oversight

JFMIP News: A Newsletter for Government Financial Managers, Fall 1997, Vol. 9, No. 3

Published by the Government Accountability Office on 1997-01-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

A Newsletter for Government Financial Managers                                                                          Fall 1997     Vol.9. No.3.




        ATTENTION                                        Update on the U.S. CFO Council
       JFM IP NEW S                                                he federal financial management community will miss the following individuals who
         Recipients:                                               recently left their positions as chief financial officers:
 To reduce costs for printing and mailing
  and to gain the beneflit of a wider distribution        * Bonnie Cohen, formerly CFO, Department of the Interior, is now the Under Secretary
 with the use of the Internet through                       for Management at the Department of State.
  FinanceNet, the TFMTP is changing the way
 it distributes exposure drafts of JF.NII                 * George Munoz, formerly CFO, Department of the Treasury, is the Chairman, Overseas
 publications. JFMIIP has established a new                     Private Investment Corporation.
 mailing list in cooperation with our liaisons
 from organizations in both the public and                * Louise F. Stoll, formerly CFO, Department of Transportation, has taken a position in
 private sectors. The liaisons determine who                    the private sector.
 in their organizations wvill receive future
 exposure drafts of TFIIP publications, such             Some new members of the CEO Councl are:
 as financial systems requirements and core
 comperencies t-or financial management                      Kenneth Bresnahan was sworn in as the Deputy Chief Financial Officer (DCFO) of the
 personnel in hard copy. The liaisons in federal,        Department of Labor on October 15, 1996. He is currently the Acting CFO at Labor.
 departments and agencies are usually memibers           Prior to his Labor Department appointment, Mr. Bresnahan has held financial and program
 of the U.S. Chief Financial Officers Council,
 Federal Audit Executive Council, Small                                                                                                    conrinued on page 4.
 Agency Council's Financial Management
 Committee and Executive Council on Integrity
 and Efficiency. You may access and
 dowvnload exposure drafts on FinanceNet
                                                         Educating Millions on EFT 99
 under TF\IPl>:
  _ _ _ _ .,, .>..   .:er,.-er _.   ;: ' !rf.
                                         /      ''1 D/    T        he Department of the Treasury, Financial Management Service (FMS), is leading
                                                              fl   the effort to implement the Debt Collection Improvement Act (Public Law 104-
                                                                    134), which will have a major impact on the way the Federal government issues
 Current Exposure Drafts                                        payments. The law requires the use of Electronic Funds Transfer (EFT) for all
                                                         Federal payments after January 1, 1999, with the exception of tax refunds. These
 TF-IILP has issued the following exposure               disbursements include Federal benefit payments, such as Social Security and veterans'
 drafts:                                                 benefits, Federal salary payments, and vendor payments. The Treasury Department refers
 Corr Competencies in Financial Management               to this effort as EFT 99.
 JOr Inrndation Technology Perstmnei (CC-3)
  - Scprember 1997                                             On September 16, 1997, Treasury issued a
      This document is jindy issued by JFAIP             Notice of Proposed Rulemaking, 31 CFR
  and the Human Resources Commirtee of the               Part 208, for implementing the EFT                            E    Inside this Issue
  Chief Financial Officers (CFO) Council.                requirements. The proposed rule addresses
  Comments are due by November 17, 1997.                 how current and new recipients of Federal
 Caem Competenciefor Financial System                    payments will arrange to have their payments           Surchargejfor FMSS.                     2
 Analyrs (CC4) - September 1997                          delivered electronically, how those without
      This document is jointly issued by JFIIIP          accounts at financial institutions will receive         CFOC Human Resources Committe.         3
  and the Human Resources and Financial                  their payments, and who is eligible for a               Profikl Elizabeth Smedy .
  Systems Committees of the CFO Council.                 waiver. EFT is defined as any transfer of
  Comments are due by November 17, 1997.                 funds using other than paper instruments.              FASAB Update.          .     .          8
  Core Compeenies in Financial Management                This includes electronic transactions such as
 Jbr Management Analysts and Financial                   Automated Clearing House (ACH), Fedwire,                HUD's Accountablity Report.           10
  Specialistr (CC-5) - Ocoy 1997                         credit cards, automated teller machine (ATM)            TIN Regulation Proposed . .           12
     TIhis document is joindy issued by JFMN'            and point-of-salc (POS) transactions. Public
  and the Human Resources Committee of the               hearings on the proposed rule will be held in




                                                                                         IjDJ 7 on pae 4.
                                                              _________________________________continued
   Aiup NEWS                                                                                                                                  Fall 1997




3AO Issues Executive Guide on                                                                          Surcharge for Use
Measuring Performance of Information                                                                   of Financial
Management and Technology                                                                              Management
    C      ontinuing its efforts to assist agencies
           in understanding and devising
           effective information management
                                                         The Executive Guide presents an approach
                                                     that emphasizes three primary practice
                                                     areas: (1) aligning IT systems with agency
                                                                                                       Systems Sc he duIe
           practices, the General Accounting         missions, goals, and programs, (2) consoutin:g            he General Services Administration
Office (GAO) recently issued an executive            measures using a balanced approach that                   (GSA) will be colecting a surcharge
 prid that presents a suggested framework            determine how well IT is supporting             i         for any orders issued against the
t r designing and implementing IT                    strategic, customer, and internal business                Financial Management Systems
pertormance management approaches.                   needs, and (3) implementing performance           Software Multiple Award Schedule (FMSS
Issued as an exposure draft under the title          measurement mechanisms at various                 Schedule) contracts efective October 1,
Erecutiie Guide: ieasuring Pertbrm7ance and          decision-making levels throughout 2n              1997 The FMSS Schedule must be used by
Dcenonsrraring Results of Infoirmarion               organization. In addition, two supporting         federal agencies in acquiring core financial
Technoloqy Inmestmnents (GAO/ALMD-97-                practice areas, perjornanct data collection and   management systems software unless a
163), the guide is based upon GAO's                  analysis and strengthening processes being used   waiver is granted. The FMSS Schedule also
research of several leading public and private       to deliver IT products and services are           provides technical support services, training,
oranizarions with established reputations            important to achieving an effective IT            documentation,
                                                                                                       theuendors alo     and maintenance.    Most of
                                                                                                                                opional software
tor their IT performance leadership and              measurement system.
management expertise. The organizations                                                                modules, such as proper accounting or
*rudied included Xerox, Eastman Kodak,                   The approach outlined includes several        procurement, to be used with the core
Texas Instruments, M\lotorola Semiconductor          distinguishing features, including:               financial system software.
Products Sector, American Express Travel                  differentiating between IT's impact on
Relared Services Company, the Oregon                      intermediate versus final program               'GSA recently communicated the
Decpartment of Transportation, and the                    outcomes,                                    surcharge to senior procurement officials,
ciries of Phoenix, Arizona and Sunnyvale,                 using a good mixture of different kinds      chief financial officers and other senior
Cllitornia.                                               of IT measures to increase confidence in     management officials in federal agencies by a
                                                          measurement results,                         memorandum dated September 18, 1997
      Scvcral management reform laws, including           mtfrom                                              Robert J. Woods, Commissioner,
-he Government Performance and including               * understanding that measures may differ        Federal Technology Service, GSA. As a
 Act ot 1993, the Federals Acquisition                    by management tier within an                 result of organizational and budgetarv
irreamlllininlv Act of' 1994, and the Clinger-            organization, and                            changes within GSA, the agency needs to
C('hen Act of 1996, contain provisions that            * evaluating both the overall performance       recoup the costs of operating this program,
                           require
rC,_11re agencies to measure         agencies to measure of the IT function within an
                                    -~~~whchwa
                                performance                                                            which was povde
                                                                                                                   provided tto fdealagncesatn
                                                                                                                                  federal agencies at no
 and report resuts tor investments made in                organization and the outcomes for            cost since the inception of the FMSS
 titormation technolog, (IT). GAO's                        individual IT projects.                     Schedule program The surcharge to users
research hasicafly tvund that organizations                                                            of the FMSS Schedule will be used to cover
that use comprehensive per         gaormance             In addition, the guide notes that IT          GSA's costs of establishing and
tntormation tor its IT spending decisions            organizations can start by measuring the          administering the FMSS Schedule contracts
make much better informed decisions that             quality and effectiveness of existing internal
 'Oclis oni IT's contribution to 'imorovements       IT operations-a critical first step that               For orders issued on or after October 1,
 ii mission, or business, performance. In            strengthens credibilirv and experience             1997, agencies will be required to provide a
addtimison,meabsuingsIT performance. In              essential when constructing other measures        fee (surcharge) to GSA of .75 % of the total
.oitt provd aeasurln warning indicator to            aimed at ITs strategic contributions to           dollar value of each delivery/task order
corecprobldems oner maritigat risdiso                misotrouieseut.issued                                     under the FMSS Schedule program.
                           correct
                                 riss,roblemsor'mitiatc
                                                      misson or bsiness esults.This                          surcharge will be reviewed periodically
  t2 ) provides better input into resource               Copies of the report may be obtained by       and adjusted as necessary to cover GSA's
allocation and planning, and (3) provides            calling 202/512-6000. An electronic               cost of maintaining this program.
feedback to employees, customers,                    version (.pdf format) is available on GAO's
stakeholders, and the general public about           Internet WEB page at:                                  For information on the FISS Schedule
the cluality, cost, and timeliness of products                                                         or this procedure, please contact Kathy
and services.                                         nltp:/   /ww.ga3:.:          -y a i   i6 3pdf     Wood at (703)756-4214. C3


                                                                            2
Fall 1997                                                                                                                   JFMIP NEWS




    U.S. CFO Council Human Resources                                                         OMB Issues
               Committee                                                                     Implementation
        he U.S. Chief Financial Officers
        (CFO) Council, comprised of the
                                                CFO Council, have established a              Guidance for
                                                workgroup to address recruitment and
        CFOs and Deputy CFOs of the
        largest 24 Federai agencies and
                                                retention. Their first product is a
                                                publication, Current Recruitment and
                                                                                             FFM IA
executives of the Office of Management and      Retention Tools, that summarizes into six
Budget (OMB) and Treasury, was                  pages information on existing authorities               .Edward DeSeve, Acting Deputy
established to improve Federal financial        (some rarely used, scattered throughout                 Director for Management, Office
management. Acknowledging that a highly         three volumes of Title V of the Code of                 of Management and Budget
qualified financial workforce is key to         Federal Regulations) available to                       (0MB), transmitted a September
achieving success and sustaining progress,      management for recruiting and retaining      9th memorandum to Chief Financial
the Council chartered the Human Resources       highly qualified personnel. The              Officers (CFO) and Inspector Generals (IG)
Committee (HRC).                                HR(C/IAG group is working with OPM           at the CFO Act agencies that provided
                                                to update classification and qualification   guidance to agencies on the implementation
    The HRC began its work bv first             standards for financial management           of the Federal Financial Management
establishing the framework for a highly         positions. Also, the HRC formed a            Improvement Act (FFMIA) of 1996. The
qualified financial workforce. In               team to develop an entry level               guidance was prepared by an interagency
collaboration With JFMIP, the Framework for     recruitment program to enable the            working group composed of the CFO
Core Comnpetencies for Financial M'Ianagement   federal government to compete for            Council's Systems Committee, Presidents
                                                                                             Council for Integrity and Efficiency's
Personnel in the Federal Government was         highly qualified personnel.                   CIE) Aui Committ          the General
published in November of 1995. This                                                          (PCIE) Audit Committee, the General
document begins a series of documents that         The HRC has several projects              Accounting Office (GAO), and OMB.
identifies the core competencies             underway related to the development of
(knowledge, skills, and abilities) for       financial personnel. The CFO Council                The guidance stated that FFMIA
personnel wvithin a specific occupational    approved the concept of a CFO Fellows           fundamentally does two things:
grouping, and it identified core             Program, to be inaugurated in FY 1998,           * in statute, establishes financial
comperencies for financial managers, budget  that will be a highly competitive                    management system requirements that
analysts and accountants. Recognizing that a program for developing potential                     are already established by Executive
govern~ment that works better and costs less executive financial managers. A                      Branch policies, and
requires a sound partnership between         subcommittee is working to define                 * establishes new requirements for
program and financial managers, the second   selecp on csrteria and idenstft a training           auditors to report on agency compliance
document in the series identified core       sxplornso/dmnstrator.e ithhe HrCisvalso              with these basic requirements, and for
             competencies
                in finSeanocCouncilandgacadmiafforagency                                                   heads and agency management
program managers. Exposure drafts are in     Sector Councl and academia for delivery              to correct deficiencies within a certain
process for financial svstems analvsts,      of uniform and consistent quality                     . pod
inf'ormation  technologv pronl
    infrmaiontechnology   personnel          financial management training to Federal             tme per
management analysts and financial            personnel throughout the nation.                    The FFMIA is effective for fiscal year
specialists. In addition to identifying core       Further information and news is           ending September 30, 1997. The first
competencies, the documents identify         available on the HRC's Internet home            report required by FFMIA will be a part of
learning objectives and training resources.  page on FinanceNet at                           the auditor's report on the FY 1997 financial
                                                page onwFinanceNet.a                         statements. The guidance that 0MB issued
    With work nearing completion on             httpi /www. financenets                      statended
                                                                                                inv/      as interim
                                                                                                                   guidance to be used as
development of core competencies, the           ninancenetf/fed/cfto/hr:/ hrc . htm          part of audits of Federal financial statements
HRC has begun focusing on the                      The HRC welcomes volunteers to            for FY 1997 reporting.
recruitment, development and retention of       help with these initiatives. For further
personnel, with the core competencies as the                 pleaseThe                              implementation guidance explains
foundation. The HRC and the Interagency         Bresnahan, Chair, at (202) 219-6891.         t circumstances when an agency or
Advisor' Council (IAG), which is the                                                         department is substantially in compliance
Federal human resources equivalent to the                                                                                continued on page 11.


                                                                       3
JFEMP NEWS                                                                                                                             Fall 1997




CFO Comncil Update continued from fronrpage.

management positions at the Department of       appointment, Mr. Gould was Deputy                received a Master of Science Management
Agriculture. Since 1991, he was the Budget      Assistant Secretary (Departmental Finance        with a major in finance from the
Officer for Agriculture's Food and              and Management), Department of the               Massachusetts Institute of Technology and a
Consumer Service. He also served as Acting      Treasury, where he was responsible for           Bachelor of Arts degree in economics from
Deputy Administrator for Financial              budgeting, planning, procurement, payroll,       Vassar College.
Management at Food and Consumer                 personnel and organizational management
Service. Mr. Bresnahan is the Chair, CFO        for the department and its eleven bureaus.          President Clinton sent the following
Human Resources Committee.                      He was a White House Fellow, and has             nominations to the U.S. Senate for
                                                worked also for the Governor of                  confirmation:
   Peter J. Rabideau, Deputy CFO,               Massachusetts. His private sector experience      * John Berry, CFO, Department of the
Nuclear Regulatory Commission was               includes being a management consultant               Interior
appointed the Deputy CFO on August 17,          and an Assistant Professor of Naval Science       * Richard Keevey, CFO, Department of
1997. He has been with the Federal              at the University of Rochester.                      Housing and Urban Development
government for 18 years. Prior to his
current position, Mr. Rabideau was the              Nancy Killefer was confirmed as               * Michael Telson, CFO, Department of
Budget Director, Director of Accounting         Assistant Secretary(Management) and the             Energy
and Finance, and held progressively more        Chief Financial Officer, Department of the        * Sally Thompson, CFO, Department of
responsible management positions involving      Treasury, on September 19, 1997. Prior to           Agriculture
policy development, planning, program and       her appointment, she was a director and
resource analysis, and administrative support   senior partner for McKinsev & Company,             For more information on the CFO
at the Nuclear Regulatory Commission.           an international management consulting           Council, please go to the CFO Council
                                                firm, for 18 years. She was an associate for     website under FinanceNet at
   W. Scott Gould was sworn in as the           Metropolitan Cultural Alliance,and worked        http: i/cw . if inancene   .   go.   i/-- /   .   o
CEO and Assistant Secretary for                 with members of associations of nonprofit
Administration, Department of Commerce,         arts organizations to develop their financial
on Septcmber 30, 1997. Prior to this            management and control systems. She



FFT 99 :onrinted from fronr page.
October and written comments must be                 The public education campaign will          technological deficiencies or cost factors.
received no later than December 16, 1997.        focus on educating the public on the law        The new EFT law, however, should drive
                                                 and its implications and encourage              demand up, as vendors look to their
   Currently, Treasury issues over 300           individuals without accounts to join the        financial institutions to provide EDI
million checks annually. While many              banking mainstream. The campaign will           services.
individuals choose to receive their payments     also promote the most popular EFT
by Direct Deposit, there may be as many as       benefits:                                           Information on the EFT 99 effort, the
10 million people currently receiving              * EFT is safer, faster, and more              Notice of Proposed Rulemaking, the
Federal benefits that do not have bank                convenient than a check payment and        locations and times of public hearings on
accounts and cannot, therefore, enroll in             doesn't get lost or stolen; and            the proposed rule, and the Guide to Federal
Direct Deposit. Their reasons vary from                                                          Financial EDI Payments and other materials,
perceived difficulty in managing an account       * EFI saves taxpayers money.                   are available on the Internet at:
and being overdrawn to not having enough            Convening vendor payments from papr          http //,ww. fms . treas .gov/e-t/
monev to need an account. FMS, with the
                                  mone' to neanacto electronic transactions represents another       For additional information, please
help of other Federal agencies, financial
institutions, and trade and consumer             challenge to the Federal government and         contact Susan Alvarez at (202) 874-6908. o
                     ~ an cnsme
             institutions,
              anduvtradea      ~       ~         fnania
organizations, has been involved in an effort    financial community. Federal EFT
to educate Federal payment recipients on         payments to vendors include remittance
                                                 information, in an electronic data
the benefits of receiving their payments         interchange (EDI) format, which vendors
through various EFT methods. A contractor          ° to oile their accounting systems.
with public relations and advertising            use teconcl tiraccounting stm
             expeienc ishelpng
                         lan nd xecue a          Many vendors, financial institutions, and
experience is holpng plan and execute a          Federal agencies now lack the capability to
public educatio campaign.                        pass or receive financial information due to

                                                                       4
Fall 1997                                                                                                                            IFLIP NEWS




                                                    FINANCIAL MANAGEMENT

                                                        PROFILE
 E     lizabeth E. Smedley (Bertv) is the Deputy Chief Financial
        Officer, Department of Energv (DOE). She joined DOE in
                                                                             won a National Performance Review's Hammer Award for the
                                                                             office.
        1979 from the Department of the Navy. She was appointed
        Controller in 1985 and served as Acting                                                     This early emphasis on TQM also facilitated
Chief Financial Officer when the CFO office was                                                 implementing the Government Performance and
established in 1991 and again this year when the                                                Results Act (GPRA) because both required
position was vacant. The CFO manages budget and                                                 strategic planning and measuring results. In the
accounting operations which total over $20 billion                                              1995 Budget, DOE began to display performance
annually in resources, develops financial policy, and                                           measures to indicate results expected from each of
conducts a review program to ensure compliance                                                  its programs. These measures have evolved, but
with financial procedures. She has also been                                                    the Department still has a major challenge in
Director of Financial Policy; Deputy Director,                                                  identifying true outcome oriented performance
Office of Budget; Agency Budget Officer; and                                                    indicators for its varied business lines which
Assistant Controller for Budget, Policy, and                                                    include such divergent missions as radioactive
Compliance.                                                   .S             -                  waste clean up, basic research and maintenance ot
                                                                                                the nation's nuclear weapons stockpile.
    At Navy, she was Head of the Operating Forces                                                   Ms S            m
Branch, Office of the Comptroller. She had                 .                   -cacMs.                   Smedley's management stnle    is to bea
responsibilirv for formulation, defense and                        _                  Em        information, and receptive to the ideas of others.
execution of the portion of the Naw budget which                                                She believes this approach encourages staff to
provided operating funds for the Atlantic and                                contribute their ideas and talents and to buy in to the decisions that
Pacific fleets. From 1964 to 1975,
                                 . . she
                                      n served in positions of
                                         . . .....................           are made. She said that one of the most          m      pratfactors in
increasing responsibility with the Public Health Service, Department         achieving accountability in the financial management arena is to
of the Army, Defense Communications Agency, and Department of                have the senior leadership in the agency demonstrate commitment
the Navy,                                                                    to doing the right thirig and having zero tolerance for improprieties.
   Ms. Smedlev received a Bachelor of Arts degree in International           She feels fortunate to have worked for such leaders during the
Relations from Goucher College in 1964 and did graduate work in              course of her career.
Business and Public Administration at George Washington                           One of the key challenges facing the financial community is to
University. In recognition of hero work
                                     . .at DOE,z she received
                                                     .       . the.                 ways to support the programs and activities of the
                                                                             h~~~~~~fnd
rank of Distinguished Executive in the Senior Executive Service in           administration within the rules of sound financial management. This
1982; the DOE Meritorious Service Award in 1984 and 1990; the                is particularly challenging when resources are scarce and when there
rank of Meritorious Executive in the Senior Executive Service in             are basic differences in priorities and philosophy bet een the
1988; the Secretary's Award in 1989; the Donald L. Scantleburv               administration and the Congress. She believes that communication
Memorial Award in 1989; and the Superior Performance Award in                between field and headquarters financial personnel is critically
1989, 1990, 1991, and 1992.                                                  important to ensure all have current information and to discuss
     She attributes former Secretary O'Leary's commitment to total           solutions to complex problems in advance. At the Department of
qualitv management (TQM) as having a major impact on her career.             Energy major field orgaizationseach have a CFO who reports
Secretarv O'Leanr took all of her senior staff to Motorola                   both to the field office manager and to the headquarters CFO.
Corporation to see how a major corporation benefitted from TQM.              These men and women are all qualified financial management
Ms. Smedlev was impressed with what she saw. Especially, a                   professionals and are responsible for proper stewardship of
presentation by the Motorola Controller in which he described how            resources. A monthly conference call, annual meeting and use of
the company used TQM1 to reduce the time it took to close their              email to disseminate information are some of the tools used to
books at the end of the vyear, from thirty days to two. The                  promote communication. Currently, the Department is installing
 Department of Energy took 45 days to close its books. Ms. Smedley           an Executive Information System which will make key financial and
came back and personally conducted a mini-TQM training class for             program data available across the department in a user friendly
 her entire staff. After the class, they held an idea day during which       tormat.
employees broke into their work groups and brainstormed ideas to                 The past 2 years have seen significant downsizing. The CFO
improve the way they performed their work. These sessions resulted           headquarters office has dropped from 285 to 210 people including
in over 600 ideas for improving operations ranging from simple, low          one reduction in force of 15 employees last year. In addition to loss
cost improvements that could be done immediately to longer range             in numbers, much valuable expertise has been lost as long term
ideas. As ideas were implemented they led to additional ideas. This
total innovation package led to a series of accomplishments which                                                               continued on next page.


                                                                         5
JFtIP NEWS                                                                                                                               Fall 1997




employees accepted buyouts. During this same period,                        to quantify the extensive environmental clean up liability DOE
headquarters took on additional responsibility by becoming one of           faces. She indicates that her staff are currently hard at work on the
three consolidated accounting centers for the Department picking            FY 1997 statements and she is hopeful that the department will
up work previously performed at four field locations. Ms. Smedley           continue to receive clean audit opinions.
said that automation has been very important in allowing her to
make this transition. and to function at reduced staffing levels. One           Ms. Smedley believes the budget process is too rigid and that
of her major automation initiatives has been the adoption of Travel         some barriers need to be removed if operations are to become more
Manager software coupled with the mandatory use of the American             efficient. DOE uses management and operating contractors to
Express Card for airline tickets, hotels and meals and cash                 operate most of its sites. Under the auspices of the Financial
advances. This has substantially reduced the audit of travel                Management Systems Improvement Council these contractors
vouchers from every 10th voucher to every 100th voucher allowing            undertook a benchmarking initiative against each other and the best
savings of over 7 FTEs at headquarters alone. It has also allowed           in corporate America. This initiative indicated that DOE spends
the Department to move to a paperless travel authorization and              more than five times more than private firms for the budget
voucher system and to reimburse travelers 24 hours after receiving          function. One of the reasons this is true is the rigidity of the budget
their voucher.                                                              process. One example was a problem DOE recently experienced
                                                                            with inadequate funding for security clearances. Because clearances
   Other significant activities include bringing together the more          could not be processed, projects requiring cleared personnel were
than 40 contractors who operate the Department's laboratories and           delayed, overtime costs increased and inefficiencies resulted as
weapons complex facilities in a Financial Management Systems                cleared employees had to accompany uncleared ones during certain
Improvement Council (FMSIC) to share best practices and work                assignments. DOE would have Liked to be able to use some funds
on common solutions to financial management issues, and                     from a project that would otherwise be delayed, to process the
consolidating accounting activities, previously performed at                clearances needed to move it forward, but since security clearances is
nineteen offices throughout the country, into three centers of              a separate category in the DOE budget, this wasn't possible. Ms.
excellence. As a result of the consolidation effort, all payments are       Smedley believes that the-only way to increase budget flexibility is to
now made from 3 centers at a savings of S17 million and over 60             build an environment of trust with OMB and the Congress so they
FTEs.                                                                       will be willing to allow flexibilities which make sense. DOE has one
                                                                            advantage in that their budget and accounting structures are the
    Nis. Smedlev said DOE is about to look into what DOE                    same. o
systems of the future should look like. The ongoing effort in
standardizing the contractor's systems will be examined to look for
relevance to this project, and the Department intends to address
not onl' svstems needs but ways processes can be re-engineered to
improve customer service and reduce costs.
    Cross training and professional development are particularly
important in DOE's downsizing environment. DOE developed a
Financial Management Development Program in 1991. This
program provides a curriculum for Accountants, budget analysts,
accounting technicians and financial managers. The curriculum
includes formal course training, on-the-job development activities,
selfsrudv initiatives and opportunity for rotational assignments and
special projects. Certificates are issued to employees who complete
one of the curriculums. She sees many employees completing the
curriculum in their area and then working on a curriculum from
another area to broaden their skills. Her office also sponsors a
mentoring program. Currently 17 pairs of mentor-mentee are in
place. She credits this program as a major factor in enabling her
office to build new skills and transition employees out of dead end
jobs, such as branch secretary, into jobs with career potential. It
has been a major factor in her office's ability to manage under a
total hiring freeze for the last two and a half years.
    DOE prepared its initial Department-wide financial statements
for FY 1996 and received an unqualified opinion. An early start
helped her department focus on processes and issues, such as how
                                                                        6
Fall 1997                                                                                                                           JFMIP NEWS




                                                 News from FinanceNet
 F      inanceNet is the Internet's home for
       government financial management
                                                                                                   released. One is accessible at fin-
                                                                                                   legislation@fmnancener.gov and is a one-way
       worldwide and the JFMIP's                                                                   distribution list only. Messages sent this
       clearinghouse for electronic financial                                                      address will consist of monthly updates and
management documents. Some recent
major changes and enhancements to
FinanceNet include:
                                                     FIn afleeN et
                                                       \                                  t
                                                                                                   status reports on all pending legislation that
                                                                                                   may impact government financial
                                                                                                   management. Some of the reports will be
                                                                                                   prepared by the U.S. Chief Financial
     1. World wide web (WWW) based, user                                                           Officers Council Legislation Committee.
friendly access is now available to the newly                                                             The second public mailing list is
created government newsgroups                                                                      accessible at f
(GovNews). A WWW browser can easily                                                                adn-operations@hnancenetgov
read and post to over 200 government                                                               and is a moderated open discussion list that
reagen andposttopical nvews200goverot the            Online conferences on breaking topics         targets the fill range of government
need for a special newsreader and provides        can now be created nearly "on the fly" with      administrative financial management
users with the best of both the WWW and           discussions either open or password              operations such as vendor payments, cash
usenewith
       worl.bovt ews rapidl                       protected as requested. For details, contact     management, travel, accounting
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                                                                        7
JFMIlP NEWS                                                                                                                              Fall 1997




                                                     FASAB Update
   Highlights of FASAB actions taken at              proposing to redefine as National Defense      standard providing specific reporting
recent meetings are as follows:                      PP&E. At earlier meetings, the Board had       requirements and data sources. The Board
                                                     proposed that National Defense PP&E            felt that the reporting classifications are
Awuust 29 Meeting                                    include only weapons systems used by           sound and that the illustrative report would
     Issuance of Interpretation Number 3             military departments solely in performance     provide a good sample report to include in
     Pension Measurement Date                        of their military missions, and the Maritime   the soon-to-be-issued technical amendment
                                                     Administrations's Naval Defense Reserve        exposure draft to SFFAS 6, Accounting for
      The Board approved its third                   Fleet ships. The Board's discussion centered   Property, Plant, and Equipment and
Interpretation of Federal Financial                  on the definition of National Defense PP&E     SFFAS 8, Supplementary Stewardship
Accounting Standards, Interpretation                 and addressed specific items that should be    Reporting. The Board feels that continued
Number 3: Measurement Date for Pension               included or excluded from the category such    work by the Department and comments on
and Retirement Health Care Liabilities. The          as munitions, Coast Guard vessels and          the exposure draft could be used to finalize
interpretation provides that liabilities for         aircraft, and government furnished material.   the illustrative report that would appear in
pension and retirement health care will be               The Board will be issuing draft language   the final recommended standards
measured as of the end of the reportin                     h or        imb isigdatlnug
perioda but mas be based on an actuarial             related to the proposed changes to             Social Insurance
valuation performed as of an earlier datePPE                                           for public
during the reporting period with suitable            comment. An exposure draft is expected to          The Board discussed (1) whether to
 adjustments fortheg peffectsof changes during       be issued before December 1997.                establish definitive criteria for social
adjustments for the effects of changes during                                                       isrneporm
                                                                                                    insurance   programs orrEtteseii
                                                                                                                               list the specific
the y'ear in major factors.                          Septemnber26 Meetin                            programs included in the standard, and (2)
 ~Nativunal Scienre Feou~ndtion Request fir Guidance    Board Defers Implementation of Cost         which programs, in addition to Social
                                                                                                    Security and Medicare, should be covered bv
    Both the Chief Financial Officer and the         Accountig Standards                            the standard. The Board discussed whether
Inspector General of the National Science              After discussing responses to the            the standard should provide definitive
Foundation requested guidance from the            exposure draft issued following a request         criteria, or list the specific programs covered
FASAB on applying SFFAS 6, Accounting             from the Chief Financial Officers Council         and describe rypical characteristics. The
for Propertl Plant, and Equipment, to             for a two year deferral of the effective date     Board agreed that the standard should
property, plant, and equipment (PP&E)             of the standards prescribed in SFFAS 4,           describe "charactestics" rather than try to
acquired and/or used by grant awardees but        Managerial Cost Accounting Concepts and           set definitive "criteria." The Board agreed
for which the National Science Foundation         Standards for the Federal Government, the         on six characteristics for social insurance
holds title, but for which it is prohibited by    Board decided , albeit reluctantly, to defer      programs:
law from controlling or operating.                for a one year period the etTective date of        (1) Sponsorship and regulation by the
Specifically, thev asked whether the              the standards prescribed in SFFAS 4,                   Federal Government.
provision regarding "reversionary interest"       Managerial Cost Accounting Concepts and            (2) Financing from, or on behalf of,
in PP&E applies in specific types of the          Standards of the Federal Government. This              participants.
National Science Foundation's grants or           decision will change the date from FY 1997
operations. After discussion the Board            to FY 1998. The Board did not defer the            (3) Eligibilitv derived from taxes and,'or
asked the FASAB staff to do further research      effective date of Interpretation No. 2,                fees paid.
on the issues and present possible                Accounting for Treasury Judgment Fund              (4) Benefits not directly related to taxes
approaches for resolving the basic question.      Transactions. Interpretation 2 is effective in         and/or fees paid.
   The discussion on this request for              FY 1997.                                          (5) Benefits prescribed in law.
guidance continued at the September               DeparonentofDefnse Presents Illustrative           (6) Intended for the general public and not
meeting, discussed below.                         Repor on National Defense PPC.tE                       solely for Federal employees.

Technical Corections to SFFAS 6 and SFFAS 8            Board member Nelson Toye and the                  The Board will list in the standard the
Considered                                         Department's Director of Accounting              specific programs covered, and will provide
                                                   Policy, De Ritchie, presented the                for any further additions of programs to the
    Members continued their discussion on          Department of Defense's suggestion for an        List; decisions on inclusion will not be at the
the proposed definition and reporting              illustrative stewardship report. Mr. Tove        discretion of the agencies.
requirements of Federal Mission Property,          suggested that such an illustrative report
Plant, and Equipment (PP&E), the category          could convey the reporting requirements of          Other issues discussed included (1)
of stewardship PP&E which the Board is             the standard in lieu of the text of the          which programs, in addition to Social

                                                                         8
Fall 1997                                                                                                                         JFMIP NEWS




Security and Medicare, should be included       operating costs of the asset; (3) who gets       probable and estimable; and (3) preparation
in the social insurance standard and (2)        the economic benefit from the asset; or          and audit of interagency confirmations.
reporting improper payments.                    (4) who holds title to the asset. Members
                                                generally agreed that, although some                 In early August, the Accounting and
Additional Programs                             guidance to the National Science Foundation      Auditing Policy Committee (AAPC)
                                                is in order, a special interpretation should     provided guidance to members of the Chief
       The Board agreed to include Railroad     not be issued at this time. Instead, the         Financial Officers Council and the
Retirement and Black Lung Benefits in the       language of the PP&E standard should be          President's Council on Integrity and
social insurance standard. The Board also       further examined and may need clarification.     Efficiency on submission of issues to the
tentatively agreed to include Unemployment      FASAB staff will further research the issues     AAPC. This guidance provides that matters
Insurance, but directed the staff to develop    and present possible approaches for resolving    may be referred to the AAPC by its
alternative supplementary stewardship           the question posed by the National Science       members: OMB, GAO, Treasury, FASAB
information on Unemployment Insurance           Foundation.                                      Board members, Federal agency CFOs or
for the Board's review before making a final                                                     Deputy CFOs, IGs, or other interested
decision                                           For additional information on FASAB,          parties. Submission or referral of an issue to
                                                contact Dick Tingley, (202) 512-7350.            the AAPC should be addressed to the AAPC
Reporting Improper Payments                                                                      Chairperson, Ms. Wendy M. Comes at:
     During its first comprehensive audit of                                                     Accounting and Auditing Policy Committee c/o
Medicare records, the Inspector General of
the Department of Health and Human
                                                Acco unt ing and                                 Federal Accounmig Standards AdvisoLy Board 441
                                                                                                 G St., N.W., Suite 3B18          Washington,
Services sampled 5,300 claims, finding          Auditing Po Ii cy                                D.C. 20548
problems with 14 percent of the payments
($23 billion). The problems ranged from a       Committee                                        SeptemberMeeting
lack of documentation (47 percent) and                                                              At the AAPC's September 12 meeting,
improper coding, to fraud. The Board                                                             members discussed the following issues:
realized that the scope of this issue is much   July and August Meetings                          * Who should be the source of legal
larger than Medicare. Therefore, if the                                                              representation for matters involving the
Board were to address the issue of improper         As a result of the discussions at its July      Treasury Judgement Fund and litigated
payments, it should be done outside of          and August meetings, the Accounting and             by the Justice Department on behalf of
social insurance standards The Board            Auditing Policy Committee (AAPC)                    other federal agencies?
agreed that reporting of improper payments      approved both its Charter and its Operating
would provide performance and                   Procedures. The Charter includes the                    The Committee reviewed draft
management information and that such            following mission statement:                     guidance for agencies on legal representation
information could improve control over                                           ietters.        l        Primarv concerns were that current
payments throughout an agency and assist                  mission of the      ipoge              systems (databases) for tracking litigation
the auditor. The Board agreed that the          the Federal Government in improving              handled by the Department of Justice are
scope of such a project would be complex,       financial reporting through the timely           not adequate. In addition, internal controls
but that the issues would be researched.        identfication, discussion, and                   at each agency may not result in reliable and
                                                recommendation of solutions to accounting        complete case listings. The Committee
Exposure Draft                                  and auditing issues within the framework of      generally agreed that each agency's General
                                                existing authoritative literature."              Counsel should take the lead.
    The Board anticipates issuing an                                                               aWa        rtrasol        eue o
exposure draft on social insurance standards       The Charter and Operating Procedures               What criteria should be used for
by the end of the calendar year.                address topics such as selection of members,          determining when it is probable and
                                                tenure, voting, and issue processing. Both            reasonably estimable that a liability
National Science Foundation Requestfor          documents are posted on the AAPC's home               exists for environmental cleanup costs
Guidance                                        page:                                                 for past transactions or events?
    As a continuation of the discussion from    http://www.fir.ancenet.go/fed/aapc.htm               The Committee reviewed and gave
the previous month's Board meeting, the             The AAPC approved three issues for its       tentative approval of guidance on
focus at the September meeting was on           agenda: (1) responsibility for providing         environmental liabilities. It was agreed that
whether the accounting and reporting entity     legal representation letters; (2) determining    the document wil be circulated to AAPC
for the PP&E should be based on (1) who         whether environmental liabilities are
controls the asset; (2) who picks up the                                                                                     conted on nextpag.

                                                                      9
JFMIP NEWS                                                                                                                            Fall 1997




                                 HUD's FY 1996 Accountability Report
   T    he Department of Housing and
        Urban Development (HUD)
        published its FY 1996 Accountability
                                                non-conformances with Federal
                                                requirements, and audit recommendations
                                                of the Inspector General. By participating
                                                                                                 objective. Most of this information is
                                                                                                 provided by the various program offices,
                                                                                                 based on guidance from the CFO office. In
        Report in mid-April, 1997. HUD          in the pilot program, HUD was able to            future reports there will be a significant tie-
was one of eight agencies participating in a    summarize this information in its                in between this information and the
pilot program to enhance reporting of           Accountability Report. This helped HUD           requirements under the Government
financial information. The objective of the     streamlined the reporting process and saved      Performance and Results Act of 1993. The
pilot program is to determine an effective      time and resources.                              Financial Management Accountability
way to integrate reporting of financial                                                          section includes a summary of the
information, normally included in several        The Accountability Report serves as             information previously included in
separately issued reports, into one          "one-stop shopping" for a reader to gain a          separately issued reports such as those
Accountability Report. The FY 1996 report    good overall understanding of the                   required under FMFIA, the Debt Collection
was HUD's first such report. The FY 1997     Department, including its mission,                  Act, Prompt Payment Act, and Civil
report will be the final year of preparing   objectives, significant programs, program           Monetary Penalties Act. The last section
Accountability Reports under this pilot      and financial performance, and status of            consists of the financial statements,
program.                                     internal control weaknesses. Prior to the           footnotes, and auditors' report.
                                             Accountability Report one had to review
    In past vears, the Office of the Chief   several reports to obtain this same                    A copy of the FY 1996 report can be
Financial Officer (CFO) at HUD spent a       information.                                        ordered by calling 1-800-767-7468 and
great deal of time  in producing  the
greaots rqieunethFeeaMagrsinformation annual     HUD's report is broken down into three          requesting item number
                                                                                                              on the      04188.
                                                                                                                     report, contactFor more
                                                                                                                                     Larry
reports required under the Federal Managers  major sections. The first section is the            Green, (202) 708-0831, extension 3710. 3
Financial Integrity Act (FMFIA), and the     Discussion and Analysis, organized by
Secretary's Semiannual Reports to Congress.  Departmental objectives, discusses the
These reports included detailed information  program and financial performance
on the status of material weaknesses, svstem information which contribute to each


ALAPC corninued frotm previous page

members for a fatal flaw review, to FASAB       OctoberAeeting                                      The AAPC discussed a status report on
for approval, and then to OMB                                                                    Estimation of Undocumented Property,
     What schedules should be established           The AAPC reviewed the draft guidance         Plant, and Equipment Costs. Members
     for preparation and audit of interagency   on legal representation letters and a progress   considered alternatives for providing
     confirmations of audit assurance?          report on resolving the completeness/            assistance on this issue. Thev noted that,
                                                internal control issues. It was noted that       although the FASAB standards are clear
    Committee member Bob Dacey, GAO,            timeliness is an issue and Xvho should deal      regarding flexibilitv to use estimates in the
reported on progress in working with the        with the timeliness issue. Tentative             absence of documentation, the valuation of
Office of Personnel Management and the          approval was given to a draft bulletin. Final    existing PP&E presents a challenge to many
Social Securitv Administration. Procedures      action was deferred until after meetings are     agencies. It was decided that the AAPC
for audit assurance should be obtained on       held with Department of Justice on               would sponsor a one-dav (or longer) forum
pension expense. Agency consensus should        resolving the completeness issues.               as soon as possible on selected issues and
be obtained. The AAPC will leave this item          Committee members reviewed draft             case studies related to this PP&E issue; also,
on its agenda as a long-range issue and         guidace o         emers         les.      S      a white paper should be developed which
obtain interim progress reports.                vgidane on eironmena iproable                    would identify "best practices." A working
                                                legal Issues were discussed; "probablelebycmiteebrTd
    The AAPC added the following issue to       liability" is not necessarily the same as "legal group ld by co te             Derte
its agenda: When documentation to               liability." Committee member Bob Dacey,          Agriculture, is coordinating this effortm
support the cost of general PP&cE is not        GAO, will make necessary changes and
available, what acceptable alternatives are     resubmit the guidance to AAPC for final              For additional information on AAPC,
available to arrive at a value for financial    approval.                                        contact Wendy Comes, (202) 512-7350. o
 reporting purposes?

                                                                     10
Fall 1997                                                                                                                        JFMIP NEWS




  FACTS 11                    Collecting Budget Execution Data Electronically
   T   he Office of Management and
        Budget (OMB) and the Department
        of the Treasury's Financial
                                                 that will underlie the FACTS II computer
                                                 system. The subcommittee members
                                                 included: Jeff Hoge and Judy Yuran, FMS;
                                                                                                    For FMS 2108 and SF 133 reporting,
                                                                                                 there are no more than half a dozen
                                                                                                 attributes used in conjunction with a single
        Management Service (FMS) have            Jean Holcombe, OMB; Damon Sutton,               SGL account.
reamed up on a project called FACTS II to        HHS; Betty Beard, HUD; Dave Mielke,
collect a single set of year-end budget          NASA; and other agency representatives                 Mr. Fairhall described the data
execution data from Federal agencies in          from AID, DOD and Education who made            model, as well as crosswalks between the
November 1999, rather than continuing to         contributions on a periodic basis.              model and the FMS 2108 and SF 133, to
collect data separately on the FMS 2108                                                          members of the CFO Financial Systems
Year End Closing Statement and the SF 133                The premise behind the model is that    Committee on September 22. The data
Report on Budget Execution.                      U.S. Standard General Ledger (SGL)              model and crosswalks will be placed on the
                                                 accounts are critical to describing financial   Internet by early October. The web address
    FMS is seeking volunteers to participate     information, but they are not the only piece    is: http: //www. financenet.qov/
in pilots that will take place starting in the   of data that agencies need to capture to        financenet/fed/omb/factsii . htm
Summer of 1998. Please contact Jeff Hoge,        satisfy OMB and Treasury budget execution
FMS Financial Standards and Reporting            reporting requirements. The Subcommittee           For additional information, please
Branch on (202) 874--6179; or email              reviewed each line item on the FMS 2108,        contact Chris Fairhall, (202) 395-4836, or
JeffHoge@FMS.Sprint.Com .                        SF 133 and P&F Schedule, and asked              email cfairhal@mail3.eop.gov. o
                                                 whether the information being requested
    The first key milestone for FACTS II,        could be answered from a SGL account
which was completed in September, is a           balance, or whether additional attributes
logical data model that describes in detail      were needed to respond to OMB and
the financial data that agencies need to         Treasury requirements.
capture in their core financial systems to               The model identifies about 20
meet OMB and Treasury year-end reporting                  The        needen coution
requirements as described in the FMS 2108,       attn utes that are needed in conjunction
the SF 133, and the Program & Financing          with SGL accounts. Some of these include
(P&F) Schedule published in the President's      credit cohort, which is used for reporting of
Budget. In addition to describing the            direct and guaranteed loan financing
financial data reported by the agencies, the     accounts; reimbursable flag, which is used
model shows how these data relate to             to distinguish between reimbursable and
Treasurv's central accounting system, STAR,      direct financial iformaton; appoonment
and to the President's Budget.                   category, i.e., Category A, Category B, or
                                                 not subject to apportionment; and,                 oMB continued from page 3.
    Chris Fairhall, a project manager from       availability indicator, which indicates            with FFMIA in the areas of financial
the OMB Budget Review and Concepts               whether a budgetary resource is available for      systems requirements, federal accounting
Division who has been involved in the            obligation in the current period, will be          standards, and standard general ledger at
FACTS II for the past year, stated, 'What        available in a subsequent period, or is            the transaction level. The
we are attempting to do in a broad context       unavailable.                                       implementation guidance also explains
is integrate budget formulation and budget               M.Hoge of FMS points out that              the relationship between FFMIA and
we will dramaticaldegreewe can do this,          not all attributes are used in conjunction         Section 4 of the Federal Managers'
burdens for agency financial and budget          with all SGL accounts. "It is really a mix         Financial Integrity Act.
Offices, improve the qualiry and consistency     and match paradigm," he says. "If you look            The guidance is available on
of financial data that agencies report to        at reporting of obligations incurred on an         FinanceNet at:
OMB and Treasury, and improve budget             SF 133, agencies are required to distinguish       http://www.financenet.qov/fed/
estimates."                                      Category A from Category B apportionments.         cfo/c fodocs/inpn9o2 .htmr. For
                                                 What this means is that when agencies              additional information, please contact
       Over the last year, Mr. Fairhall led an   report undelivered orders and other SGL            Jean Holcombe, (202) 395-5048. o
inter-agency group (the Budget and               accounts recording obligations, they also
Accounting Classification Structure              need to tell us what the apportionment
Subcommittee of the Standard General             category is."
Ledger (SGL) Board's Issue Resolution
Committee) in developing the data model

                                                                      11
JF.VP NEWS                                                                                                                               Fall 1997




Regulation Proposed on Taxpayer                                                                   IGs Issue Journal
Identifying Number                                                                                of Public Inquiry
T      he taxpayer identifying number
        (TIN) is a nine-digit identifier
                                                  collection by offset and vendor income
                                                  reporting. A 60-day comment period ends
                                                                                                         he Journal of Public Inquiy is a semi-
                                                                                                       annual publcation by the Inspectors
        required of all individuals and           November 3. The proposed rule requests                  General of the United States.
        businesses that file tax returns in the   agencies to specifically comment on:                    Articles in this journal are of interest
United States. For businesses and                   * The status of agency compliance with        to members of the President's Council on
organizations, the TIN is the employer                the requirement of the DCIA to furnish      Integrity and Efficiency (PCIE) and the
identification number (EIN) assigned by the           TINs with each certified voucher and        Executive Council on Integrity and
Internal Revenue Service. For most                    actions planned to achieve compliance.      Efficiency (ECIE). The PCIE is a council
individuals, it is the Social Security number       * Issues anticipated in connection with       of the Inspectors General from 24 largest
(SSN). For certain aliens ineligible for a            furnishing TINs for any specific class or   departments and agencies in the federal
SSN, it is the individual taxpayer                    ty of payments or pages.                                   chaired by the Deputy
identification number (IT>N) assigned by                                                          governmentrchairedmbytthefDeputy
the IRS.                                           * Issues anticipated due to the rejection      Director for Management, Office of
                                                     of payment requests which do not             Management and Budget. The ECIE
                                                     iofTNisacrticaideti
                                                            den foreespcich
                                                                        o            cs
                                                                                      nor         consists of the Inspectors General from
   The TIN is a critical identifier f'or              include TIs for any specific class or       other federal agencies.
matching payment requests with debtor                 type of payments or payees.
information -for the collection of delinquent      * Issues regarding foreign currency                Some of the articles in the Summer 1997
debt by administrative offset under the               payments, or payments to foreign            issue include:
provisions of the Debt Collection                     governments, foreign nationals                * IG Gate-Investigating Major Scandals:
Improvement Act of 1996 (DCIA). The                   employed overseas, or other specific             Climate That Leads to IG Handling
DCIA (Public Law 104- 134, enacted on                 classes of payees overseas.                      Customer Dissatisfaction
Apnl 26 1996) requersons doing business               Disbursing official readiness to reject       * GPRA: A Catalyst for Enhanced

with them (31withU.S.C.
                     hem7701
                 U..C.    (1 (c)
                         701   () (1))
                                   (1) and
                                       andTINs payment  andrequests which dotonot
                                                            actions planned       include
                                                                               achieve               Federal Management Processes
requires executive agencies to provide TIiNs      readines.*                                         Congressional Oversight: The 10 Do's
to disbursing officials (31 U.S.C. 3325(d)).      readiness.for                                         Inspectors General
The TINs will be used to reduce or               FMS is working with agencies to ensure            * The Truth About Cats and Dogs: The
withhold an eligible Federal payment to pay  that the Federal Acquisition Regulations                Auditors and the Investigators
the recipient's delinquent debt owed to the  (FAR) and the Prompt Payment Circular
United Stares or to collect delinquent debts are compatible with provisions of the DCIA            * The Urge to Merge: OIG Semiannual
owed to States, including past-due child     and the proposed rule. The proposed rule is               Report/Agency Accountability Report
support. Federal agencies need TINs to       available on the FMS home page at                     * The Art of the Referral: Presenting
comply with vendor income reporting          http://www.fms.treas.gov/regs.html.                       Cases to U.S. Attorneys
requirements under the Internal Revenue
Code.                                            For additional information, contact               * Cyber-Crackers: Computer Fraud and
                                             Catherine McHugh, at (202)874-7497 or                    Vulnerabilities.
    On September 2, 1997, the Financial      catherine.mchugh@fms.sprint.com, or                     The Journal can be found on IGnet
Management Service, Department of the        Barbara Wiss, at (202)874-7491 or
Treasury, issued a notice of proposed        barbara.wiss@fms.sprint.com. a                       (http://www.sbaonline.sba.gov/ignet. For
rulemaking that would require disbursing                                                          more information, contact Agapi
officials to reject any executive agency                                                          Doulaveris, (410) 966-9135. o
payment request that does not include the
TIN, beginning six months after publication
of the final rule. The proposed rule is
intended to ensure that agencies provide
TINs to disbursing officials for debt

                                                                       12
Fall 1997                                                                                                                          JFMIP NEWS




   Treasury Issues Report on Developing
             Financial Systems                                                                              THE CENT ER FOR
                                                                                                     APPLIED FINANCIAL MANAGEMENT
    n June 1997, Treasury's Financial             and CIO decision-making authority within
    Systems Integration Committee (FSIC)          each bureau; and (4) Identified and
     issued a report identifying administrative   recognized practices that lead to clearer,
     and functional actions and outcomes          more effective decision-making.                   Nober 1997
related to financial systems development.
FSIC was established to survey Treasury                Functional actions recommended are:          20-21 Budget Execution: $335
departmental offices and bureaus and               (1) Develop a strategy and methodology for
recommend ways for Treasury to (1) create          delivering and implementing integrated           December 1997
fully integrated financial systems; and            systems; (2) Prepare a set of integration        2-3   Managerical Cost Accounting: $365
(2) improve financial systems decision-            evaluation criteria for all new and existing     4-5   Property, Plant and
making in the Treasury CFO and Chief               systems for assessing their impact on                  Equipment/Stewardship Reporting:
Information Officers (CIO) communities,            financial systems; and (3) Define common               $365
                                                   core data elements through the creation of a
     Integral to this effort were surveys          data dictionary and/or data administrator.       8-9    Dollars and Sense: $335
conducted to identify how financial systems        Functional outcomes expected are: (1)
were developed both within the department          Updated and consolidated Departmental           January 1998
and at other agencies. Those surveys asked         guidance for developing integrated systems       12-13 Accrual World: $335
(1) How do organizations choose and                published; and (2) Overwhelming number           13-14 SGL: Basic: $335
prioritize new or enhanced financial               of current directives regarding the
systems?, (2) Who authorizes and directs           development of financial systems in               14-15 SF 224 Statement of Transactions:
 'inancial systems development?, (3) How           Treasury reviewed and streamlined into                  $335
should financial systems development               brief process oriented guidelines bound in        15-16 SGL: Advanced: $335
change so the decision and     approval
                           change  so the decision one
                               approval              andeasy-to-use document for IRB use.          ~~~~16 Reconciling Differences: $195
processes encourage better systems                     FSIC recommended that Administrative
integration?, and (4) What roles do the            and Funconal subgroups be created to             27-29 Survey of FASAB: $440
CFO and CIO Councils have in financial             assist it, with some common membership,          27-28 SF 1219/1220: $335
systems development?                               that would lead to fully integrated financial    30    Certifying Officers: $195
    FSIC recommended 3 administrative             systems and an approval process with
actions: (1) Define the role and authorities      widespread support throughout Treasury.              To register for The Center courses, call
of Bureau information resources boards in             The report contains responses to the          (202) 874-9560, check the website
relation to established financial investment      survey by both Treasury bureaus and other         www.fms.treas.gov/center/, or submit an
thresholds, the shifting of financial and         federal agencies and diagrams of the systems      SF- 182 to:
human resources, and the overall Treasury         development processes.                                  etrr
Information Resources Board; (2) Establish         egThe                                                   Center for Applicd Financial
an ideal role for the CFO in the overall                                                               Manageietnt
systems development process as a member                                                                Washington, DC 20006 o
of the IRB; and (3) Integrate the annual
planning and budgeting cycle with the
functions of the CFO and CIO Councils
and IRBs. Administrative outcomes
expected are: (1) Defined decision-making
roles for the CFO and CIO Councils for
integrated financial systems; (2) CFO and
CIO involvement with all systems
development efforts so the impact on all
processes throughout the agency is clearly
understood; (3) An evaluated and
communicated level of appropriate CFO
                                                                        13
JEMEP NEWS                                                                                                                                         Fall 1997




   T
 GAO Reports Improvements Needed In Draft Agency Strategic Plans
        he General Accounting Office (GAO)
         recentlv issued a report to the House
         Majority Leadership stating that draft
                                                         GAO found that a significant amount of
                                                     work remained to be done by executive branch
                                                     agencies if their draft strategic plans are to fulfill
                                                                                                                agencies' ability to achieve strategic goals.


         agency strategic plans need sustained       the requirements of the Results Act, serve as
attention if agencies are to develop the dynamic     a basis for guiding agencies, and help                     plans the identification and planned
strategic planning processes envisioned by the       congressional and other policymakers make                  coordination of activites and programs
         strategic,.                                                                                            that,,cut
                                                                                                                       .....
                                                                                                                          across multiple agencies. GAO
Government Performance and Results Act               decisions about activities and programs. All               has recently reported that mission
(Results Act). The report: Managing fir              27 draft plans included the required mission               fragmentation and program overlap
Results: Critical Issuesfor linpraoing Federal       statement; however, 21 plans lacked one or                 fragm        e   ad program therlap
Agencies' Strategic Plans (GAO/GGD-97-               more of the other required elements and                    appear widespread throughout the federal
180) was issued September 16, 1997. GAO              over one fourth lacked three or more. For                  goverment. GAO noted that nteragency
plans to issue another report in November            example, two plans did not contain long-                   that crosscutting program efforts are
1997 on the final version of these strategic         term strategic goals, and six did not describe             mutually reinforcing and efficiently
plans.                                               approaches or strategies for achieving those               implemented. However, 20 of the draft
                                                     goals and objectives.                                      strategic plans lacked evidence of
   The Results Act requires agencies to                  GAO also identified the following                      interagency coordination.
Congress and submit these plans in final             critical strategic planning issues in need of            5. GAO's work suggests that the questionable
form to Congress and the Office of Manage-           sustained attention:                                        capacity of many agencies to gather
ment and Budget (OMB) bv September 30,               1. Most of the draft plans did not adequately               performance information has hampered,
1997. The GAO report (1) summarizes                     link the required elements. For example,                 and may continue to hamper, efforts to
GAO reviews of the latest available version             some plans did not consistently describe                 identify appropriate goals and confidently
of the draft strategic plans that were submitted        the alignment between an agency's long-                  assess performance. For example, the lack
to Congress for consultation by cabinet                 term strategic goals and objectives and                  of reliable data to measure the costs and
departments and selected independent                    the strategies planned to achieve those                  results of agency operations has been a
agencies and (2) identifies the strategic planning      goals and objectives. Nineteen plans did                 long-standing problem for agencies across
issues most in need of sustained attention.             not describe the linkages between long-                  the federal government. Moreover,
                                                        term strategic goals and annual                          agency officials with experience in
     In performing its work, GAO used the                performance goals.                                      performance measurement cited
Results Act supplemented by OMB's                    2. Long-term strategic goals often tended to                ascertaining the accuracy and quality of
guidance on developing the plans (Circular              have weaknesses. GAO said the intent of                  performance data as 1 of the top 10
A- 11, part 2) as criteria in determining               the Results Act is for agencies to focus                 challenges to performance measurement.
whether the draft plans complied with SiX               their strategic goals on results to the               6. The draft strategic plans did not adequately
specific elements required by the Results
 Act. These      elements are: (1) a
                      ILX                               extent feasible. However, GAO found                     address program evaluations. For
Act. These Sagelements are (te)s a                      that several plans contained goals that                 example, 16 plans did not discuss program
                                         ,.
                                 compreobjc      s      were not as results oriented as they could              evaluations and the discussions of program
(2) agencAv-lvde
              (2)long-term
                 lng-term
                   agcnvxvidegoals
                              oals and objectives
                                   andhave               a
                                                              been. In addition, several plans also             evaluations in the remaining 11 plans
for all major functions and operations;                 contained goals that were not expressed                 lacked critical information, including the
(3) approaches (or strategies) and the vanous
resources needed to achieve the goals and                in a manner that would allow future                     lack of descriptions of how evaluations
objectives; (4) a description of the relationship        assessments of whether they were being                  were used in setting strategic goals and
between the long-term goals and objectives               achieved. Further, in three plans, long-                schedules for future evaluations. GAO
and the annual performance goals; (5) an                 term goals were not developed for major                 said evaluations are important because
                                      identiicatio   ofkyatfunctions or activities.                              they potentially can be critical sources of
identificatioll of kev factors, external to the
agency and bevond its control, that could            3. Many agencies did not fully develop                      iformaton for ensurig that goals are
significantly affect the achievement of the             strategies explaining how their long-term                reasonable, strategies for achieving goals
strategic goals; and (6) a description of how           strategic goals would be achieved. For                   are taken in       tham implemenation.
program evaluations were used to establish or           example, GAO found that each of the                      a t       i
revise strategic goals and a schedule for               plans could be strengthened if the sections               For copies, call (202) 512-6000 or an
future program evaluations. To make                     on strategies included, among other things,           electronic version is available on GAO's
judgments about the overall quality of the              specific actions, planned accomplishments,            Intemnet web page at http: //www.gac .gov
plans, GAO used its May 1997 Guide, Agencies'           and implementation schedules. Also, the
Strategic Plans Under GPRA: Kev Questions               plans for most of the 27 agencies did not
to Facilitate Congressional Review                      reflect strategies for addressing key manage-
(GAO/GGD- 10. 1.16).                                    ment challenges that could affect the
                                                                              14
Fall 1997                                                                                                                          JFMEP NEWS




Inspectors General Issue         Internet Site for Human
Progress Report to the President Resources Management
T      he Vice Chair of the President's Council on Integrity and
       Efficiency (PCIE), June Gibbs Brown, and the Vice Chair of
                                                                                     he U.S. Office of Personnel Management has a website for
                                                                              human resources management that contains data that ranges
       the Executive Council on Integrity and Efficiency (ECIE),             * from Accountability to Worker-Trainee Programs and
       Thomas D. Blair, released its fourth joint annual report of the          Weather Dismissal Procedures It is but a few mouse clicks
PCIE and ECIE. This report highlights the accomplishments of the           awa atht
                                                                                  e :r/      .               It but a f       o    c
Federal Inspectors General (IGs) during Fiscal Year (FY) 1996.
                                                                               This site is designed to provide a ready reference for federal
    Based on recommendations from the IGs, agency managers                 personnel offices. It allows them to obtain the latest information and
agreed to change their spending plans for $15.1 billion, which can         policy guidance on issues and programs that affect federal employees.
now be put to better use. Also as a result of IG recommendations,          Employees can access this site to find answers to common questions
managers agreed to cancel or seek reimbursement of over $5.5 billion       about federal personnel programs and policies.
in questioned costs.
                                                                               Some of the information that can be found on this website are
   IG investigations in FY 1996 resulted in the recovery of more           listed.
than $1.1 billion from companies and people who defrauded the
Federal government. IG investigative work resulted in 12,508                   * Annual Review of Special         * Health Insurance
successful criminal prosecutions of wrongdoers and 4,633 debarments,               Salary Rates
exclusions and suspensions of firms or individuals doing business                                                    Holidavs, Federal
with the Federal government.                                                   * Application Forms                   Government
                                                                               * Buvout Guidance                  * Jobs
    During the past year, PCIE and ECIE committees explored issues
of common interest and concern, including a survey of the Offices of           * Career Transition                  Open Season Health
Inspector General on their involvement in Government Performance                 Assistance                         Benefits
and Results Act activities and finalization of a governmentwide                * Civil Service Retirement         * Reimbursable Services
"master contract" that all IGs can use for their independent public              System                             V               .
accountant contract needs. The PCIE's Audit Committee is updating                C     iVeterans
                                                                                        .    Felriormed                      and
the 4udit Peer Review MAanual, which will incorporate recent changes             CaCombined Federal                 Servlces
to the Gm'ernmenrtAudit Standards and improve the quality and                    Campaign                           Voluntary Separation
completeness of future peer reviews.                                           * Computing Retirement               Incentive Program Guide o
                                                                                 Benefits (CS RS)
   This committee also established a task group to revise the PCIE               Besbiits JosR fo
Federal Financial Statement Audit fanual in response to changes                  Persons with
mandated bv recent legislation.
                                                                               * Disabled Veteran's
    The Inspection and Evaluation Committee issued a July 1996                   Employment
report on Accountabilityfor Block Grants that documents existing
provisions for accountability in the 13 Federal block grant programs.
The review identifies general accountability concepts, discusses               * Electronic Forms
specitic issues concerning block grant statutes, and suggests ways to          * Employee's Guide to
inodifih existing block grant programs to improve their accountability.          Buvouts Under Public Law
The Inspection Roundtable worked closely with the directors of
IGnet to develop a library of inspection report abstracts for public               104-208
reference via the Internet, and created a training resource on IGnet to        * Employment Information
help inspection personnel identity worthwhile training opportunities.          * Executive Schedule
    The Professional Development Committee hosted several forums                   positions
covering a wide variety of technical and management topics with                * Family Medical Leave Act
professional educations credits. These topics included: "How IGs               * Federal Employees
Confront Change," "The Office of the Future" and "IGs and Chief                    Retirement System
Financial Officers: Coming Together in Changing Times."                        * Federal Executive Boards

   This report is available on IGnet   http://www.sba.gov/ ignet     3         *   Federal Salary Tables

                                                                          15
JFMIP 27th Annual                               he foowings contribauttko thise:                              Change of Address?
Financial                                                                                                     Write toJFMTP News at:

Managem ent                                    Susan Alvarez . . . . . . . . . Treasury-FMS                      Room 31 11
                                                                                                                  441 G Street NW
Conference                                     Wendy Comes .FASAB                                                 Washington. DC 20548-0001
                                               Agapi Doulaveris . . . . . . . . . . . . SSA                   or call, 202/512-9209
   The Joint Financial Management              Chris Fairhall.. ..........                      OMB
Improvement Program's 27th Annual                                                                        M TheZ          News is published quarterlv
Financial Management Conference will be        Larry Green ..                                   HUD         TheJ.M.Newispublshedquarerl
held Mlarch 25, 1998 at the Washington                                                                   by the Joint Financial Management
Hilton and Towers Hotel, 1919                  Jef Hoge ...........                  Treasury-FMS        Improvement Program. The purpose of the
Connecticut Avenue NW, Washington, DC.         Jean Holcombe .0....             . .MB
                                                                                   .....    .            newsletter is to promote sharing and
   The conference theme is: Vision to          Janet Laytham .........                 . . . . Labor     dissemination of current financial
Reality: Change, Implementation and Results.
Speakers and panel sessions will be            Dave   McClure .....         .     ......     . GAO       management information, activities and
announced in future issues of the JFMIP
News.                                          Catherine McHugh ......              . Treasury-FMS       practices.
Mark your calendar for March 25, 1998! c       Diane Miglori ........               . Treasury-FMS            Suggestions and article submission are
                                               Preston Rich .NS                                 . NSF
                                                                                                    F.   encouraged and may be sent to JFMIP
                                               Alan Stapleton .GAO                                       News at the above address, fax 202/512-
                                               Glenn Sutton ..          .                    .. OPM      9593, email kietzb jfniip@gao.gov

                                               -Dick Tingley......                          FASAB        ..     ...........Editor: Doris A. Chew
                                                                                                                Soliciting
                                                                                                               ....

                                               Bernie Trescavage .J.M.                     .. JFMIP           Publications Specialist: Bruce W. Kletz
                                               Kathy Wood .GSA

    US General Accounting Office

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   MARK YOUR CALENDAR
  JFMIP Annual Financial Management Conference
                March 25, 1998
             Vision to Reality:
    Change, Implementatton and Results