oversight

Core Financial System Requirements Checklist: Systems Reviewed Under the Federal Financial Management Improvement Act of 1996 (Exposure Draft) (Superseded by AIMD-00-21.2.2)

Published by the Government Accountability Office on 1999-08-01.

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

                     United States General Accounting Office

GAO                  Exposure Draft

August 1999          CORE FINANCAL
                     SYSTEM
                     REQUIREMENTS
                     CHECKLIST
                     Systems Reviewed
                     Under the Federal
                     Financial Management
                     Improvement Act of
                     1996




                      A_ GAO   Accountability * Integrity * Reliability

GAO/AIMD-99-21.2.2
          United States

v   O
    kGA
          General Accounting Office
          Washington, D.C. 20548
          Accounting and onlormation
          Management Division


          B-282975

          August 1999


          HEADS OF DEPARTMENTS AND AGENCIES

          The Federal Financial Management Improvement Act (FFMIA) of 1996 requires, among other
          things, that agencies implement and maintain financial management systems that
          substantially comply with federal financial management systems requirements. These
          requirements are detailed in the Financial Management Systems Requirements series issued
          by the Joint Financial Management Improvement Program (JFMIP) and in Office of
          Management and Budget (OMB) guidance (Circular A-127 and September 9, 1997,
          implementation guidance). JFMIP intends for the requirements to promote understanding of
          key financial management systems concepts and requirements, to provide a framework for
          establishing integrated financial management systems to support program and financial
          managers, and to describe specific requirements of individual types of financial management
          systems.
          We are issuing this checklist that reflects JFMIP's revised Core Financial System
          Requirements (February 1999) to assist (1) agencies in implementing and monitoring their
          core system and (2) management and auditors in reviewing their core systems to determine if
          they are in substantial compliance with FFMIA. This checklist is not required to be used in
          assessing the core system. It is provided as a tool for use by experienced staff. This
          checklist, the JFMIP source document, and the two previously mentioned OMB documents
          (Circular A-127 and the September 9, 1997, implementation guidance) should be used
          concurrently. Experienced judgment must be applied in the interpretation and application of
          this tool to enable users to consider the impact of the completed checklist on their entire core
          system and whether the system, as a whole, substantially complies with requirements.
          Additional copies of the exposure draft can be obtained from Room 1100, 700 4th St. NW, U.S.
          General Accounting Office, Washington, D.C. 20548, or by calling (202) 512-6000, or TDD
          (202) 512-2537. This checklist, when implemented in final, will replace GAO's previously
          issued Core Financial System Checklist (May 1998) and will be available on the Internet on
          GAO's Home Page (www.gao.gov) under "Special Publications." Please send comments by
          October 29, 1999, to Robert W. Gramling, Director, Corporate Audits and Standards,
          Accounting and Information Management Division, at

                                        U.S. General Accounting Office
                                        441 G Street NW, Room 5089
                                        Washington, D.C. 20548




                 C Steinhoff
            ting Assistant Comptroller General

                                           GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
CONTENTS


Overview                                                                                  3

      Authoritative Guidance                                                              4

      How to Use This Checklist                                                           4

Core Financial System Requirements                                                        7

         Core Financial System Management Function                                        9

         General Ledger Management Function                                              22

         Funds Management Function                                                       25
         Payment Management Function                                                     36

         Receipt Management Function                                                     47

         Cost Management Function                                                        54

         Reporting Function                                                              59

Figure
         Figure 1: Agency Systems Architecture                                            3

Abbreviations

ABA             American Banking Association
ACH             automated clearing house
BPA             blanket purchase agreement
CFO             Chief Financial Officers
DUNS            data universal numbering system
EFT             electronic funds transfer
EIN             employer identification number
FASAB           Federal Accounting Standards Advisory Board
FAST            federal account symbols and titles
FFMIA           Federal Financial Management Improvement Act
FMFIA           Federal Managers' Financial Integrity Act
FMSS            Financial Management Systems Software
GPO             Government Printing Office
GSA             General Services Administration
ID              identification number
IRS             Internal Revenue Service
                                                                                   (continued)

                              GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
JFMIP    Joint Financial Manrugement Improvement Program
NARA     National Archives and Records Administration
OMB      Office of Management and Budget
PMO      Program Management Office
SGL      Standard General Ledger
SSN      social security number
TFM      Treasury Financial Manual
TIN      taxpayer identification number




Page 2             GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
OVERVIEW


The Federal Financial Management Improvement Act (FFMIA) of 1996 requires, among
other things, that agencies implement and maintain financial management systems that
substantially comply with federal financial management systems requirements. These
system requirements are detailed in the Financial Management Systems Requirements
series issued by the Joint Financial Management Improvement Program (JFMIP)' and
Office of Management and Budget (OMB) Circular A-127, Financial Management Systems.
JFMIP requirements documents identify (1) a framework for financial management
systems, (2) core financial systems requirements, and (3) 16 other financial and mixed
systems supporting agency operations, not all of which are applicable to all agencies.
Figure 1is the JFMIP model that illustrates how these systems interrelate in an agency's
overall systems architecture.
Figure 1: Agency Systems Architecture




                                            Directe ForfitPe
                    / /      \,              S      Systemsl
                                                    System
                                                    SbLO               m

       All JFMP Federal Financial Management
     Source:                                            System      Requirements documents.


                      \\te             So    | Arsttm   \Systeyst                 /


                    Management,
                        in cooperation
                           working     with each other and with operating agencies to




improve financial                   practices throughout the government. The program was
                                  anagement



Management, working in cooperation with each other and with operating agencies to

initiated in 1948 by the Secretary of       th e        e Director of the Bureau of the


now the Office of Personnel Management, joined JFMIP in 1966.


Page 3                        GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
    To date, JFMIP has issued the framework document and systems requirements for the
    core financial system and 7 of the 16 systems identified in the architecture. (See figure
    1.)2

    Authoritative Guidance

    OMB Circular A-127 and OMB's Implementation Guidance for the Federal Financial
    Management Improvement Act (FEvIIA) of 1996, issued September 9, 1997, provide the
    basis for assessing compliance with the FFMIA requirements for agencies to implement
    and maintain financial management systems that comply substantially with federal
    requirements. OMB's September 1997 implementation guidance identifies various criteria
    that an agency must meet to be in substantial compliance with these requirements. One
    of the criteria listed in the OMB guidance is the JFMIP systems requirements series.

The source of all the questions in this checklist is the JFMIP Core Financial System
 Requirements (JFMIP-SR-99-4, February 1999). This JFMIP document represents the
third update to the core document., first issued January 1988. This most recent update
clarifies some of the existing requirements, reflects changes in laws and regulations such
as the Debt Collection Improvement Act, and adds requirements for budget execution and
revolving fund functions. The JFMIP requirements remain the basis for the federal
government to test compliance of commercially based, core financial software. During
fiscal year 1999, JFMIP's new Program Management Office (PMO) developed a new
testing and qualification process, directly linking tests back to these requirements.

How to Use This Checklist

OMB's 1997 implementation guidance provides chief financial officers and inspectors
general with a means for determining whether their agencies' financial management
systems substantially comply with federal financial management systems requirements.
The annual assurance statement required pursuant to section 4 of the Federal Managers'
Financial Integrity Act (FMFIA) is one of the means to assist agencies in the
determination of substantial compliance. Agencies can also use this checklist and
JFMIP's core test as tools to help determine annual compliance with section 4 of this act.3

Filling out this checklist will allow agencies to systematically determine whether specific
system requirements are being met. In determining substantial compliance, agencies
should assess the results of the completed checklist on the core system requirements
taken as a whole. "No" answers should not be viewed individually or taken out of

2 Thus far, the series includes the (1) Framework for Federal Financial Management
Systems, (2) Core Financial System Requirements, (3) Inventory System Requirements,
(4) Seized/Forfeited Asset System Requirements, (5) Direct Loan System Requirements,
(6) Guaranteed Loan System Requirements, (7) Travel System Requirements, (8) Human
Resources & Payroll System Requirements, (9) System Requirements for Managerial Cost
Accounting. In early 1998, JFMIP decided to initiate projects to update system
requirements documents that were not current with regulations and legislation. JFMIP
also planned to initiate projects to complete the remaining systems requirements where
none currently exist. As these projects are completed we plan to issue related checklists.
3 In addition, the Chief Financial Officers (CFO) Council has charged the Financial
Systems Committee with developing implementation guidance for performing FFMIA
compliance reviews. The CFO Council and JFMIP plan to jointly issue the guidance.
Page 4                         GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
context. Rather, "no" answers should be assessed as to the impact on the overall core
system and the extent to which the "no" answers inhibit the entire core system from
meeting substantial compliance.

The checklist contains three columns with the first citing the question to be answered.
Use the second column to answer each question "yes," "no," or "NA." Use the third
column to explain your answer. A "yes" answer should indicate that the agency's core
system provides for the capability described in the question. For each "yes" answer, the
third column should contain a brief description of how the core system contains the
capability and should also refer to a source that explains or shows the capability.

A "no" answer indicates that the capability does not exist. For a "no" answer, the second
column should provide an explanation and, where applicable, a reference to any related
supporting documentation. Such explanations could include the following examples: (1)
the agency is working on modifying or implementing its core system to have the
capability available in subsequent years or (2) management believes the capability is not
cost effective and will not enhance the core system's ability to manage operations. Cost-
benefit studies, or other reasoning that supports a "no" answer should be identified in the
explanation column. If there are no cost-benefit studies or other support, a full
explanation should be provided.

Not every checklist may apply to each agency. Further, while a checklist may be
applicable to an agency, certain questions within the checklist may not be applicable.
Answer such nonapplicable question(s) with "NA" and provide an appropriate
explanation in the third column.




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                       (BLANK)




Page 6   GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
CORE FINANCIAL SYSTEM REQUIREMENTS


The core financial system requirements document helps agencies meet government
requirements by establishing standard requirements to support an agency's integrated
financial management system. It provides common processing routines, supports
common data for critical financial management functions affecting the entire agency, and
maintains the required financial data integrity control over financial transactions,
resource balances, and other financial management systems.

The seven functions of the core financial system are discussed below.

1. Core Financial Management consists of the processes necessary to maintain system-
   processing rules consistent with established financial management policy. This
   function sets the framework in which all other core financial system functions
   operate. (The checklist questions for this area are drawn from pp. 16-21 of the JFMIP
   source document.)

2. General Ledger Management is the central function of the core financial system. The
   general ledger is the highest level of summarization and must maintain account
   balances by the fund structure and individual general ledger accounts established in
   the core financial system management function. (The checklist questions for this
   area are drawn from pp. 22-23 of the JFMIP source document.)

3. Funds Management is a system for ensuring that the agency does not obligate or
   disburse funds in excess of those appropriated and/or authorized. The checklist
   questions for this area are drawn from pp. 24-28 of the JFMIP source document.)

4. Payment Management is a function that provides appropriate control over all
   payments made by or on behalf of an agency. (The checklist questions for this area
   are drawn from pp. 29-33 of the JFMIP source document.)

5. Receipt Management is the function that supports activities associated with recording
   agency cash receipts, including servicing and collecting receivables. (The checklist
   questions for this area are drawn from pp. 34-37 of the JFMIP source document.)

6. Cost Management attempts to measure the full cost of federal programs, their
   activities, and outputs. (The checklist questions for this area are drawn from pp. 38-
   40 of the JFMIP source document.)

7. Reporting is the function that provides useful financial information on time to (1)
   support management's fiduciary role; (2) support budget formulation and execution
   functions; (3) support fiscal management of program delivery and program decision-
   making; (4) support internal and external reporting requirements, including, as
   necessary, the requirements for financial statements prepared in accordance with the
   form and content prescribed by OMB, reporting requirements prescribed by Treasury,
   and legal, regulatory, and other special management requirements of the agency; and
   (5) monitor the financial management system. (The checklist questions for this area
   are drawn from pp. 41-43 of the JFMIP source document.)

Page 7                     GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
Core Financial System Requirements


The checklist questions follow the JFMIP source document. It should be noted that not
all questions will apply in all situations and, as with the use of any checklist, professional
judgment should be exercised. Using the JFMIP source document, and appendix b of the
source document which defines terms used, along with the two previously mentioned
OMB documents, will help ensure that the user is cognizant of the background
information necessary to fully understand the questions.

Additionally, the checklist should also be used in conjunction with JFMIP's WEB-based
electronic repository, called the Knowledgebase, which can be reached through the
JFMIP/PMO homepage http://wwvv.financenet.gov/fed/jfmip/pmo.htm. These
requirements will form the major portion of the Knowledgebase. In addition, technical
and vendor support requirements are included in the Knowledgebase and are comprised
of internal controls, security, year 2000, training, documentation and other requirements.
The Knowledgebase will feature ongoing comment capability, for both agencies and
vendors, including the ability to comment on proposed requirements prior to their
establishment.




Page 8                      GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
Core Financial System Requirements



     Core financial system             Yes/no
     management function                NA                      Explanation
Accounting classification
structure management process

1. Does the system provide the
   capability to classify accounting
   transactions by the following
   structures: fund, program,
   organization, project, activity,
   cost center, object class, and
   any other data elements needed
   to meet the data classification
   and/or reporting needs of the
   agency? This will include
   relating Federal Account
   Symbols and Titles (FAST)
   structures established by
   Treasury in the system's fund
   structure for reporting
   purposes.

2. Does the system achieve
   consistency in budget and
   accounting classifications and
   synchronization between those
   classifications and the
   organizational structure?
   Consistency will include
   maintaining data relationships
   between budget formulation
   account code classifications
   (budget accounts published in
   the President's budget), budget
   execution and accounting
   classifications (appropriation
   fund symbols published in the
   Treasury annual report
   appendix and other Treasury
   publications), and the agency's
   organizational structure (the
   groups and/or individuals who
   have responsibility for the
   account coding classifications).

3. Does the system provide a fund
   structure that defines each
   entity for which separate

Page 9                     GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
Core Financial System Requirements



      Core financial system              Yes/no
      management function                 NA                      Explanation
   accounting and reporting are
   needed to meet legal and
   assigned responsibilities and
   reporting requirements? This
   structure should provide for
   identification of appropriation
   or fund accounts established by
   OMB and Treasury through the
   budget process, receipt
   accounts, credit program and
   financing accounts, deposit
   funds, clearing accounts, and
   other accounts as may be
   deemed necessary. The fund
   structure must provide for
   additional detail below the
   appropriation level to support
   fiscal year accounting,
   appropriation sub-accounts
   used for reporting to Treasury,
   and financial statement
   preparation.

4. Does the system differentiate
   between the type of budgeting,
   accounting, and reporting
   treatments to be used for each
   fund (e.g., annual appropriation,,
   multiyear appropriation, no-year
   appropriation, revolving fund,
   trust fund, receipt account)?
   The account classification
   structure will provide additional
   fund structure information that
   supports the detailed
   accounting and reporting
   needed to fulfill legal
   requirements, reporting
   requirements, and assigned
   responsibilities. At a minimum,
   these characteristics must be
   supported: fund type, e.g.,
   general fund, deposit fund, trust
   fund revolving fund; borrowing
   source, and OMB function
   designations; budget status, e.g.,

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Core Financial System Requirements



      Core financial system             Yes/no
      management function                NA                      Explanation
   on budget, off budget, or
   financing account; and the fiscal
   year designation, e.g., annual,
   multiyear, or no-year obligation
   authority.

5. Does the system provide a
   program structure with
   sufficient levels of detail to
   allow reporting for all
   categories on which budgetary
   decisions are made, whether
   legally binding, as in
   appropriation limitations, or in
   the nature of policy guidance, as
   in Presidential pass-backs,
   congressional markup tables, or
   internal agency decisions? The
   account classification structure
   must also support additional
   detail needed to meet external
   reporting requirements to OMB
   and Treasury and be flexible
   enough to meet agency-specific
   requirements.

6. Does the system provide the
   capability to establish an
   organization structure based on
   responsibility segments, such as
   offices, divisions, and branches?

7. Does the system provide for the
   ability to tie responsible
   organizational units to programs
   and projects?

8. Does the system identify agency
   location codes and
   appropriation fund symbols for
   all transactions and reports
   involving Treasury disbursing
   centers, such as SF-224
   "Statement of Cash
   Transactions," SF-215 "Deposit


Page 11                    GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
Core Financial System Requirements



     Core financial system               Yes/no
     management function                  NA                      Explanation
   Ticket," and SF-5515 "Debit
   Voucher?"

9. Does the system provide a
   project structure that is
   independent of the other
   classification structures to
   allow multiple organizations,
   programs, and funding sources
   to be associated with a project?

10. Does the system provide an
    object class structure consistent
    with the standard object class
    codes contained in OMB
    Circular A-l1, Preparation and
    Submission of Budget
    Estimates? This structure must;
    also accommodate additional
    levels (higher and/or lower)
    needed to support agency
    management reporting and
    control needs.

11. Does the system provide a
    revenue source code structure
    to identify and classify types of
    revenue and receipts received
    by an agency so that they are
    represented properly on the
    agency's financial statements?

12. Does the system provide the
    capability to classify accounting
    transactions by other data
    elements needed to meet the
    data classification and/or
    reporting needs of the agency?

13. Does the system provide the
    capability to define additional
    data elements for use in data
    classification for internal
    reporting and/or control needs
    for agency-specific purposes?


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Core Financial System Requirements



       Core financial system            Yes/no
       management function               NA                      Explanation
14. Does the system derive the
    expanded accounting
    classification structure from
    abbreviated user input so that
    user input is minimized, data
    entry is made easier, and errors
    are controlled and reduced?
    Examples of methods include
    entering "shorthand codes"
    using a keyboard function to
    look up additional elements,
    "clicking" on entries in a
    "lookup table" or "pop-up
    menu," and using a scanning bar
    code.

15. Does the system provide
    flexibility to process additions,
    deletions, and changes to
    accounting classification
    structure codes without
    extensive program or system
    changes? Table-driven systems,
    where frequently changed
    information is kept in tables
    separate from program logic
    and under a system
    administrator's control, and
    database management systems,
    are two examples of ways to
    provide such flexibility.

16. Does the system provide the
    ability to account for budgetary
    resources at a lower level in the
    accounting classification
    structure than they are
    budgeted and controlled?

The standard general ledger
(SGL) process - account
definition

17. Does the system use a chart of
    accounts consistent with the


Page 13                     GAO/AIMD-99-21.2.2 - Core Fin Sys Req Checklist Exp Draft (8/99)
Core Financial System Requirements



     Core financial system              Yes/no
     management function                 NA                       Explanation
   basic numbering structure
   provided in the U.S. SGL? Any
   expansion to the numbering
   system must roll up to the
   posting accounts provided in
   the U.S. SGL.

18. Does the system incorporate
    both proprietary and budgetary
    accounts in the system, and
    maintain the relationships
    between accounts as described
    in the U.S. SGL?

19. Does the system use account
    titles consistent with the
    account titles provided in the
    U.S. SGL?

20. Does the system provide
    subsidiary ledger support for
    U.S. SGL accounts? Support
    may be as detailed as the agency
    deems appropriate for asset
    protection, management
    information, and fund
    accounting. The system must
    also support reconciliation of
    U.S. SGL control accounts to
    their respective subsidiary
    records by accounting period.

21. Does the system support an SGL
    account structure for multiple
    appropriations (including
    receipt accounts) or funds and
    multiple fiscal years within the
    appropriations, including
    annual, multiyear, and no-year
    appropriations?

22. Does the system support the use
    of processing of information
    consistent with the standard
    transaction identification

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Core Financial System Requirements



     Core financial system               Yes/no
     management function                  NA                      Explanation
   process rules from U.S. SGL?

23. Does the system provide the
    capability to create additional
    sub-accounts to the U.S. SGL for
    agency specific tracking and
    control? These sub-accounts
    will summarize and track back
    to the U.S. SGL accounts.

The standard general ledger
process - transaction definition

24. Does the system use
    standardized transactions
    identified by reference codes to
    control transaction editing,
    posting to the appropriate U.S.
    SGL accounts, and updating of
    other information maintained in
    the system, such as document
    balances and available funding?

25. Does the system allow
    standardized transactions,
    including system-generated
    transactions, to be established,
    modified, or deleted by
    authorized personnel?

26. Does the system provide for
    traceability of changes?

27. Does the system update both
    budgetary and proprietary
    accounts based on a single input
    transaction?

28. Does the system generate and
    post compound U.S. SGL debit
    and credit entries (at least four
    pairs) to the U.S. SGL as a result
    of a single transaction?




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Core Financial System Requirements



       Core financial system             Yes/no
       management function                NA                      Explanation
29. Does the system process
    system-generated transactions,
    such as automated accruals,
    closing entries, cost assignment
    transactions, recurring
    payments, and transactions that
    generate other transactions in
    those cases where a single
    transaction is not sufficient?

30. Does the system automatically
    liquidate, partially or in full,
    document balances through
    designated transaction codes?
    This capability will be used in
    the liquidation of commitments,,
    undelivered orders, payables,
    receivables, or other items, as
    appropriate.

31. Does the system provide the
    capability to add, modify, and
    maintain editing and posting
    rules through systems tables
    controlled by authorized
    personnel?

32. Does the system perform
    integrity checks on batches
    received via interfaces? Checks
    should include a batch number
    to detect duplicate or skipped
    batches, and validity of header
    and trailer records to ensure
    that counts and amount in the
    trailer agree with records in the
    batch.




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Core Financial System Requirements



      Core financial system             Yes/no
      management function                NA                      Explanation
Transaction control process -
audit trails

33. Does the system provide audit
    trails to trace transactions from
    source documents, original
    input, other systems, system-
    generated transactions, and
    internal assignment transactions
    through the system?

34. Does the system provide
    transaction details to support
    account balances?

35. Does the system provide audit
    trails to trace source documents
    and transactions through
    successive levels of
    summarization to the financial
    statements and the reverse?

36. Does the system provide audit
    trails to identify changes made
    to system parameters and tables
    that would affect the processing
    or reprocessing of any financial
    transactions?

37. Does the system select items for
    review based on user-defined
    criteria by type of transaction?
    Examples of reasons to select
    items are payment certification
    and financial statement audits.

38. Does the system provide audit
    trails that identify document
    input, change, approval, and
    deletions by originator?

Transaction control process -
transaction processing

39. Does the system post to the

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Core Financial System Requirements



       Core financial system             Yes/no
       management function                NA                      ExDlanation
    current and prior months
    concurrently until month-end
    closing, and maintain and
    provide on-line queries and
    reports on balances separately
    for the current and prior
    months? At a minimum,
    balances must be maintained
    on-line for both the current and
    prior months until prior month
    closing.

40. Does the system, at year's end,
    post to the current year by
    month, as well as to the prior
    year, regardless of when year-
    end closing occurs? For
    example, a user should be able
    to post to the previous fiscal
    year while also posting
    transactions to the current year.
    Balances must be maintained
    and accessible through on-line
    queries for both the current and
    prior fiscal years until year-end
    closing.

41. Does the system provide control
    over the correction and
    reprocessing of all erroneous
    transactions through the use of'
    error file(s) and/or suspense
    accounts? Erroneous
    transactions must be
    maintained and tracked until
    either corrected and posted or
    deleted at the specific request of
    an authorized user.

42. Does the system provide
    standard record format(s) for
    interface of transactions from
    other systems to the core
    financial system and subject all
    transactions from interfacing
    systems to the core financial

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Core Financial System Requirements



      Core financial system              Yes/no
      management function                 NA                       Explanation
   system edits, validations, and
   error correction procedures?
   Erroneous transactions must be
   maintained and tracked until
   either corrected and posted or
   deleted by an authorized user.

43. Does the system support both
    batch and real-time on-line data
    entry and use the same edit and
    update rules as appropriate for
    each mode?

44. Does the system support
    simultaneous data entry/access
    by multiple users in a variety of
    access modes?

45. Does the system support
    management controls to ensure
    that transactions are processed
    in accordance with government
    and agency-prescribed
    standards and procedures, the
    integrity of data in the system is
    maintained, and access is
    restricted to authorized users?

46. Does the system provide
    transaction edits that control, at
    a minimum, fund availability,
    account structure, and tolerance
    levels between related
    transactions, such as between
    an obligation and its related
    accrual?

47. Does the system provide
    controls to prevent the creation
    of duplicate transactions?

48. Do the system's user entry and
    query screens support
    validation of codes entered on
    the screen and assist users in


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Core Financial System Requirements



       Core financial system             Yes/no
       management function                NA                      Explanation
    determining correct codes if an
    invalid code is entered?

49. Does the system provide for
    inquiry by the user to verify
    valid codes during the data
    entry process?

50. Does the system provide the
    capability to enter and store for
    future processing any
    transactions in the current
    month for processing the
    subsequent month?

51. Does the system provide the
    ability to process intra-
    governmental transactions and
    track intragovernmental
    balances related to other federal
    agencies?

Archiving and purging process

52. Does the system archive
    transactions and related
    information needed for audit
    trails in a format accessible by
    audit software?

53. Does the system allow closed
    documents to be reopened at
    the document control level with
    all associated transaction
    history? Prior month's control
    totals and balances will not be
    affected by a reopened
    document.

54. Does the system provide the
    authorized system administrator
    the flexibility to determine
    whether records are to be
    archived or purged? For those
    documents that meet the

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Core Financial System Requirements



      Core financial system             Yes/no
      management function                NA                      Explanation
   criteria, the system must allow
   selective action. The system
   must include the capability to
   establish and maintain user-
   defined archival criteria.

55. Does the system retain system
    records in accordance with
    federal regulations established
    by the National Archives and
    Records Administration
    (NARA), GAO, and others?

56. Does the system prevent the
    purging of transactions prior to
    the proper period?




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Core Financial System Requirements




  General ledger management            Yes/no                    Explanation
            function                    NA
General ledger posting process

1. Does the system post
   transactions to SGL in
   accordance with the transaction
   definitions established by the
   core financial system
   management function?

2. Does the system maintain
   historical data to produce
   comparative financial reports
   for management use?

Accruals, closing and
consolidation process

3. Does the system provide for
   automated month-and year-end
   closing of SGL accounts and
   rollover of SGL account
   balances (note that this includes
   sub-accounts)?

4. Does the system allow selected
   transactions (i.e., adjustments)
   to be processed?

5. Does the system provide the
   capability for multiple
   preliminary year-end closings
   before final year-end closing
   while maintaining the capability
   to post current period data?
   Posting of current period data
   will not be affected by this
   process.

6. Does the system automatically
   generate selected recurring
   accrual entries and reversals in
   the next fiscal period?




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Core Financial System Requirements



  General ledger management              Yes/no                  Explanation
             function                     NA
7. Does the system allow for
   accruals of contracts or other
   items that cross fiscal years?

8. Does the system selectively
   generate required transactions
   as needed by the year-end
   closing procedures?

9. Does the system separately
   identify amounts that would be
   eliminated when preparing
   intra-agency and interagency
   consolidations?

10. Does the system prepare trial
    balances and other supporting
    information needed for external
    reports and financial
    statements, including
    consolidated statements?

11. Does the system support
    multiple pre-final closings to
    accommodate incremental
    adjustments and closing?

12. Does the system provide for a
    year-end rollover of appropriate
    system tables into the new fiscal
    year, under the control of an
    authorized system
    administrator?

13. Does the system provide the
    capability to process, track, and
    control prior fiscal year
    adjustment transactions?

General ledger analysis and
reconciliation process

14. Does the system report a
    comparison between amounts
    in other components of the core

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Core Financial System Requirements



  General ledger management              Yes/no                   Explanation
             function                     NA
   financial system and the related
   control accounts in the U.S. SGL
   and annotate out-of-balance
   accounts on the report?

15. Does the system provide control
    accounts in the general ledger
    to balance between the general
    ledger and other systems, such
    as property and travel
    management?

16. Does the system provide the
    capability for authorized users
    to correct out-of-balance
    conditions discovered during
    the reconciliation process?

17. Does the system maintain an
    audit trail of any such
    corrections?

18. Does the system provide for
    reconciliation of all open
    accounting period (prior month,
    current month, prior fiscal year,.
    and current fiscal year)
    balances to their respective
    subsidiaries through on-line
    queries and reports?




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Core Financial System Requirements




  Funds management function            Yes/no                    Explanation
                                        NA
Budget execution process

1. Does the system provide the
   ability to track changes to
   budget authority at multiple
   levels of distribution?

2. Does the system provide the
   capability to track actual
   amounts (e.g., commitments
   and obligations) against the
   original and revised budgeted
   amounts consistent with each
   financial planning level?

3. Does the system provide
   flexibility in establishing and
   modifying funding distribution
   and spending levels at multiple
   organizational levels?

4. Does the system allow
   authorized personnel to
   reallocate funds at designated
   levels?

5. Does the system provide the
   ability to manage and control
   prior year funds in the current
   year, including the capability to
   identify prior year and current
   year de-obligations separately?

6. Does the system support
   tolerance levels that are user-
   defined and established and
   maintained in tables controlled
   by authorized personnel? The
   tolerance levels should be
   maintained in terms of
   percentages of the total with a
   not-to-exceed dollar threshold.




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Core Financial System Requirements



  Funds management function              Yes/no                   Explanation
                                           NA
Funds allocation process

7. Does the system record funding
   and related budget execution
   documents?

8. Does the system record
   limitations and control the use
   of funds against them consistent
   with appropriation and
   authorization language, and
   administrative limitations
   established by agency
   management?

9. Does the system distribute,
   track, control, and report funds
   authorized at various funding
   levels based on SGL, accounting
   classification structure, and
   project structure?

10. Does the system allow
    modification of limitations in
    accordance with apportionment
    actions, reprogramming,
    rescissions, and other
    adjustments?

11. Does the system record and
    control funds that receive other
    budget authority in addition to
    appropriations and identify the
    type of authority?

12. Does the system record the
    expiration and cancellation of
    the appropriation in accordance
    with laws and regulations,
    including OMB Circular A-34
    and the U.S. SGL?

13. Does the system maintain
    operating plans at or below the
    funds control level of the

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Core Financial System Requirements



  Funds management function             Yes/no                  Explanation
                                         NA
   classification structure?

14. Does the system allow
    authorized personnel to
    reallocate funds at designated
    levels?

15. Does the system account for
    budgetary resources below the
    allotment level as necessary to
    accommodate internal
    management purposes?

Funds control process - funds
availability editing

16. Does the system provide for on-
    line notification of funds
    availability prior to the
    distribution of lower level
    funding and the processing of
    commitment, obligation, or
    expenditure transactions?

17. Does the system support the
    timely recording of
    transactions?

18. Does the system check
    commitment transactions
    against available funds?

19. Does the system include
    adequate controls to prevent the
    recording of commitments that
    exceed available balances?

20. Does the system support
    recording obligations or
    expenditures that exceed
    available balances and produce
    a report or otherwise provide a
    method that allows
    management to review the
    cause of this over-obligation

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Core Financial System Requirements



  Funds management function             Yes/no                   Explanation
                                         NA
    condition?

21. Does the system provide for
    designated authorities to
    establish and modify the level of
    fund control using elements of
    the classification structure,
    including object class, program.,
    organization, project, and fund?

22. Does the system provide for
    designated authorities to
    establish and modify the
    system's response (either reject
    transaction or provide warning)
    to the failure of a funds-
    availability edit for each
    transaction type?

23. Does the system provide the
    capabilities and controls for
    authorized users to override
    funds-availability edits?

24. Does the system record the
    financial impact of all
    transactions that affect the
    availability of funds, such as
    commitments, liquidations,
    obligations, and expenditures?

25. Does the system provide
    automatic real-time notification.
    to users of transactions failing
    the funds-availability edit and
    place the rejected transactions
    in an error file and/or suspense
    account for corrective action?
    In cases where the actual event
    has already occurred (such as
    labor hours worked or a
    contract already signed), the
    transaction should be recorded
    and a warning or report issued
    to alert the user to the need for


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Core Financial System Requirements



  Funds management function             Yes/no                   Explanation
                                         NA
    follow-up action.

26. Does the system update all
    appropriate accounts to ensure
    that the system always
    maintains and reports the
    current status of funds for all
    open accounting periods?

27. Does the system determine
    funds availability on
    adjustments to obligations or
    expenditures based on whether
    the funds cited are current,
    expired, or cancelled?

28. Does the system check available
    funds for obligating documents
    (including amendments to
    obligating documents resulting
    in a change to dollar amounts or
    to the classification structure)?

29. Does the system check available
    funds when the expenditure
    exceeds the obligating
    document due to quantity or
    price variances within
    tolerances, additional shipping
    charges, etc.?

30. Does the system adjust available
    fund balances as reimbursable
    orders are accepted? In the
    case of reimbursable orders
    from the public, an advance
    must also be received before
    additional funding authority is
    recorded.

31. Does the system check available
    funds for commitments and
    obligations incurred in support
    of reimbursable agreements?


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Core Financial System Requirements



  Funds management function              Yes/no                   Explanation
                                           NA
Funds control process -
commitments

32. Does the system allow
    commitment documents to be
    entered into the core financial
    system on-line and from
    multiple locations, as well as
    through interfaces with other
    systems?

33. Does the system maintain
    information related to each
    commitment document,
    including amendments? At a
    minimum, the system must
    capture requisition number,
    accounting classification
    structures, and estimated
    amounts.

34. Does the system provide for
    modifications to commitment
    documents, including ones that
    change the dollar amount or the
    accounting classification
    structure cited?

35. Does the system invoke funds
    availability editing for the
    changed amounts?

36. Does the system allow for
    commitment documents to be
    future dated, stored, and posted
    at the appropriate date?

37. Does the system subject these
    documents to edit and
    validation procedures prior to
    posting?

38. Does the system close
    commitment documents under
   the following circumstances:


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Core Financial System Requirements



  Funds management function              Yes/no                   Explanation
                                          NA
    (1) by the system upon issuance
    of an obligating document, (2)
    by an authorized user, and (3)
    as part of the year-end closing if
    the commitment is in an annual
    appropriation or in the last year
    of a multiyear appropriation?

39. Does the system provide the
    capability to support
    commitment accounting based
    on agency needs?

Funds control process -
obligations

40. Does the system record
    obligations based on obligating
    documents and liquidate, at the
    user's request, the related
    commitments, either partially or
    fully?

41. Does the system record
    obligations for which there is no
    related commitment?

42. Does the system maintain
    information related to each
    obligation document, including
    amendments? At a minimum,
    the core financial system must
    capture obligating document
    number and type; vendor
    number and other identification,
    including vendor identification
    number (ID), social security
    number (SSN), taxpayer
    identification number (TIN),
    employer identification (EIN),
    and data universal numbering
    system (DUNS); accounting
    classification structures;
    referenced commitment (if
    applicable); and dollar amounts.


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Core Financial System Requirements



  Funds management function            Yes/no                   Explanation
                                        NA
43. Does the system allow
    obligation documents to be
    entered into the core financial
    system on-line and from
    multiple locations, as well as
    through an interface with other
    systems?

44. Does the system allow
    transactions creating
    anticipated obligation
    documents to be entered early,
    stored, and posted at the
    appropriate date?

45. Does the system subject these
    documents to edit and
    validation procedures prior to
    posting?

46. Does the system permit the user
    to delete the transaction
    without posting it if the
    anticipated obligation does not
    occur?

47. Does the system allow multiple
    commitments to be combined
    into one obligating document
    and one commitment document
    to be split between multiple
    obligating documents?

48. Does the system allow
    authorized modifications and
    cancellations of posted
    obligating documents?

49. Does the system provide on-line
    access to all obligations by
    selection criteria, e.g.,
    document number?

50. Does the system maintain an on-
    line history file of closed-out

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Core Financial System Requirements



  Funds management function             Yes/no                   Explanation
                                         NA
   documents for a user-defined
   period of time?

51. Does the system retain (for
    audit purposes) all system
    record files along with all
    amendments?

52. Does the system close
    obligating documents either
    (1) automatically upon
    complete performance/delivery
    or (2) through an authorized
    user?

53. Does the system record various
    intragovernmental acquisition
    transactions, such as General
    Services Administration (GSA)
    Personal Property Center,
    reimbursable orders, and
    printing from the Government
    Printing Office (GPO)?

54. Does the system record and
    maintain contracts and grants
    so that fiscal year-to-date and
    inception-to-date information
    can be presented?

55. Does the system record blanket
    purchase agreements (BPA) and
    track, control, and monitor
    records of call?

56. Does the system track, control,
    and monitor delivery orders
    against a contract limitation?

57. Does the system record
    expenditures related to
    payments made through use of
    imprest funds, third-party
    drafts, and government credit
    cards?

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Core Financial System Requirements



  Funds management function             Yes/no                    Explanation
                                         NA
58. Does the system record
    expenditures claimed against
    advance payments made, such
    as travel advances, contract
    advances, and grants?

Funds control process - analysis

59. Does the system maintain
    current information on
    commitments and obligations
    according to the classification
    structure on a fund by fund
    basis?

60. Does the system track the use of
    funds against operating or
    financial plans?

61. Does the system report plan
    compared to actual data at the
    level of the operating plans?

62. Does the system summarize,
    compare, and report the
    operating plans to the
    appropriate level of funds
    control?

63. Does the system produce
    detailed lists and summary
    reports by the defined level of
    funds control for those
    documents that represent
    commitments, undelivered
    orders, and expenditures?

64. Does the system provide control
    features that ensure that the
    amounts reflected in the fund
    control structure agree with the
    U.S. SGL account balances at
    the end of each update cycle?




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Core Financial System Requirements



  Funds management function           Yes/no                    Explanation
                                       NA
65. Does the system maintain
    historical data on all
    commitment, undelivered order,
    payable, and payment
    transactions?

66. Does the system maintain open
    documents to show the status of
    commitments, undelivered
    orders, accruals, and
    disbursements by document line
    item?




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Core Financial System Reqnirements




 Payment management function            Yes/no                   Explanation
                                          NA
Payee information maintenance
process

1. Does the system maintain payee
   information that includes data
   to support obligation, accounts
   payable, and disbursement
   processes?

2. Does the system support
   payments made to third parties
   that act as agents for the payee?

3. Does the system maintain
   information needed to support
   Internal Revenue Service (IRS)
   1099 and W-2 reporting,
   including TIN and payee type
   (e.g., sole proprietorship,
   partnership, and corporation)?

4. Does the system maintain 1099
   information for the principal
   party rather than the agent in
   cases where a third party acting
   as agent receives the payment?

5. Does the system provide the
   capability to identify payees
   who receive 1099s, including
   1099Cs?

6. Does the system allow multiple
   payment addresses and/or bank:
   information for a single payee?

7. Does the system provide a
   search capability for payee
   information?

8. Does the system produce payee
   lists based on agency-defined
   criteria, e.g., payee name and
   number?

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Core Financial System Requirements



 Payment management function            Yes/no                    Explanation
                                         NA
Payment warehousing process

9. Does the system warehouse and
   schedule payments in
   accordance with applicable
   regulations, for example, OMB
   Circular A-125?

10. Does the system provide the
    capability to capture, store, and
    process appropriate invoice
    information, including: invoice
    number, invoice amount,
    obligating document references,
    vendor number, payee name
    and address, discount terms,
    invoice amount, invoice date,
    and invoice receipt date in
    accordance with Treasury
    standards and as necessary to
    satisfy requirements of the
    Prompt Payment Act?

11. Does the system record an
    accrued liability upon receipt
    and acceptance of goods and
    services and properly identify
    them as capital asset, expense,
    prepaid expense, or
    construction?

12. Record invoices through
    keyboard entry by a user and
    through an electronic interface
    with vendors in an electronic
    commerce arrangement?

13. Does the system access
    previously entered information
    and/or record additional
    information necessary to
    automatically determine the due
    date and amount of vendor
    payments in accordance with
    OMB Circular A-125, based on


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Core Financial System ReqWirements



 Payment management function             Yes/no                   Explanation
                                          NA
   invoices, receiving reports, and.
   contracts or purchase orders?
   Due date determination should
   take into account special
   situations, such as contract
   provisions specifying
   nonstandard acceptance
   periods; laws specifying
   payment terms for certain
   commodities, such as meat or
   dairy products; failure to return
   a defective invoice promptly;
   and others specified in OMB
   Circular A-125.

14. Does the system provide the
    capability of splitting an invoice
    into multiple payments on the
    appropriate due dates when
    items on the invoice have
    different due dates?

15. Does the system record
    discount terms and
    automatically determine
    whether taking the discount is
    economically justified as
    defined in the Treasury
    Financial Manual, Volume I,
    section 6-8040?

16. Does the system record
    additional shipping and other
    charges to adjust the payment
    amount, if they are authorized?

17. Does the system adjust the asset
    or expense recorded with the
    liability if the authorized
    payment (based on the invoice)
    is different from the amount
    accrued (based upon receipt
    and acceptance) using contract
    information and any increase is
    within agency tolerances?


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Core Financial System Requirements



Payment management function             Yes/no                   Explanation
                                         NA
18. Does the system also
    automatically adjust the
    obligation amount and edit for
    funds availability to cover
    increases?

19. Does the system automatically
    update the funds control and
    budget execution balances to
    reflect changes in the status of
    undelivered orders and
    expended appropriations, as
    well as changes in amounts?

20. Does the system establish
    payables and make payments on
    behalf of another agency, citing
    the other agency's funding
    information?

21. Does the system allow
    obligating documents to be
    reopened by authorized staff
    after final payment has been
    made?

22. Does the system allow changes
    to payment schedules by
    authorized staff prior to
    submission to the disbursing
    office?

23. Does the system process credit
    memoranda for returned goods
    or other adjustments?

24. Does the system apply the
    credit to the specific obligation
    that resulted in the credit,
    reducing the expense attributed
    to that obligation?

25. Does the system maintain the
    balance of the credit for
    application against a future

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Core Financial System Requirements



 Payment management function             Yes/no                   Explanation
                                          NA
    payment if a credit is not fully
    liquidated by one payment?

26. Does the system create the
    appropriate notice to the vendor
    that a credit has been applied to
    the affected payment?

27. Does the system reestablish
    payables for voided checks or
    checks or Electronic Funds
    Transfers (EFT) that have been
    returned but have not been
    negotiated, and allow for
    reversing the accounting
    transaction leading to the
    disbursement and reestablishing
    a payable, as appropriate?

28. Does the system record
    obligations, expenses, assets,
    etc., associated with payments
    made through use of imprest
    funds, third party drafts, and
    government credit cards?

29. Does the system establish
    payables to replenish the
    imprest fund or pay the
    financial institution handling the
    third party drafts and credit
    cards?

30. Does the system schedule
    payments of advances, prepaid
    expenses, loans, grants, etc.,
    with the appropriate accounting
    entries for each?

31. Does the system record
    expenses, assets, etc., based
    upon performance funded by
    advances, prepaid expenses,
    and grants and make the
    appropriate liquidations?

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Core Financial System Requirements



 Payment management function             Yes/no                   Explanation
                                          NA
32. Does the system automatically
    update funds control balances
    to reflect obligation changes?

33. Does the system provide the
    capability to support capture,
    storage, and processing of
    invoices received in electronic
    format through an electronic
    commerce arrangement or from
    another system?

34. Does the system allow for
    compliance at the data level,
    with existing Treasury
    standards dictating format and
    length for certain invoice fields?

35. Does the system adjust the
    obligation based on final
    invoice/payment tolerance
    percentage and amount
    authorized, provided the
    amount is within the funds
    limitations and checks?

Payment execution process

36. Does the system automatically
    identify and select payments to
    be disbursed in a particular
    payment cycle based on their
    due dates?

37. Does the system provide a
    function for review and
    certification by an authorized
    certifying officer?

38. Does the system allow specific
    payments selected for
    disbursement to be excluded
    from the payment cycle and
    held for later payment?


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Core Financial System Requirements



 Payment management function            Yes/no                   Explanation
                                         NA
39. Does the system automatically
    compute amounts to be
    disbursed, including discounts,
    withholdings, interest, or
    penalties, in accordance with
    applicable regulations?

40. Does the system generate the
    appropriate transactions to
    reflect the above deductions
    and additions?

41. Does the system automatically
    include on each payment
    relevant identification
    information (e.g., invoice
    number, obligating document
    number, and interest penalty
    amount and calculations)?

42. Does the system collect
    information on discounts taken,
    discounts lost, and interest
    penalties to comply with current
    applicable prompt payment
    information tracking
    requirements?

43. Does the system calculate totals
    by appropriation symbol for
    inclusion on the payment
    schedule, except unidentified
    appropriations?

44. Does the system provide for
    various forms of payment to be
    used, i.e., check or electronic
    funds transfer (e.g., Automated
    Clearing House (ACH), wire)?

45. Does the system provide the
    capability to capture, store, and
    process information related to
    supporting the creation/
    generation of EFT payments

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Payment management function            Yes/no                   Explanation
                                        NA
   (ACH or wire) in accordance
   with Treasury standards,
   including American Banking
   Association (ABA) routing
   number, recipient bank account
   number, and account type?

46. Does the system support
    Treasury-specific standards for
    format of check and EFT
    payment requests?

47. Does the system allow for
    consolidation of multiple
    payments to a single payee, up
    to the Treasury Financial
    Manual (TFM)-prescribed
    limitation in order for the
    disbursing office to produce one
    check or EFT and itemize all
    payments covered by the one
    check or EFT?

48. Does the system allow for
    separate checks to a payee in
    specific instances where
    needed?

49. Does the system allow a
    payment request to be removed
    from the automated scheduling
    stream and to be scheduled as a
    manual payment by an
    authorized official?

50. Does the system provide the
    capability to schedule and make
    payments in various forms (e.g.,
    ACH, SF-1166) as required by an
    agency's disbursing offices,
    including physical media (e.g.,
    tape, electronic transfer)?

51. Does the system prepare reports
    to Treasury on disbursements

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 Payment management function             Yes/no                   Explanation
                                          NA
    made by an agency with its own
    disbursing authority?

52. Does the system process
    transactions resulting from
    payments made using other
    systems, such as payroll?

53. Does the system record
    disbursements, assets,
    expenses, obligations, or other
    accounts as appropriate, but
    does not schedule a payment
    through the core financial
    system if the payment has
    already been made by the other
    system?

54. Does the system support the
    receipt of bills from other
    federal agencies, and their
    payment through central
    electronic systems?

55. Does the system record
    payments made by another
    entity, such as a finance center,
    on behalf of the agency using
    agency funds?

56. Does the system allow for
    cancellation of an entire
    payment schedule or a single
    payment within a payment
    schedule after payments are
    scheduled and prior to actual
    disbursement by Treasury?

57. Does the system flag payment
    transactions that will disburse a
    fund into a negative cash
    position? Reimbursable work
    can result in this type of
    transaction with appropriate
    authority.

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 Payment management function             Yes/no                   Explanation
                                          NA
Payment confirmation and
follow-up process

58. Does the system provide
    information about each
    payment to reflect the stage of
    the scheduling process that the
    payment has reached and the
    date each step was reached for
    the following processing steps:

    *     payment scheduled
    *     schedule sent to appropriate
          disbursing office
    *     payment issued by
          appropriate disbursing
          office?

59. Does the system provide for the
    comparison of the agency's
    payment schedule and
    disbursing office's
    accomplished payment
    schedule?

60. Does the system update
    payment information when
    confirmation is received from
    the disbursing office, including
    the paid schedule number,
    check numbers or trace
    numbers, and date, amount of
    payment, and payment method
    (check or EFI)?

61. Does the system maintain a
    history of every payment by the
    core financial system, including
    authorizing document number,
    payment schedule number,
    payment date, invoice number,
    vendor number, vendor name,
    payment address, appropriation
    charged, and prompt payment
   information?


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 Payment management function               Yes/no                   Explanation
                                             NA
62. Does the system provide on-line
    access to vendor and payment
    information?

63. Does the system provide on-line
    access to open documents
    based on agency selection
    criteria, e.g., document number'?

64. Does the system produce IRS
    1099s in IRS acceptable form
    (hard copy or magnetic tape)?

65. Does the system produce the
    SF-224, Statement of
    Transactions?

66. Does the system produce
    supporting information needed
    to prepare the prompt payment
    report in accordance with
    requirements in OMB Circular
    A-125?

67. Does the system automatically
    liquidate the related liability or
    the in-transit amount when
    payment confirmation updates
    the system?




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 Receipt management function              Yes/no                  Explanation
                                           NA
Receivable establishment
process

1. Does the system support the
   calculation, generation, and
   posting of customer bills based
   upon billing source, event
   and/or time period, and type of
   claim in accordance with
   agency program requirements?
   Bases used for billing may
   include:

    *     percentage of reimbursable
          obligations, accrued
          expenditures, or costs, using
          data recorded by the cost
          accumulation function;
    *     fee schedules for goods or
          services provided;
    *     duplicate payments;
    *     erroneous payments; and
    *     payment schedules or other
          agreements with other
          entities.

2. Does the system record the
   establishment of receivables
   along with the corresponding
   revenues, expenditure
   reductions, or other offsets?

3. Does the system support the
   establishment and tracking of
   receivables to be paid under
   installment plans, including
   plans for which payments have
   been rescheduled?

4. Does the system print bills,
   accommodating the generation
   of standard forms, such as SF-
   1080s or SF-1081s, and
   turnaround documents to be

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Core Financial System Requirements



 Receipt management function            Yes/no                   Explanation
                                          NA
   used as a remittance advice?

5. Does the system allow
   customized text in generated
   billing documents?

6. Does the system support bills
   and collections between federal
   agencies through the use of an
   electronic system, including
   recording collections and
   payments between agencies
   with supporting documentation?

7. Does the system allow
   transactions related to manually
   prepared bills to be entered by
   authorized personnel?

8. Does the system record
   adjustments to bills and post
   them to customer accounts?

9. Does the system date the bills
   with the system-generated date
   or with the date supplied by an
   authorized user?

10. Does the system print
    statements as well as bills?

11. Does the system accept
    transactions that generate
    receivables from other systems
    in a standard format for entry
    into the core financial system?

Receivable management process

12. Does the system maintain
    detailed information by account
    (e.g., individual, employee,
    private sector organization,
    state or local government, or
    other federal agency) sufficient_

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 Receipt management function           Yes/no                   Explanation
                                        NA
   to provide audit trails and to
   support billing and research
   activities?

13. Does the system maintain
    accounts for reimbursable
    orders and identify government
    and nongovernment accounts?

14. Does the system update each
    account when billing documents
    are generated and collections
    are received?

15. Does the system allow
    authorized personnel to add,
    modify, or delete nonfinancial
    account data?

16. Does the system maintain data
    on individual receivables and
    referenced transactions
    supporting the receivables?

17. Does the system provide on-line
    query capability to receivable
    and account information?

18. Does the system provide
    information, on a summary
    basis and on individual
    receivables, on the age of
    receivables to allow for
    management and prioritization
    of collection activities?

19. Does the system provide
    automatic calculation and
    assessment of interest,
    administrative charges, and
    penalty charges on overdue
    receivables?

20. Does the system allow for the
    waiver of the above charges

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 Receipt management function.            Yes/no                  Explanation
                                           NA
    with appropriate authority?

21. Does the system identify and
    report receivables that meet
    predetermined criteria for bad
    debt provisions or write-off?

22. Does the system maintain data
    for receivables referred to other
    federal agencies and/or outside
    organizations for collections?

23. Does the system record the
    write-off of delinquent or
    uncollectible receivables
    (including interest, penalties
    and administrative charges) and
    maintain data to monitor closed
    accounts?

24. Does the system produce
    dunning (collection) letters for
    overdue receivables in
    accordance with Treasury
    requirements and existing
    legislation?

25. Does the system provide
    authorized users with the ability
    to customize the dunning
    process parameters and
    dunning letter text?

26. Does the system provide
    information to allow either
    manual or automated reporting
    of delinquent accounts to
    commercial credit bureaus and
    referral to collection agencies or
    other appropriate governmental
    organizations?

27. Does the system maintain
    information needed to support
    IRS 1099Cs in the amounts of

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 Receipt management function              Yes/no                   Explanation
                                           NA
   debts forgiven?

28. Does the system maintain a
    history of billings and receipts
    for each receivable and account
    in accordance with agency
    requirements?

29. Does the system match receipts
    to the appropriate receivables
    and update system balances?

30. Does the system provide the
    ability to apply receipts to more
    than one receivable?

31. Does the system update
    receivable balances document
    by document, classifying and
    posting against principal,
    interest, fees, etc., as required
    by OMB Circular A-129,
    Managing Federal Credit
    Program?

32. Does the system identify
    receivables that have been
    reduced by some means other
    than cash collections, such as
    waivers or write-offs?

33. Does the system provide for
    reestablishment of a receivable
    for checks returned due to
    insufficient funds?

34. Does the system provide the
    ability to uniquely record,
    classify, and report the status of
    reimbursable funds received
    and used by customers and, in
    addition, does this information
    agree with the standard account
    structure?


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 Receipt management function            Yes/no                   Explanation
                                         NA
Collection process

35. Does the system record
    complete and partial receipts?

36. Does the system record
    revenues, expenditure
    reductions, or other appropriate
    offsets associated with
    collections for which no
    receivable was previously
    established?

37. Does the system record deposits
    and related debit vouchers for
    reconciliation to deposit
    confirmation information
    provided by Treasury or the
    banking system?

38. Does the system provide for the
    processing of cash or credit
    card receipts against
    outstanding receivables?

39. Does the system allow for offset
    of funds due to delinquent
    indebtedness through
    administrative offset, federal
    employee salary offset, and
    income tax refund offset?

Offsets

40. Does the system provide the
    ability to capture TIN data for
    the debtor and report overdue
    receivables with associated TIN
    data to Treasury for possible
    offset?

41. Does the system comply with
    requirements of the Internal
    Revenue Service Tax Refund
    Offset Program and Treasury

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 Receipt management function         Yes/no                   Explanation
                                      NA
   Offset Program requirements?




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   Cost management function             Yes/no                   Explanation
                                         NA
Cost recognition process

1. Does the system provide the
   ability to post accruals to
   recognize costs? The cost of
   goods and services used,
   consumed, given away, lost, or
   destroyed must be recognized
   within the period of time the
   event occurred, regardless of
   when ordered, received, or paid
   for. Similarly, revenues must be
   recognized when earned.

2. Does the system reduce asset
   balances, such as inventories
   and prepaid expenses, as the
   assets are used and expended?

3. Does the system use the
   agency's accounting
   classification structure to
   identify information, such as
   fund, program, organization,
   project, activity, and cost center
   to support the cost
   accumulation and assignment
   processes?

4. Does the system support
   managerial cost accounting by
   providing the capability to
   measure and report the costs of
   each segment's outputs?

Cost accumulation process

5. Does the system capture fees,
   royalties, rents, and other
   charges imposed by the agency
   for services and things of value
   it provides? These costs should
   be captured at the lowest level
   to reflect related actual costs


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   Cost management function               Yes/no                   Explanation
                                           NA
   incurred by the agency in
   providing goods and services.

6. Does the system identify all
   costs incurred by the agency in
   support of activities of revolving
   funds, trust funds, or
   commercial functions, including
   the applicable portions of the
   related salaries and expense
   accounts identified with those
   activities?

7. Does the system provide for a
   variety of information to
   support the managerial cost
   accounting decision-making
   process, the management of the
   agency, and external reporting?
   This will include

    *     cost reports to be used in
          the analysis of
          programmatic activities,
    *     schedules and operating
          statements in support of
          financial statement
          preparation and audit,
    *     meaningful cost information
          needed to support
          performance measures,
    *     ability to transfer cost
          information directly to and
          from other systems,
    *     cost information for
          comparison to other
          program data to determine
          compliance with planned
          budgeted activities, and
    *     support of the billing
          process by providing cost
          information to the
          receivable function for
          producing bills.


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   Cost management function              Yes/no                   Explanation
                                          NA
Cost distribution process

8. Does the system provide for
   identifying costs based on the
   accounting classification
   structure?

9. Does the system identify and
   record direct costs incurred,
   including input on costs from
   feeder systems, such as
   inventory, travel, or payroll?

10. Does the system assign indirect
    costs to interim and final cost
    objects using a method
    consistent with agency cost
    accounting standards? Indirect
    costs will be assigned on a basis
    that best provides for a causal/
    beneficial relationship between
    the costs being distributed and
    the cost object receiving the
    cost. Indirect cost assignment
    may be based on total cost
    incurred, direct labor hours
    used, square footage, metered
    usage, or any other reasonable
    basis.

11. Does the system allow for
    multilevel assignment and
    reassignment?

12. Does the system support the use
    of historical data to conduct
    variance analysis, adjustment of
    rates, and disposition of
    variance by performing periodic
    assignments to adjust cost
    based on estimated rates to the
    actual costs incurred for the
    period?




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   Cost management function               Yes/no                  Explanation
                                           NA
13. Does the system assign costs to
    entities or cost centers
    regardless of how they have
    originally been posted to the
    system (e.g., for financial
    statement presentation)?

14. Does the system provide an
    audit trail that traces the
    transaction from the original
    cost pool to the final cost
    object?

Revolving fund process

15. Does the system provide the
    capability to support the use of
    revolving funds for working
    capital programs?

16. Does the system provide the
    capability to create and track
    service-level agreements for
    customer projects, including the
    project or reimbursable
    agreement number, the client
    organization, and funding
    citation?

17. Does the system provide the
    ability to link orders and
    expenses directly to a service -
    level agreement if appropriate?

18. Does the system provide the
    capability to verify fund
    availability for service orders
    directly attributable to a
    particular customer of the
    revolving fund operation?

19. Does the system provide the
    capability to support funding to
    the revolving fund through the
    use of advances or through

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   Cost management function              Yes/no                   Explanation
                                          NA
    reimbursement?

20. Does the system support
    assignment of costs incurred by
    the revolving fund through one
    of the following methods: direct
    assignment or indirect
    assignment?

21. Does the system provide the
    capability to establish/use
    multiple assignment methods,
    such as fixed fee, square
    footage, full-time equivalent
    (FTE)?

22. Does the system provide the
    capability to generate sununary
    statements by revolving fund
    customer and/or project?

23. Does the system provide the
    ability to bill customers based
    on appropriate fee structures?




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          Reporting function           Yes/no                   Explanation
                                        NA
Access to information process

1. Does the system allow for the
   information contained in the
   system to be queried to present
   specific detailed data as
   requested? This will include
   user-defined criteria to access
   data for open or closed
   accounting periods.

2. Does the system present
   information resulting from
   system queries formatted to
   facilitate the understanding of
   the information by non-
   technical users, and
   unformatted for more
   technically proficient users?

3. Does the system provide for the
   production of formatted
   reports? The system must allow
   for the reformatting of reports
   to present different sorts of the
   information, the presentation of
   only specific information in the
   format selected, the
   summarization of data, and the
   modification of report formats
   to tailor the reports to the
   specific requirements of the
   user.

4. Does the system allow users to
   design reports and extract files
   for their specific requirements
   and to perform table look-ups
   and expansion of codes when
   needed to clarify the
   information contained within
   the reports?




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          Reporting function             Yes/no                   Explanation
                                          NA
5. Does the system facilitate the
   analysis of information
   contained in the system by
   allowing analysts to obtain
   report information and the
   results of system queries in data
   files that can be transferred to
   other applications or analytical
   tools?

6. Does the system provide for
   easy access to historical files for
   comparative, analytical, and
   trend information?

7. Does the system have available
   the capability to perform a
   "Print Screen" on all user
   screens?

Financial reporting process

8. Does the system use financial
   data that can be traced directly
   to SGL accounts to produce
   reports providing financial
   information, whether used
   internally or externally?

9. Does the system maintain
   accounting data to permit
   reporting in accordance with
   federal financial accounting
   standards issued by the
   Comptroller General and the
   Director of OMB, and with
   reporting requirements issued
   by the Director of OMB and the
   Secretary of the Treasury
   (Appendix C)?

10. Does the system provide
    summarized data electronically
    to systems used by the agency
    for decision support and


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          Reporting function            Yes/no                  Explanation
                                         NA
   provide for the preparation of
   financial statements from the
   SGL and by "line of business?"

11. Does the system provide data in
    the format required, including
    electronic formats, to central
    agency systems used for
    summary financial reporting
    (e.g., FACTS, SF224, SF1219, SF
     1220, SF133)?

12. Does the system report events
    and transactions according to
    the accounting classification
    structure and within a given
    accounting period?

13. Does the system maintain the
    financial information required
    for program performance,
    financial performance, and
    financial management
    performance measures needed
    for budgeting, program
    management, and financial
    statement presentation?

14. Does the system produce,
    distribute, and provide access to
    formatted reports defined by
    agency management for the
    specific requirements of the
    agency?

15. Does the system use the U.S.
    SGL mandated chart of
    accounts as the basis for
    preparing external reports or
    data transmissions to OMB and
    Treasury?

16. Does the system provide the
    capability to electronically
    transmit the following reports to

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          Reporting function             Yes/no                   Explanation
                                          NA
   Treasury: SF133, credit reports,
   year-end closing statements,
   and quarterly and annual
   FACTSI and FACTSII reports?

17. Does the system provide the
    ability to produce an on-line
    current status of funds report
    down to the lowest level of the
    organizational structure,
    including

   *      annual budget (including
          revisions),
   *      open commitments,
   *      open obligations,
   *      net payments/liquidated
          obligations, and
   *      balance available?

System monitoring process

18. Is the overall operation of the
    system monitored to determine
    if operations are on schedule
    and all necessary operating
    steps have been completed
    successfully, and can it alert the
    system manager to malfunctions
    on a timely basis?

19. Does the system provide system
    managers with system statistics
    to determine the functions and
    operations performed by
    specific users and reports
    generated or accessed?

20. Does the system perform and
    report the result of data
    integrity verifications, such as
    reconciliation between reports
    produced and data sets within
    the system, and the results of
    validity, combination, and

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          Reporting function              Yes/no                    Explanation
                                           NA
    balancing edits?

21. Does the system provide for
    sufficient audit trails to trace
    data errors and the result of
    various operations of the
    system?




(922262)




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