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| **DATE**: May 17, 2006                                                |
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| **ATTENDEES:** Brendon Despres, Quinntella Wilson, Allan Roit,        |
| Kathryn O'Toole, Michael Brown, Charlene Raphael, Barbara Newman,     |
| Michael Beller, Deborah Burtor, Mona Williams, Carol Sampson, Cindy   |
| Neily, Michael Anthony, Marc Hebert, Chappell Henderson, Ramsay       |
| Tanham, Fernando Ayala, and Jessica Rancourt                          |
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| **ACTION ITEMS**                                                      |
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| -   Meet with BOR, MMS, and OSM offline to clarify homework           |
|     statistics and ensure accurate version of Bureau alignment to the |
|     Strategic Plan                                                    |
|                                                                       |
| -   Follow up with USGS regarding their methodology for developing    |
|     the Statement of Net Cost                                         |
|                                                                       |
| -   Bureaus should provide any updates to their work activity         |
|     dictionary or the DOI work activity dictionary for FY07 to Office |
|     of Financial Management (PFM) by August 15                        |
|                                                                       |
| -   Dot is collecting changes to the work activities to incorporate   |
|     HSPD12                                                            |
|                                                                       |
| -   Review activities that were not costed from the homework exercise |
|     with the bureaus. Also, review the strategic components, end      |
|     outcome goal (EOG), end outcome goal measure (EOGM), intermediate |
|     outcome goal (IOG) and intermediate outcome goal measure (IOGM).  |
|     Grant Thornton will perform this analysis and engage in dialogues |
|     with Bureaus to understand their budgeting process and approach   |
|     to integrating budget and cost.                                   |
|                                                                       |
| -   Grant Thornton will provide gap analysis of the new and old       |
|     strategic plan, when the plan is finalized.                       |
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| **DETAILED MINUTES**                                                  |
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| **Topic 1: Introductory Remarks**                                     |
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| > The DOI ABC program has been realigned under PFM. New members of    |
| > the AOT (from PFM) introduced Mona Williams, Mike Anthony, Cindy    |
| > Niely, and Carol Samson. Dorothy Sugiyama will relocate from PAM to |
| > PFM on 19 Mary 2006. Her contact information will change to room    |
| > number, 2546 and phone, 202-208-5789. Her email will remain the     |
| > same.                                                               |
| >                                                                     |
| > Reviewed meeting agenda                                             |
|                                                                       |
| -   Bureau homework discussion                                        |
|                                                                       |
| -   Costing model (alignment)                                         |
|                                                                       |
| -   Costing methodology (statement of net cost)                       |
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| **Topic 2: Bureau Homework Discussion (homework reviewed)**           |
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| 49% of the strategic plan could be costed by 92% of the DOI work      |
| activities. The AOT showed encouragement for this first alignment.    |
| The 49% do not include Management Excellence PM's, nor XEO work       |
| activities. Non-key measures were not part of the analysis conducted  |
| by Grant Thornton.                                                    |
|                                                                       |
| Grant Thornton was unable to answer the following question: "Did the  |
| 8% of activities not aligned to the strategic plan represent the      |
| remainder of the cost of the remaining strategic plan?" Grant         |
| Thornton will perform analysis and work with Bureaus to resolve       |
| issues for their work activities, through DOI activities, not         |
| aligning to the strategic plan. Also, issues were raised concerning   |
| the strategic plan not being costed. BOR, OSM and MMS will send       |
| changes \-- they believe the counts of the bureau "not applicable" do |
| not accurately portray their alignment. The issue was raised that     |
| five EOGs were not costed. In response to this, Grant Thornton        |
| discussed and demonstrated how the statistics were irrespective of    |
| level, for example, the statistics take into account alignment of     |
| Bureau ABC work activities to EOGM below these EOGs.                  |
|                                                                       |
| Grant Thornton is currently conducting a Gap Analysis of the new and  |
| the old strategic plan and determining the impact on the baseline     |
| alignment. Results of this gap analysis will be prepared for the      |
| Assistant Secretary's review. The Grant Thornton team knows that the  |
| new Strategic Plan is not final, but is prepared to update the        |
| crosswalk upon completion to determine the effects of all changes     |
| made.                                                                 |
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| **Topic 3: Costing Model (work schedule questions and answers)**      |
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| First part of the alignment model project was initiated with homework |
| completion, analysis, and briefing. Grant Thornton will compare these |
| homework assignments to the budget submittals, Section B. The team    |
| will look at the performance measures Bureaus' are populating in the  |
| performance module. Determine consistency and gaps between the        |
| performance module and the budget submittals.                         |
|                                                                       |
| Uncostable DOI Strategic performance measures and DOI work activities |
| will be validated by Bureaus and Grant Thornton. Grant Thornton will  |
| provide their gap analysis of the Strategic Plan, and will create a   |
| dialogue between the Planning Office after the public comment period  |
| is over.                                                              |
|                                                                       |
| Goal is to evolve the different alignment and costing methodology.    |
| Take two pieces and distribute budget, finance, and ABC               |
| communications, so that an agreed upon model can be developed to use  |
| and distribute budget formulation guidance.                           |
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| **Topic 4: Costing Methodology (work schedule question and answers)** |
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| CFO Act requires the Department of the Interior to generate an        |
| auditable Statement of Net Cost by FY2008. This second task will      |
| review the Statement of Net Cost (for FWS, BLM, and NPS) down to the  |
| Standard General Ledger. The common approach of these three Bureaus   |
| will be tested against each Bureau for integration. This analysis     |
| along with input from the AOT will establish a best practice and      |
| create requirements for the FBMS system. The task will identify the   |
| Department level and the Bureaus account structure. The 2005          |
| Statement of Net Cost will be used to create the standard approach    |
| for bureaus to develop the Department's Statement of Net Cost.        |
|                                                                       |
| Are these three bureaus using their ABC system to cost their          |
| statement of net cost? FWS plans to develop a process of using their  |
| ABC system to develop their Statement of Net Cost. USGS               |
|                                                                       |
| currently does this at the transaction level that accumulates at the  |
| end outcome goal that could be                                        |
|                                                                       |
| audited through their ABC codes. USGS has volunteered to work with    |
| the group on this Task.                                               |
|                                                                       |
| The costing model alignment from the Bureau homework and the budget   |
| submittal model will provide some parameters for a standard           |
| generation of the Department Statement of Net Cost. The driver for    |
| this project is that in 2008 DOI will need to have one methodology    |
| for all Bureaus.                                                      |
|                                                                       |
| Accounting information and management information which requires the  |
| alignment model to link budget, performance, and finance -- need to   |
| develop an approach for this. It was also stated by one of the        |
| Bureaus that performance and accounting do not belong in the same     |
| system. It was also stated that there would be a potential to place   |
| the finance system at risk if management related algorithms are       |
| included in the accounting system. PFM restated that we do have to    |
| link these two parts \-- the objective of marrying these two phases   |
| of the project is to determine how best to do that. From the homework |
| exercise and the budget submission, the model that is chosen may not  |
| require a lot of rework. The best practice (July 26) is the           |
| methodology for costing to the Department Strategic Plan through the  |
| ABC activities. Bureaus will be able to provide input at that time.   |
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| **Topic 5: Inventory requirements (scope reviewed)**                  |
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| Is this for all bureaus? Since each Bureau has its own way to perform |
| the integration of cost and performance, Grant Thornton will help to  |
| determine DOI best practice. Grant Thornton will review Bureaus'      |
| documentation related to their cost and performance systems within    |
| their budget submission. PFM will choose three Bureaus to further     |
| document process, methodology, and technology. The idea is to gather  |
| a best practice from those bureaus and provide recommendations to the |
| AOT and ABC Steering Committee for an interim solution for            |
| establishing BPI solutions for the Bureaus and the Department while   |
| FBMS is implemented.                                                  |
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