A fix for formulating budgets

OMB declares war on the spreadsheet as a tool in the annual budget process

Some traditions are worth keeping, but the way federal agencies formulate their budgets is not one of them, budget experts say. For years, agencies have relied on spreadsheets, e-mail messages and word processing documents during the collaborative, interagency process of developing budget requests each year. Officials then must manually enter the funding requests into the Office of Management and Budget’s Max system.The process leads to inconsistencies, errors in data entry and poor use of many employees’ time, experts say.“One agency I know of has a $20 billion budget, and they use [Microsoft] Excel,” said Andy Schoenbach, policy lead for the Budget Formulation and Execution Line of Business (LOB) consolidation effort and chief of the Budget Systems Branch at OMB. It’s a tricky process, he added. “They have to ensure any changes that are made are taken throughout the entire spreadsheet. What we want is to put in the numbers and make a justification, push a button and the reports come out that are all the same.”Soon federal agencies could see those error-prone traditions come to an end. Led by the Defense and Treasury departments, agencies are expected to switch to applications that integrate feeder systems and facilitate better collaboration between bureaus and headquarters.“Our vision is the OMB Max system will disappear and be replaced by an agency’s own systems where budget and text move seamlessly,” Schoenbach said.The budget LOB initiative is one of nine initiatives OMB has introduced to standardize and improve information sharing. It is also one of the latest, along with the Geospatial and Information Technology Infrastructure LOBs.Since February 2006, a budget LOB task force has focused on setting a foundation for the initiative. After analyzing the budget-formulation process, the task force identified nine major business processes and 59 business activities in those processes.OMB and the task force have not announced the next step in the initiative, but they are likely to recommend a shared-services approach, which would be consistent with how OMB has implemented other LOB initiatives. Treasury is taking the lead in showing how agencies could provide budget-formulation software as a service.Treasury spokeswoman Eileen Gilligan said five agencies used its Budget Formulation and Execution Manager to develop their fiscal 2009 budget requests. The system is a single repository of budget numbers and narratives, she said. “Text and numbers uploaded into BFEM are dynamically linked and inserted into templates [to produce] a consistently formatted, departmentwide budget document,” Gilligan added.For the fiscal 2010 budget, Treasury will charge existing customers $65,000 to $97,000, depending on the level of redesign they need for their budget documents. New customers will pay $90,000 to support the initial setup and design of their budget documents, Gilligan said.In January, Treasury will expand BFEM to include a performance-tracking module, which will enable integration of budget and performance information. Agencies can subscribe to that module for an additional $98,000, she said.Treasury’s system and similar ones offer streamlined data collection, version control, document management and change management to produce a departmentwide budget submission, Gilligan said.“The system eliminates confusion during the highly fluid budget-formulation process,” Gilligan said. It also reduces the need for labor-intensive data reconciliation and produces consistently formatted documents that don’t require manual editing, she added.

Budget LOB targets 6 problem areas

The Budget Formulation and Execution Line of Business (LOB) initiative established six working groups to address ways to improve the process of formulating and executing agency budgets.

The working groups will:

1. Document budget execution processes.
2. Identify best practices and define decision-making tools.
3. Get a better understanding of general ledger and intragovernmental processes.
4. Improve the flow of funding from the Office
of Management and Budget to agency budget offices and accounting systems.
5. Identify major intersections between the budget LOB and the Financial Management LOB.
6. Define data-exchange standards for the two LOB initiatives.

  • — Jason Miller
























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