FMLoB Spring Newsletter, May 2008

## 

## Mary Mitchell's Prospects for the Future: Sustained Improvements from FMLoB

**Mary Mitchell,**\
*Former Deputy Associate Administrator and FMLoB Program Manager*

Thank you for the opportunity to say a few words about FMLoB. I am
convinced the collective effort on this initiative will yield sustained
improvements in Federal financial management over the long term. Success
is frequently tied to collaboration and the amount of engagement has
continued to grow as the FMLoB standards were established.

It was so important to engage a broad group of stakeholders early in the
process that included not only subject matter experts from the agencies,
and also financial system vendors, Treasury\'s FMS and the budget
community. This made a significant difference in the quality of the
standards and it will also accelerate the availability of software that
meets Federal needs. Agencies should also be less resistant to adopting
these best practices because they were part of the process of agreeing
on them. 

Other communities who developed business process standards have found
sustained benefits were realized as adoption rates climbed. In the near
term, it will be important for those agencies who must modernize their
financial system now to participate in case studies to capture the
benefits and provide feedback.  While it is important to drive down
costs, there are other tangible and intangible benefits that need to be
captured including:

-   Standardized communication between finance, various functional areas
    and suppliers

-   Streamlined business processes

-   Improved data quality and reliability

-   Better control and monitoring of processes

-   Reduced deployment time for software upgrades

-   Greater ease in integrating other backend processes

-   Improved visibility of external process effects on overall financial
    data

-   Reduced training demands when staff transfer between Finance and
    Accounting (F&A) functions or agencies

-   Improved collaboration capabilities that enable better
    decision-making

The FMLoB standards will be ready when the government transitions to the
next administration.  The new leaders will demand on CFO organizations
to provide deeper, more meaningful, real-time analysis and insight into
overall enterprise operations. The pressure to drive down F&A costs
while improving the accuracy and timeliness of financial data will
remain constant. The new standards are the basis for a common
understanding that will help improve the agility of CFO organizations to
respond.

It is also a safe bet to assume use of shared services will continue to
grow, as it has done over the past, because of the underlying business
case. Customer satisfaction surveys from Federal Shared Service
Providers (SSPs) have shown that they have served the smaller agencies
very well.  Mid-sized and larger agencies are giving more consideration
to shared services. They want to see a proven track record to allay
their residual fears.  Federal SSPs have demonstrated the ability to
deliver a system at lowered operational risk, to achieve faster
implementation times, and to provide more frequent upgrade cycles.
Commercial providers need to show they can also provide a repeatable
solution and deliver a team with significant Federal experience.
Governance is an essential component to maintaining a strong
partnership. Members of the SSP Forum have come together regularly to
discuss how to enhance the services they offer to agencies.

Leading the FMLOB was a career highlight for me because it embodied so
many of aspects from past experience that I feel made a difference --
the focus on standards, necessary controls and security, testing,
performance measurement and essential collaboration between
organizations.

## SSP Spotlight: BPD (Bureau of Public Debt) Administrative Resource Center (ARC)

During the last ten years, the Bureau of the Public Debt's
Administrative Resource Center (ARC) has transformed from an
administrative function for a single Treasury bureau into a major
franchise service provider, offering financial management services as
well as human resources, travel, procurement, and information technology
services to a wide variety of organizations within the Federal
government. ARC, once referred to as "the best kept secret" in the
Federal government, grew its customer base rapidly with referrals from
existing clients. ARC's ability to provide service to customers with
unique needs helped to strengthen the reputation in all of its service
lines. As a result, ARC's success as a financial management Shared
Service provider has prompted the need for a new financial management
system, a new building, and new management strategies to prepare for the
future.

ARC's financial management platform and offerings provide all of the
basic financial management functions agencies require. ARC's system
includes functionality for a variety of special needs: manufacturing,
revolving funds, credit reform, investments, and payroll accounting from
any of the four e-payroll providers. Integration capabilities between
travel, procurement, and payroll systems further enhance the efficiency
of these processes.

ARC is uniquely positioned to be experts in accounting for Federal
investments, as Public Debt is responsible for accounting for the
national debt. Its systems are interfaced to ensure a seamless process
for ARC's accounting customers with investment authority. ARC is
currently focusing on improving the capacity of its Oracle Federal
Financials system, standardizing and documenting its current operations
and offerings, and evaluating its costing and pricing methodologies.

Financial management is the core of ARC's administrative services---it
is the foundation upon which ARC's other highly sought after services
are based. ARC takes pride in the close relationships it has developed
with its customers and in the confidence customers have in the
organization's capabilities. ARC employees often become an extension of
its customer's own financial management staff, developing an in-depth
understanding of the customer agency and providing qualified personnel
able to cover a wide range of financial management tasks. These forged
personal relationships help ARC management partner with customers in
developing strategies for the future.

## Performance Measures: Collection Effort Nears One Year Anniversary

With nearly a year of metrics collected, the Performance Measures work
stream has begun the final refinement stage of the process. Beginning
with April, 2008 data, which agencies should have input into the
Financial Management Services Metrics (FMSM) system by May 30, 2008,
requirements for some of the metrics will change. Specifically:

-   Metric 2, Help Desk Tickets, will be revised to provide for the
    collection of both the number of *closed* tickets (optional metric)
    as well as the number of *opened* tickets (required metric).

-   Metrics 3a and 3b regarding security scans, incidents, and
    vulnerabilities will no longer be required metrics; however,
    agencies may still report for their own benefit. The Federal
    Information Security Management Act (FISMA) and the President's
    Management Agenda (PMA) quarterly scorecard reporting will replace
    this metric.

-   Metric 5, Number of G/L Transactions and Report Production,
    identifies Trial Balance as the preferred report for tracking. The
    number of cumulative G/L transactions will remain a required metric,
    while report production time will become optional.

-   Metric 6, regarding new user access, will remain; however, it will
    become an optional metric as agencies can report this metric through
    Metric 2, Help Desk Tickets.

The changes will not impact two of the metrics: Metrics 1 and 4
regarding infrastructure and application availability will remain the
same.

In addition to these changes, the reporting feature of FMSM will also be
updated to allow agencies to preview prior entries and make comparisons
of data over time. As these final refinements are made, stay tuned for
updates to the FMSM User Guide which will be revised shortly to reflect
the new modified metrics. For additional information, please contact\
Jacke Zeiher at 202-501-8970, jacke.zeiher@gsa.gov.

## Receivables Management: Standard Business Process

The Receivables Management standard business process exposure draft was
published May 16, 2008 and is available for public review and comment
until July 1, 2008. The process details the best practice business
processes for administering and managing non-reimbursable receivables.

The benefits of effective receivables management include:

-   Improved revenue recognition;

-   Improved cash flow;

-   Reduced loss due to bad debts; and

-   Lower administrative cost in the entire revenue cycle.

The Receivables Management process flowcharts with corresponding step
descriptions and business rules were developed using Treasury's Managing
Federal Receivables guidance, Treasury Financial Manual, Core Financial
System Requirements, the Debt Collection Improvement Act, applicable OMB
Circulars and IRS regulations, and the Claims Collections Litigation
Report as well as the input of subject matter experts from multiple
agencies that participated in the process development.

The major process steps covered in the standard processes include
establishing and analyzing accounts receivable, billing, collecting and
applying receipts, dunning, allowance for loss on accounts receivable,
write-off, issuing credit memos, accounting for returned items, waiver
of interest, fees and penalties, and installment agreements. The steps
are depicted in flowcharts. Following each flowchart are descriptions of
the steps and the related business rules. These steps were designed to
reflect best practices in an electronic environment, sound internal
controls, and compliance with the Office of Federal Financial Management
(OFFM) Core Financial System Requirements (CFSR).

Please submit your questions and comments during the comment period to
ensure your agency concerns are addressed in the development of the
receivables standard business process. The exposure draft can be found
at http://www.fsio.gov/fsio/fsiodata.

### Building the Foundation for FMLoB Data Standardization

With assistance from the Federal Enterprise Architecture (FEA) Project
Management Office and Treasury's Financial Management Service (FMS)
Enterprise Data Architecture Team, FMLoB has continued efforts to build
a foundation for data standardization for Federal financial management.
The FMLoB team is repackaging materials to better follow the guidance of
the FEA with respect to the Business Reference Model, Service Component
Reference Model, and the Data Reference Model. The group has set forth
the following goals to streamline the integration of the above reference
models:

-   Promote the common identification, use and appropriate sharing of
    financial data/information across the Federal government

-   Specify information about the definition, authoritative source, data
    type, format and uses of government-wide financial data elements

-   Better understand the metadata surrounding the data elements

-   Develop a detailed representation as presented in a Unified Modeling
    Language (UML) data model

-   Reflect the descriptive business relationships and associations
    between the data elements

In particular, the team has made substantial progress in developing data
standards for the Payment Management Standard Business Process. To date,
we have developed an initial list of standard interface data
requirements for these specific business process messages: commitments,
obligations, receipt, acceptance, and payment request. Through
facilitated sessions and weekly meetings, we have nearly completed an
Extensible Markup Language (XML) schema model for each of the business
process messages. The model reflects both the definition and structure
of the message composition. The group will also release a dictionary of
data elements, an implementation guide presenting the mapping and
technical information in a non-technical document, a UML model for each
message, and a reference document that explains the business process for
each message. The group plans to complete the payment data requirements
by August 2008 and will target the Receivables Management business
process messages shortly thereafter.

The FMLoB Data Standardization Team has also worked with the FMS
Enterprise Data Architecture Team to improve and standardize the naming
and definition of the Common Government-wide Accounting Classification
(CGAC) data model presented in the CGAC August 2007 release. The revised
CGAC data model will provide a better understanding of the metadata
surrounding the CGAC data elements and a detailed representation of CGAC
in a UML data model. Finally, the model will reflect the descriptive
business relationships and associations between the CGAC data elements.
While the CGAC data elements are 99% complete, we have planned meetings
with Treasury and OMB to harmonize data elements based on future changes
in the Central Agency systems and processes.

## 

## Are You Aware of the OMB Policy Update?

OMB released a policy update for the FMLoB on January 28, 2008 which is
summarized below:

-   FSIO tested and certified software will include CGAC and standard
    business processes and will be released as the Federal configuration

-   Integrators must implement the Federal configuration

-   Agencies must use the Federal configuration

-   The Federal configuration will be the standard; approved deviations
    must be registered with FSIO

Projected Accomplishments for Calendar Year 2008:

-   Finalize the business standards: Payment Management, Funds\
    Control, Receivables Management, Reimbursables and Reporting\
    Processes.

-   Update the Core Financial Systems requirements to incorporate the
    business standards

-   Develop business process cost and performance measurements

-   Expand the migration planning guidance to better assist agencies in
    navigating the acquisition process for shared financial services.

##### FMLoB Contacts

**Dianne Copeland**, *FMLoB Program Director*\
(202) 219-0550\
dianne.copeland@gsa.gov

**Keith Thurston**, *Deputy Project Manager*\
(202) 501-3175\
keith.thurston@gsa.gov

**Doris Chew**, *FSIO Deputy Director*\
(202) 219-0528\
doris.chew@gsa.gov

**Dale Miller,** *Business Processes and CGAC*\
(202) 219-0543\
dale.miller@gsa.gov

**Michael Ploen,** *Funds Control and Reporting Business Processes*\
(202) 219-0529\
Michael.ploen@gsa.gov

**Jacke Zeiher,** *Performance Measures*\
(202) 501-8970\
jacke.zeiher@gsa.gov