Draft standard could improve financial reports

Agencies would use the standard report management process to generate financial data and statements including for balance sheets and statement of budgetary resources.

The Office of Management and Budget (OMB) and the Financial Systems Integration Office (FSIO) have published a draft version of a standard business process that agencies will use to produce required reports that are given OMB and the Treasury Department.

The processes are among several core standards that agencies are to adopt to improve financial management when they move to modernized financial systems, said a FSIO news release of Feb. 23. FSIO IS an office in the General Services Administration. Implementing standard business processes is a component of OMB’s Financial Management Line of Business (FM LOB) consolidation effort.

Agencies would use the standard report management process to generate financial data and statements including for balance sheets and statement of budgetary resources, according to the draft document. Other standard business processes are for management of payments, funds control, accounts receivables or billing customers, and reimbursables or payments for goods and services.

FSIO said it plans to incorporate the business standards into the core financial system requirements after a comment period that ends March 25. Agencies must implement the standards by moving to systems that incorporate the business standards when they update their current financial systems, OMB has said. Agencies must move to these systems by using government or commercial shared-services providers that meet criteria under the FM LOB, OMB has said. Those providers are equipped to offer financial management systems and services to many agencies.

By standardizing processes, data and interfaces, agencies can provide more reliable financial data more quickly at lower cost for senior officials to use to make management decisions, Dianne Copeland, FSIO’s director, has said. Under the FM LOB effort, agencies are also beginning to use governmentwide accounting standards.

In another report about financial management, federal and industry executives said the FM LOB had already made significant progress, but the Obama administration needs a comprehensive strategy, improved governance and processes for interagency collaboration to advance the effort, according to a transition study group of the Industry Advisory Council.

The administration should increase the focus on financial management and its integration with key management support functions, including planning, acquisition, programming and budget management, said the report released Feb. 11.

“The path has been charted, but it is still a dirt road,” the IAC report said.

Agencies need to modernize their financial management systems so they can produce reliable and timely financial and performance information throughout the year and at the fiscal year end, the IAC said. Current and accurate financial data will also be required for the administration’s transparency efforts, such as www.recovery.gov, to monitor how agencies spend money from the economic stimulus law, the report said.

In addition to a comprehensive plan and more effective governance, IAC recommended that the administration:

  • Communicate the value to Congress of the FM LOB.
  • Support centralized services through a service-oriented architecture and an enterprise services bus to drive budgeting, reporting and influence business case decisions for information technology spending.
  • Direct agency executives to establish and fund best practices and approaches in IT, such as centralizing business processes and IT infrastructure.