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Friday, August 23, 2013

Department of Defense to Use Invoice Processing Platform (IPP) for Intra-governmental Buy/Sell Transactions

In 2012, Treasury launched a proof-of-concept pilot using IPP to help federal agencies manage intra-governmental buy/sell transactions. Several agencies participated in the pilot, including the Department of Defense (DoD), who found that IPP helped increase visibility into intra-governmental buy/sell transactions, as well as helped with difficult, labor-intensive reconciliation and elimination efforts.

On August 5, 2013, the Under Secretary of Defense (Comptroller) issued a memo that it is partnering with the U.S. Department of the Treasury to implement the Invoice Processing Platform as DoD’s core system to manage all inter- and intra-governmental transactions and documentation. According to the memo, this partnership will strengthen management and accountability for nearly $273 billion in intra-governmental business.

The phased implementation will initially include only DoD-to-DoD transactions. At a later date, transactions between DoD and its civilian trading partners will be included. Excluded from this effort are commercial transactions (which will continue to be managed using DoD’s Wide Area Workflow) and DoD's interfund transactions.

The buy/sell process between government agencies has been fraught with challenges. A 2013 GAO audit of the U.S. Government's Fiscal Years 2012 and 2011 Consolidated Financial Statements (report GAO-13-271R) found a $20.2 billion difference in intra-governmental buy/sell activity and balances. It also revealed that the reconciliation process for buy/sell transactions was difficult and labor intensive.

IPP supports more efficient intra-governmental buy/sell transactions between federal agencies by helping ensure consistent communication between trading partners and providing visibility into each stage of the transaction.

To view the DoD memorandum regarding the implementation of IPP for intra-governmental buy/sell reimbursable transactions, please visit:http://www.ipp.gov/downloads/DoD_Memo.pdf

For more information on the DoD IPP intra-governmental buy/sell implementation, contact the DoD Business Integration Office (BIO)

For more information on IPP’s intra-governmental capabilities, contact Michael Bolin at michael.bolin@fms.treas.gov.

For more information about the features and benefits of IPP’s intra-governmental module, visit: http://www.ipp.gov/about-ipp/intra-governmental.

- Federal Reserve Bank of Boston / Treasury FMS
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