For Federal CFOs, the Pressure is on

Do you feel like the frog being boiled? Only four years ago, it was cool to be in government again – but now the pot’s boiling on extra high. The heat continues to rise with the taxpayers’ distrust of the management and stewardship of their money; whether it’s anything from ballooning deficits to irksome conference spending – the federal CFO community is in the thick of things. And the view from the bunker is not pretty either, as we emerge from the turbulence of continuing resolutions, threats of government shutdowns, whilst still toiling away under the cloud of sequestration. And do not forget what we all did to make the execution of the Recovery Act a success with transparency in reporting and very little instances of fraud, waste, and abuse?

As we approach the presidential election and despite recent history and events, there has been somewhat of a hiatus from new management initiatives – but expect this to change quickly (no matter who wins the election) with a newly invigorated administration, some severe externalities hanging over us, and a backlog of legislative proposals aimed at improving how the government spends its money. The federal CFO community will continue to experience increasing pressure and demands to keep performing with ever eroding levels of resources. I see that these challenges are starting to drive an emerging agenda for the federal CFO to address and work on over the next handful of years. So, here are four of the bigger things I see on the agenda:

1. Maintain the measure of fiscal integrity;
2. Build a relentless focus on cost management;
3. Mitigate severe human capital risks; and
4. Find capital to invest in new business systems (or find someone else to run them).

-Owen Barwell, GovExec.com
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AGA Research Study Sees Benefits For Federal Governments Using Managerial Cost Accounting

Research examined managerial cost accounting practices within federal government agencies

Alexandria, VA (November 5, 2009) - A recently released research study conducted by the Association of Government Accountants (AGA), examined the status of managerial cost accounting (MCA) implementations within federal government agencies. The case studies depict entities at various stages of implementation, from one that has been in existence for more than thirty years, and other mature systems (more than ten years in existence) to some that have only just started (two years or less). The research publication, Managerial Cost Accounting in the Federal Government: Providing Useful Information for Decision Making, was released in October 2009.

Download the report (PDF)

Cost of 2010 census remains elusive, officials tell panel

Overseers of the 2010 census said on Wednesday that it is almost impossible to determine the total cost of the decennial count.

"At this point, it's just unknown" if the cost of the census will ultimately surpass the current estimate of $14.7 billion, Commerce Department Inspector General Todd Zinser told the Senate Homeland Security and Governmental Affairs Federal Financial Management Subcommittee, which oversees the count.

A GAO report released at the subcommittee's hearing showed that the first major operation conducted by census workers -- the "address canvassing" campaign to confirm millions of addresses nationwide -- went $88 million over budget, or 25 percent of costs.

Once expected to cost $11.5 billion, estimates of the funds required to conduct the count jumped last year after a failed effort to equip census workers with handheld computers.

Census Director Robert Groves, who took the reins of the bureau in July, acknowledged last month that the agency is revising its methods of cost modeling.

-Carrie Dann, GovExec.com
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Today's GAO Publications

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

Debt Management: Treasury's Cash Management Challenges and Timing of Payments to Medicare Private Plans.
GAO-09-118, January 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-118
Highlights - http://www.gao.gov/highlights/d09118high.pdf

GAO Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Capital Program Costs.
GAO-09-3SP, March 2009.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-3SP

Today's GAO Publications

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

Social Security Administration: Service Delivery Plan Needed to Address Baby Boom Retirement Challenges. GAO-09-24, January 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-24
Highlights - http://www.gao.gov/highlights/d0924high.pdf

Aviation Security: TSA's Cost and Performance Study of Private-Sector Airport Screening. GAO-09-27R, January 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-09-27R

FederalNewsRadio - Federal CFO Insights - William Collison (FDA)

Leveraging Commercial Best Practices

William Collinson,
Acting Director, Office of Financial Management, Food and Drug Administration

The show will focus on how commercial best practices are being leveraged by federal agencies and what benefits we are starting to see across our government. Discussion highlights:

• Internal controls
• Risk control and management
• Business intelligence/analytics
• Activity-based cost accounting
• Sarbanes-Oxley
• CFO Act
• Government Performance and Results Act
• OMB Circular A-123

Listen Here

Today's GAO Publications

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

Department of Labor: Better Cost Assessments and Departmentwide Performance Tracking Are Needed to Effectively Manage Competitive Sourcing Program.
GAO-09-14, November 21
http://www.gao.gov/cgi-bin/getrpt?GAO-09-14
Highlights - http://www.gao.gov/highlights/d0914high.pdf

Today's GAO Publications

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

Information Security: FDIC Sustains Progress but Needs to Improve Configuration Management of Key Financial Systems.
GAO-08-564, May 30.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-564
Highlights - http://www.gao.gov/highlights/d08564high.pdf

Federal User Fees: A Design Guide.
GAO-08-386SP, May 29.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-386SP
Highlights - http://www.gao.gov/highlights/d08386sphigh.pdf

Today's GAO Publication

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

Cost Assessment Guide: Best Practices for Estimating and Managing Program Costs--Exposure Draft.
GAO-07-1134SP, July 2
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1134SP

Today's GAO Publications

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

Report

Property Management: Lack of Accountability and Weak Internal Controls Leave NASA Equipment Vulnerable to Loss, Theft, and Misuse.
GAO-07-432, June 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-432
Highlights - http://www.gao.gov/highlights/d07432high.pdf

Correspondence

Food and Drug Administration: Methodologies for Identifying and Allocating Costs of Reviewing Medical Device Applications Are Consistent with Federal Cost Accounting Standards, and Staffing Levels for Reviews Have Generally Increased in Recent Years.
GAO-07-882R, June 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-882R

Testimonies

Long-Term Fiscal Challenge: Additional Transparency and Controls Are Needed, by David M. Walker, comptroller general of the United States, before the House Committee on the Budget.
GAO-07-1144T, July 25.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1144T


Inspectors General: Opportunities to Enhance Independence and Accountability, statement for the record by David M. Walker, comptroller general of the United States, before the Senate Committee on Homeland Security and Governmental Affairs.
GAO-07-1089T, July 11.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1089T
Highlights - http://www.gao.gov/highlights/d071089thigh.pdf

Today's GAO Publication

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

Managerial Cost Accounting Practices: Implementation and Use Vary Widely across 10 Federal Agencies.
GAO-07-679, July 20
http://www.gao.gov/cgi-bin/getrpt?GAO-07-679
Highlights - http://www.gao.gov/highlights/d07679high.pdf

FASAB Seeks Comments on Two Exposure Drafts

The chairperson of the Federal Accounting Standards Advisory Board's Accounting and Auditing Policy Committee (AAPC), Wendy Comes, CGFM, has announced that the AAPC has issued an exposure draft of a new Federal Financial Accounting Technical Release titled, Implementation Guide for Statement of Federal Financial Accounting Standards 29: Heritage Assets and Stewardship Land. Comes stated that the proposed technical release "addresses important implementation questions regarding assets for which financial representations do not satisfy federal reporting objectives." Specific questions for respondents are included in the exposure draft and other comments are welcome. Responses are requested by Aug. 13, 2007.

AAPC has also issued an exposure draft of a new Federal Financial Accounting Technical Release titled, Clarification of Standards Relating to Inter-Entity Cost. Full implementation of the inter-entity cost provisions of Statement of Federal Financial Accounting Standards (SFFAS) 4 is required by SFFAS 30, Inter-Entity Cost Implementation Amending SFFAS 4, Managerial Cost Accounting Standards and Concepts, which becomes effective Sept. 30, 2008. Responses to the exposure draft are requested by Aug. 6, 2007.

Today's GAO Publication

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

Human Capital: DOD Needs Better Internal Controls and Visibility over Costs for Implementing Its National Security Personnel System.
GAO-07-851, July 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-07-851
Highlights - http://www.gao.gov/highlights/d07851high.pdf

Today's GAO Publication

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

Federal Aviation Administration: Cost Allocation Practices and Cost Recovery Proposal Compared with Selected International Practices.
GAO-07-773R, June 8
http://www.gao.gov/cgi-bin/getrpt?GAO-07-773R

Today's GAO Publications

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

Internal Control: Improvements Needed in the Library of Congress' Capitol Preservation Fund-Related Internal Controls.
GAO-07-732R, May 25
http://www.gao.gov/cgi-bin/getrpt?GAO-07-732R

Managerial Cost Accounting Practices at the Department of the Interior.
GAO-07-298R, May 24
http://www.gao.gov/cgi-bin/getrpt?GAO-07-298R

Bottom-line results: Snow finesses financial systems at Coast Guard

Avie Snow and her team really had to move after 9/11 when the Coast Guard was reassigned from the Transportation Department to the Homeland Security Department and had to migrate off DOT’s accounting system. In nine months, they built the Core Accounting System (CAS) for about $7 million.

The success of the project was due to her “amazing team” and “our CFO, who let me do stuff,” said Snow, chief of financial systems at Coast Guard headquarters in Washington.

The USCG chief financial officer, Robert Horowitz, said letting Snow “do stuff” was a business decision.

“I provided Ms. Snow this latitude because her proposed course of action would deliver to the Coast Guard a user-friendly and technologically advanced financial-systems solution at lowest possible cost,” he said. “We have a very good relationship with the Homeland Security Department and our development contractor that allowed Ms. Snow to pursue this initiative under constrained timelines. We have been quite pleased with her success.”

The first pieces of the integrated suite were the core accounting system, Oracle Corp.’s Oracle Federal Financials, Finance and Procurement Desktop for simplified acquisition, funds management and field accounting, followed by the Contract Information Management System for contract writing.

Rather than proprietary Web brokers or middleware to integrate applications, CAS uses open-standard Web services, which let disparate applications integrate in real time.

“Many in the technology sector still consider a services-oriented architecture and integration using Web services to be a technology vision,” said Ray Muslimani, president of Coast Guard integrator Global Computer Enterprises Inc. of Reston, Va.

Snow shrugs off the praise. “At the time, there was $10 billion invested throughout the industry in SOA,” she said. “And this is the private sector, where profit is the bottom line. I could guess things were going that way.”

The Coast Guard is realizing residual profits from the move, Snow said. The Office of Management and Budget’s introduction, post-CAS implementation, of its Federal Enterprise Architecture program calls for agencies to migrate to SOA.

“We’re already compliant, ahead of the game,” Snow said.

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Today's GAO Correspondence

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

Managerial Cost Accounting Practices:

Department of Agriculture and
Department of Housing and Urban Development.
GAO-06-1002R, September 21.
http://www.gao.gov/cgi-bin/getrpt?GAO-06-1002R

Financial LOB moves to standardize rules

Agencies will gain a clearer picture next month of how the administration wants them to standardize financial-management activities.

The General Services Administration expects to complete the major milestones for data and business process standardization in September to advance the Financial Management Line of Business Consolidation initiative.

Combined, these milestones constitute a foundation for letting agencies share financial data internally and eventually across government, said Keith Thur- ston, assistant deputy associate administrator in the Office of Technology Strategy in GSA’s Office of Governmentwide Policy.

With the financial LOB, the Office of Management and Budget aims to lower the cost, and improve quality and performance of financial-management systems, as agencies move to shared-services pro-viders, said Adam Goldberg, chief of the Financial Integrity and Analysis Branch in OMB’s Office of Federal Financial Management.

Although more guidance will evolve over time, it will be clear to agencies next month that a road map is in place, Thurston said.

“If agencies want or need to move to a new financial-management system now, the processes and expectations will be in place to help that occur,” he said.

In September, GSA will unveil the Common Governmentwide Accounting Code, giving agencies common definitions, data elements and structure, Thurston said.

“With universal data definitions, we will be able to aggregate and compare data,” he said at a recent federal financial-management conference sponsored by the Treasury Department’s Financial Management Service.

All new financial-management systems must adhere to the common code, he added.

GSA also will release the first set of business process standards for financial and accounting tasks in the common areas of payments, receipts, funds management and reporting. The standards will be the result of consolidating and harmonizing agencies’ accounting methods and business practices for the core financial-management functions, Thurston said.

A strong foundation for the accounting of government resources is critical for accomplishing the goals of the FM LOB, said Sam Mok, Labor Department chief financial officer.

GSA, its Financial Systems Integration Office, OMB and the Chief Financial Officers Council govern the Financial Management Line of Business.

Reeling In Business

"Entries in the Forest Service's financial management system can be so inaccurate that in 2002, the agency had to adjust its record for the value of its real property assets by $1 billion. At the time, financial management at the Forest Service was on the Government Accountability Office's high-risk list, and the agency never had received a clean audit opinion. It was struggling to keep straight its various financial systems, which track data such as payments from loggers for timber harvested on national land, fees from ski resorts operating on that land and costs charged to other agencies for Forest Service assistance during emergencies.

Jesse King, the Forest Service's chief financial officer, arrived at the height of that mess in 2001. Part of the problem, he observed at the time, was the Forest Service had 153 financial operating units. Preparing these combined financial statements in a timely fashion required herculean efforts, he says. King came from commercial banking, where consolidation of administrative functions as a means of cost savings was de rigueur. He brought those 153 units to a center in Albuquerque, N.M., in February 2005, which will save $36 million in operating costs annually after recovering the initial investment costs, he says. That's the equivalent of about 700 more park rangers. The Forest Service received its first clean audit opinion for fiscal 2002, helping the Agriculture Department get its first as well. (The Forest Service is Agriculture's largest agency.)

But from the perspective of the Office of Management and Budget, King's ap-proach is not centralized enough. OMB's financial management arm has instituted a use-it-or-lose-it approach to federal accounting, telling agencies late last year that they must either move their financial systems to a designated public or private center for financial management or become one themselves. Linda Combs, OMB's controller, recently emphasized timing during an interview: "We're encouraging them to look at this when it makes good sense to look at a new financial system or [when] upgrading their financial systems."

According to OMB documents, 17 of the 24 largest agencies still host their own financial management systems. Two agencies, the Labor Department and Small Business Administration, rely on a commercial center for hosting, and four agencies use federal centers. Within the next decade, OMB expects most agencies to move their financial management systems to outside providers."

FederalNewsRadio - Ask the CFO - Ramesh Punwani (FAA)

"Ramesh K. Punwani was named as the Federal Aviation Administration (FAA) chief financial officer (CFO) on March 26, 2004. As CFO, Punwani oversees the FAA's $14 billion operating budget as well as the development and agency-wide application of cost accounting and financial management systems. Punwani joined the agency following his work as senior vice president for global strategy at the Cendant Corp.

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