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)

at (703) 697-1096.

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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GAO: Federal Reserve needs better controls over auction systems

"The Federal Reserve needs to bolster security controls for its distributed-based systems and supporting network environment used for Treasury Department securities auctions, the Government Accountability Office said.

Federal Reserve banks have in general implemented effective information system controls over the mainframe applications they maintain and operate for the Treasury Department's Bureau of the Public Debt to support auctions and financial reporting, GAO said in its report released yesterday. But Fed banks did not consistently identify and authenticate users to prevent unauthorized access, ensure that access was authorized only when necessary and appropriate, and implement adequate boundary protections to limit connectivity to systems that process Public Debt business.

'Without consistent application of these controls, the auction information and computing resources for key distributed-based auction systems remain at increased risk of unauthorized and possibly undetected use, modification, destruction and disclosure,' GAO said in its report authored by Gregory Wilshusen, director of GAO's information security issues; Keith Rhodes, GAO's chief technologist; and Gary Engel, director of GAO financial management and assurance.

The Federal Reserve needs to establish a management structure to ensure that decentralized IT security is effective and put in place an application test environment for the auction systems. The Fed also should correct weaknesses in identification authentication, authorization, boundary protection, encryption, auditing, and monitoring and configuration management.

The Fed has already taken corrective actions, including improving its ability to coordinate and oversee its operational and technical environments, and replacing its existing auction applications and operational infrastructure by the end of 2007, said Louise Roseman, director of the Federal Reserve’s division of Reserve bank operations and payments systems.

“We have also taken actions to improve our ability to coordinate and oversee our complex IT systems effectively,” she said.

The Fed and Treasury plan to validate the integrity of the new application and infrastructure at several points during the development of the application, she said. "