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Thursday, January 13, 2011

New governmentwide financial systems on tap

By the summer, agency chief financial officers will begin figuring out how to move to new governmentwide systems to process intergovernmental transactions and vendor invoices.

Danny Werfel, the Office of Management and Budget's controller, said the Treasury Department is in the middle of testing and analyzing existing systems to see which could be expanded.

Werfel said by May or June Treasury and OMB should come to a final decision about which systems to use and begin to figure out how agencies should migrate to these common systems.

OMB and Treasury has been working on these common systems since last winter.

It's also how the Obama administration has modified the Financial Management Line of Business initiative started under the Bush administration. The FM LOB tried to standardize business processes and terminology, and get agencies to shut down their systems and move to shared service providers. OMB announced in March it was closing the Financial Systems Integration Office (FSIO), which led much of the business process standardization work. Instead of FSIO, OMB set up the Office of Financial Innovation and Transformation (OFIT) within Treasury to lead these intergovernmental transactions and vendor invoicing pilots.

Werfel said the governmentwide systems are among the CFO community's top priorities in 2011.

One of the top goals is to further reduce improper payments. Werfel said agencies made significant progress in 2010, reducing the governmentwide improper payment rate to 5.49 percent, from 5.65 percent in 2009.

Werfel said this means that agencies prevented an additional $3.8 billion in improper payments from being made in 2010.

Along with improper payments, Werfel and other agency CFOs detailed priorities and plans at a recent CFO Council meeting. The 47-page PowerPoint presentation goes through everything from improper payments to technology innovation to open government and transparency to decision support and workforce challenges.

Werfel said federal financial management is getting better each year despite the Defense Department's inability to get audited.

The Government Accountability Office issued its annual report last month finding for a 14th straight year that auditors could not issue an opinion.

Still, Werfel said the total number of clean opinions is up to 20, including NASA, which moved from a disclaimed opinion to a qualified opinion.

OMB also is working closely with DoD on its financial books.

Werfel said the Pentagon is focused on different key areas to help it become auditable. He said DoD is starting with activities that are most closely related to their operational and mission success, which includes things like how money flows through the agency, managing execution and cash flows.

-Jason Miller, FederalNewsRadio.com

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