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Monday, March 31, 2008

Today's GAO Publication

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

Financial Audit: Special Counsel Expenditures for the Six Months Ended September 30, 2007.
GAO-08-541, March 31

Thursday, March 27, 2008

Agencies still resist outsourcing financial management, expert says

This March marks the third anniversary of an Office of Management and Budget program to consolidate financial management systems across government, but some agencies still are resisting the move, according to an industry expert.

Under OMB's financial management line of business, agencies are asked to outsource their operations to shared service centers, which are run by an agency that has set itself up as a centralized clearinghouse for those services. By outsourcing the operations, agencies can reduce the IT infrastructure needed to support billing and accounting systems such as servers, software, data warehousing and support personnel.

For fiscal 2008 and in fiscal 2009 budget requests, agencies collectively have set aside more than $1.75 billion to comply with the financial management line of business, according to a report released March 26 by INPUT, a federal consulting firm based in Reston, Va.

Some Cabinet-level agencies have resisted outsourcing to a shared service center because they already are consolidating many IT operations and because of the common fear that they will lose control of their financial operations.

Smaller agencies have adapted to the shared services model faster than larger agencies, according to the INPUT report. To date, 70 small and independent agencies have signed up with a shared service center.

Four agencies offer financial management services to agencies: the General Services Administration and the departments of Transportation, Interior and Treasury. GSA should award the contract for the commercial shared service centers in fiscal 2008, but the program appears to be on hold.

-Gautham Nagesh, GovExec.com

Wednesday, March 26, 2008

Coming April 1--The AGA Blog

A wide variety of government financial management experts will share their wisdom and insight with readers on the new AGA blog. Each of the "celebrity" bloggers will check back during their day to answer questions and comments posted by readers.

Bookmark http://aga.typepad.com/aga--the place for government finance professionals to share ideas and dialogue with some of the top names in the business.

Guests include:

April 1: AGA Past National President Jeffrey Steinhoff, CGFM, retired managing director, Financial Management and Assurance, U.S. Government Accountability Office. Jeff recently retired after 40 years of federal service and has lots of experience he's willing to share. Jeff is also known within AGA for being the "father" of the Certified Government Financial Manager (CGFM) Program. Who better to kick off this new AGA offering?

April 2: Wednesday is AGA Day on the blog, and today Executive Director Relmond Van Daniker, DBA, CPA, will talk about what we learned in our recent nationwide poll on "Public Attitudes Toward Government Accountability and Transparency 2008."

April 3: John Webster, CGFM, retired chief financial officer, Library of Congress. John now teaches a number of government finance courses for Management Concepts and will talk about the brain drain occurring in federal agencies resulting from retirements.

April 4: John Radford, CGFM, Oregon state controller, will ask the question "How serious are we about accounting for performance-based management?" John, a member of AGA's National Executive Committee, is a national leader in the area of performance-based management and will answer all your questions.

April 5: Thomas J. Sadowski, CGFM, CPA, Missouri state controller, AGA Past National President, two-time Past National Treasurer. Mr. AGA will be in the house to talk about accounting, life and what you can do to ensure a successful government career.

Upcoming guests include:

Wendy Payne, CGFM, executive director, Federal Accounting Standards Advisory Board

Joe Kull, CGFM, CPA, director of federal practice, PricewaterhouseCoopersLLP
AGA National President-Elect Designate Billy Morehead, Ph.D., CGFM, CPA, chair, Division of Accountancy, Computer Information Systems and Finance, Delta State University

Dave Bennett, CGFM, CPA, assistant county mayor/finance director, Blount County (TN) Government and AGA National Treasurer

Have something to say? Want to join the fun? Contact AGA Communications Director Marie Force to get on the guest list. We are now booking for May. Bloggers are asked to provide a 500-750-word essay on a topical subject that ends with a question to encourage readers to post comments/questions. Then, on your "day" as AGA's guest, you are asked to check back a couple times to reply to comments. Sound like fun? Get your name on the schedule for May!

INPUT: $2 Billion in Opportunities from Financial Management Line of Business

Reston, VA (Vocus/PRWEB ) March 26, 2008 -- The Office of Management and Budget’s (OMB) Financial Management Line of Business (FM LoB) is shifting federal agencies to a Shared Service Center model and driving billions in financial management system spending. Almost $2 billion in FM LoB opportunities exist across the Civilian and Defense Markets which target the short-term sustainment of legacy systems as well as the long-term consolidation of modernized financial solutions, according to new report recently released by INPUT, the authority on government business.

“According to the FY 2009 OMB Exhibit 300s, $1.75 billion has been specifically requested to support the continued development of the FM LOB over the next two years,” stated Vajira Ranaviraja, federal analyst with INPUT. “These funding requests reinforce the federal government’s commitment to pursuing the goals of the FM LOB; cost savings for the Government through consolidation, and leveraging common solutions for financial management.”

INPUT’s report, Financial Management Line of Business: Market on the Move, measures departmental progress, highlights budgetary information and provides valuable business development opportunities and contacts.

The analysis provides vendors an understanding of the changing financial management market. Vendors can expect to see the current status of federal financial management solutions shift toward the shared service model. Market watchers should anticipate future business opportunities with Shared Service Providers to expand as federal agencies move beyond legacy sustainment.

The report suggests that, despite resistance at the federal agency’s senior leadership level, the financial management market is moving toward four Shared Service Centers (SSC) and commercial Shared Service Providers (SSP). Under the guidance of the OMB, the four SSCs are leading the development of this initiative and will be the impetus for future strategy. “Even though there is uncertainty at the Cabinet level, continued OMB commitment to the shared service center model will drive this transition,” said Ranaviraja. “As always, vendor relationships with SSCs will be important to future business opportunities.”

INPUT’s Financial Management Line of Business: Market on the Move industry report is available on INPUT’s website at http://fmlob.input.com/.


Monday, March 24, 2008

Today's GAO Publication

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

Federal User Fees: Substantive Reviews Needed to Align Port-Related Fees with the Programs They Support.
GAO-08-321, March 24
Highlights - http://www.gao.gov/highlights/d08321high.pdf

Thursday, March 20, 2008

Collaboration essential to overcoming skepticism about shared services, report says

A new report points to buy-in from all stakeholders and communication among agencies as essential to a shared services environment that consolidates business processes across government. But reluctance to relinquish information, confusion about the business model and skepticism about funding continues to stall progress, said a government official.

In 2004, the Office of Management and Budget established the lines of business initiative to meet a President's Management Agenda goal to expand electronic government. The intent was to provide services across agencies and consolidate operations to save money and improve efficiency. Agencies are encouraged to share services managed by federal or commercial providers. Human resources services, for example, are offered through the Treasury Department's HR Connect Program, the Agriculture Department's National Finance Center and the Interior Department's National Business Center. Interior's center also provides financial management services.

To help agencies make the transition, IAC's Collaboration and Transformation Shared Interest Group interviewed service providers and their customers at large civilian agencies to determine best practices. The analysis focused on four of the administration's e-government initiatives: payroll, rulemaking, financial management and human resources.

The overarching finding from the report was that managers and staff at both the provider and customer agencies, as well as oversight organizations, should be involved in the initial design, planning, migration and operation of shared services. That, in turn, allows more customization of services and a migration path that is least disruptive to the agencies involved.

Other best practices highlighted in the report include continuous marketing of services and a business approach to funding.

Funding is not the only issue driving skepticism from some agencies about shared services. A reluctance to hand over ownership of information and confusion about the business model persist. While many agencies praise the concept, Ed Meagher, deputy chief information officer at Interior, which was among the agencies interviewed for the study, compares the buzz to the emperor's new clothes -- outwardly positive, but artificial.

To come around to the idea of shared services, agencies need a clearly defined and gradual approach that doesn't require completely scrapping existing business processes, Meagher said.

-Jill Aitoro, GovExec.com

OMB Release PMA Guidance for FY082Q


SUBJECT: Guidance on Quarterly President’s Management Agenda (PMA) Scorecard Meetings for FY 2008 Second Quarter

1. Scope/purpose: This memorandum provides Resource Management Offices (RMOs) and PMA Initiative Leads with instructions for preparing for the quarterly PMA scorecard meetings to discuss agencies’ status and progress in implementing the PMA for the period January 1, 2008 through March 31, 2008. This memorandum may be shared with agencies.

Download the Memo

FederalNewsRadio - Ask the CFO - Maureen Wylie (NOAA)

National Oceanic and Atmospheric Administration

Maureen Wylie - Chief Financial Officer

Everyone likes to talk about the weather. Only, NOAA's challenge is do to more than just talk about the weather. Wylie says NOAA must find ways to go beyond the weather and make sure that taxpayers get value from a wide range of range of earth sciences. Beyond that, she says that NOAA must also find ways to meet increasing expectations from a public that has come to rely on much of the information that NOAA provides. The FY 2009 budget will also be critical for NOAA. Wylie says the President's proposal includes needed money for NOAA's GOES-R (Geostationary Operational Environmental Satellite), will be the agency's eyes in the sky, and to help monitor critical climactic data.

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Friday, March 14, 2008

Today's GAO Publication

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

Centers for Disease Control and Prevention: Changes in Obligations and Activities before and after Fiscal Year 2005 Budget Reorganization.

GAO-08-328R, February 25.

Today's GAO Publication

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

Centers for Disease Control and Prevention: Changes in Obligations and Activities before and after Fiscal Year 2005 Budget Reorganization.
GAO-08-328R, February 25.

Thursday, March 13, 2008

Today's GAO Publications

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

Internal Revenue Service: Fiscal Year 2009 Budget Request and Interim Performance Results of IRS's 2008 Tax Filing Season.
GAO-08-567, March 13.
Highlights - http://www.gao.gov/highlights/d08567high.pdf

Principles of Federal Appropriations Law: Annual Update of the Third Edition.

OMB seeks to improve value of internal controls reporting

The Office of Management and Budget is considering how to realign internal controls for financial reporting so it is more relevant and valuable to agencies. On April 13, OMB will conduct the first in a series of forums on integrating internal controls to help agencies expand the effectiveness and efficiency of their organizations, said Danny Werfel, OMB’s acting controller.

Agencies must report to OMB on the effectiveness of their internal controls not only for financial reporting. Some of those internal controls overlap into information security and procurement, he said.

Chief financial officers “are overwhelmed by compliance. The internal controls are numerous, complex and aren’t right-sized for added value,” Werfel said at the Federal Financial Management Conference March 11. CFOs often have the responsibility to fix material weaknesses but not the authority because the problem may reside in a program in one of the department’s operating agencies.

“We need to relook at financial reporting requirements and realign them to drive more value,” Werfel said.

OMB has asked agencies to evaluate internal controls not only for financial reporting, which OMB requires under Circular A-123, but where they overlap for acquisition and information security and where they can have greatest impact on mission effectiveness. OMB wants agencies to take an enterprisewide view of internal controls under A-123 and a broader view of risk. CFOs could find risk in procurement or information security.

OMB also wants agencies to take an integrated approach to internal controls. The CFO, chief information officer, chief acquisition officer and chief human capital officer each have internal controls to oversee.

Agencies can enhance their organizational capacity by being more efficient and effective so CFOs can move beyond compliance. Agencies need to become more standard in how they do business, such as through the Financial Management Line of Business, which focuses on common systems, business processes and accounting standards across government. CFOs also should work more with other agency CXOs to build more support throughout the agency. And agencies should integrate financial management throughout the organization.

OMB last month also asked the Federal Accounting Standards Advisory Board, of which it is a member, to take on the project to evaluate and integrate the standards for which agencies must report. The board tends to add to the standards that agencies must account for instead of integrating or consolidating or reducing them, Werfel said.

-Mary Mosquera, FCW.com

FederalNewsRadio - Ask the CFO - Jim Martin (HUD)

Department of Housing and Urban Development

Jim Martin - Deputy Chief Financial Officer

Effectively managing the finances of a government agency has to be about more than just numbers and even performance metrics. Martin says you also have to take a good look at risk management. This is especially important for HUD, as its Federal Housing Administration takes on the foreclosure crisis. Underlying all this has been the department's efforts to upgrade its IT capabilities, especially the IT supporting its financial management systems. Martin also serves as HUD's Performance Improvement Officer and talks about the impact of the recent executive order.

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Monday, March 10, 2008

Financial Accounting Foundation Approves Changes to FAF, FASB and GASB

The Financial Accounting Foundation (FAF) Board of Trustees has approved changes to oversight, structure and operations of FAF and its two standards-setting boards, the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB). Changes include altering the size of the FAF and FASB and securing a permanent funding source for GASB. Read more

Friday, March 07, 2008

Nuclear Regulatory Commission Puts CFO on Leave

The U.S. Nuclear Regulatory Commission has placed its CFO, William McCabe, on leave for a number of weeks. McCabe was tapped as the reactor-licensing commission's finance chief last June after a five-year stint at the Department of Education that included service as the department's acting finance chief.

An NRC spokeswoman, who said she didn't know the reason for the move and that the commission hadn't issued a press release on the departure, told CFO.com Friday that McCabe "wouldn't be back for a couple of weeks." A person who picked up his phone at the commission confirmed he had left.


Today's GAO Publication

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

Surface Transportation: Restructured Federal Approach Needed for More Focused, Performance-Based, and Sustainable Programs.
GAO-08-400, March 6.
Highlights - http://www.gao.gov/highlights/d08400high.pdf

Business Systems Modernization: Internal Revenue Service's Fiscal Year 2008 Expenditure Plan.
GAO-08-420, March 7.
Highlights - http://www.gao.gov/highlights/d08420high.pdf

Financial Audit: Senate Restaurants Revolving Fund for Fiscal Years 2007 and 2006.
GAO-08-463, March 7.

Thursday, March 06, 2008

Today's GAO Publication

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

Defense Management: More Transparency Needed over the Financial and Human Capital Operations of the Joint Improvised Explosive Device Defeat Organization.
GAO-08-342, March 6.
Highlights - http://www.gao.gov/highlights/d08342high.pdf

Coast Guard: Observations on the Fiscal Year 2009 Budget, Recent Performance, and Related Challenges, by Stephen L. Caldwell, director, homeland security and justice issues, before the Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard, Senate Committee on Commerce, Science, and Transportation.
GAO-08-494T, March 6.
Highlights - http://www.gao.gov/highlights/d08494thigh.pdf

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 to 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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Tuesday, March 04, 2008

Today's GAO Publications

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

Defense Travel System: Validity of Travel Payments Statistical Sampling in Question.
GAO-08-444R, March 3.

Management Letter: Recommendations for Improvements to MCC's Internal Controls and Policies on Premium Class Air Travel.
GAO-08-468R, February 29.

Monday, March 03, 2008

Comment: New tools improve government transparency

Today, there is more public information available about federal finances and program performance than ever before. Agency Web sites contain detailed reports on just about every aspect of how taxpayer funds are spent. These reports include the nuts and bolts of agency finances such as debt collection, assets and liabilities, and the “who, what, where and when” of federal payments. Beyond these basics, agency reports provide volumes of detailed data and information that shed light on what results we get for taxpayer dollars.

However, transparency is not achieved through quantity alone. We cannot expect taxpayers to wade through thousands of pages of reports and make sense of them all. A report released by the Association of Government Accountants last month confirmed that citizens not only want more government transparency, but they also want simplicity.

The government has been continuing to make important advances in improving how information is made available to the public. “The Citizens’ Guide to the 2007 Financial Report of the United States” transmitted to Congress last week is one example. (See www.omb.gov/part/agency_performance_addresses.html .) Instead of poring through 182 pages of the government’s 2007 financial report, readers can use the eight-page guide to quickly pull up the key results of the report. The guide provides an overview of the government’s short-term and long-term financial outlook, with emphasis on the government’s biggest fiscal challenge, the unsustainable growth in entitlement programs. This is the first time such a summary has been issued, and it is expected such summary reports will be published annually.

Other user-friendly Web search tools and summary reports are available to help citizens find information that is important to them:
Agencies also issue summary versions of their Performance and Accountability Reports (PARs). A traditional PAR contains numerous details on agency finances and performance, but often exceeds hundreds of pages. Under a pilot program developed by the Office of Management and Budget, 15 major agencies have issued PAR highlights documents that condense key results into a shorter, easier-to-read format. (See www.omb.gov/part/agency_performance_addresses.html.)

While there is no shortage of financial and performance information available to the public, federal leaders are committed to making that information continually more accessible. In the meantime, we can do a better job educating citizens about the many tools available and solicit their feedback on how to improve and expand these tools. Citizens can help by sending comments on how to improve the transparency and simplicity of government reports to statements@omb.eop.gov. Include the title “transparency” in the subject line of your e-mail. Through this collaboration, citizens will be better positioned to hold federal leaders accountable for spending taxpayer money more effectively every year.

- Robert Shea is associate director of management and Danny Werfel is acting controller at the Office of Management and Budget.


Today's GAO Publications

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

Supplemental Appropriations: Opportunities Exist to Increase Transparency and Provide Additional Controls.
GAO-08-314, January 31.
Highlights - http://www.gao.gov/highlights/d08314high.pdf

Financial Audit: American Battle Monuments Commission's Financial Statements for Fiscal Years 2007 and 2006.
GAO-08-326, February 29.
Highlights - http://www.gao.gov/highlights/d08326high.pdf

AGA Research Report Released: 21st Century Federal Financial Managers--A New Mix of Skills and Educational Levels?

Federal government agencies face a serious human capital and leadership challenge. Recognizing the human capital challenges facing government agencies, AGA, with support from its Corporate Partner Advisory Group partner Management Concepts, conducted a study to provide a snapshot in the year 2007 of how federal financial management leaders and mid-level professionals are framing the challenges facing them.


Panel witnesses press for GAO audits of intelligence agencies

Government and public policy experts Friday said legislation is badly needed that would affirm the right of GAO to audit programs and financial activities of the U.S. intelligence agencies, especially because their scope and complexity have grown enormously since the Sept. 11, 2001, terrorist attacks. Such legislation has been introduced by Sen. Daniel Akaka, D-Hawaii, who chairs a Senate Homeland Security and Governmental Affairs subcommittee on government oversight.

"It is my strong belief that the intelligence community could benefit from the Government Accountability Office's expertise in reviewing organizational transformations and management reforms," Akaka said during a hearing of his subcommittee Friday. "GAO has substantial expertise evaluating virtually all of the bread-and-butter management challenges that the intelligence community is confronting." Experts who testified at the hearing included GAO Director David Walker, National War College professor Marvin Ott and Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists. They all said they support Akaka's legislation.

Akaka and Walker said they believe GAO has authority to audit the intelligence agencies. Akaka's bill would essentially allow Congress to clarify that such authority exists. The hearing did not include a witness from the intelligence agencies. Walker said the opposition by intelligence officials to allowing GAO to conduct audits goes back decades. He said he believes GAO could conduct audits of such things as management practices, personnel reforms and financial transactions without needing to review classified sources and methods or covert operations.

-Chris Strohm, GovExec.com

Sunday, March 02, 2008

Report says inspectors general lack independence, resources

The federal government's top agency watchdogs, appointed to root out waste, fraud and mismanagement, lack the necessary staffing or budget autonomy to retain their independence, according to a report released Thursday by an investigative nonprofit group.

The Project on Government Oversight surveyed 49 inspectors general appointed by the president or agency chiefs to determine whether they have the tools and resources necessary to meet their oversight responsibilities.

The report painted a disturbing picture of IGs pressured by agency heads to keep unflattering reports private; threatened with staffing and budget cuts as retaliation for unwanted investigations; and encumbered by a pair of coordinating councils whose focus appears to be on reconciliation with agency management.

Beverley Lumpkin, a POGO investigator and lead author of the report, said inspectors general were being asked to "cross over an important line" to become team players and work with agency chiefs to solve program management issues.

The report indicated that all IGs were not created equal. Presidentially appointed IGs, who worked for larger agencies and were confirmed by the Senate, generally received more funding than agency-appointed ones, even those with critically important roles.

According to the Office of Management and Budget, spending for all IG offices has increased by more 73 percent since 2001, with a nearly 55 percent increase in spending for Cabinet department IG offices.

Agency-appointed IGs also were not held to the same hiring standards as those appointed by the president. According to the 1978 Inspector General Act, presidentially appointed IGs are to be appointed "without regard to political affiliation and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations." The same criteria are not mandated for agency-appointed IGs.

Most of the serious problems with autonomy outlined in the report involved agency-appointed IGs. Many of these offices did not have separate line items in the president's budget, lacked staff auditors and investigators, and were forced to rely on their agency's general counsel -- rather than in-house attorneys -- for legal advice. The only presidentially appointed IG without its own counsel is the Defense Department.

Such a relationship can create an inherent conflict of interest because the general counsel is obliged to protect the agency and its bosses, according to Danielle Brian, POGO's executive director. "The [general counsel] is deciding what can be redacted and what should be released," she said. "It's in their best interest to redact what's embarrassing to the agency."

The report offered more than a dozen recommendations to improve IG independence. Among the suggestions:

Combining the two councils that supervise IG offices -- the President's Council on Integrity and Efficiency, and the Executive Council on Integrity and Efficiency -- to share resources, improve coordination and create a pool of employees who can assist smaller offices.

Removing the deputy director of the Office of Management and Budget as head of the councils. Clay Johnson, OMB's No. 2 official, chairs both councils, but POGO suggested that selecting an

IG instead would provide greater independence.
Reviving a selection committee once used to help hire IGs.

Setting a fixed term of seven years for presidentially appointed IGs. POGO recommended that no cap be placed on the terms of agency-appointed IGs.

-Robert Brodsky, GocExec.com