Shared Services Requirements: Kicking the Tires

Buying a car is a process that many of us have gone through at one point or another (more than once for a lot of us). Thinking back on that process raises the question of why some of the simple techniques we use in our personal lives aren’t being better applied in the workplace.

If we can apply four lessons from buying a car to the workplace, we can be as happy with our new systems as we are with our new cars.

1) Focus on what’s unique

2) Leave the engine to the engineers

3) Keep your priorities straight

4) Take it for a test drive

The process of buying a car can teach us a lot about how we should (and shouldn’t) approach requirements gathering for shared services migrations. Use the resources at your disposal to start with the baseline and focus on what’s unique, stay away from trying to design the system, make sure you stay realistic about your priorities, and of course take it for a test drive. This will help make sure that you don’t end up with a high-end sports car when all you can afford and all you really need is the economy model.

About the Authors

Teia Clarke, Deloitte Consulting Senior Manager in Federal Practice Shared Services

Karen Ganley, Deloitte Consulting Specialist Leader in Oracle and Technology Implementation

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HUD MARKS A MAJOR SHARED SERVICES MILESTONE WITH FINANCIAL SERVICES MIGRATION

Department’s New Core Project is on a path to become first cabinet-level agency to fully migrate financial systems
WASHINGTON, D.C. – October 21, 2015 – (RealEstateRama) — Today, October 20, 2015, the U.S. Department of Housing and Urban Development (HUD) announces another major milestone in transitioning HUD’s financial management and procurement operations to the U.S. Department of Treasury’s Administrative Resource Center (ARC).  This milestone marks the shift of financial and procurement management functions from HUD to ARC. Although significant work remains, HUD is the first cabinet-level agency to move core financial systems to a Federal Shared Service Provider.In 2010, HUD reviewed its aging financial systems, and decided to transition from costly legacy systems that did not provide the necessary scale and breadth required to meet today’s financial management needs. 

This collaborative relationship between HUD and Treasury is the result of the Federal IT Shared Services Strategy. In May 2012, the Office of Management & Budget (OMB) announced the strategy to agencies for identifying and operating shared services for commodity, support, and mission IT functions. That strategy recommended a phased approach for implementing shared services, (e.g., “crawl-walk-run”) beginning with intra-agency commodity IT, to allow agencies to gain proficiency, then evolving to support and mission IT areas.

The transformative project has made significant progress to date. In October 2014, HUD began its phased implementation, migrating travel functions, and in February 2015, its time and attendance functions. Together with the most recent payment processing milestones, HUD’s New Core project continues to enhance financial transparency and analytical capabilities, increase regulatory compliance, and improve efficiency through the transition of HUD’s core financials and key administrative systems and services. 


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About HUD:

HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.govand http://espanol.hud.gov. You can also follow HUD on twitter @HUDgov, on Facebook at  www.facebook.com/HUD, or sign up for news alerts on HUD’s News Listserv. 

About Treasury’s Administrative Resource Center (ARC):  

ARC helps customers, like HUD, focus on their mission by delivering responsive, customer-focused, cost-effective administrative support to  other federal agencies. The reimbursable administrative services that ARC provides include financial management, human resources, procurement, travel and relocation, and information technology services.  For more information please visit: our website at https://fiscal.treas.gov. 

Jereon Brown 202-708-0685 
http://www.hud.gov/news/index.cfm

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MACFADDEN TO HOST PANEL ON DHS SHARED SERVICES MIGRATION AT 2014 AGA PDT

Macfadden & Associates, Inc. (Macfadden) will be hosting a panel presentation at the Association of Government Accountants’ 2014 Professional Development Training in Orlando, Florida. The panel presentation, titled “Shared Services Migration – Perspectives from the Department of Homeland Security’s Progression toward Financial Shared Services Solutions,” will take place on Tuesday, July 15 – Day 3 of the conference, and will feature three members of the Department of Homeland Security’s executive leadership and a director from the Department of Treasury.

Macfadden’s panel is comprised of four speakers:

1. Elizabeth Angerman, Director at Office of Financial Innovation and Transformation, Department of the Treasury
2. Jeffrey Bobich, Director of Financial Management, Department of Homeland Security
3. Captain Mark Rose, USCG Ret., Director of Financial Operations/Comptroller, U.S. Coast Guard
4. George Asseng, Director of Financial Management, Transportation Security Administration

The panel will be moderated by Doug Davidson, Director of Financial Services at Macfadden.

This panel intends to provide perspectives and insights from DHS entities proceeding toward various shared service solutions. Discussion will include lessons learned through the planning, selection, and due diligence phases of shared services migration. This session will provide the audience with real-world and current experiences from agency implementations in progress.

The annual ADA PDT brings together the top officials in federal, state and local government, as well as from academia and the private sector, for three-and-a-half days of valuable training and networking. Attendees can earn up to 24 Continuing Professional Education (CPE) hours.

This is Macfadden’s first year hosting a panel, as well as its first year as a member of the AGA’s Corporate Partner Advisory Group.

Macfadden is an employee-owned, ISO 9001:2008 certified, international professional services corporation that applies integrated information technology solutions and program/project management expertise to help solve critical issues impacting the health, safety and security of the world around us.

Shared service providers preparing for more, bigger agencies

Existing financial shared service providers will implement improvement plans starting this month to expand their capabilities and take on more customers.

The federal shared service providers (FSSP) improvement plan will expand the capability and capacity of providers to accommodate more and larger agencies, according to updated goals on Performance.gov.

This is just one step toward the Obama administration's cross-agency goal of expanding agency use of shared services and establishing clear guidance and evaluation for providers.

The Office of Management and Budget and the Department of the Treasury also plan to establish governmentwide principles for shared services governance by the end of August. There were no details on what the guidelines would include, but the report stated individual FSSPs and customers would implement their own principles to tailor to the broader regulations.

The guidelines would aid OMB and Treasury as they plan to expand their focus to the Human Resources Shared Services initiative and start the second rollout of those shared services in December.

OMB and Treasury already have succeeded in meeting past goals around financial management. The Performance.gov update stated they have reviewed financial management SSPs, established a governance group of CFOs and providers and sought input from industry on ways to avoid duplication within agency administration.

Now the Obama administration is monitoring agency transitions to shared services providers. Agency executive councils will finalize performance metrics and customer satisfaction surveys by November.

With these metrics, the administration will look at the number of migrations to shared services providers, the percentage of transitioned departments, customer satisfaction and the number of new services offered by providers. OMB and Treasury have not set target numbers for these metrics, but the report stated the two agencies will collect measures and surveys annually.

OMB and Treasury also outlined other goals in the report including the financial management agency advisory group would review their expansion in shared services to provide recommendations for further growth. The administration also plans to formally recognize OMB and Treasury as overseers for the shared services marketplace.

-Stephanie Wasko, FederalNewsRadio.com
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OMB and GSA developing unified measures to cut down on costs

The Office of Management Budget and the General Services Administration have created a plan to gather data and make progress toward cutting unnecessary spending and inefficiency.

Currently, OMB and GSA have trouble analyzing the efficiency of government agencies, something that makes agency cooperation difficult, according to a White House report released June 30.

OMB and GSA will create a unified data set from all agencies.

The plan revolves around agencies setting performance benchmarks, which the report expects to be completed by the end of July. The benchmarks, then, are assessed by OMB and GSA, which will compare the practices used by the most efficient agencies and share them with the others. Leadership teams from agencies then will meet with OMB and GSA to share their findings.

OMB and GSA are looking for efficiency indicators, measured in cost savings or reduced square footage of federal property, which can be traced back to benchmark related actions. OMB and GSA also are looking for increased service quality and shared services adoption among agencies.

Based on the findings, finance, human resources and IT working groups will come up with an action and implementation plan, which interagency management councils will analyze for effective strategies that could be shared. This all comprises the first phase of the plan. The second phase uses the results of the first to create a standard plan and metrics.

The benchmarks policy set by OMB and GSA is the latest in a series of actions implemented by the Obama administration to decrease waste, fraud and abuse. Since 2009, the administration has been trying to reform real estate policies and improper payments.

Under the Freeze the Footprint initiative, OMB required agencies to submit three-year Revised Real Property Cost Savings and Innovation Plans to more narrowly focus on how they can maintain their real estate footprint and include a prospective analysis of spending.

In 2010, agencies paid $125 billion in improper payments, whether by contractor fraud or paying more than $1 billion to dead people.

Congress passed a law requiring Treasury to create a "do not pay" list of fraudulent contractors and a tool to let death certificate data be shared more easily among agencies.

The improper payment rate has dropped to 3.54 percent in 2013 from 5.42 percent in 2009.

The Obama administration has set new cross-agency priority goals for managing government as part of its 2015 budget. Federal News Radio examines the eight areas identified by the White House in our special section 2014 Cross Agency Priority Goals.

-Ariel Levin-Waldmen, FederalNewsRadio.com
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Treasury's Gregg to retire after 41 years in federal financial management

A long-time stalwart in the federal financial community decided to call it a career after 41 years in government.

The Treasury Department announced May 27 that Fiscal Assistant Secretary Richard Gregg is retiring at the end of June. Treasury said Dave Lebryk, currently the commissioner of the Bureau of the Fiscal Service, will take over for Gregg, and Sheryl Morrow, currently deputy assistant secretary for Fiscal Operations and Policy at Treasury, will succeed Lebryk as commissioner. The changes will be official as of June 30.

During his career, Gregg worked under 16 different Treasury secretaries and served for 10 years as the commissioner of the Bureau of the Public Debt.

Most recently, Gregg oversaw efforts to move Treasury into the electronic world. He led initiative for Treasury to stop issuing paper checks in 2013.

Gregg also was a big proponent of shared services for financial management. He played a key role in reinvigorating the program, which recently named new federal providers.

Over the course of the last few years, Lebryk has worked closely with Gregg on many priorities.

Lebryk has been with Treasury for more than 25 years, serving in several senior leadership positions, including the deputy assistant secretary for Fiscal Operations and Policy, and deputy director and acting Director of the Mint.

Morrow, who has more than 34 years with Treasury, will continue to unify the government's fiscal and debt operations under one central vision and leadership under the recently merged Fiscal Service. During her career, she held numerous positions assistant commissioner for payment management and chief disbursing officer at the Financial Management Service.

- Jason Miller, FederalNewsRadio.com
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Treasury official calls for quick Data Act demos

The three-year schedule to implement the Digital Accountability and Transparency Act, a measure that puts federal financial data on a single, machine-readable standard and requires its publication to the public online, might be too ambitious, said Dick Gregg, fiscal assistant secretary of the Treasury and the executive in charge of implementing the law.

"It will be difficult and maybe impossible in some areas to hit all the timelines," Gregg said on May 20 at the Federal Financial Management Conference in Washington, D.C., before an audience of government accountants and financial managers who will be on the front lines of implementing the changes required under the Data Act.

The challenge is for Treasury and the Office of Management and Budget to come up with a standard for publishing financial data, then convert federal financial management systems to that standard. There was no money included in the law to finance the effort, but agencies will surely need some resources to implement changes.

"I'm not sure what the approach of OMB will be when agencies make requests," Gregg said. "There will be some costs. It's important to work together to figure out how to minimize the cost of doing this." One way is to leverage gains made in the Treasury's own internal goal of improving financial transparency through the management of the USASpending.gov website, which recently moved to Treasury from OMB as part of the fiscal 2014 budget.

The shift to a federal-first approach to agency financial management could help streamline the process, Gregg pointed out. "Shared services is a force multiplier," Gregg said, because consolidation of financial management at the four providers means that agencies will be able to outsource some of their compliance. "The sooner we can move more agencies into shared services, the easier it's going to be for them to implement the Data Act," Gregg said.

The financial management community will reap the benefits as well, Gregg said. The new emphasis on standardization means that chief financial officers can shift from systems implementation and operation to the more interesting and rewarding work of managing programs.

-Adam Mazmanian, FCW.com
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Improving Financial Systems through Shared Services, OFIT Industry Day May 21st

Solicitation Number: RFI-FIT-14-0055

Agency: Department of the Treasury
Office: Bureau of the Public Debt (BPD)
Location: Bureau of the Fiscal Service

MB Memorandum M-13-08 directed all executive agencies to use, with limited exceptions, a shared service solution for future modernizations of core accounting or mixed systems. In implementing this policy, the Office of Management and Budget (OMB) is following a guiding principle of "Federal First" whereby executive agencies must consider one of the Federal Shared Services Providers (FSSP) designated by the Department of the Treasury (Treasury) as eligible to provide financial management shared services to other executive agencies.

On May 2, 2014, OMB and the U.S. Department of the Treasury designated four agencies as FSSPs. They are Department of Agriculture's National Finance Center; the Department of the Interior's, Interior Business Center, the Department of Transportation's Enterprise Services Center, and Treasury's Administrative Resource Center.

A copy of OMB M-13-08, "Improving Financial Systems through Shared Services," is located at: http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-08.pdf .

The Division of Procurement Services, on behalf of the Financial Innovation and Transformation (FIT), is conducting market research in the form of this RFI and an Industry Day event scheduled on May 21, 2014. 

The Government will hold an Industry Day event on May 21, 2014, starting at 8:15 a.m. ET, with sign-in starting at 7:45 a.m. ET at GSA Central Auditorium located at 1800 F Street, NW, Washington, DC 20006. There will be a general session followed by question/answer session. The general session will include background information on the implementation of OMB M-13-08, FIT's role in the implementation, current plan and associated challenges. Following the general session, each FSSP will provide background on their organization, current platform and customers, challenges, current contracting vehicles and potential needs/desires to improve financial management services offerings. 

Treasury begins shared services quest to educate, integrate

The Treasury Department's Office of Financial Innovation and Transformation is starting to put the bigger pieces of the shared services puzzle in place.

It started by approving four shared service providers — one new one and three current providers — on May 2. Now OFIT is on an education and data quest.

The office issued two requests for information to industry in the past few weeks, including one to begin telling industry about the role contractors will play in this governmentwide initiative.

One RFI , issued May 7, announced an industry day on May 21 where all four shared service providers — the departments of Agriculture, Interior, Transportation and Treasury — will present current capabilities and those they would like to have in the future.

OFIT also wants to gather market research on private sector solutions and capabilities that could be of assistance to OFIT (in its oversight role), the FSSPs (in their service provider role) and customers or prospective customers) in 11 different areas, including optimizing shared services, assisting in customer migrations and identifying alternative contract approaches such as share-in- savings or public-private partnerships.

Then on May 22, OFIT will host an agency day so potential customer agencies can learn about the shared services offerings and ask questions about the initiative.

The second RFI is focused on data management.

The April 18 RFI asks vendors for insights into "the development and implementation of a shared data transfer capability (e.g., enterprise bus) to facilitate the interaction and communication between mutually interacting software applications. Software applications may include financial systems, procurement systems, e-invoicing systems, inventory systems, or other mixed systems. These software applications may or may not be owned and operated by the federal government."

Responses to the RFI are due May 16.

The RFIs are more pieces to this financial management shared services puzzle.

Treasury, which is leading this administration effort, is trying to get data and information out to the agencies so they really get what's expected of them and what they can expect.

At the conference, audience members sought answers about how the initiative works, and the RFIs and several other document or data releases over the next two weeks are part of those answers.

Angerman says the OFIT will post those documents on its website.

-Jason Miller, FederalNewsRadio.com
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USDA joins the ranks of the financial shared services providers

Agencies will continue to have four approved federal shared services providers to buy financial management services from. The only difference is the Agriculture Department replaces the General Services Administration.

The Office of Management and Budget and the Treasury Department today announced they recertified the departments of Interior, Treasury and Transportation and added USDA to be the support pylons of its shared services initiative.

By adding USDA, OMB and Treasury partly solve concerns over a lack of competition among providers, because they all offered Oracle as their back-end software. USDA offers SAP's federal financials.

USDA in 2013 continued deploying its Financial Management Modernization Initiative (FMMI), a new financial system that replaces USDA's legacy financial system, according to OMB's January 2014report to Congress on the benefits of E-Government initiatives. "FMMI is based upon a commercial, off-the-shelf resource planning product. FMMI is an advanced, Web-based, financial management system that provides general accounting, funds management, and financial-reporting capabilities that has been deployed to 28 of USDA's 29 administrative organizations."

GSA's decision to get out of the financial management services is no real surprise. The agency said it was getting out of the human resources services last summer, and several government and industry sources said financial management wasn't far behind.

But by GSA not receiving OMB and Treasury's approval, it means one less software package will be available for agencies to choose from (it offered CGI's Momentum), and it's unclear what will happen to the people running the Federal Integrated Solutions Center's External Services Branch or its 44 internal and external financial management customers.

OMB and Treasury's approval of the four providers should kick off a series of decisions that will underlie the financial management share services effort.

-Jason Miller, FederalNewsRadio.com
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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

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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
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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
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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
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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.

-WTOP.com
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Former interim IRS chief lands private sector gig

Danny Werfel, the interim IRS commissioner for much of 2013, has landed at the Boston Consulting Group, the firm announced Monday.

Werfel held down one of the more thankless positions in the federal government last year, working to put the IRS on firmer footing after the agency was rocked by controversy over the improper scrutiny given to Tea Party groups.

Werfel said he would explore private-sector opportunities when he left the IRS several months ago, after the Senate confirmed his replacement, John Koskinen.

-Bernie Becker, TheHill.com
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2014 AGA Federal Financial Systems Summary and Links to Presentations

Pinpointing how to address challenges through leadership for future success takes center stage

By: Joseph Davis, Marketing & Communications Manager, AGA

It’s no secret the last year has been a tough one — fiscally and otherwise — for the federal government and its supporting agencies, which highlights the tough conditions government financial managers in particular, have had to endure. Though they produce constraints, budgetary and resource limitations also create opportunities for innovation and leadership.

Addressing challenges and paving a way for the road ahead was the center of attention as nearly 400 government and private sector financial managers took part in AGA’s 2014 Federal Financial Systems Summit (FSS) last week.

“Because of fiscal constraints, we have to do everything we can to focus on ‘mission’ and leadership,” said Norman Dong, Interim Controller, Office of Management and Budget (OMB), during a panel discussion centered on, “The Vision and Roadmap for Federal Financial Management and Systems.” He stressed that with the help of shared services — which remained at the forefront of this year’s FSS — OMB, as well as other government agencies, can focus on business outcomes rather than a “check-the-box approach” to financial management processes.

READ MORE...

READ THE EXECUTIVE REPORT HERE...

Financial management and freedom of choice

At a time when governments are increasingly looking to private-sector solutions to improve efficiency and solve complex challenges, the Treasury Department appears to be headed in the opposite direction when it comes to shared services, with potentially disastrous results.

In April, the CIO Council published the Federal Shared Services Implementation Guide, which establishes a strategy for moving agencies to shared-services environments for business areas such as budget formulation, human resources and, notably, financial management. Charged by the Obama administration with developing an implementation strategy, Treasury's Office of Financial Innovation and Transformation (FIT) developed a plan to streamline and consolidate financial management systems by tapping federal shared service providers (FSSPs) almost exclusively.

Although consolidation might be a good idea, major concerns exist about the viability of the chosen approach.

Representatives from the Software and Information Industry Association and its member companies met with Office of Management and Budget and FIT officials to understand how their effort would improve upon previous attempts, such as the Lines of Business initiative, which ultimately failed in 2006. So far, however, those conversations have led to more questions than answers, particularly concerning the role of commercial providers in the new shared-services arrangement.

Consolidation is a noble goal but not when it flies in the face of efficiency and rationality.

In fact, OMB and Treasury recently announced plans to "assign" all agencies to an existing FSSP, deviating from the April memo and leaving commercial providers completely out of the picture. That action makes little sense in theory and is not feasible in practice. It fails to recognize the complexity of the current federal financial management system environment.

Today only a handful of the agencies covered by the Chief Financial Officers Act receive their core financial management services from an FSSP, and most of those agencies are themselves FSSPs. Even Treasury, which is implementing the initiative and has its own shared-services center, does not host the core financial management systems of three of its largest bureaus. Presumably, those bureaus were deemed too large or complex to use Treasury’s center or another FSSP.

Most agencies are running their own financial management systems powered by commercial software, and those systems largely work as intended. And we know that commercial software has the right capabilities because even the FSSPs use commercial software as their backbone.

By virtue of their size, large federal agencies cannot simply pick up their financial systems and move them to an FSSP. If the Department of Homeland Security or Defense Department tried, the provider would be completely overwhelmed by the complexity and number of financial transactions generated on a daily basis. The cost of migration would far outweigh any projected cost savings.

Consolidation is a noble goal but not when it flies in the face of efficiency and rationality. The administration needs to wake up to the fact that an agency like DHS, with a $40 billion budget and 22 component agencies, is already operating at such a large and complex scale that moving it to a new FSSP would be an unwieldy, expensive mess.

Instead, the administration should take a step back and focus on its original objectives of boosting efficiency and saving money. To start, officials must determine whether there is any evidence that we are currently wasting significant money on our financial management systems. And because commercial software powers the federal government's financial systems -- even the FSSPs -- the private sector must be included in the reform process.

Ultimately, agencies need the freedom to choose the financial management solution that is best for them. They should not be bullied into switching to an FSSP that likely won't meet their needs.

-Mike Hettinger, FCW.com
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Interior takes financial management system to an enterprise cloud

The Interior Department’s Financial and Business Management System is being migrated to an enterprise cloud run by Virtustream, the company reported.  

FBMS provides the administrative backbone to support DOI’s financial transactions, acquisitions, travel, grants and subsidies, and property and fleet management functions across 60 offices. When fully deployed, it will replace and/or integrate 160 of Interior's 162 legacy business systems and subsystems, according to the agency website.

Virtustream, a provider of cloud software and services, is working with prime contractor Unisys to move the financial management system, which is based on SAP software, to its Virginia-based data center, which complies with security guidelines stipulated by the Federal Information Systems Management Act (FISMA).

SAP application hosting is the first project Interior officials and contractors are tackling as the department expedites its move to the cloud. In August, Interior awarded a set of contracts valued at up to $10 billion to 10 vendors in a bid to transform overall IT capabilities. 

Interior expects to save $100 million each year from 2016 to 2020 by moving applications to the cloud. 

Virtustream is SAP-certified in both cloud and hosting services. The company is currently going through the process to get security accreditation for its enterprise cloud under the federal government’s Federal Risk and Authorization Management Program, said Kevin Dattolico, chief sales officer for Virtustream.

-Rutrell Yasin, GCN.com
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AGA Executive Reports Address Shared Service and Improper Payment Reduction Strategies

AGA released two reports identifying specific steps that all levels of government can take to get more for their money, promote program excellence and reduce improper payments. The papers summarize two special sessions conducted this summer during AGA's training event in Dallas.

One session examined lessons learned by governments at the forefront of implementing shared service arrangements; the other explored the feasibility of developing a common strategy to reduce improper payments across all levels of government.

The reports, entitled, "Envisioning and Realizing the Promises of Shared Services," and "Reducing Improper Payments through Collaboration," are available in AGA's Thought Leadership Library.

The sessions revealed that shared services can be used to accomplish critical government objectives, including efforts to mitigate improper payments. AGA Executive Director Relmond P. Van Daniker explained that a number of federal databases are actually shared services that help states mitigate improper payments by improving their ability to determine program eligibility and payment amounts.

For example, "the National Directory of New Hires maintained by the U.S. Department of Health and Human Services, helps states mitigate improper payments," Van Daniker said. "The national directory allows state agencies to match new hires, reported by employers, with individuals owing child support. It further helps state agencies reduce unlawful or erroneous public assistance payments, including payments for welfare, Supplemental Nutrition Assistance Program (formerly food stamps) and Medicaid payments."

In a similar vein, the Treasury Offset Program (TOP) is a shared service that collects delinquent debts owed to federal agencies or states. Jeffrey Schramek, U.S. Department of the Treasury(Treasury), spoke during each session, alluded to the success of TOP. Under TOP, federal agencies and states can offset delinquent debts - including overpayments -against appropriate federal and state payments. "TOP's successful state program recovered more than $3 billion for the states, alone, in 2012," said Schramek.

Arizona Comptroller, Clark Partridge, co-chair of AGA's Intergovernmental Partnership, highlighted how AGA's intergovernmental ToolKits and guides help to reduce improper payments. During the session on improper payments, Partridge identified the Intergovernmental Partnership's Cooperative Audit Resolution and Oversight Initiative guide as an excellent resource to reduce improper payments by determining the underlying cause of audit findings. AGA's ToolKits and guides are available online and are free to use.

Cooperation, and the ability to agree on a shared mission, is fundamental to developing successful shared-service arrangements, according to Dan Murrin, Partner, Ernst & Young (EY). EY sponsored the session on shared services and Murrin moderated the session on improper payments.

Murrin said that governments can be more successful in mitigating improper payments by working together. 

"Governments can develop shared systems that help verify eligibility and payment amounts," Murrin said. "There are opportunities to establish regional eligibility systems and to develop 21st-century cooperative arrangements that leverage investments made by governments." Murrin added that the use of shared services provides opportunities to standardize processes and improve governments' ability to work together in preventing improper payments.

Richard Gregg, Treasury's Fiscal Assistant Secretary, issued a challenge to government financial officials while closing the session on shared services, "The benefits of shared services are too large for us to ignore as a government." Gregg further stated, "To realize the cost savings and the better flow of information that can be derived from shared services, the government accountability community must develop the courage to act and make a commitment to change."

According to Van Daniker, AGA will build on information contained in the reports to forge alliances among officials at all levels of government in an effort to improve government performance and increase accountability.