants. “While DHS has made progress, it still has much to do to establish a cohesive, efficient and effective organization,” Skinner wrote.

-Alice Lipowicz, FCW.com

Judge: U.S. can’t account for money owed Indian landowners

A federal judge ruled Wednesday that the Interior Department is unable to complete an accounting of billions of dollars owed to Indian landholders across the country.

“It is now clear that completion of the required accounting is an impossible task,” Judge James Robertson said in a 165-page decision in a federal lawsuit that alleges Interior officials mismanaged Indian trust funds.

Still, Robertson said the dispute is not hopeless.

“It does mean that the time has come to bring this suit to a close,” he said of the 11-year-old lawsuit.

Jim Cason, associate deputy Interior secretary, has said previously that systemic problems do not persist throughout the department and that staff has worked diligently to do an accounting of the trust lands.

- Dianna Marrero, FederalTimes.com


Tuesday, January 29, 2008

OMB to agencies: Use business standards in new financial software

The Office of Management and Budget will require agencies to use governmentwide business standards when they upgrade their financial systems software and move to a public or private shared-services provider. OMB released the memo this morning.

Business standards, such as the common governmentwide accounting code and business processes, will be incorporated into existing core financial systems requirements under the Financial Management Line of Business, said Danny Werfel, OMB acting controller, in the memo, which Federal Computer Week obtained.

The Financial Systems Integration Office will test the standards during its software qualification and certification process. Once FSIO certifies that the software meets core financial systems requirements, agencies will be able to use the certified software only as configured with the finalized business standards. Agencies will have to adopt these standards when it moves to a shared-services provider.

Through this year, OMB and FSIO will finalize the business standards for funds control, payment management, receivable management, reimbursables and reporting processes, and develop cost and performance measurements for them. The standards for funds control and payment management are about to be finalized. OMB and FSIO also will expand the current migration planning guidance to help agencies navigate the acquisition process for shared financial services, the memo states.

In 2009, OMB and FSIO will update testing methods for business standards in addition to testing scenarios. Financial system providers will integrate the business standards into their software in preparation for testing.

The requirements of FM LOB take effect when an agency is modernizing its system, Werfel said.

-Mary Mosquera, FCW.com

Monday, January 28, 2008

FMLOB January 2008 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 fourth 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.


Friday, January 25, 2008

At Agriculture, CIOs and CFOs are putting their heads together

In the military, they are called two-hatters: officers with two jobs. But you’ll also find civilian agency two hatters.

Chuck Christopherson at the Agriculture Department is one such hybrid. He’s the chief information officer and the chief financial officer. With those two hats, you might think Christopherson simply has meetings with himself to decide IT spending priorities.

But it’s not quite that simple.

Having a single CIO/CFO “strengthens the priorities on both sides,” Christopherson says. “Often, in the financial side, if there’s a vacuum, support of IT becomes weak.” If there’s a vacuum on the IT side, the tech folks may find they are not getting the funding they need “and not understand why.”

As a dual hatter, Christopherson tends to delegate day-to-day activities to the deputies, but is not above reaching down into the ranks to operate at a more detailed level when necessary.

In effect running IT and finances for what he describes as the world’s eighth largest bank, Christopherson says he finds advantages in having the two functions work closely together. Being in the loans, grants and insurance business, the CIO/CFO combine has focused on IT-enabled process quality improvement according to the so-called Six Sigma philosophy.

Five major projects concern establishing departmentwide standard processes for invoicing, grants, loans, insurance issuance and geospatial information systems. “So USDA will have one process for the whole department, with minor variations,” Christopherson says. He expects the effort to start saving the department $20 million per year, all resulting from finance and IT teams working together.

Christopherson is pushing change throughout USDA process owners. He is also sending large groups for training in project and change management at the department’s school in Greenbelt, Md. By the end of this year, he hopes 130 people will have been trained in the art and science of overhauling business processes.


Defense bill includes chief management officer for Pentagon

The Defense Department will have to add a senior management position under the fiscal 2008 defense authorization bill passed this week by the House and Senate.

The measure requires that Deputy Defense Secretary Gordon England become the department's chief management officer, a step the Pentagon has taken.

The bill also requires the appointment of a Senate-confirmed deputy chief management officer reporting to England and overseeing the department's Business Transformation Agency, which implements management reforms.

Creation of a nonpolitical CMO at the Defense Department is a longtime hobby-horse of Comptroller General David Walker and Senate Homeland Security and Governmental Affairs Oversight of Government Management Subcommittee Chairman Daniel Akaka, D-Hawaii, and ranking member George Voinovich, R-Ohio.

All three have for years argued the department needs a long-term, high-level manager to drive through a series of fiscal and managerial reforms that political appointees lack time to complete.


Agencies report more improper payments, take steps to address them

Major federal agencies reported about $55 billion in erroneous payments for fiscal 2007, according to the Government Accountability Office. While the estimate was up about $14 billion from 2006, GAO said agencies are making strides in reporting, and with continued effort should lower the number of improper payments.

The Office of Management and Budget applauded the improvement in agencies' reporting and other financial markers in November.

OMB added that in 2007, 13 more programs were included in the reporting from the previous year and almost 86 percent of high-risk programs reported, compared to 81 percent in 2006.

GAO's review (GAO-08-377r) found that eight high-risk programs were responsible for 88 percent of improper payments. Such payments are defined as those mistakenly made to ineligible recipients or as a result of fraud or other error.

In November, Danny Werfel, acting controller for OMB's Office of Federal Financial Management, said the majority of errors identified in the 13 programs reporting for the first time in 2007 were instances in which there was insufficient documentation to verify the accuracy of a claim or propriety of a payment. "Errors in these 13 programs will decrease significantly after correcting the root cause of the insufficient documentation errors," Werfel said.

GAO said implementing reporting requirements will need continued attention and oversight.

-Elizabeth Newell, GovExec.com


Thursday, January 24, 2008

FederalNewsRadio - Ask the CFO - Kathleen Turco (GSA)

General Services Administration

Kathleen Turco - Chief Financial Officer

GSA offers bundled buying power to federal agencies and it is the job of the CFO to appropriately manage and report on the money trail. To make sure the job gets done, Turco says GSA has started issuing monthly financial reports on revenue and expenses. She says that is also part of the GSA response to its 2005 audit, when it lost its clean opinion. Two years -- and two clean opinions -- later, Turco says GSA is on the right track and that agencies should have confidence in turning to GSA. However, she still sees some remaining challenges, including GSA's business feeder systems.

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Memo: USDA prepared for CIO, CFO vacancies

The Agriculture Department has experienced a number of resignations and retirements recently among its executives in the offices of the chief information officer and chief financial officer, and some employees have expressed concern over the vacancies, said CIO/CFO Charles Christopherson Jr.

Many Senior Executive Service employees are eligible to retire, so the vacancies came as no great surprise, Christopherson said in a Jan. 22 internal memo that Federal Computer Week obtained, in which he laid out interim plans.

He also named Chris Smith as acting deputy CIO and Jon Holladay as acting deputy CFO.

“Experienced senior executives know that change often creates attrition of key individuals,” Christopherson said in the memo to CIO and CFO employees. He said he discussed the potential impact of the changes with the office of Acting Secretary Chuck Connor.

Christopherson said he expects the changes will create an organization that will mitigate the risk of cybersecurity and exposure of personally identifiable information, provide better vision for hardware and software architecture, and allow agencies to focus less on federal requirements and more on citizens to support USDA programs. The area where he expects a small void is the review of documents and the answering of questions that current SES managers provide.

In preparation for personnel changes, some higher-grade-level employees in the CFO and CIO offices have received advanced training, such as Lean Six Sigma classes, and their projects can be used as examples for SES qualification requirements, Christopherson said. Lean Six Sigma is an approach to business process improvement that helps managers implement programs faster and reduce costs through continuous improvements. USDA is prepared with employees who are qualified for interim management and to compete for the vacant positions, he said.

-Mary Mosquera, FCW.com


Wednesday, January 23, 2008

Today's GAO Publication

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

Improper Payments: Federal Executive Branch Agencies' Fiscal Year 2007 Improper Payment Estimate Reporting.
GAO-08-377R, January 23.

Tuesday, January 22, 2008

AGA Past National President Jeffrey C. Steinhoff, CGFM, Retires

Steadfast, determined, consummate professional, outstanding fiscal steward, and finally, “father.” These were just some of the adjectives used by his colleagues and friends to describe AGA Past National President Jeffery C. Steinhoff, CGFM, CPA, CFE, on the occasion of his retirement this month after 40 years of federal service.

Credited for being the “father” of AGA’s Certified Government Financial Manager (CGFM) Program during his term as 1993–1994 AGA National President, he served as the first Professional Certification Board chairman, from 1994–1998, and continues as a board member today. He is also considered one of the fathers or principal architects behind the groundbreaking 1990 Chief Financial Officers Act.

After graduating from the College of William and Mary, Steinhoff began his federal career as an auditor with the Army Audit Agency. In 1973, he moved to the U.S. General Accounting Office (GAO, now the Government Accountability Office) where he spent the remainder of his career, retiring as managing director for Financial Management and Assurance.

As managing director, he headed up GAO’s largest audit unit, with responsibility for oversight of financial management and auditing issues across the federal government. Included in his duties were the audit of the government’s consolidated financial statements, the establishment of Government Auditing Standards and internal control standards, reviews of internal control, forensic auditing, financial management systems reviews, cost management, improper payments, and the full range of accountability and corporate governance issues.

The recipient of AGA’s highest honor, the Robert W. King Memorial Award in 1996, Steinhoff also received the AGA’s Distinguished Leadership Award in 1990, AGA’s Elmer Staats Award in 1999, AGA National President’s Awards in 1995, 1997 and 2003, and was one of 23 people recognized by AGA in 2000 for significant contributions toward advancing government accountability during the Association’s first 50 years.

Other awards included GAO’s Distinguished Service Award in 1984, 1991 and 1998; the America Institute of Certified Public Accountants’ Outstanding CPA in the Federal Government in 2006; the first National Intergovernmental Audit Forum’s Distinguished Federal Leadership Award in 2006; Office of Secretary of Defense Award for Excellence in 2007; and the Comptroller General’s Award, GAO’s highest honor, in 2007. He attained the rank of Meritorious Executive in the Senior Executive Service and received many other awards and honors during his long career.


Friday, January 18, 2008

Today's GAO Publication

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

Legal Services Corporation: Improved Internal Controls Needed in Grants Management and Oversight.
GAO-08-37, December 28
Highlights - http://www.gao.gov/highlights/d0837high.pdf

Thursday, January 17, 2008

FederalNewsRadio - Ask the CFO - Larry Warder (Ed)

Department of Education

Larry Warder - Chief Financial Officer

It may be the Department of Education but from a Financial Management point of view, it might be better described as a bank. Warder says the department essentially encompasses two businesses: grant-making and student aid. On the grant-making side, Warder says the department has turned to technology to implement the necessary performance metrics and internal controls necessitated by initiatives like No Child Left Behind. He also says the department is working with states too on standardizing the way in which critical information, which while not always financial in nature, is collected. Warder also talks about his role as acting head of the department's student loan office at a time when there is increasing scrutiny on the billion-dollar industry.

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Wednesday, January 16, 2008

Agencies not yet sold on software as a service

Industry experts expect the federal government will move more aggressively to buying software as a service during the next two years, but agency officials warned that there are huge security and culture questions that need to be answered first.

Software as a service is a burgeoning trend in the commercial marketplace, but agencies have yet to take full advantage of it, experts say.

The concept of software as a service is not necessarily new — it is similar to managed services or application service provider offerings. In this case, users buy access to a specific platform used by many different companies or agencies at the same time. Users also buy software through a subscription fee or each time they use it as opposed to buying the license and maintenance.

“Software as a service is growing in acceptance, but it is slow,” said Richard Colven, vice president of Input at the Software As A Service conference sponsored by the Software and Information Industry Association, Input and the Information Technology Association of America in Washington.

Colven said Input surveyed 66 federal executives and found many are hesitant to move to this model immediately, but see it happening in time.

Colven and others said examples of software as a service in government include human resource and financial management Line of Business shared service providers.

-Jason Miller, FCW.com

VA renews effort to improve financial, asset management

The Veterans Affairs Department plans to begin work on a system to manage financial data and essential assets, such as medical equipment, three years after scrapping a previous effort.

The Financial and Logistics Integrated Technology Enterprise (FLITE) program aims to standardize VA’s work processes and modernize the information technology that supports financial and logistics management, according to a notice published Jan. 14 on the Federal Business Opportunities Web site. VA anticipates that the modernized system will eliminate its major financial weaknesses.

The department plans to hold a briefing on Feb. 12 to brief potential bidders on the proposed technical requirements and business approach.

The program has two components: the Strategic Asset Management project and the Integrated Financial Accounting System. The FLITE program also includes requirements for program management support, organizational change management and independent verification and validation. VA has said it plans to implement FLITE in fiscal 2009.

-Mary Mosquera, FCW.com

Labor seeks financial management system provider

The Labor Department seeks a public or private shared-service provider to develop and host a New Core Financial Management System to replace its current mainframe accounting system.

Labor is conducting a public/private competition to acquire Oracle Federal Financials software, hosting and administration, application management and system implementation services from another agency or a commercial provider.

The New Core Financial Management System will be deployed by Oct. 1, 2009, Labor said in its request for proposals, posted today on Federal Business Opportunities.

The competition will follow guidance from the Office of Management and Budget to implement the Financial Management Line of Business, OMB’s competitive framework for FM LOB, and migration planning from the General Services Administration’s Financial Systems Integration Office.

Key components of the system should include administration, general ledger, purchasing, payables, receivables and fixed assets.

Currently, Labor’s financial management functions, processes and activities are distributed across multiple information systems and financial applications, all centered on the Department of Labor Accounting and Related Systems, or DOLAR$, mainframe accounting system. DOLAR$ has been enhanced and extended over its lifetime since 1989 to meet departmental and external requirements but continuing to maintain sound financial management using DOLAR$ would be a challenge. The customized applications require specialized support and staff.

Although DOLAR$ complies with FSIO Federal Financial Management System Requirements, the processing could be much more efficient with an updated system, Labor said. The agency also wants to automatically distribute between the core financial management system, feeder systems and agency systems. Not having that ability increases time delays and error rates due to batch processing, manual entry and the absence of timely financial management information.

-Mary Mosquera, FCW.com

Tuesday, January 15, 2008

Today's GAO Publication

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

Iraq Reconstruction: Better Data Needed to Assess Iraq's Budget Execution.
GAO-08-153, January 15.
Highlights - http://www.gao.gov/highlights/d08153high.pdf

Monday, January 14, 2008

Commentary: Other agencies use DoT accounting services

The Transportation Department four years ago completed the conversion of all of its component agencies to a single state-of-the-art financial system using commercial off-the-shelf software. We now provide proven financial system and expert accounting services to other agencies as a federal shared service provider, as designated by the Office of Management and Budget.

In the past, each federal agency developed its own financial system, writing custom software to create unique systems. This resulted in hundreds of different financial systems and was never cost-effective.

Over time, more and more governmentwide accounting standards were mandated. These standards made possible a great change: using standardized commercial off-the-shelf software to replace outdated “home-grown” financial systems that were expensive to operate and maintain. The Financial Systems Integration Office operated by the General Services Administration tests and certifies that vendors’ commercial software meets federal accounting requirements.

After extensive planning and testing, a new financial system called Delphi was implemented in one of Transportation’s components, the Federal Railroad Administration, in April 2000. The remaining components migrated to Delphi over the next 3½ years culminating in November 2003, when the Federal Aviation Administration went live on Delphi with an integrated procurement management system.

Delphi is unique in producing financial statements and reports overnight from the core accounting system. This strengthens internal controls and makes financial reporting faster and more efficient.

Over the last few years, the department has consolidated its operational accounting at the Enterprise Services Center in Oklahoma City. FAA saved $4 million a year by consolidating nine regional accounting offices. Consolidating accounting services makes it easier to standardize business processes, which results in even more cost savings.

The Government Accountability Office, the Commodity Futures Trading Commission, the National Endowment for the Arts and the Institute for Museum and Library Services all use the department’s Delphi system and some or all of our accounting services.

The risk is low because customers get an accounting system that’s been in production for 7½ years, provides all standard federal interfaces, and has been successfully upgraded six times. It is better, faster and cheaper to implement and use the standard Delphi system than it is for an agency to design, implement and operate a new customized system on its own.

Initially, some agencies focused only on consolidating the hosting of their financial systems. This view was too narrow. Merely moving a system from one data center to another provides no net benefit to the government. Plus, hosting is only a small part of the cost of a financial system. The biggest cost is application support — the knowledgeable, experienced professionals who support, enhance and upgrade the system. The only way to minimize the cost of application support is to use a standardized financial system operated by a designated shared service provider.

When you combine the savings of consolidating accounting services with a cost-effective standard financial system, customers realize an even bigger financial advantage. This is good for the users, good for the government and good for the taxpayers.

Ensuring competition among shared service providers initially focused on federal and private-sector service providers competing with each other for new customers. However, Transportation and most other shared service providers use contractors to provide a third, a half or more of the staff resources needed to support our customers. Based on the department’s experience as a shared service provider, we can better ensure competition by having joint public-private teams compete for customers. This simplifies the competitive process and enables customers to take advantage of the unique strengths that both the federal and private-sector providers bring to the table.

The department had made tremendous progress by implementing Delphi and consolidating accounting operations at the Enterprise Services Center. This strategy offers benefits to all federal agencies. For information, visit www.esc.gov.

-Larry Neff, FederalTimes.com
Larry Neff is deputy chief financial officer at the Transportation Department.


More CIO execs to leave USDA

The exodus from the Agriculture Department continues with Jerry Williams, deputy chief information officer, and Chris Niedermayer, associate CIO for information and technology management, announcing they are leaving in February.

Williams will move to the Office of the Director of National Intelligence, where he has conditionally accepted a position to be director of financial improvement under Chief Financial Officer Janice Lambert, he said. Niedermayer will go to the Patent and Trademark Office, where as program manager, he will lead the transformation of information technology governance processes for the agency’s IT investments under CIO David Freeland, he said.

-Mary Mosquera, FCW.com

Thursday, January 10, 2008

FederalNewsRadio - Ask the CFO - Dan Fletcher (DOI)

Department of the Interior

Dan Fletcher - Deputy Chief Financial Officer

Department of the Interior Secretary Dirk Kempthorne has said that, given its assets and responsibilities, the department would rank among the top 50 largest companies on the Fortune 500. Perhaps more importantly, Fletcher says Interior is already halfway home when it comes to bringing some of the best practices employed at those companies to bear. He says the key step has been establishing one financial, business and management system. Still, there are challenges when it comes aligning the multiple systems responsible from record keeping. Yet for all these challenges, Interior earned a clean audit opinion in FY 2007 and, for the first time, there were no material weaknesses. Fletcher says a big part of that is the department's approach to risk management. Fletcher also talks about Interior's accounting efforts related to Indian monies, going back to 1887.

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FBI Wiretaps Dropped Due to Unpaid Bills

WASHINGTON (AP) - Telephone companies cut off FBI wiretaps used to eavesdrop on suspected criminals because of the bureau's repeated failures to pay phone bills on time, according to a Justice Department audit released Thursday.

The faulty bookkeeping is part of what the audit, by the Justice Department's inspector general, described as the FBI's lax oversight of money used in undercover investigations. Poor supervision of the program also allowed one agent to steal $25,000, the audit said.

More than half of 990 bills to pay for telecommunication surveillance in five unidentified FBI field offices were not paid on time, the report shows. In one office alone, unpaid costs for wiretaps from one phone company totaled $66,000.

-Laura Lakes Jordon, Associated Press (FederalNewsRadio.com)


White House unveils 'e-budget' initiative

WASHINGTON (AP) -- The conventional wisdom around Washington is that President Bush's budget will arrive on Capitol Hill dead on arrival.

But at least it won't be made from a dead tree.

The White House announced Wednesday that it's going paperless when it submits the fiscal 2009 budget Feb. 4. It's a move aimed at saving a few bucks for taxpayers - and the lives of a few trees.

Instead of printing 3,000 copies of the budget to give out free to the media, lawmakers, the White House and Cabinet, the White House will put the 2,200-page tome online at www.budget.gov.

Jim Nussle, the White House budget director announced the move - appropriately enough - in a statement sent by e-mail to reporters.

"This step will save nearly 20 tons of paper, or roughly 480 trees," Nussle said. "In terms of fiscal savings, we estimate the E-Budget will save nearly a million dollars over the next five years."

-Andrew Taylor, Associated Press (GovExec.com)

The Basics: Lines of Business

When corporations merge, executives routinely consolidate functions that are duplicative. These functions include human resources, back-office operations and information technology. In doing so, executives look to consolidate the business processes and IT systems that support the functions. The idea is a company doesn't need two HR systems, two payment systems, two e-mail systems and so on. After all, consolidation is a large part of what makes the merger financially viable -- creating economies of scale that present efficiencies that reduce unit costs.

The same theory can be applied to government, and the Bush administration has tried to do just that with its lines of business initiative.

Find all you wanted to learn about the lines of business initiative and more in Government Executive's new in-depth profile section: The Basics

-Martin Bosworth, GovExec.com

Monday, January 07, 2008

Bush’s legacy: Why 2008 is a make-or-break year

As the deputy director for management at the Office of Management and Budget, Clay Johnson is probably most responsible for the imprint on government President Bush will leave next year.

Asked to sum up Bush’s legacy as he enters his final lap, Johnson puts it in a word: accountability.

“I think there is more accountability — formal accountability — for performance than there has been before.”

Steps forward
Despite the setbacks, there have been key management successes in the last seven years, many of which got little attention:

Financial management. The number of agencies with clean financial audits increased from 17 to 19 out of 24, while the number of material weaknesses in those audits fell from 62 to 39. Financial audits now are turned around in 45 days from the close of the year, instead of the six months it used to take.

But even in those areas where significant inroads were made, much work remains. Agencies continue to face challenges with several key aspects of IT management, including implementing major systems modernization projects, protecting data from security breaches and being able to share information between and among agencies, Walker said.

And while agencies are turning around their year-end financial statements in record time, Walker said they focus too much attention simply on getting clean opinions. Sound financial management means being able to link cost data with program performance information so managers can make more informed decisions, he said.

“I think we need to redefine success in financial management to move away from clean opinions. Those should be the result of having a sound financial management system,” Walker said.

-Tim Kauffman, FederalTimes.com


OMG updates payment standard

The Object Management Group, a computer industry consortium, announced approval of the new Conversion Models for Payment Message Standard.

The standard lets financial institutions convert information from existing financial message formats to ones that comply with the International Organization for Standardization’s ISO 20022 Universal Financial Industry message standard.

According to OMG, multiple message conversions often lead to errors and mistakes that cost the industry several billion dollars annually.

-Patrick Marshall, GCN.com

Wednesday, January 02, 2008

Labor plans FM LOB competition

The Labor Department plans to conduct a public/private competition to acquire Oracle Federal Financials software, hosting and administration, application management services,and system implementation services from a federal or commercial shared-services provider.

The competition will follow guidance from the Office of Management and Budget to move agencies to the Financial Management Line of Business, OMB’s competitive framework for FMLOB, and migration planning from the General Services Administration’s Financial Systems Integration Office (FSIO).

Labor anticipates issuing its request for proposals Jan. 15. The performance-based contract will have a one-year duration with eight one-year options.

Labor will modernize its core financial management functions by transitioning from its existing systems to a FSIO-compliant financial management shared-services provider. The department also will reduce the number of disparate, overlapping systems and data, and establish an environment that provides reliable, timely information, Labor said in its Dec. 28 posting on the Federal Business Opportunities Web site.

Labor already has significant investment in Oracle Federal Financials and wishes to maximize it. Therefore, this acquisition is restricted to shared-services providers whose offers are based on Oracle Federal Financials software.

-Mary Mosquera, FCW.com

FederalNewsRadio - Ask the CFO - John Vonglis (USAF)

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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Today's GAO Publication

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

Government Auditing Standards: Implementation Tool: Professional Requirements Tool for Use in Implementing Requirements Identified by "Must" and "Should" in the July 2007 Revision of Government Auditing Standards.
GAO-08-210G, December 31

The U.S. Government Accountability Office has issued a guidance document, Government Auditing Standards: Implementation Tool -- Professional Requirements Tool for Use in Implementing Requirements Identified by *Must* and *Should* in the July 2007 Revision of Government Auditing Standards. This Professional Requirements Tool lists the requirements for audit organizations and auditors included in the July 2007 Revision of generally accepted government auditing standards (GAGAS), also commonly known as the Yellow Book.

As described in the July 2007 Revision, GAGAS use two categories of professional requirements, identified by *must* and *should,* to describe the degree of responsibility they impose on auditors and audit organizations. The Professional Requirements Tool contains general requirements for audit organizations, and specific requirements for financial audits, attestation engagements, and performance audits. The general requirements section contains entity-wide requirements for the audit organization and is intended for use in addition to the specific sections for financial audits, attestation engagements, and performance audits, which contain engagement-specific requirements for the auditors conducting the engagement.

This tool does not include explanatory material from the July 2007 Revision of Government Auditing Standards. Audit organizations and auditors should read the entire text of the July 2007 Revision of Government Auditing Standards, including the explanatory material when planning the audit and making professional judgments about compliance with professional requirements.

This guidance document and the July 2007 Revision should be used in conjunction with the following additional guidance documents, which are all available on the Yellow Book Web page at
  • Government Auditing Standards: Answers to Independence
    Questions (GAO-02-870G, July 2002) and
  • Government Auditing Standards: Guidance on GAGAS Requirements
    for Continuing Professional Education (GAO-05-568G, April 2005).

This tool was prepared by GAO's government auditing standards staff to facilitate audit organizations' and auditors' implementation of the standards, and does not represent additional standards or requirements. The staff welcomes your feedback and comments. If you have questions or comments related to this tool, please contact Heather Keister, at (202) 512-2943 or keisterh@gao.gov. For other questions on GAGAS, please contact us at yellowbook@gao.gov.