Financial LOB moves to standardize rules

Agencies get road map to migrate to shared-services providers

Agencies will gain a clearer picture next month of how the administration wants them to standardize financial-management activities.

The General Services Administration expects to complete the major milestones for data and business process standardization in September to advance the Financial Management Line of Business Consolidation initiative.

Combined, these milestones constitute a foundation for letting agencies share financial data internally and eventually across government, said Keith Thur- ston, assistant deputy associate administrator in the Office of Technology Strategy in GSA’s Office of Governmentwide Policy.

With the financial LOB, the Office of Management and Budget aims to lower the cost, and improve quality and performance of financial-management systems, as agencies move to shared-services pro-viders, said Adam Goldberg, chief of the Financial Integrity and Analysis Branch in OMB’s Office of Federal Financial Management.

Clear direction

Although more guidance will evolve over time, it will be clear to agencies next month that a road map is in place, Thurston said.

“If agencies want or need to move to a new financial-management system now, the processes and expectations will be in place to help that occur,” he said.

In September, GSA will unveil the Common Governmentwide Accounting Code, giving agencies common definitions, data elements and structure, Thurston said.

“With universal data definitions, we will be able to aggregate and compare data,” he said at a recent federal financial-management conference sponsored by the Treasury Department’s Financial Management Service.

All new financial-management systems must adhere to the common code, he added.

GSA also will release the first set of business process standards for financial and accounting tasks in the common areas of payments, receipts, funds management and reporting. The standards will be the result of consolidating and harmonizing agencies’ accounting methods and business practices for the core financial-management functions, Thurston said.

A strong foundation for the accounting of government resources is critical for accomplishing the goals of the FM LOB, said Sam Mok, Labor Department chief financial officer.

GSA, its Financial Systems Integration Office, OMB and the Chief Financial Officers Council govern the Financial Management Line of Business.

OMB last year named GSA, the Interior Department’s National Business Center, the Transportation Department and the Treasury Department’s Bureau of the Public Debt as financial-management LOB shared-services providers.

Agencies that need to update their financial-management systems will not get the funding to do it unless they go to a public or private-sector shared-services provider or can justify to OMB why they should keep it in-house.

Over the next five years, many agencies will have to shift over because they’re on a system reaching the end of its lifecycle, said Ed Crump, chief of the Solutions Coordination Office in the National Business Center.

“If I had to take an educated guess, I would say that 50 percent of the major federal agencies are going to have to be in play over the next three to four years in one way, shape or form,” Crump said.

A few agencies likely will obtain incremental funding to continue with legacy systems and migrate in seven or eight years, he said.

A gradual shift over five to eight years and among four or five competing shared-services providers creates a manageable process. “If everybody was in play (at once), there’d just be complete chaos,” Crump said.

Earlier guidance

OMB in May released the updated Migration Planning Gui- dance to clarify a road map for agencies moving to shared-services providers under the FM LOB. It included frequently asked questions and answers, a competitive framework, a template for migration project plan, change management best practices and a menu of services that shared-services providers can furnish.

OMB next month will further update details in those migration elements, Thurston said.

Last month, GSA started developing a draft for a data objects/process model, which maps business processes for most of the core functions in a federal financial-management system for receipts, payments, funds management and reports.
This includes, for example, breaking the payments process down to the invoice review process, cross-checking with collaborating records, and the payment approval process, and further defining the business data objects and attributes that are needed to permit that process to occur. The draft is expected to be available this fall for public comment.

Performance measures, another leg of the FM LOB foundation, already are in place to assess how a shared-services provider fulfills financial, accounting and IT activities, including cost per transaction and cycle time. Agencies will be able to compare the benchmarks for similar services among the provider organizations.

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