As sequestration cuts loom, unimplemented IG recommendations could save billions

Over the past few years, unimplemented agency inspector general recommendations that could potentially save the government billions of dollars have piled up.

Now, with $85 billion in automatic budget cuts kicking in, lawmakers on the House Oversight and Government Reform Committee are telling agencies there's no excuse for them to further delay implementing the cost-saving measures and best practices identified by their IGs.

In 2009, there were 10,894 open IG recommendations, according to a report released by the oversight committee ahead of a hearing Tuesday. But by 2012, that number had grown to 16,906, representing a potential $67 billion in savings.

And if agencies won't act on those recommendations, Rep. Darrell Issa (R-Calif.), chairman of the oversight committee, said he will.

Issa's committee has sought to forge close ties with agency watchdogs. In January, a letter from both the House and Senate oversight committees called on the Obama administration to fill persistent vacancies in the IG ranks.

The IG community is also beset by a spate of longstanding vacancies including those at six large agencies: the departments of Defense, Homeland Security, Interior, Labor and the U.S. Agency for International Development.

According to the committee, there's a connection between vacancies and unimplemented recommendations. Among the agencies with most unfulfilled recommendations are those with long-term vacancies in their IG offices.

Long-term vacancies "weaken the office of the Inspector General," the report stated. "A permanent IG has the ability to set a long-term strategic plan for the office, including setting investigative and audit priorities. An acting official, on the other hand, is known by all OIG staff to be temporary."



-Jack Moore, FederalNewsRadio.com
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CGI awarded 10-year BPA with the U.S. Department of State and U.S. Agency for International Development

CGI awarded 10-year, US$395 million BPA with the U.S. Department of State and U.S. Agency for International Development

FAIRFAX, VA, Jan. 19 /PRNewswire-FirstCall/ - The U.S. Department of State has awarded CGI Federal Inc. (CGI), a wholly-owned U.S. operating subsidiary of CGI Group Inc. (NYSE: GIB ; TSX: GIB.A), a competitive, single award, 10-year Blanket Purchase Agreement (BPA) with a ceiling of up to US$395 million under CGI's GSA-IT Schedule Contract in support of the agencies' Joint Financial Management System (JFMS).

JFMS is a global platform based on CGI's Momentum(R) software used by both the Department of State and the U.S. Agency for International Development to efficiently and cost-effectively manage domestic and overseas financial management activities. Under this BPA, CGI will provide systems integration, consulting services, and operational support for more than 5,000 JFMS users in more than 300 posts and missions around the world.

PUBLISHER'S NOTE: TeraThink Corporation is a member of the CGI JFMS team.

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Recent GAO Publications

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

Financial Audit: Office of Financial Stability (Troubled Asset Relief Program) Fiscal Year 2009 Financial Statements.
GAO-10-301, December 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-301Highlights - http://www.gao.gov/highlights/d10301high.pdf

Recovery Act: States' Use of Highway and Transit Funds and Efforts to Meet the Act's Requirements, by Katherine A. Siggerud, managing director, physical infrastructure issues, before the House Committee on Transportation and Infrastructure.
GAO-10-312T, December 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-312T
Highlights - http://www.gao.gov/highlights/d10312thigh.pdf

Smithsonian Institution: Implementation of Governance Reforms Is Progressing, but Work Remains.
GAO-10-190R, December 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-190R
Highlights - http://www.gao.gov/highlights/d10190rhigh.pdf

Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability.
GAO-10-231, December 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-231
Highlights - http://www.gao.gov/highlights/d10231high.pdf

Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability (Appendixes).
GAO-10-232SP, December 10.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-232SP

Troubled Asset Relief Program: The U.S. Government Role as Shareholder in AIG, Citigroup, Chrysler, and General Motors and Preliminary Views on its Investment Management Activities, by Orice Williams Brown, director, financial markets and community investment, and A. Nicole Clowers, acting director, physical infrastructure, before the Subcommittee on Domestic Policy, House Committee on Oversight and Government Reform.
GAO-10-325T, December 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-325T
Highlights - http://www.gao.gov/highlights/d10325thigh.pdf

Veterans Health Administration: Inadequate Controls over Miscellaneous Obligations Increase Risk over Procurement Transactions, by Kay L. Daly, director, financial management and assurance, before the Subcommittee on Oversight and Investigations, House Committee on Veterans' Affairs.
GAO-10-307T, December 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-307T
Highlights - http://www.gao.gov/highlights/d10307thigh.pdf

Status of GAO Recommendations to the Department of Defense (Fiscal Years 2001-2008).
GAO-10-211R, December 16.http://www.gao.gov/cgi-bin/getrpt?GAO-10-211R

Formula Grants: Funding for the Largest Federal Assistance Programs Is Based on Census-Related Data and Other Factors.
GAO-10-263, December 15.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-263
Highlights - http://www.gao.gov/highlights/d10263high.pdf

Impoundment Control Act: Use and Impact of Rescission Procedures, by Susan A. Poling, managing associate general counsel, office of general counsel, before the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, Senate Committee on Homeland Security and Governmental Affairs.
GAO-10-320T, December 16.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-320T
Highlights - http://www.gao.gov/highlights/d10320thigh.pdf

UN Office for Project Services: Management Reforms Proceeding but Effectiveness Not Assessed, and USAID's Oversight of Grants Has Weaknesses.
GAO-10-168, November 19.
http://www.gao.gov/cgi-bin/getrpt?GAO-10-168
Highlights - http://www.gao.gov/highlights/d10168high.pdf

Recovery Act: Planned Efforts and Challenges in Evaluating Compliance with Maintenance of Effort and Similar Provisions.
GAO-10-247, November 30
http://www.gao.gov/cgi-bin/getrpt?GAO-10-247
Highlights - http://www.gao.gov/highlights/d10247high.pdf

Appropriations Decisions:

B-318499, Department of the Navy--Lunch for Volunteer Focus Group,
November 19, 2009
http://www.gao.gov/decisions/appro/318499.htm

B-318425, Chemical Safety and Hazard Investigation
Board--Interagency Agreement with the General Services
Administration, December 8, 2009
http://www.gao.gov/decisions/appro/318425.htm

Today's GAO Publications

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

Improper Payments: Weaknesses in USAID's and NASA's Implementation of the Improper Payments Information Act and Recovery Auditing.
GAO-08-77, November 9.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-77
Highlights - http://www.gao.gov/highlights/d0877high.pdf

Responses to Posthearing Questions Related to Improving Single Audit Quality.
GAO-08-318R, December 7.
http://www.gao.gov/cgi-bin/getrpt?GAO-08-318R

Agencies continue to make strides in financial management

All major agencies met financial reporting deadlines for the third year in a row, completing the audit process within 45 days of Sept. 30, the end of fiscal year, the Office of Management and Budget reported Monday. The audit results show continued improvement in financial management and accounting, OMB officials said.

The deadline for submitting complete financial reports was shortened to 45 days from 150 days in 2001. Clay Johnson, deputy director for management at OMB, said Monday that revising the deadline forced agencies to improve their financial management year-round.

In addition, agencies are gradually improving their overall financial management. Nineteen of the 24 major federal agencies received clean audits for fiscal year 2007, one more than last year. And the number of governmentwide material weaknesses dropped to 39 from 41 last year, for a 35 percent decrease in material weaknesses since 2001.

Material weaknesses are management or accounting deficiencies deemed by auditors to be significant enough to note in the final report. Danny Werfel, acting controller for OMB's Office of Federal Financial Management, said the decline in material weaknesses was particularly noteworthy in light of recent changes to government audit guidelines.

Thirteen agencies received clean audits with no material weaknesses noted. Five of them -- the Justice, Interior, and Energy departments, the Small Business Administration and the U.S. Agency for International Development -- did not meet that mark last year.

Werfel said agencies also are working hard to report on and eliminate improper payments, which can mean anything from an incorrect amount or recipient to a payment for an unallowable service to insufficient documentation to prove a payment was proper. This year, 13 more programs took part in improper payment reporting; almost 86 percent of high-risk programs reported on improper payments this year, up from 81 percent last year. Werfel said publication of improper payments not only identifies problem areas but motivates agencies to address themquickly.

The government's largest spender by far, the Defense Department, continued to come up short in the area of financial management. Johnson said the department did not receive a clean audit, and likely won't for years to come, because it has chosen to make thorough reform a higher priority than a clean audit.

-Elizabeth Newell, GovExec.com

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Three agencies recognized for financial management gains

Three agencies have proven their ability to use financial information in daily decision-making, earning recent promotions to "green" grades indicating success in that area of the President's Management Agenda.

The Housing and Urban Development Department, U.S. Agency for International Development and Office of Personnel Management all moved up from yellow, for mixed results, to green on the latest traffic-light-style report card released earlier this week.

With the latest change, 12 agencies have the top rating in financial management, while the other 14 graded -- including the behemoth Defense Department -- are stuck at red for poor performance.

To earn a yellow rating, agencies must meet standards that include obtaining a clean audit of their financial statement and not having any recurring material weaknesses, or significant problems with the accounting process. For many agencies, getting to the first clean audit is a huge hurdle. To move from yellow to green, agencies must show that they are using their newly available financial data to make informed management decisions.

Office of Management and Budget Controller Linda Combs said HUD, USAID and OPM had all met that standard.

-Jenny Mandel, GovExec.com

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Scorecard shows agency improvements in financial management

Three agencies gained ground in financial management while four fell in e-government on the management scorecard released May 1 by the Office of Management and Budget.

The quarterly traffic-light style reports track 26 agencies’ progress on the five main management initiatives — financial performance, electronic government, competitive sourcing, human capital, and budget and performance integration — that make up the president’s management agenda. OMB officials issue the scores after visiting agencies and reviewing documentation from them. Green shows success. Yellow means mixed performance. Red shows serious flaws.

To get green on financial performance, agencies must comply with requirements such as receiving a clean audit opinion and show that they are expanding use of financial data to manage programs.

The Office of Personnel Management, the Agency for International Development and the Housing and Urban Development Department improved their financial scores to green in the quarter ending March 31. That raised the number of agencies with the top financial score to 12.

OMB Controller Linda Combs said the gains reflect governmentwide progress on financial management. “It’s a great success,” Combs said.

AID recently began using a new accounting system that allows managers to monitor financial data of programs on a daily basis, Combs said. The agency has also increased managers’ accountability for meeting budget goals on projects.

OPM improved its score by introducing a plan to improve its cost accounting, while HUD has upgraded its ability to track the benefit of its spending on public housing, Combs said.

“They really have demonstrated that they have this financial data that caused their program managers to make good decisions,” she said.

-Daniel Friedman, FederalTimes.com

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Agencies' grades fall on e-gov section of OMB score card

Several federal agencies saw a drop last quarter in their grades on the e-government portion of the Bush administration's traffic-light-style management score card.

Four agencies lost ground in e-government on the latest score card, with one -- the Smithsonian Institution -- moving down two notches from a green light for "success" to a red, which translates to "unsatisfactory."

The grades, released Tuesday, cover the five major categories of the President's Management Agenda and several specialized initiatives such as property management. They reflect agencies' status as of March 31, the end of the second quarter of fiscal 2007.

The other three agencies that did worse in e-government for the second quarter were the Office of Management and Budget, the Office of Personnel Management, and the Small Business Administration. All three received red lights.

Two agencies -- the Health and Human Services and Homeland Security departments -- moved up in e-government from red to yellow, indicating "mixed results," making it the most volatile of the five main categories graded. Grades in the e-gov category have fluctuated for more than a year.

In a statement on the score card results, OMB attributed the e-government downgrades to problems with agencies' use of "enterprise architecture" blueprints to boost efficiency and move to the next generation of the Internet, called Internet Protocol Version 6. Agencies that came up short in this area have plans to improve their performance this quarter, according to OMB.

The administration's statement emphasized that overall, grades have improved substantially. "Federal agencies have significantly greater ability to be effective today than they did in 2001, when they began working on the PMA," said Clay Johnson, deputy director for management at OMB.

Three agencies -- the Housing and Urban Development Department, Office of Personnel Management, and U.S. Agency for International Development -- moved up a rung to green lights in financial management. And two -- the Environmental Protection Agency and Veterans Affairs Department -- improved to green and yellow respectively, in integrating information on program performance with budget decisions.

- Amelia Gruber, GovExec.com

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Military services questioned over financial management

Lawmakers on Thursday voiced concerns during a Senate Armed Services Readiness Subcommittee hearing that the military services have failed to make substantial changes in their business operations, leading to continued cost hikes and schedule delays on the Pentagon's expensive weapons systems.

The result is billions of dollars squandered every year that could be better spent on more pressing needs both for the military and elsewhere in the government, the senators said. "This is mundane stuff," said Senate Armed Services Readiness Subcommittee Chairman John Ensign, R-Nev. "This is not fighting wars."

But a failure to transform business operations, which makes warfighting more difficult, he added. Ensign was joined in his criticism of the services' business efforts by Government Accountability Office Comptroller General David Walker, who urged Congress to establish a chief operating officer in the Pentagon to keep program costs and schedules under control.

Army, Navy and Air Force officials, meanwhile, touted their attempts to transform their business offices over the last year. However, they also acknowledged that more work must be done to boost financial oversight and accountability.

"Improving the Army's financial accountability and modernizing business systems are challenging endeavors, which require a long-term commitment to ensure that enduring improvements are implemented," John Argodale, deputy assistant secretary of the Army for financial operations, said in his prepared testimony.

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Federal managers look for where LOBs intersect

The success of the slow-moving plan to consolidate grant management systems across government will depend on how well these few applications integrate financial-management systems at agencies and shared-services centers.

While the Office of Management and Budget and the Grants Line of Business Consolidation Initiative executive boards decide on the final list of consortia providers, a working group of financial-management and grants experts are starting to develop a high-level architecture to see where the two functions intersect.

“Our fate is somewhat tied together,” said Mary Mitchell, FM LOB’s program manager, at a recent event on the Lines of Business sponsored by the Armed Forces Communications and Electronics Association’s Bethesda, Md., chapter. “We are working with the Grants LOB to identify touch points to a standard interface. We will work on data standardization and standardized business processes in 2007.”

The working group will prioritize the interfaces that both functions use, she added. In the meantime, the grants executive board has whittled the number of agency proposals to become additional consortia members from eight to three. OMB now will decide on the final consortia providers to go with the Education and Health and Human Services departments and the National Science Foundation, which the administration named last February.

OMB is expected to name the new consortia leads when the president submits his fiscal 2008 budget to Congress in February.

Sources said there is a push by some to have all eight agencies become consortia members, which still would reduce the number of grant systems to 11 from about 100.

Charles Havekost, Grants LOB program manager and HHS CIO, said he would not comment on the number of proposals submitted to OMB, but said the agencies who want to be consortia members demonstrated over the past year that they could be good cross-service providers.

While OMB decides on the next set of consortia providers, agencies are figuring out which one would fit their needs best and are preparing migration plans to the shared-services centers.

At least one consortia member and two other agencies are not waiting for the Grants and FM LOBs to figure things out.

HHS has connected its grant system with its financial system, which runs Oracle Federal Financials, Havekost said.

Meanwhile, the State Department and the Agency for International Development are working on a system to pull grant data into the shared financial system, CGI-AMS Momentum.

Grice Mulligan, director of federal solutions for Infoterra Inc. of Arlington, Va., whose software package, Grantium, is being used by USAID and State, said the agencies are about a month away from releasing the final design notes on how the data will flow from one system to the other.

“State and USAID could not wait for high-level guidance to come out,” he said. “We are trying to ensure what we embark upon is something that complies with all the modern technology standards, Joint Financial Management Improvement Program rules and other relevant guidance and standards.”

Ensuring data transfers from grants systems to financial apps is fairly straightforward, experts say. Mulligan said the data fields and the relationships between them are well-known, which will make it easier.

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White House report touts management success stories

The President's Management Council on Friday published its annual report on governmentwide efforts to improve program performance, this time emphasizing agency success stories over specific grades on a traffic-light-style management score card.

The report, released by the Office of Management and Budget, reviewed the government's efforts to meet the goals laid out in the President's Management Agenda. It is a supplement to the administration's quarterly score cards assessing agency management accomplishments.

OMB Deputy Director for Management Clay Johnson said this year's focus on success stories reflected President Bush's interest in knowing how improvements in agencies' ratings translate into program enhancements.

The report described an administration goal of saving $50 billion annually through enhancements to performance and efficiency, and highlighted examples of programs that have reported improvements.

The council also noted that a consolidation of financial management systems at the State Department and U.S. Agency for International Development is projected to save $20 million over 10 years.

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CIOs crucial to financial-management performance

"Financial management isn't just for chief financial officers anymore. Just ask Agency for International Development CFO Lisa Fiely, who recently helped roll out a new financial-management system for her agency at locations all over the world.

Although the CFOs are the experts in understanding the new system, the rollout would not have succeeded without constant interaction with her agency's CIO.

'The collaboration and support we got from our CIO was tremendous,' Fiely said at a panel discussion Wednesday in Vienna, Va., hosted by the Industry Advisory Council. 'They were right there with us.'

Other CFO experts at the panel agreed that as agencies modernize their financial management systems, they must reach out and collaborate with their CIO counterparts.

'That's a theme we need to talk about - Do we have a CFO and CIO that work together? - said Adam Goldberg, financial integrity and analysis breach chief at the Office of Management and Budget's Office of Federal Financial Management.

Kathleen Turco, CFO at the General Services Administration, said that when her agency lost a clean audit opinion, she worked extensively with the CIO's office to develop a plan to fix the agency's financial-reporting problems.

This experience convinced Turco that every government CIO needs to understand the financial-management auditing cycle.
'It's not just about the budget anymore,' she said. Audit cycles, essentially, last all year, 'there's no let up.'

Turco also said CIOs must be fluent in OMB Circular A-123, which implements financial controls for government agencies in the spirit of the Sarbanes-Oxley Act that directed private corporations to implement internal controls for financial reporting.

'We’re living and breathing it here at GSA,” she said. "

IBM Business of Government Hour - Lisa Fiely, CFO USAID

"Lisa Fiely , chief financial officer at the Agency for International Development, will be the guest on 'The IBM Business of Government Hour' at 9 a.m. tomorrow (Saturday March 11, 2006) on WJFK (106.7 FM)."