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Tuesday, April 29, 2014

Bill to track every federal dollar headed to Obama’s desk

The House on Monday gave final congressional approval to a bipartisan bill that would require federal agencies to report all of their expenditures online in a single location, sending the measure to the White House for President Obama’s signature.
Both chambers of Congress passed the DATA Act unanimously this month, representing a rare showing of widespread agreement between Democrats and Republicans. Sens. Mark Warner (D-Va.) and Rob Portman (R-Ohio) sponsored the legislation.
Rep. Darrell Issa (R-Calif.), who sponsored a similar measure in 2011 with Rep. Elijah Cummings (D-Md.), described the DATA Act as “a win for good government, moving the federal bureaucracy into the digital age and setting the stage for real accountability.”
Transparency advocates have complained that federal agencies rarely make spending data readily available under the current system. The Data Transparency Coalition applauded the House vote on Monday, calling on Obama to sign the bill and commit the Office of Management and Budget to “pursue robust standards throughout federal financial, budget, grant and contract reporting.”
Comptroller General Gene Dodaro, who heads the Government Accountability Office, said during testimony this month that the DATA Act is the “single biggest thing” lawmakers could do to identify wasteful federal spending.

-Josh Hicks, WashingtonPost.com

Defense Dept. CIO Teri Takai Resigns

Teri Takai will be leaving her post as the Defense Department's chief information officer next month.
Takai submitted her resignation to Secretary of Defense Chuck Hagel, effective May 3, a DoD spokesperson confirmed Monday. A replacement hasn't yet been named.
Takai has served as the DoD's CIO since November 2010. While in that position, she was the principal advisor to Secretary Hagel for information management, information technology, and information assurance. She also oversaw non-intelligence space systems, critical satellite communications, navigation, and timing programs, as well as spectrum and telecommunications.

-Elena Malykhina, InformationWeek.com

Monday, April 21, 2014

Fear not: The case for shared services in government

The federal government, much like any other organization, either provides for itself or buys a wide range of overhead services to support its operations. Overhead is not a derogatory term — it is just the term that is applied to services that are necessary to support the mission of an agency. Missions do not get accomplished without overhead services. While overhead services such as Human Resources, Financial Management or Contracting support follow laws and regulations that are remarkably consistent across agencies, most agencies have dedicated internal service providers. The result is a level of redundancy and cost that diverts scarce resources to overhead functions rather than agency missions. Faced with decreasing budgets and shocks such as sequestration, agencies can no longer afford to carry out business-as-usual with respect to common support services. Secretary of Defense Chuck Hagel challenged his department and its stakeholders to "challenge all past assumptions" and "put everything on the table."

Commentary by Jeff Neal
Founder of ChiefHRO.com
& Senior Vice President, ICF International


Friday, April 18, 2014

Federal watchdog says SEC security issues put financial data at risk

A congressional watchdog has tasked the U.S. Securities and Exchange Commission (SEC) with addressing a number of security weaknesses impacting its system.
On Thursday, the U.S. Government Accountability Office (GAO) released a report (PDF) detailing the issues, which included SEC not encrypting sensitive data, properly identifying and authenticating users, or securely configuring a vital financial system, leaving it vulnerable to attack.
According to the 25-page report, “the information security weaknesses existed, in part, because SEC did not effectively oversee and manage the implementation of information security controls during the migration of this key financial system to a new location."
The watchdog said that SEC did not adequately oversee a contractor it hired to migrate its systems to a different data center last June.
As a result of SEC's need to improve security controls, GAO determined that the agency – which regulates the securities market, including exchanges, brokers, dealers and investment firms – had a “significant deficiency in internal control over financial reporting for fiscal year 2013.”
-Danielle Walker, SCmagazine.com

Friday, April 11, 2014

Treasury figuring out how the shared services pieces fit into governmentwide puzzle

Over the next few months, answers to some of the most pressing questions about how financial management shared services will work must be clarified.

The Office of Management and Budget, the Treasury Department and the CFO Council are trying to plug the holes in the shared services process that thwarted the effort a decade ago.

Whether it's ensuring the four current civilian agency shared service providers or the new ones OMB expects to name in the coming weeks have the capacity to take on large agencies, or whether it's the role of the private sector in this latest effort, or whether it's the process by which Treasury will work with customer agencies to determine which shared service provider is most suitable and make sure there is lasting governance, reducing the amount of uncertainty about how version 2 of financial management shared services will work is among the administration's top priorities over the next six months.

In part three of the special report, Shared Services Revisited, Federal News Radio explores how OFIT is putting the pieces in place to create a successful shared services program.

OMB reintroduced the concept of shared services for financial management systems in March 2013. 

The White House issued a memo creating a federal-first policy when agencies upgrade their financial systems.

Over the last year, OFIT and OMB have slowly been putting the processes together to smooth out some of the long-standing problems.

In the mid-2000s under the George W. Bush administration, OMB introduced this concept of shared services, offering both public and private sector options. Large agencies mostly opted out of initiative, instead deciding to upgrade their systems on their own. OMB said mostly small agencies took advantage of the shared service providers.

But after a series of failed financial management projects at large agencies, and the fact that OMB estimates agencies are spending $8 billion a year for the operation, maintenance and upgrade of these financial systems, the administration decided to push through with another attempt at shared services.

-Jason MIller, FederalNewsRadio.com

Wednesday, April 09, 2014

Financial management providers ill-equipped to take on large customers

A metric of success for federal shared services is how many agencies are using the capability. Federal financial management shared service providers are facing an uphill battle to meet that metric.

One of the biggest challenges to making this second attempt at financial management shared services in the last decade successful is federal providers' ability to ramp up in a timely manner.

Interior, Transportation, Treasury and possibly as many as four other agencies are gearing up to accept 40,000 or more new customers at a time over the course of the next few years.

As federal financial management shared services providers, these agencies need help in the form of changes to law and policy to meet those goals.

Experts say only by letting these providers act more like private sector businesses will federal shared services find success.

In part 2 of the special report, Shared Services Revisited, Federal News Radio explores the long-standing capacity challenges that current and new financial management shared service providers will have to overcome in the coming years to meet the growing demands of agency customers.

The Office of Management and Budget requires agencies to modernize financial management systems only through federal shared service providers (SSPs). In a March 2013 memo, OMB detailed its plans to reduce costs and duplication across the government through the use of federal SSPs.

But many of the same questions limited the success of this initiative in the mid-2000s, including whether the shared service providers have the capacity to handle large cabinet level agencies.

Over the course of the last seven years, no cabinet level agency moved to a federal shared service provider. The Labor Department outsourced to a private sector provider. The Small Business Administration unsuccessfully followed suit to a different private sector company.

But over the course of the next five to 10 years and starting this year with the departments of Commerce and Housing and Urban Development, and the Coast Guard, large agencies are expected to let go of their financial management systems and take advantage of a multi-tenant set up that is widely considered an industry best practice.

OMB and Treasury's Office of Financial Innovation and Transformation (OFIT), which is managing the financial management shared services initiative, are trying to address the challenges providers face.

But it's about more than just money and people. The question is whether Interior, Transportation, Treasury or any of the new providers can handle more than one large agency every few years.

Federal and private sector experts say migrating to a shared service provider is extremely complex.

Beth Angerman , the director of OFIT, said OMB and OFIT will not mandate where agencies migrate to, but there are factors that agencies must take into account.

"We recently finished the design of the FIT Agency Modernization and Evaluation (FAME) process. What that process consists of are a series of evaluative models and artifacts that are produced by the agency with FIT's oversight and assistance to help them get through different gates of identifying if there is a federal shared service provider who will meet their needs," Angerman said.

OMB estimates agencies are spending $8 billion a year and have more than 53,000 people supporting all federal financial management systems.

There is a long history of financial management systems that have failed to meet expectations. In fact, OMB in 2010 reviewed 30 financial systems to ensure they were meeting cost, schedule and performance goals, and ended up rebaselining several after finding they were off track.

Despite this increased oversight, the Government Accountability Office found in 2012 that the reviews had little effect. Auditors said 13 projects estimated no change in their long term costs, and 16 said their schedule remained the same.

So given all of these systemic problems, Angerman said the private sector has to appreciate the changes that are happening, meaning once they were implementing large scale systems, and now they are supporting the agency providers with specific expertise.

-Jason Miller, FederalNewsRadio.com

Tuesday, April 08, 2014

Familiar questions, few answers so far for OMB's latest financial systems effort

The departments of Commerce and Housing and Urban Development and the Coast Guard are planning to outsource their financial management systems in the coming year.

These three agencies have only one choice in how they modernize their financial management systems — through a federal shared services provider.

The Office of Management and Budget's March 2013 policycreated a federal first priority for agencies to modernize their financial management systems through a shared services provider.

But this second attempt by OMB to move agencies to financial management shared services is fraught with the same obstacles of a decade ago.

But OMB believes this attempt at shared services is different. The administration says budget concerns and technology advancements will help overcome these long- standing barriers.

OMB named five shared service providers under the Financial Management Line of Business initiative. With the exception of the Defense Finance and Accounting Service, the four civilian providers — the departments of Treasury, Transportation and Interior, and GSA — mostly found success with small and micro agencies.

But with agencies spending more than $8 billion a year on financial management systems and with more than 53,000 employees supporting those efforts, the opportunity to consolidate and simplify is great.
So administration officials say the time is right for a renewed push for shared services.

Three of the four current shared service providers for civilian agencies offer only Oracle's Federal Financial software.

GSA offers CGI's financial management software called Momentum. But industry and federal sources say GSA is likely to get out of the financial shared services this year.

Other agencies are using SAP, Savantage and other financial management software that meet federal standards.

Infor and Workday both offer software-as-a-service options for enterprise financial management services.

OMB and OFIT are close to naming new federal shared services providers, with at least one agency providing software that is not Oracle.

Federal News Radio's special series, Shared Services Revisited, looks at whether there still are too many unanswered questions that would doom shared services once again.

-Jason Miller, FederalNewsRadio.com

Tuesday, April 01, 2014

Treasury's Reger joins OMB to fill financial management void

The Office of Management and Budget turned to a veteran of federal budgeting to begin replacing its top two financial managers.

Mark Reger recently came over to OMB on detail from the Treasury Department to be the acting deputy controller.

Reger's detail helps fill the void left when controller Danny Werfel became the acting IRS Commissioner in May 2013, and his replacement Norman Dong, who had been deputy and then acting controller, moved over to head up the General Services Administration's Public Building Service in late March.

By bringing Reger over, OMB has a veteran of state and local government, and someone who has served in senior executive capacities in small and large agencies.

Reger has been Treasury's deputy assistant secretary accounting policy in the Office of the Fiscal Assistant Secretary since 2010 where he's helped lead the financial management standards effort. He is a member of the Federal Accounting Standards Advisory Board and was CFO at the Office of Personnel Management for three years.

Reger also comes as OMB is putting some of the most important pieces in place to give its financial management shared services some life. OMB and Treasury's Office of Financial Innovation and Transformation are expected to name new federal shared service providers in the coming month.