Today's GAO Publications

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


Information Technology: DHS Needs to Improve Its Independent Acquisition Reviews.
GAO-11-581, July 28.

http://www.gao.gov/products/GAO-11-581
Highlights - http://www.gao.gov/highlights/d11581high.pdf

American Battle Monuments Commission: Improvements Needed in Internal Controls and Accounting Procedures-Fiscal Year 2010.
GAO-11-577R, July 28.

http://www.gao.gov/products/GAO-11-577R

Improper Payments: Reported Medicare Estimates and Key Remediation Strategies, by Kay L. Daly, director, financial management and assurance, and Kathleen M. King, director, health care, before the Subcommittee on Government Organization, Efficiency, and Financial Management, House Committee on Oversight and Government Reform.
GAO-11-842T, July 28.
http://www.gao.gov/products/GAO-11-842T
Highlights - http://www.gao.gov/highlights/d11842thigh.pdf

DOD Financial Management: Numerous Challenges Must Be Addressed to Achieve Auditability, by Asif A. Khan, director, financial management and assurance, before the Panel on DOD Financial Management, House Committee on Armed Services.
GAO-11-864T, July 28.
http://www.gao.gov/products/GAO-11-864T
Highlights - http://www.gao.gov/highlights/d11864thigh.pdf

FAR update clarifies interagency contracting responsibilities

Anytime the Defense Department hires another federal agency to do procurements for it, those servicing agencies are now responsible in regulation for ensuring that the General Services Administration schedule orders they place on behalf of the DoD comply with Defense regulations.

The new regulation--part of an interim rule made effective Dec. 13 and so subject to change (although, if past experience is anything to go by, minor changes)--settles an argument among federal agencies about how far regulations from the original customer agency penetrate past the level of another federal agency hired to perform procurement services. The answer is all the way.

The rule, in fact, applies to the entire government, but the Defense Department is the federal agency with the most involved set of department-specific regulations and so generally the most likely to have a difference from federalwide regulations. The new rule specifically states that the contracting officer placing the order is responsible for applying the regulatory and statutory requirements of the agency for which the order is being placed. The same goes when establishing a GSA blanket purchase agreement. The new language is part of a revised Part 8.404(b)(1) of the Federal Acquisition Regulation

-David Perera, FierceGovernmentIT.com
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Carter: Incremental development and prototypes for business systems

The Defense Department says it's taking a more incremental development approach to business information technology systems and will require prototypes, starting immediately.

In a Nov. 15 memo, Pentagon acquisition czar Ashton Carter says the department should allow no more than three-and-a-half years of measured time to elapse between the moment when the milestone decision authority approves a business system modernization worth more than $1 million to when the system achieves initial operational capability. If a larger business system effort has been broken down into discrete increments, then the timeline for IOC applies to those increments, says Carter--whose official title is undersecretary of defense for acquisition, technology and logistics.

According to the memo, that means 12 months for assigning a program manager, developing a project plan and getting the investment review board to sign off on the business case. The clock starts ticking again after contract award (the memo doesn't appear to budget time for the procurement process) for a 12 month phase during which the program must produce a prototype. Thereafter, project officials have 18 months to complete engineering development and reach initial operational capability. The timeline, along with all the attendant decision points, is known as the Business Capability Lifecycle.

Overall, no more than five years should pass from when money is first obligated to when an increment of a major automated information system is complete or, should the program not be a MAIS, it achieves initial operational capability, Carter states.

-David Perera, FierceGovernmentIT.com
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Oracle Unveils Oracle Contract Lifecycle Management for Public Sector

Co-Development Agreement With CACI Delivers Automated Procurement Contract Processes for Public Sector Organizations
SAN FRANCISCO, CA, Sep 21, 2010 (MARKETWIRE via COMTEX) -- ORACLE OPENWORLD --
News Facts

-- To help public sector organizations author, execute and manage both routine and complex procurement contracts, Oracle today announced the availability of Oracle Contract Lifecycle Management for Public Sector, developed in co-operation with CACI.

-- By providing complete end-to-end acquisition and contract writing capabilities, Oracle Contract Lifecycle Management for Public Sector enables organizations to audit all categories of government spending by increasing transparency and providing clear accountability.

-- Oracle Contract Lifecycle Management for Public Sector builds on the advanced procurement capabilities within the Oracle E-Business Suite 12.1 and is fully integrated with Oracle Federal Financials. Oracle Contract Lifecycle Management for Public Sector delivers clear visibility into procurement contracts helping to achieve compliance with federal mandates such as the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS).

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SOURCE: Oracle Corporation


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IG Upgrades DHS Acquisition Management

The Department of Homeland Security (DHS) has improved management of its major management activities slightly over last year, making some progress in achieving its goals in acquisition management, according to a scorecard released Wednesday by the DHS inspector general (IG).

The scorecard found DHS making "moderate" progress in acquisition management, information technology management, and emergency management--indicating that DHS was meeting many of its goals in those areas but not quite achieving "substantial" success.

However, DHS is making only modest progress in grants management and financial management due to failing to meet many of its goals in those areas. The rating "modest" is one step below a rating of "limited" on the four-step scale used by the IG office to rate the categories in its report Major Management Challenges Facing the Department of Homeland Security.

Grants management and financial management were the weakest management areas for the department, the report found.

While FEMA made "moderate" progress in meeting the goals of successful disaster grants management, it made only "modest" progress in doing so for non-disaster grants.

For both, FEMA should exert more influence to implement improved oversight of subgrantees. But non-disaster grants management suffers from inconsistent and incomplete financial and program monitoring, the report found, partly because FEMA does not have enough grants management staffers to manage the programs.

Financial management at the department also remains weak, with the IG office granting a score of "modest" to the department's efforts. Both military and civilian financial systems at DHS face tremendous challenges.

The US Coast Guard has made little progress in tackling internal control weaknesses identified by an audit in fiscal 2008, the report said. Those weaknesses include a lack of an effective general ledger system and a lack of effective policies, procedures, and controls surrounding the financial reporting process.

While the Coast Guard plans to overcome many of these problems in future years, it lacked sufficient financial management personnel to resolve these issues in fiscal 2009, the report said.

With regard to its civilian financial systems, DHS has several internal control weaknesses in its financial reporting, particularly at FEMA and the Transportation Security Administration (TSA), the report said. Financial reporting actually deteriorated at US Customs and Border Protection (CBP) during fiscal 2009 as well, but problems at that agency are not as bad as problems at FEMA and TSA, the report characterized.

-Mickey McCarter, HSToday
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Recent DHS IG Reports

The following Inspector General Management Reports for U.S. Department of Homeland Security were recently published:

OIG-10-11 - Independent Auditor's Report on DHS' FY 2009 Financial Statements and Internal Control over Financial Reporting (PDF, 57 pages - 794 KB)

OIG-10-16 - Major Management Challenges Facing the Department of Homeland Security (PDF, 36 pages - 802 KB)

OIG-09-105 - CBP Needs to Improve the Monitoring of the Cash Collection Process (PDF, 21 pages - 1.24 MB)

OIG-09-104 - Audit of Application Controls for FEMA's Individual Assistance Payment Application (PDF, 23 pages - 867 KB)

Homeland Security Acquisition Manual (HSAM) (PDF, 399 pages - 6.33 MB) implements and supplements the Federal Acquisition Regulation and the Homeland Security Acquisition Regulation. Effective through HSAM Notice 09-03.

U.S. Department of Homeland Security Inspector General Management Reports

New Inspector General Management Reports for U.S. Department of Homeland Security:


OIG-09-33 - The State of California's Management to State Homeland Security Program Grants Awarded During Fiscal Years 2004 through 2006
(PDF, 67 pages - 1.26 MB) New 03/13/2009

OIG-09-32 - Internal Controls in the FEMA Disaster Acquisition Process (PDF, 25 pages - 651 KB)
New 03/13/2009

OIG-09-31 - FEMA's Implementation of Best Practices in the Acquisition Process (PDF, 40 pages - 930 KB)
New 03/13/2009

CACI and Oracle Team To Provide Functionality for Federal Procurement Contracts Management

CACI and Oracle announced today that the two companies have entered into an agreement to jointly develop a Contract Lifecycle Management solution that helps federal organizations author, execute, and manage procurement contracts in compliance with the Federal Acquisition Regulation (FAR), Defense Federal Acquisition Regulation Supplement (DFARS), and other agency supplements. CACI will provide subject matter expertise gained from years of experience designing and implementing contract management systems for the Department of Defense and federal civilian agencies to help Oracle enhance the functionality of its commercial-off-the-shelf (COTS) Oracle(R) E-Business Suite. This functionality is expected to support both simplified and complex acquisitions and be integrated with Oracle's procurement and financial management applications to provide a complete procure-to-pay process that meets government compliance mandates and transforms federal contract management.

Oracle Contract Lifecycle Management is an enterprise solution that helps create and enforce better contracts by enabling standardized contract processes, reduced time-to-contract, and contract compliance. The solution builds on existing procurement and contract lifecycle management functionality within Oracle E-Business Suite, providing capabilities to help significantly cut supply management costs for federal customers by integrating requisitioning, sourcing, purchasing, and supplier collaboration with business intelligence. It provides contract professionals with capabilities to author, approve, sign, monitor, track, modify, renew, and close out contracts.

CACI will leverage its experience gained from over 30 years in the federal procurement space to transition the current user community from existing solutions to Oracle's enhanced contract management offering. CACI's depth and breadth of capabilities stem from the development and implementation of widely used acquisition systems and contracting operations that encompass the full spectrum of procurement, ranging from shopping cart buys to complex acquisition management. In addition, the company works with federal customers as a systems integrator to achieve consolidation of acquisition, financial, and other business systems into enterprise resource planning (ERP)-centric models through its broad-based implementation services. The company also specializes in the development and delivery of end-user training programs that integrate agency procurement business processes with automated acquisition applications.

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An investigation’s cost

Today’s FBI is a threat-based, intelligence-driven, technologically supported agency of more than 30,000 employees working in 56 field offices in the U.S. and 61 Legal Attaché offices overseas. These employees combat threats as diverse as terrorism, corporate fraud, cybercrime, human trafficking, violent crime and money laundering.

Making optimum use of the FBI’s large and geographically dispersed work force, as well as its $7 billion budget, takes on enhanced importance — and difficulty — when viewed against the backdrop of the terrorist attacks of Sept. 11, and the resulting transformation of the FBI to an agency that fuses intelligence into its national security and law enforcement functions.

The FBI’s chief financial officer, through the Finance Division, is a key partner in achieving the FBI’s mission. While the Finance Division’s contributions can take many forms, two of the most important are providing accurate and useful financial information for decision-making and being a change agent for improved operations and efficient use of resources.

The CFO’s office has been a driving force to bring about, through the budget process, more integrated thinking and comprehensive analysis of FBI programs. As part of this effort, the FBI has adopted a multiyear budgeting cycle, enabling better business planning and the analysis of the out-year impact of current budget decisions, particularly the impact on information technology, space and other infrastructure requirements. This approach also makes the FBI planning cycle consistent with that of the U.S. intelligence community, improving its ability to coordinate with the Director of National Intelligence and the other intelligence agencies.

To be fully successful, both the planning process and daily operations need timely, accurate and useful information. While not the complete answer, information derived from audited financial statements is certainly part of this equation. In recent years, the FBI has made steady progress in improving the quality of its financial statements; its fiscal 2007 statement received an “unqualified” opinion with no financial material weaknesses or significant deficiencies. This accomplishment is significant because it was achieved using an antiquated financial system scheduled for replacement.

Beyond financial statement data, the CFO’s office strives to provide information needed to plan and execute FBI responsibilities in the most effective and efficient manner. An example of such information is a current effort to determine the cost of an investigation. Costs will be calculated based on the type of investigation, size of field office and other variables. By analyzing and comparing this data, program managers at FBI headquarters and special agents in charge of field offices will be able to identify best practices, problem areas, and other insights of how to best utilize bureau resources. The CFO’s goal is to be both proactive in identifying areas where better financial data would improve decision-making, as well as to serve as a ready resource to program managers needing assistance in developing and analyzing financial data.

In addition to budget and accounting, the Finance Division is also responsible for the FBI’s acquisition function. The FBI procures nearly $3 billion of goods and services annually, much of which is for information technology and other sophisticated equipment. The structure allows for better coordination among budget, procurement and accounting personnel, thus enabling the FBI to integrate budget formulation, multiyear acquisition requirements, and accountability of its resources.

With the expansion of its size and responsibilities, the FBI is, in many ways, like a large corporation with multiple business lines. Taking a page from the private sector, the Finance Division is hiring personnel with business backgrounds to focus on business process re-engineering to realize cost savings and improved operations. Through this and its other efforts, the CFO’s office can — and must — be a key contributor to the FBI’s mission as it embarks on its next 100 years.

-Rich Haley on FederalTimes.com
Rich Haley is the FBI Finance Division assistant director and chief financial officer.
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Today's GAO Publication

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

Department of Homeland Security: Progress and Continuing Concerns with Acquisition Management, by John P. Hutton, director, acquisition and sourcing management, before the Subcommittee on Management, Investigations, and Oversight, House Committee on Homeland Security.
GAO-08-1164T, September 17.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-1164T
Highlights - http://www.gao.gov/highlights/d081164thigh.pdf