Hill presents alternative LOB strategy

CRS report suggests slowing OMB’s financial management initiative to demonstrate results

Congress is exploring the possibility that conducting a demonstration project could help agencies that have been hesitant to turn over their financial management operations to a shared service provider when they are ready to upgrade or modernize their financial systems. The Office of Management and Budget made migration to shared service providers a governmentwide policy.

Agencies do not have a choice about consolidating their financial management operations using public or private shared service providers, but they can decide when they consolidate, said Garrett Hatch, a government and finance analyst at the Congressional Research Service, Congress’ policy research arm.

OMB’s Financial Management Line of Business (LOB) consolidation initiative requires agencies to make the switch to shared service providers when they are ready to upgrade or modernize their financial management systems.

CRS recently issued a report on the federal financial management LOB.
Hatch said some critics of OMB’s policy are concerned that shared service providers have not sufficiently demonstrated their capabilities and agencies need to address internal control problems before relinquishing their financial management operations to a service provider.

Many large-scale management reform initiatives begin with demonstration projects, Hatch said in the report, “OMB’s Financial Management Line of Business Initiative: Background, Issues, and Observations,” which GovExec.com obtained and first reported on.

But officials leading the shared services initiative do not see the necessity of having a demonstration project at this point.

“Shared service providers have already proven their success in supporting agency financial system operations,” said Mary Mitchell, program manager of OMB’s financial LOB initiative and executive director of the interagency Financial Systems Integration Office.

The concept of shared services is well-tested in the private and public sectors, and shared service centers are successful, said Clifton Williams, a partner at Grant Thornton’s global public sector.

“I don’t know what a pilot would do today or what additional value it would provide because they already have so many proofs of concept,” he said.

Williams cited the Defense Finance and Accounting Service. The Defense Department improved its financial accounting after it consolidated under DFAS.

Under the current LOB plan, OMB works with agencies to determine the best time for them to switch to a shared service provider. It provides migration-planning guidance, including a sample service-level agreement and a due diligence checklist for vetting prospective service providers.

Most federal agencies have not migrated to shared service providers. OMB officials report that in any single year, probably only two or three of the 24 largest agencies will make the switch. The Department of Housing and Urban Development, the Agriculture Department and the Office of Personnel Management are in various stages of procuring shared services. The Environmental Protection Agency recently awarded a financial management services contract to CGI Federal.

Hatch said OMB should not slow its work on financial management standardization issues because standards will reduce the risk for agencies as they shift their financial operations to shared service providers — whenever that happens.




Slow down on financial management consolidationThe Office of Management and Budget should consider slowing agencies’ migration to shared service providers to reduce the inherent risks, according to the Congressional Research Service. Garrett Hatch, an analyst at CRS, prepared a report for Congress in which he wrote that OMB should:
  • Initiate a demonstration project involving a few agencies so people can observe and analyze the migration process in a controlled environment.
  • Push for standardization by developing performance metrics, standardizing business processes and establishing governmentwide accounting codes. Those efforts would enable agencies to compare financial data.
— Mary Mosquera

The 2015 Federal 100

Meet 100 women and men who are doing great things in federal IT.

Featured

  • Shutterstock image (by venimo): e-learning concept image, digital content and online webinar icons.

    Can MOOCs make the grade for federal training?

    Massive open online courses can offer specialized IT instruction on a flexible schedule and on the cheap. That may not always mesh with government's preference for structure and certification, however.

  • Shutterstock image (by edel): graduation cap and diploma.

    Cybersecurity: 6 schools with the right stuff

    The federal government craves more cybersecurity professionals. These six schools are helping meet that demand.

  • Rick Holgate

    Holgate to depart ATF

    Former ACT president will take a job with Gartner, follow his spouse to Vienna, Austria.

  • Are VA techies slacking off on Yammer?

    A new IG report cites security and productivity concerns associated with employees' use of the popular online collaboration tool.

  • Shutterstock image: digital fingerprint, cyber crime.

    Exclusive: The OPM breach details you haven't seen

    An official timeline of the Office of Personnel Management breach obtained by FCW pinpoints the hackers’ calibrated extraction of data, and the government's step-by-step response.

  • Stephen Warren

    Deputy CIO Warren exits VA

    The onetime acting CIO at Veterans Affairs will be taking over CIO duties at the Office of the Comptroller of the Currency.

  • Shutterstock image: monitoring factors of healthcare.

    DOD awards massive health records contract

    Leidos, Accenture and Cerner pull off an unexpected win of the multi-billion-dollar Defense Healthcare Management System Modernization contract, beating out the presumptive health-records leader.

  • Sweating the OPM data breach -- Illustration by Dragutin Cvijanovic

    Sweating the stolen data

    Millions of background-check records were compromised, OPM now says. Here's the jaw-dropping range of personal data that was exposed.

  • FCW magazine

    Let's talk about Alliant 2

    The General Services Administration is going to great lengths to gather feedback on its IT services GWAC. Will it make for a better acquisition vehicle?

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above