Financial Management and Budget Standardization

Background

Many newspaper articles and technical journals have been written about the need to improve the quality and integrity of financial information and to establish standards to better manage the government. In developing financial solutions, federal agencies have operated and developed systems and business processes that stand alone and do not share information. While there are many software tools and products currently available for agencies to manage financial information, the business processes and the data that supports these processes are lagging behind. As a result, much of the information from agencies' systems is difficult to compare and aggregate governmentwide.

To address this issue, a movement toward standardization is underway. The Office of Management and Budget (OMB) has refocused and redirected the Financial Systems Integration Office [FSIO, formerly called the Joint Financial Management Improvement Program (JFMIP)], by creating the Chief Financial Officer (CFO) Council's Financial Management Line of Business (FMLoB). See the Web site at Financial Management Line of Businessfor additional information on FMLoB.

The pyramid diagram below summarizes the overall FMLoB vision/framework

FMLOB Vision/Framework

The standardization effort is divided into two parts: the Common Governmentwide Accounting Classification (CGAC) Code; and the Standard Business Processes, Rules, and Data Elements.

In June 2007, after several collaborative meetings with agencies, vendors, and Shared Service Providers (SSPs), FSIO and OMB released CGAC Version 1.0. See the Web site at CGAC Structure Report July 31, 2007. CGAC is a dynamic document and FSIO will update it on an as-needed basis. CGAC supports standardization in the following ways:

• Identifies the data elements to be used for classification of accounting transactions;
• Establishes standard names, definitions, and formats for the data elements to be captured and reported within agencies and to and from OMB, and the Department of the Treasury, Financial Management Service (FMS); and
• Aligns the values of similar codes used by OMB and FMS.

To comply with CGAC, FMS is aligning the Agency Identifier Code [part of the CGAC Treasury Account Symbol (TAS)] with OMB so that there is only one agency code. A CFO letter with information about the proposed Agency Identifier Code changes was released on May 1, 2008. See the Web site Financial Reference Data. To support the standardization effort, FMS also is working with OMB to align the Bureau Codes.

Standardizing the Standard Business Processes, Rules, and Data Elements is the second part of the effort. Under FSIO/FMLOB, the current efforts for development and implementation include: Payments and Funds, Receivables (collections), Reporting, and Reimbursables Management. Each standard business process provides a basic mapping of the business objectives, processes, rules, and associated standard data definitions. FMS is working closely with FSIO to develop the Standard Interagency Agreement for reimbursable activity.

In addition to the FMLoB, there is the Budget Execution and Financial Management Line of Business (BEFMLoB). For core budget execution process maps, see the Web site MAX HomePage. The BEFMLoB is working closely with the FMLOB to coordinate standardization activities governmentwide.

To be effective, Standardization must be applied governmentwide. Therefore, government agency cooperation is necessary to achieve the benefits of Standardization. FMS intends to work closely with government agencies to implement financial Standardization on a governmentwide basis.