Platts: Financial management business line needs clear rules

Office of Management and Budget officials left Capitol Hill June 28 with policy-makers asking more questions about the financial management line of business initiative.

Departments planning a major change in their financial management systems must consider using a shared service center to do the operations or becoming one. The problem is designating such centers.

Rep. Todd Platts (R-Pa.), chairman of the House Government Reform Committee’s Government Management, Finance and Accountability Subcommittee, asked what constitutes a shared service center and whether OMB needs to designate an agency or private company as such.

“What we need is a clear understanding of the process of how you become an approved shared service center,” he said. The new business line has too many gray areas.

Under the President’s Management Agenda, OMB intends for financial management to be concentrated in these centers, where one service provider handles back-office functions for several agencies to save money.

Agencies are modernizing their financial management systems, and although they should be moving the operations to shared service centers to do the work, they aren’t.

The Small Business Administration and the Labor Department have outsourced their financial management duties to private companies — Corio and Oracle, respectively. However, Linda Combs, controller of OMB’s Federal Financial Management Office, said neither company has been deemed an official shared service center.

Platts asked how agencies could move their systems to either company without OMB designating them shared service centers.

The line of business is evolving, and OMB is ironing out the details, Combs said. But although some details are fuzzy, OMB cannot keep agencies from moving forward with modernizing their financial management systems.

OMB is working on the final guidance, which should be released in the fall.

Departments and private companies interested in becoming shared service centers need to know the rules, especially because the process has begun, Platts said.

“My worry is we are getting the cart ahead of the horse more and more,” he said.

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