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 goverment wide 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.

Financial Accountability at the DoD: Reviewing the Bidding

The Chief Financial Officers (CFO) Act of 1990 requires the DoD to produce private sector-style financial statements that can win unqualified opinions from auditors. After many years of effort to comply, the department is now projecting that its balance sheets will not be ready until 2017 and is unable to predict when its income statements will be ready. Given that discouraging situation, combined with the increasingly widespread realization that external financial statements are of no practical use for internal management, the question arises whether it makes sense for the DoD to continue its pursuit of “CFO compliance.”

-Christopher Hanks



Changes coming to federal financial management

The Financial Systems Integration Office, the federal office that manages the Financial Management Line of Business, will stop testing and certifying federal financial systems on March 31.

In a letter posted to the Office of Management and Budget website March 16 OMB controller Danny Werfel said OMB will “develop the new path for financial systems in the Federal government.”

With a planned March 31 update to core financial systems requirements, “we believe that FISO has finished developing FMLoB business process and data standards as it related to its mission,” Werfel wrote. “In response to these challenges, we have reassessed the need for the core financial systems testing and product certification program and will be discontinuing this function,” he added.

The FMLoB has been an effort to consolidate financial systems within the government, with four federal agencies and private sector organizations acting as centralized service centers to other agencies.What-is-Financial-Management-Meaning-Definition-Scope

For example, the Interior Department’s National Business Center hosts financial systems and business operations for external executive branch organizations, and a few legislative branch organizations.

Senators seek to remove special inspector general for Afghanistan

Four senators have asked President Obama to remove Arnold Fields as the special inspector general for Afghanistan reconstruction, saying a recent government review had found major deficiencies in audits carried out by Fields’s office.

Twice in the past 18 months “we have repeatedly raised concerns regarding performance of the SIGAR,” wrote Sen. Claire McCaskill (D-Mo.), chairman of the homeland security subcommittee on contracting oversight. She was joined in the letter by Sens. Tom Coburn (R-Okla.), Susan Collins (R-Maine) and Charles E. Grassley (R-Iowa). SIGAR is the abbreviation for Fields’s office.

SIGAR spokeswoman Susan Phelan said that Fields was en route to Afghanistan and that she had no direct comment on the senators’ letter. Phelan said Fields had welcomed recommendations made by the Council of Inspectors General on Integrity and Efficiency, an independent government organization that carried out the review, and had vowed to implement them by Sept. 30.

In February of this year, the Council of Inspectors General began its review, which Fields initiated, according to SIGAR’s Web site. That review “found multiple major deficiencies in SIGAR audits including failure to meet minimum standards for quality control,” the senators wrote.

McCaskill and others have in the past recommended that the office of the special inspector general for Iraq reconstruction, a parallel organization run by Stuart W. Bowen Jr., a figure popular on Capitol Hill, be merged with SIGAR so that there is only one inspector general for work in both countries.

-Walter Pincus,

Recent GAO Publications

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

Presentations By The Acting Comptroller General

1. “Ensuring Accountability in a Time of Financial and Fiscal Stress,” by Gene L. Dodaro, acting comptroller general, before the American Institute of CPAs’ National Governmental Accounting and Auditing Update Conference, in Washington, D.C. GAO-09-930CG, August 10, 2009.

2. “Ensuring Accountability in a Time of Financial and Fiscal Stress,” by Gene L. Dodaro, acting comptroller general, before the National Association of State Auditors, Comptrollers, and Treasurers’ 2009 annual conference, in Dearborn, Michigan. GAO-09-952CG, August 17, 2009

Appropriations Decisions:

B-318386, U.S. Fish and Wildlife Service–Steller’s and Spectacled
Eiders Conservation Plan, August 12, 2009

Because considerable conservation efforts over several years have
not halted the decline of two threatened eider species, GAO will
not object to the U.S. Fish and Wildlife Service’s (FWS) proposed
use of appropriated funds to purchase and distribute caps and other
items to residents of Alaska North Slope communities in furtherance
of the agency’s eider conservation plan. FWS will print images of
the threatened eiders on these items and, for some items, include
eider conservation messages. The items, which FWS will distribute
as part of agency outreach events, will help residents identify the
threatened species and serve as reminders of the agency’s
conservation message.

B-318325, National Indian Gaming Commission–Reimbursing Bicyclists
as Part of the Agency’s Transportation Fringe Benefit Program,
August 12, 2009

Under the federal government’s transportation fringe benefit
program, as established by 5 U.S.C. sect. 7905 and Executive Order
No. 13150, the National Indian Gaming Commission (NIGC) provides
monthly transit subsidies to employees who certify that they use
mass transit to commute to and from work. NIGC may use its
authority under 5 U.S.C. sect. 7905 to extend the program to
provide a $20 cash reimbursement to those employees who commute to
and from work by bicycle. If NIGC chooses to do so, NIGC should
consider the provisions of the Internal Revenue Code, 26 U.S.C.
sect. 132(f)(5), and guidance provided by the Internal Revenue
Service and the Office of Management and Budget.

Other Decisions:

B-317634, Inclusion of Public-Private Partnership Roadways in
Calculating Total Lane Miles When Apportioning Highway Trust Funds,
August 17, 2009

Responding to a request for an opinion from Senator Bingaman,
Chairman, Subcommittee on Energy, Natural Resources and
Infrastructure, Committee on Finance, GAO has issued an opinion
concluding that the Department of Transportation (“DOT”), in
calculating highway lane miles under 23 U.S.C. § 104(b) as part
of its annual apportionment of highway funds to states, may
properly include mileage for roadways operated or maintained
by private third parties under long-term public-private partnership
agreements with a state (so-called ‘P3 agreements’)

DoD will spend at least $6.9 billion more on ERPs

The future financial systems health of the Defense Department depends on enterprise resource planning projects that are mostly late and over budget, according to the Government Accountability Office.

In testimony presented Sept. 29 before a Senate Homeland Security and Government Affairs subcommittee, the GAO said the Defense Department has identified 10 ERPs essential to transforming its business operations. Of those ten, so far one–the Defense Logistics Agency’s Business System Modernization–has been implemented despite $5.8 billion already spent, according to the GAO.

That spending figure will likely increase by at least another $6.9 billion, according to figures in the GAO’s prepared testimony.

During the hearing, Defense officials emphasized the importance of ERPs in making the notoriously messy DoD books auditable at fiscal year’s end. The 10 ERPs being implemented should replace more than 500 legacy systems.

As for the department’s stated goal of achieving a clean audit by 2017–a goal that previously was by 2007, but which was changed after the Pentagon realized it would be impossible–Robert Hale, the DoD comptroller and chief financial officer, said it’s doable. That is, doable for budget information and information pertaining to mission critical assets.

“If we try for everything, I’m afraid we’ll get nothing once again. I believe firmly we’ve got to pick some priorities and go after it. The only way, in my mind, to set those priorities is to focus on what we use to manage in the Department of Defense,” Hale said.

Under current audit guidelines, a clear financial picture in those areas would be insufficient to get a clean audit, Hale acknowledged. The rules might need to be changed, he added, since the hurdle to getting a clean audit would be historical asset cost data.

-David Perera,
For more:
– go to the hearing webpage, complete with prepared statements, or go directly to the webcast
– download the GAO’s prepared testimony (.pdf)
– read the fiscal 2010 Defense authorization bill

OMB Releases Performance Management Expectations

OMB instructed Agencies on its expectations for Delivering an Efficient, Effective, and Accountable Government by providing immediate attention to GPRA and Executive Order 13576.

OMB Memo M-11-31

CFOs exercise new muscle to impact agency performance – Quoted for Story

(This story is part of Federal News Radio’s special report, Rise of the Money People.)

Federal chief financial officers were responsible for $1.2 trillion in federal spending in 1990. Now it’s $3.8 trillion. CFOs today not only face a larger budget, but one that is more complex.

Does that mean the law that created the position of federal chief financial officers 23 years ago, needs to be updated? Has the CFO Act fallen behind the times? And, have agencies met the spirit and intent of the law?

The answers almost across the board from experts in and out of government are: No. No. And, yes.

As part of Federal News Radio’s week-long on-air and online special report, “ Rise of the Money People: Financial management moves front and center as agencies make the final assault on wasted billions,” we explore just how well the CFO Act has survived over the last two-plus decades, and how federal CFOs have morphed from number crunchers to master analyzers of data to help agencies make better decisions.

“I think there is an opportunity to evolve our financial management model and compliance framework in a way that we are moving beyond the basics of financial statements, and moving directly into a space where the CFO sees across government significant discipline and consistency in how we are tackling some of the other elements of the bottom line of government,” said Danny Werfel, the controller in the Office of Management and Budget, a position akin to that of the federal CFO.

“We have to be branching out in to more areas of discipline that get at that citizens’ bottom line and get more in the areas of financial performance. What happens is CFOs are branching out today in many, many different ways. The issue is whether the framework which they operate under, how they are audited, how they are capturing that information and reporting it publicly, is that following suit and being aligned with CFOs emerging responsibilities around these bottom line issues of citizens’ trust in government, program and financial performance, fraud, error and waste.”

The framework Werfel is referring to is the CFO Act.

Congress passed it and President George H.W. Bush signed it into law in 1990. It created the position of CFO in the major agencies and instituted the requirement for strong internal controls.

Twenty-three years later, experts in and out of government say agencies have met both the spirit and intent of the law. And now, CFOs are evolving beyond the initial requirements of the law.

Part of the expanded role CFOs play is derived from several of the administration’s priorities, such as reducing improper payments and better managing real property.

But the factor that will influence most how CFOs affect federal agency performance is enabled by the growing use of financial data to make better decisions.

“We now have managers of financial information versus processors of financial information in our CFO community,” said Doug Davidson, vice president of TFC Consulting and publisher of the financial management blog, “And agencies are able to act upon the information they have in front of them versus looking back strictly for auditability.”

Davidson said the evolution has been slow, mostly taking place in the last five- to-seven years. But now, financial managers have a much better grasp on where their agency is spending money, and the impact that spending is having on performance and services.

Werfel said the ability of CFOs to impact agency decision making is more important than ever in today’s budget climate.

-Jason Miller,