Federal

Financial

Management

System

Requirements

Framework for

Federal Financial

Management

Systems

JFMIP-SR-01-04
ii

What Is JFMIP?

The Joint Financial Management Improvement Program (JFMIP) is a joint undertaking of 

the U.S. Department of the Treasury, General Accounting Office (GAO), Office of 

Management and Budget (OMB), and Office of Personnel Management (OPM), working 

in cooperation with one another, with other agencies, and with the private sector to 

improve financial management in the federal government. The program was given 

statutory authorization in the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 

65). Leadership and program guidance are provided by the four principals of JFMIP: 

Comptroller General of the United States, Secretary of the Treasury, Director of OMB, 

and Director of OPM. Each principal designates a representative to serve on the JFMIP 

Steering Committee, which is responsible for the general direction of the program. The 

Executive Director of JFMIP is a permanent member of the Steering Committee and is 

responsible for the day-to-day operation of JFMIP. In addition, a representative from the 

federal community serves on the Steering Committee for a 2-year term. 

JFMIP promotes strategies and sponsors projects to improve financial management 

across the federal government; participates in the financial management activities of 

central policy organizations; and facilitates the sharing of information about good 

financial management practices. Information sharing is accomplished through 

conferences and other educational events, newsletters, meetings with interagency 

groups and agency personnel, and the Internet.

For more information on JFMIP, call (202) 219-0526, or visit the JFMIP website at 

http://www.jfmip.gov.
Foreword

The Framework for Federal Financial Management Systems reflects changes in financial 

management-related legislation and policies, advances in technology, and higher 

taxpayer expectations of the federal financial management community that have served 

as key drivers for the need for integrated financial management systems.

The Framework is the foundation document for the JFMIP Financial Management 

System Requirements. It sets forth the vision, desired capabilities, performance 

outcomes, environment and other attributes that all federal financial management 

systems must be designed to support. The JFMIP requirements are collectively called 

the Federal Financial Management System Requirements (FFMSR). Together with all 

requirements documents, the Framework provides a model for integrated financial 

management systems in the federal government. 

We thank the Chief Financial Officer (CFO) and Chief Information Officer (CIO) 

communities, and other federal agency officials, for their contributions to this document. 

We greatly value your assistance and support. With your continued support, we remain 

strongly confident that we will succeed in meeting all of the financial management 

challenges in this new century.

_______________________

Karen Cleary Alderman

Executive Director

April 2004
Contents

CONTENTS...........................................................................................................................IV

Acronyms.....................................................................................................................vi

CHAPTER 1—INTRODUCTION AND PURPOSE..................................................................... 1

Introduction.................................................................................................................. 1

Background ................................................................................................................. 2

Purpose—Framework for Federal Financial Management Systems ................. 3

Framework Document Organization....................................................................... 4

CHAPTER 2—FINANCIAL MANAGEMENT BUSINESS........................................................... 6

The Future Federal Financial Management Systems Environment................... 6

The Roles of Federal Financial Management........................................................ 6

Overview of the Federal Financial Management Environment........................... 6

Financial Management Governance, Standards, and Stewardship................... 8

Financial Management Performance ...................................................................... 9

Financial Management Performance Goals........................................................... 9

Linking Program Delivery with Financial Management ......................................10

Key Financial Management Business Processes ...............................................11

CHAPTER 3—FINANCIAL MANAGEMENT DATA AND INFORMATION.................................18

Overview of the Financial Management Information Process Flow................18

Data and Information Performance Goals............................................................20

Information Architecture ..........................................................................................20

Structures Supporting the Information Architecture............................................22

CHAPTER 4—FINANCIAL MANAGEMENT APPLICATIONS AND SERVICES........................25

Role of Financial Management Systems in Supporting the Vision...................25

Financial Management Systems Performance Goals ........................................26

Financial Applications Types..................................................................................26

JFMIP Federal Financial Management System Requirements Series 

(FMFSR) ..............................................................................................................28

Financial Management Applications and Services Relationships ....................29

CHAPTER 5—FINANCIAL MANAGEMENT TECHNOLOGY...................................................33

Technology Supports for the Vision......................................................................33

Role of Technology in Financial Management ....................................................33
Roles of the CFO and CIO Partnership in Achieving the Vision.......................34

Performance Goals ..................................................................................................34

Planning and Change Management......................................................................35

APPENDIX A—GLOSSARY

APPENDIX B—LAWS AND REGULATIONS 

APPENDIX C—DEPARTMENT OF THE TREASURY FINANCIAL MANAGEMENT 

SERVICE INTER-RELATIONSHIPS

APPENDIX D—SUMMARY OF JFMIP FEDERAL FINANCIAL MANAGEMENT SYSTEM 

REQUIREMENTS 

APPENDIX E—CONTRIBUTORS
Acronyms

ACH Automated Clearing House

API Application Program Interface

BRM Business Reference Model

CCA Clinger-Cohen Act of 1996

CFO Chief Financial Officer

CFOA Chief Financial Officers Act of 1990

CFR Code of Federal Regulations

CIO Chief Information Officer

COTS Commercial Off-the-Shelf

DRM Data and Information Reference Model

CPIC Capital Planning and Investment Control

ECS Electronic Certification System

EFT Electronic Funds Transfer

EFTPS Electronic Federal Tax Payment System

FACTS I Federal Agencies' Centralized Trial-Balance System I

FACTS II Federal Agencies' Centralized Trial-Balance System II

FAR Federal Acquisition Regulation

FASAB Federal Accounting Standards Advisory Board

FAST Federal Account Symbols and Titles

FEA Federal Enterprise Architecture

FEAF Federal Enterprise Architecture Framework 

FFMIA Federal Financial Management Improvement Act of 1998

FFMSR Federal Financial Management System Requirements

FISMA Federal Information Security Management Act of 2002

FMS Financial Management Service

FRB Federal Reserve Bank

FTD Federal Tax Deposit

FTP File Transmission Protocol

FY Fiscal Year

GAAP Generally Accepted Accounting Principles

GAO General Accounting Office

GASB Government Accounting Standards Board

GITSB Government Information Technology Service Board

GMRA Government Management Reform Act of 1994

GOALS Government On-Line Accounting Link System 

GPRA Government Performance and Results Act of 1993

GWA Government-wide Accounting

HR Human resources

IPAC Intra-governmental Payment and Collection

IRM Information Resource Management

IRS Internal Revenue Service

IT Information Technology

JFMIP Joint Financial Management Improvement Program

NIST National Institute of Standards and Technology

OMB Office of Management and Budget

OPAC On-line Payment and Collection System

PCA Private Collection Agencies

PCN Plastic Card Network

PMA President’s Management Agenda
PPA Prompt Payment Act

PRM Performance Reference Model

SRM Service Component Reference Model

SFFAS Statement of Federal Financial Accounting Standards

STAR Central Accounting System (FMS)

TAFS Treasury Account Fund Symbol

TFM Treasury Financial Manual 

TGA Treasury General Account

TIN Taxpayer Identification Number

TOP Treasury Offset Program

TRM Technical Reference Model

USSGL United States Government Standard General Ledger

1

Chapter 1—Introduction and Purpose

Introduction

The U.S. government is the world’s largest enterprise, and the scale and complexity 

of federal programs and activities that carry out the missions of federal agencies is 

monumental. Currently, the federal government executes an annual budget of 

approximately $2 trillion for over 3,000 appropriations. The budget funds 1,700 

programs1 in 113 government agencies. Business events in support of federal 

programs result in hundreds of millions of financial transactions recorded in over 

2,0002 financial management systems3. Those financial transactions result in a daily 

cash flow of more that $50 billion into and out of federal accounts. On an annual 

basis federal cash inflows include collections of over $2.3 trillion from tax receipts, 

user fees, and other collections for five major revenue programs. It results in $1.64 

trillion in payments to over a 100 million recipients. The challenge of financial 

management is to maintain policy, processes, and systems that support stewardship 

and fiscal integrity and provide accountability of public funds at multiple levels of 

management ranging from consolidated reporting for the entire federal enterprise 

down to specific bureaus and programs.

The financial resources and assets of the federal government are entrusted by the 

citizens, to the legislative and executive branches of the federal government, for their 

stewardship. Stewardship means that the financial and program managers are 

accountable for program results and responsible for the resources entrusted to them. 

Stewardship of public funds requires that financial management processes and 

systems support partnership between program and financial managers to assure the 

integrity of information for decision-making and measuring performance. There is 

increasing demand and expectation that financial management systems produce 

meaningful financial data to evaluate program plans, budgets, and performance as 

well as to support a broad array of management decisions. Meeting those 

expectations will require a transformation that goes beyond financial management as 

timely and accurate financial transaction processing and reporting, to achieving 

readily available performance-focused financial information for management.

 

1

 Includes approximately 1,077 grant programs, 44 direct loan programs, 61 guaranteed loan programs, 12 

insurance programs, 177 direct payment programs, and 383 non-financial programs.

2

 Derived from 2002 Office of Management and Budget (OMB) financial system inventory. However, this 

inventory underreports the total number of financial systems. The Department of Defense alone has 

identified more than 2,300 financial and mixed systems. 

3

 The Federal Financial Management Improvement Act (FFMIA) defines financial management systems as 

“financial systems and the financial portions of mixed systems necessary to support financial management, 

including manual or automated processes, procedures, controls, hardware, software and support 

personnel...Financial systems include an information system, comprised of one or more applications, that 

is used for (A) collecting, processing, maintaining, transmitting or reporting data about financial events; (B) 

supporting financial or budgeting activities; (C) accumulating and reporting cost information, or: (D) 

supporting the preparation of financial statements. 
2

To meet these needs, financial systems must provide accurate, timely, internally 

consistent, and readily accessible financial information in the most cost effective and 

efficient manner. This can only be realized in an integrated financial system 

framework that recognizes the full scope and dimensions of the entire federal 

enterprise, including: the business requirements and dependencies that must be 

delivered within that scope; the necessary information and data; the applications and 

services that deliver the information and data, and the technology that supports those 

applications and services4. This Framework for Federal Financial Management 

Systems describes that integrated financial system framework those dimensions.

Background

Financial management related legislation passed in recent years identifies improved 

financial performance as fundamental to carrying out the missions of federal 

agencies. The Federal Managers’ Financial Integrity Act (FMFIA) of 1982, the Chief 

Financial Officer’s Act of 1990 (CFO Act), the Government Performance and Results 

Act (GPRA) of 1993, the Government Management Reform Act (GMRA) of 1994, the 

Federal Financial Management Improvement Act (FFMIA) 5 of 1996, and other 

financial management reform legislation have resulted in a broad array of new 

financial requirements. These mandates expand the focus of federal financial 

management beyond the traditional objectives of budget formulation and execution, 

to the broader goals of producing accurate, consistent, timely, and useful financial 

information to assure accountability and support program planning, evaluation and 

decision-making. Consistent with legislative mandates, the role of the federal financial 

manager has evolved beyond controller and scorekeeper, to the broader role of 

strategic business partner, responsible for providing business acumen and financial 

information to program managers. 

Furthermore, these mandates recognize an environment where business processes 

and events that generate financial information occur throughout the enterprise and 

recorded in systems outside of the CFO domain. In the information technology arena, 

the Clinger-Cohen Act set forth a variety of initiatives to support better decision 

making for capital investments in information technology, which has led to the 

development of the Federal Enterprise Architecture (FEA) 6 and better informed 

capital investment and control processes within agencies and across government. 

This has produced another broad shift in the financial systems environment—one that 

acknowledges that financial systems planning can no longer take place within an 

isolated environment or “stovepipe,” but must now be integrated with enterprise-wide 

goals. The Framework for Federal Financial Management Systems describes the 

integrated financial management systems environment in the context of the Federal 

enterprise architecture.

 

4

 Parallels the levels of the Federal Enterprise Architecture (FEA) as described by the FEA Program 

Management Office at OMB. 

5

 The Federal Financial Management Integrity Act (FFMIA) of 1996 requires, among other things, that 

agencies implement and maintain financial management systems that substantially comply with financial 

management system requirements. These requirements are detailed in the JFMIP series and in OMB 

Circular A-127, Financial Management Systems.

6

 Improved financial systems must be developed in conformance with an agency’s architecture guidelines 

as influenced by the evolving OMB-FEA reference models. Financial systems are a critical component of 

an agency’s enterprise architecture (EA).
Chapter 1—Introduction and Purpose

3

Purpose—Framework for Federal Financial Management 

Systems

The Framework is the foundation document for the Federal Financial Management 

System Requirements series published by JFMIP. The Framework document 

describes the common financial management environment, vision, performance 

outcomes, business processes, information flows and desired characteristics that are 

applicable to all financial management systems covered by the JFMIP requirements. 

Together with all JFMIP requirements documents, the Framework achieves an 

illustration of an integrated financial management infrastructure that financial 

applications must be designed to support, and provides a broader context for 

understanding and interpreting the requirements outlined in the JFMIP Financial 

Management System Requirements (FFMSR) series. 

The Framework document:

♦ Explains how federal financial management supports federal agencies and the 

mission of government as an inherent component of the delivery of all federal 

programs;

♦ Sets forth financial management performance goals, outcomes, and desired 

capabilities and characteristics that future systems should be designed to meet;

♦ Describes financial management functions, information flows, and systems that 

support the federal agencies in carrying out programs;

♦ Describes the agency and central agency roles;

♦ Links financial management to program performance and describes how it 

supports budget and performance; 

♦ Presents the business needs, performance goals, and information architecture 

that drive financial systems requirements; and

♦ Summarizes the JFMIP Federal Financial Management Systems Requirements 

and their interrelationships 

The Framework targets the following audiences:

♦ CFOs and the financial management community. Presents a more strategic and 

programmatic perspective that supports the increased emphasis on improving 

financial and program performance and providing meaningful information to 

multiple levels of users. 

♦ CIOs and enterprise architects. Provides a model for the government-wide 

financial business and information framework that complements agency 
4

architectures and fosters collaboration among the CFO7, CIO, and program 

communities; 

♦ Program executives and federal agencies. Explains financial management and 

systems and links financial systems to improved program performance. The 

Framework raises awareness regarding the importance of financial management 

systems and encourages program executives to be partners in developing more 

effective mission support and decision making tools;

♦ Commercial service providers. Provides information allowing contracted service 

providers and systems vendors to better support the Federal government.

Framework Document Organization

To be consistent with the Federal 

Enterprise Architecture (FEA), this 

Framework document is organized to 

correspond with the architectural layers8

as follows: business architecture 

(Chapter 2), data and information 

architecture (Chapter 3), application and 

services architecture (Chapter 4), and 

technology architecture (Chapter 5). The 

layers are addresses in this document as 

follows:

♦ Financial Management Business 

architecture describes the financial management business imperatives, key 

processes and desired performance outcomes that financial management 

systems must support.

♦ Data and Information architecture specifies the data and information structure 

that financial management systems must support.

♦ Applications and Services architecture defines the applications, services and 

components that support the integrated business, data and information flows. 

♦ Technology architecture describes the minimum technology and security features 

required for all financial management systems. 

This document also has five appendixes:

♦ Appendix A contains a glossary;

♦ Appendix B summarizes relevant federal statutes, regulatory guidance, and 

Statements of Federal Financial Accounting Standards;

 

7

 The CFO community is includes all financial management or related professionals carrying out financial 

responsibilities under the purview of the CFO Act. 

8

 The web-site of the CIO Council (www.cio.gov) maintains a repository of various architectural 

framework models currently in use.

Business

Data & Information

Applications & Services

Technology Financial Management

1 8
Chapter 1—Introduction and Purpose

5

♦ Appendix C summarizes the central agency interrelationship performed by the 

Department of the Treasury Financial Management Service;

♦ Appendix D summarizes the JFMIP Federal Financial Management System 

Requirements (FFMSR) documents. 

♦ Appendix E lists the contributors to the Framework document.
6

Chapter 2—Financial Management Business

The Future Federal Financial Management Systems Environment

The vision for federal financial 

management systems is a single 

integrated financial infrastructure with 

standardized applications and 

services that are supported and 

enabled by integrated financial 

management data and information.

Federal financial management 

systems must ensure accountability

and control of resources, and 

produce accurate, consistent, timely, 

and useful financial and program 

information to measure performance 

and inform decision makers at all 

levels. To achieve that requires standardized financial management applications that 

support integrated business processes operating efficiently on common data. 

The Roles of Federal Financial Management

Federal financial management consists of the 

financial policies, processes, organizations, 

applications, and services that ensure financial 

integrity and efficiency in government. 

Financial management fundamentally supports the 

mission of government and is an inherent function of 

the delivery of all programs. Financial management, 

at all levels of the government, must account for and 

control program execution through activities that: 

capture business event information; ensure budgetary 

integrity; establish financial control over obligations and costs; and produce accurate, 

consistent, and complete financial data to enable cost-effective mission achievement 

and risk mitigation.

Overview of the Federal Financial Management Environment

The federal financial management environment encompasses an integrated process 

of program authorization, resourcing, governance, execution, and reporting (see

Figure 1). Effective financial management depends upon appropriate control of 

business transactions, in accordance with internal control standards, and recording 

business event information in a manner that satisfies multiple users and uses.

Financial events are the basis for producing financial related information. The 

combined data from all financial transactions provide the data for enterprise 

Financial management 

must ensure fiscal integrity 

and efficiency in 

government operations and 

the delivery of programs.

Business

Data & Information

Applications & Services

Technology Financial Management

18
Chapter 2—Financial Management Business

7

management information and decision support. Users of financial information include 

the public, the President, Congress, agency heads, program managers, financial 

managers, the private sector, and other governments.

Specifically, financial event information must satisfy the following:

♦ Budgetary requirements (i.e., planned, authorized, and executed budgetary 

resources); 

♦ Cash management requirements (i.e., recording and accounting for cash 

flows);

♦ Accrual requirements (i.e., recording financial impact—expenses or revenues 

associated with business events—at the point those business events occur);

♦ Internal control and audit requirements; and

♦ Information exchange requirements.

Figure 1. Financial Management Environment

Enterprise Management 

Information and Decision 

Support

Financial Information

l Financial Statements

l Financial Reports

Budgeting

l Budget & performance Integration

l Human capital management

Program Management

l Performance Measurement

l All-resource Cost Accounting

l Life cycle management

Planning & Decision Support

l Strategic planning

l Annual Performance Report 

l Fee setting, A-25

l Competitive Sourcing, A-76

l Multi-agency missions

Framework for Financial Management

Modernization to enable change

- Goals & Objectives

Feeders - Enterprise -Agency Direction

Information Systems

l HR & Payroll

l Benefits

l Travel

l Acquisition

l Property Management

l Inventory

l Revenue

l Grants

l Loans

l Insurance Claims

Core Financial Functions

l Funds Management 

l General Ledger Management

l Cost Management

l Payment Management

l Receivable Management

l Reporting Data Mining 

And Mapping

Knowledge

Management

Commercial

Financial Systems

l Services & Components

lEnterprise data sharing

l Open architecture

l Integrated tools

Congress

l Appropriates funding

l Authorizes purpose

l Authorizes period of availability

lSets expenditure limitations

The Public Interest

l OMB

lAgency Missions

l Programs 

l Business Events

l Financial Events

Governance

Accounting

Service

Delivery

Satisfying the diverse information needs of multiple users can occur only through 

defined business rules and a defined information and data architecture. 

As federal programs are authorized, funding for them is derived from a number of 

sources, including appropriations, borrowing, deposit funds, and revenues. Agencies 

are authorized to use resources to carry out programs in accordance with the 

objectives intended by Congress, and within the authorized period of availability and 

expenditure limitations. 

In carrying out missions/programs, agencies use approved strategies for program 

delivery that may include private-sector partners, state and local governments, or 

other government agencies. Program execution results in financial events such as 

payments, grants, loans, insurance payments, revenue collection, etc. Recipients of 
8

financial services include the public, other government agencies, private-sector 

companies, universities, local, state and other national governments and institutions.

Financial Management Governance, Standards, and Stewardship

The foundation of the governmental financial 

management function is established in the 

U.S. Constitution, which invests Congress 

with the “power of the purse,” and the 

creation of a Treasury to perform the control 

functions of collecting, financing, and 

keeping the records. Article I of the 

Constitution gives the Congress the power to 

lay and collect taxes, duties, and excises to 

pay the debts and provide for the common 

defense and general welfare of the United 

States. It also mandates that “No money shall be drawn from the Treasury, but in 

consequence of appropriations made by law; and a regular statement and account of 

receipts and expenditures of all public money shall be published from time to time.”

Subsequent legislation created agencies, established funding for programs, and 

assigned fiduciary, oversight, and stewardship responsibilities:

♦ Governance. It is the responsibility of the Congress, OMB, Treasury, agency 

heads, CFOs, CIOs and other designated officials, to ensure that laws, 

regulations and policies are implemented in financial processes. Various 

organizations and committees, within agencies of the financial community 9, are 

delegated governance roles to help facilitate the developing and implementing of 

standards uniformly across the enterprise;

♦ Standards. Financial management standards are needed to provide consistent 

and timely capture of data and reporting. Financial management classification 

and coding structures must follow government-wide classification and information 

standards, and support upstream and downstream entities that generate or use 

the same financial data; and

♦ Stewardship. Responsibilities for accountability and compliance rest generally 

with agency heads, CFOs, and program managers. Federal financial and 

program managers, as users of data, should ensure that existing standards and

guidance are fully utilized.

 

9

 E.g.: FASAB; USSGL Advisory Board; CFO Council; etc. 

Financial activity must be 

executed in accordance with 

appropriations law and federal 

regulations and recorded in 

accordance with federal 

accounting standards in a manner 

that results in required financial 

accountability. 
Chapter 2—Financial Management Business

9

A performance-driven, 

results-oriented 

government that is 

accountable to its citizens 

depends on successful 

financial management 

systems that link financial 

management and program 

performance.

Financial Management Performance

The public, the President, the Congress, OMB, 

agency heads, agency financial and program 

managers, and others require accurate, consistent, 

timely, and relevant financial management 

information for evaluating program performance and 

outcomes. Such information is necessary to link 

financial performance that occurs through budget 

execution to expected program outcomes and 

results.

Dimensions of financial management performance 

include the following:

♦ Timely, accurate and consistent presentation of the financial condition of the 

entity and its components. This information informs decision makers on 

trends, defined period, and up-to-date status of resources inflows, outflows, 

and sustainability. In the federal environment, this performance dimension 

includes presentation of information on a budgeted basis and on an accrual 

basis;

♦ Adherence to defined business rules. These operational performance metrics 

show current and trend information regarding foundation elements that 

support effective and efficient financial management and reporting. Examples 

include capturing information consistent with accounting standards, 

maintaining complete information, recording and reconciling transactions 

within defined parameters, and issuing payments accurately; and

♦ Capture and reporting of full cost information and trends by entity, 

organization, program, project, activity, processes, outputs and outcomes.

This element of financial management performance provides information 

necessary for decision makers to improve managerial performance (cost 

efficiency), to assess whether the program results are worth the cost (cost 

effectiveness), and to establish appropriate reimbursements or fees.

Financial Management Performance Goals

A performance-oriented, results-driven government requires clearly identifiable and 

measurable performance goals for both financial and non-financial programs. Financial 

management performance is a supporting component of overall performance and 

effectiveness of federal programs. As such, financial and program performance goals 

are interdependent.

The broad financial management performance goals and expected outcomes are to:

1. Maintain accountability and establish financial control over funds.

♦ Ensure budgetary integrity by establishing financial control over funds, 

obligations, assets, and liabilities;
10

♦ Safeguard and control federal resources to prevent waste, fraud, abuse, and 

mismanagement;

♦ Ensure the reliability of the government’s reported financial condition;

♦ Ensure efficiency in financial operations by maintaining an effective financial 

infrastructure; and

♦ Ensure public confidence and credibility through effective financial management 

governance, standards, and stewardship.

2. Improve program performance by providing management information for decision 

support that links financial and program performance.

♦ Maintain efficient business processes that capture and account for the financial 

components of business events;

♦ Enable effective decision making at all levels of the government to support costeffective mission achievement and risk mitigation;

♦ Disclose the cost and performance of federal programs and activities to the 

citizens, President, Congress, program managers, and financial managers; and

♦ Provide information and visibility regarding program costs, projections and 

performance, enabling decision makers to better address vital public needs; 

Linking Program Delivery with Financial Management

Congress, in exercising its power of the 

purse, authorizes programs and funding for 

specified purposes and uses that are carried 

out through agency missions and programs. 

Program delivery results in financial events 

such as acquisitions, grants, loans, payment 

of benefits, payroll, etc., which become the 

basis for financial transactions that must be 

captured through standard business 

processes and recorded.

All financial events that occur in carrying out the delivery of government programs 

must be carried out in accordance with their intended purpose and recorded as 

financial transactions in accordance with standards.

Financial transaction processing provides accounting and control over financial 

events and is the basis for collecting and organizing financial data. The data collected 

from financial events become the basis for ensuring accountability and providing 

accurate and meaningful decision support information.

Figure 2 below illustrates how financial transaction processing links the agency 

mission and programs with the broad financial management performance goals of 

ensuring accountability and control and improving program performance.

A financial event is any activity 

carried out in the delivery of the 

agency mission and programs that 

has a financial impact. Financial 

transactions are the component of 

financial events that must be 

recorded.
Chapter 2—Financial Management Business

11

Figure 2. Linking Financial Management and Program Delivery

Mission of 

Government

Program Delivery

Authorization and Financing

Financial 

Management

Financial 

Management 

Performance 

Outcomes

Ensure accountability and control

Pay & Benefits, Travel, 

Contracts & Acquisition, 

Grants, Loans, Benefits, 

Revenues, etc

Financial Management Data and 

Transaction Processing

Budget/Performance 

integration

Management Information for 

Decision Support 

Agency Mission/

Programs

Business

Events

Financial

Transactions

Financial Management

Information

Program Management

Information

Improve program performance

External

Information

Internal

Information

Key Financial Management Business Processes

This section summarizes the key federal financial 

management business processes that occur within 

and among federal agencies. 

The key financial management business processes 

encompasses the interrelationships between both 

agency and central agency components. 

The information needed for accountability and 

improved program performance begins with data 

collected through transaction processing. The key 

financial processes control, classify, organize, and 

consolidate common financial transactions and data 

from business events across the enterprise and 

provide the basis for integrated information and reporting.

Transaction information originates in multiple programs as unique program-specific 

business events, but share common accounting attributes. Business events are 

translated into financial transactions that can be classified and processed for 

reporting purposes. Integrated financial data and information are derived from the 

financial components of business events that originate in disparate programs, 

processes, and systems across the enterprise—into common financial transactions 

that capture financial information needed for downstream information and reporting 

requirements. As business processes become increasingly interdependent, financial 

systems must support the integration of data and information flows within these 

Key Financial Management 

Business Processes 

♦ Budget and Finance

♦ Accounting

♦ Collections and Receivables

♦ Payments

♦ Assets and Liabilities 

♦ Reporting and Information. 
12

systems. Moreover, data integrity should be maintained by strong internal control10

including the establishment of an information security program as called for by the 

Federal Information Security Management Act of 2002 (FISMA) 11.

1. Budget and Finance

Managing the federal budget process involves planning, programming, and executing 

the federal budget as prescribed by the President and intended to be carried out by 

Congress and in accordance with legislation, laws, and policies. Performance 

measures must also be built into the budget process to enable budget execution 

results to be linked to program execution. 

♦ Budget formulation involves managing the federal budget process, including the 

development of plans and programs, budgets, and performance outputs, 

outcomes and cost information. It encompasses the cycle wherein budget 

estimates are developed by agencies using projections and forecasts, submitted 

to OMB for review, transmitted by the President to Congress, and tracked 

through the congressional appropriations process. Budgets are formulated based 

on proposals, evaluations, prior performance, and policy decisions; and

♦ Federal finance includes funding federal programs and operations through 

appropriation and apportionment of direct and reimbursable spending authority, 

fund transfers, investments, and other financing mechanisms.

2. Accounting 

Accounting is fundamental to stewardship of public funds. The purpose of accounting 

is to record financial events and ensure accountability as required by law. Accounting 

data must also provide the basis for program performance measurement. Accounting 

principles and standards govern when, where, and how financial events are executed 

and recorded, and provide for accountability through agency and consolidated 

financial statements required by law. The financial component of business events 

must be properly recorded in accordance with applicable accounting and information 

classification standards. Accounting data must also be linked to performance 

measurements through assignment of costs to programs, projects, and activities. The 

following elements support the function of recording accounting transactions, and the 

subsequent preparation of financial statements:

♦ Financial classification structure maintains a government-wide and agency 

accounting and program classification structures, i.e., appropriations, OMB object 

classes, USSGL accounts, and other classifications for identifying end use, 

outcome, or organizational responsibility associated with financial transactions. It 

also includes managing the program, project, and activity classification for 

transactions needed for maintaining managerial cost accounting in support of 

program performance measures. A mandatory component of the financial 

classification structure is the U.S. Standard General Ledger. The U.S. Standard 

General Ledger maintains general ledger and control over proprietary and 

budgetary resources at the agency, department and government-wide levels. 

 

10 E.g. Standards for Internal Control in the Federal Government as published by GAO 

11 Reference Appendix B.
Chapter 2—Financial Management Business

13

♦ Budgetary accounting provides funds control and accounting for the execution of 

the budget (distribution of funds, advances, obligations, expenditures, collections, 

and receivables), including payroll and benefits management, travel 

management, acquisition of goods and services through private contracts and 

inter-agency agreements, acquisition of supplies and equipment, and 

administration of federal grants, subsidies, benefits, guarantees, and 

entitlements; and

♦ Proprietary Accounting records and reports on the all assets, liabilities, revenues, 

and expenditures related to appropriations and all other financial resources, 

federal agencies and the government as a whole. Proprietary and budgetary 

accounting must be linked through use of the U.S. Standard General Ledger.

Figure 3 provides an overview of the accounting process.

Figure 3. Overview of the Accounting Process

03/04/2003

Treasury/FMS

Financial Report 

of U.S. Government

• Monthly Treasury Statement 

• Combined Statement of 

Receipts, Outlays and Balances

of the U.S. Government

Monthly Reporting

& Reconciliation of 

Fund Balances

Fund Balance

& Other Cash

• Daily Cash Position 

• Daily Treasury Statement 

Banking System

President, Congress, Public, Federal Program Agencies

Bank Reporting/

Accounting Data

Government-wide

Accounting

Government-wide

Financial Reporting

Trial Balances

Trial Balances

Mission/Program 

Delivery/ Financial 

Events

Financial 

Transactions

Agencies

Budget Execution/ 

Funds Control

Accounting 

Classification

U.S. Standard 

General Ledger

3. Collections and Receivables

Managing collections is an accounting and control function that ensures standard 

transaction processing for collecting funds into the Treasury and agency accounts in 

accordance with laws and applicable accounting standards. It encompasses the 

stewardship, governance, and infrastructure to support the constitutionally mandated 

function of collecting money to finance government into the Treasury through taxes, 

fines, fees, forfeitures, and donations. Funds are also collected through the sale of 

property, user fees, leases, royalties, etc., that result from government operations.

Federal program agencies, the Department of the Treasury, and the Federal Reserve 

System are the primary components responsible for establishing and ensuring fiscal 

integrity of collections processes. Federal agencies, in carrying out their missions and 

programs, collect funds from individuals, corporations, and governments (federal, 

state, local and international) as part of their daily operation and deposit them into 

Treasury accounts through the Federal Reserve System, using a variety of available 
14

collection mechanisms12 and systems. The Treasury records and accounts for the 

collection of funds on behalf of agencies and the public.

The following activities support the collections process:

♦ Managing Revenue Collection Programs and Activities. Developing pricing 

structures and determining user fees for exchange revenues for sales of goods 

and services to the public or other federal agencies or determining non-exchange 

revenue in accordance with applicable standards.

♦ Collection Operations. Maintaining effective program and agency processes and 

systems to ensure the timely and accurate collection of funds; and

♦ Receivables Management. The management of receivables, including their 

accuracy and tracking, and referring debt to the other entities in accordance with 

the Debt Collection Act and supporting policy.

♦ Debt Management. Managing the collection of receivables generated through 

program delivery and maintaining effective agency and central agency processes 

and mechanisms for collecting delinquent debt owed the U.S. government.

Figure 4 below provides an overview of the collections process.

Figure 4. Overview of the Collections Process

Federal Reserve

Banks

Report on 

Collections 

Deposits

Report on Collections 

Transferred Funds,

Government

Receipts

Deposit Tickets

ACH Details

Fedwire

Lockbox

Plastic Card

Network

REX

TGA Domestic/

Int’l

Commodity

Credit

Collections

FED TAX II

Pay.Gov

EFTPS

Mission/Program 

Delivery/ Financial 

Events

Collection 

Transactions

Processing

Receipts 

Agencies

Individuals/

Corporations

Financial

Institutions

Treasury

Deposits

Reconciliation

4. Payments

Processing payments refers to the disbursement of federal funds, via a variety of 

mechanisms,13 to federal entities and private individuals, federal agencies, 

governments (state, local and international), and the private sector, to pay for goods 

and services or to distribute entitlements, benefits, grants, subsidies, loans, or claims.

 

12 The Treasury Financial Manual (TFM), available at www.fms.treas.gov describes collections methods, 

systems, and formats.

13 The Treasury Financial Manual (TFM), available at www.fms.treas.gov describes disbursing methods, 

systems, and formats. 
Chapter 2—Financial Management Business

15

Managing payments is an accounting and control function that ensures standard 

transaction processing for disbursing funds out of the Treasury on behalf of federal 

program agencies and bona-fide liabilities incurred in carrying out federal programs 

and missions. It encompasses the stewardship, governance, and infrastructure to 

support the constitutionally mandated function of financing government operations.

Federal program agencies; the Department of the Treasury; Financial Management 

Service (FMS); and the Federal Reserve Banks are the primary components 

responsible for establishing and ensuring fiscal integrity of payment processes. 

Payments are made by the FMS or authorized non-Treasury disbursing office (e.g. 

Department of State, Department of Defense, U.S. Courts, etc.) and drawn on the 

U.S. Treasury on behalf of federal program agencies. Payments are made by 

disbursing funds against accounts maintained by Treasury, that identify the agency 

and appropriation from which the payments are requested. Agencies must certify 

payments and reconcile fund balances in agency accounts against those balances 

maintained at Treasury.

Figure 5 below provides an overview of the payments process.

Figure 5. Overview of the Disbursement Process

Federal Reserve Bank

Payee’s Financial 

Institution

Treasury

Regional Financial Centers

ACH

Checks

Accounting Info.

Payment Summary 

and Appropriation Info.

Accounting 1nformation.

EFT

• Central Accounting

• Check Reconciliation

Treasury HQ

Payees

U.S. Postal Service

Agencies

Mission/Program 

Delivery/ Financial 

Events

Financial 

Transactions

Payment Schedules,

Certification & 

Reconciliation

Reporting.

Check

Deposits

5. Management of Assets and Liabilities

Managing government assets and liabilities is an accounting and control function that 

ensures standard transaction processing, accurate valuation, and disclosure of the 

acquisition and disposition of assets, and stewardship in accordance with standards.

The following activities support this function:

♦ Cash management. Managing the federal government’s receipts, cash flow, and 

the cost of banking, borrowing, and financing associated with financing the daily 

operation of the federal government;
16

♦ Property Management. Transaction processing, accounting, and valuation 

associated with acquiring or managing property, inventory, information 

technology, seized and forfeited, and other physical assets;

♦ Loan Management. Transaction processing, valuation and accounting for loan 

portfolios either direct or guaranteed by the federal government. 

♦ Management of trust funds. Providing transaction processing in support of 

managing funded and unfunded liabilities, including benefit and insurance 

programs for social insurance, pensions, claims. etc; and

♦ Public Debt Management. Managing and accounting for investments in Treasury 

securities and borrowing on behalf of federal agencies (intra-governmental), and 

sales of Treasury securities to the public.

6. Reporting and Information

Financial information supports management decision-making and program 

performance. Generating financial management information for decision support is a 

by-product of accounting for the financial data collected through financial transaction 

processing. Financial managers, as the key stakeholders in financial data, must work 

with CIO and program managers to ensure that effective business processes, 

information flows, and data architectures meet decision support and reporting 

requirements. Providing financial management information and analysis is critical to 

ensuring fiscal integrity and improving program performance and linking financial 

management with program performance measures.

Reporting and providing information on the financial status of government operations 

and use of financial resources (financial reporting) to improve financial performance 

and support the goal of ensuring fiscal integrity include the following activities:

♦ Preparation of financial statements. Preparing agency financial statements as 

required by law for preparation by Treasury of the consolidated Financial Report 

of the United States Government; and

♦ Program management information for decision support. Providing financial 

information that is tailored to be useful to decision makers at multiple levels of 

responsibility. It relies on the capture of detailed financial and programmatic data 

that are converted to information using defined reports as well as analytic tools 

such as data warehousing, data modeling, and data mining. Budget and 

performance integration, and managerial cost accounting, are examples of 

program management information that can be used to support informed 

management decisions.

Figure 6 below provides an overview of the reporting and information process.
Chapter 2—Financial Management Business

17

Figure 6. Overview of the Reporting and Information Process

Performance 

Reporting

Program 

Execution

Business 

Events

Financial 

Transactions

Transaction 

Processing

Financial 

Data

Consolidated 

Financial Stat

eme

Rep

ortin

Infor

mati

Agency Financial 

Statements

Managerial Cost 

Accounting

Mission 

Executive Support and 

Information

Public 

Informatio

Agen

cies

Performance 

Reporting

Program 

Execution

Business 

Events

Financial 

Transactions

Transaction 

Processing

Financial 

Data

Consolidated 

Financial Stat

eme

Rep

ortin

Infor

mati

Agency Financial 

Statements

Managerial Cost 

Accounting

Mission 

Executive Support and 

Information

Public 

Informatio

Agen

cies

Program 

Execution

Business 

Events

Financial 

Transactions

Transaction 

Processing

Financial 

Data

Consolidated 

Financial Stat

eme

Rep

ortin

Infor

mati

Agency Financial 

Statements

Managerial Cost 

Accounting

Mission 

Executive Support and 

Information

Public 

Informatio

Agen

cies
18

Chapter 3—Financial Management Data 

and Information

This chapter broadly describes the 

financial management data and 

information structure that financial 

management systems must support. 

The financial management data and 

information structure encompass the 

data flows, information, and reporting 

that ensure accounting and control

over financial events and provide 

management information to support 

program delivery.

The role of the financial management 

data and information architecture is critical to achieving the vision for financial 

management systems. The goal is not a single system, but to evolve from the current 

environment that is characterized by stove-piped and redundant systems to a single 

financial infrastructure with standardized applications and services that are supported 

and enabled by integrated financial management data and information. As financial 

events occur throughout the enterprise, financial managers are dependent upon 

integrated financial systems to meet enterprise management information and 

reporting requirements. Integrated financial management systems, to operate 

efficiently must be standardized and enabled by standardized business processes, 

information flows and a common data and information architecture. The CFOs, as 

users of financial data that occur throughout the federal government, must ensure 

that the information structures and processes are in place to collect and maintain data 

in financial systems to meet all expected financial and program performance 

information requirements. 

Overview of the Financial Management Information 

Process Flow

Program performance is enabled by financial management information that is based 

on an information architecture that captures and classifies data for financial reporting 

and performance measurement. The financial management information structure 

must provide the capability to capture financial data as events occur using a standard 

classification structure that facilitates efficient roll-up for downstream reporting and 

information at various levels.

Data standardization14 is essential to timely and accurate reporting. The accounting 

classification structure is the link between events, transaction data, and reporting. 

Financial and program data must be captured at the time of the financial event, to the 

extent possible, using standard data definitions and classification. It is the 

 

14 Data standardization is defined as the discipline of establishing common data definitions that are 

compatible across multiple systems and organizations owning data.

Business

Data & Information

Applications & Services

Technology Financial Management

1 8
Chapter 3—Financial Management Data and Information

19

responsibility of financial managers to ensure that the accounting classification 

structure supports end-to-end data standardization in financial accounting processes.

Figure 7 below illustrates an overview of the flow of financial information and data.

Figure 7. Overview of the Financial Management Information Structure

Fiscal Integrity

Financial Management Information

Financial Statements and Reporting

Program Management Information

Performance Measurement and Reporting

Managerial Cost Accounting

Program Data

Financial and 

Program Data

Financial Transaction Processing

Payroll

Travel

Grants

Loans

Benefits

Appropriations

Collections

Disbursements

Accounting Classification & Coding Structure

Improved Program Performance

Financial Data

The data collected become the basis for generating effective financial and program 

information and reporting. Transaction processing may be accomplished through 

different service delivery components (for example, done in-house, outsourced, or 

cross-serviced); however, internal control must still be built into all transaction 

processing, and data collected through transaction processing must provide 

information for both financial and program reporting:

♦ Financial management information includes financial information and reporting 

required by law, driven largely by external reporting requirements15 and governed 

by applicable accounting standards. Examples of financial data include 

appropriations, fiscal year, standard general ledger account, OMB object class 

codes, and other means of classifying, accounting, and controlling financial 

transactions. The financial information structure must support an audit trail that 

links financial reporting and information with the supporting financial transactions 

and events; and

♦ Program management information is the information needed for program/mission 

support and performance. Examples of data supporting management information 

and reporting are the identification of cost with the program, project, activity, or 

 

15 Treasury, OMB, FASAB, etc.
20

other data that support managerial cost accounting, performance measurement, 

and other means of evaluating mission effectiveness.

Data and Information Performance Goals

The financial management information structure supports the broad goals of ensuring 

fiscal integrity and improving program performance. Performance goals and desired 

characteristics for financial data and information are described below:

♦ Enable compliance with federal accounting standards and requirements for 

financial information and reporting;

♦ Ensure that all financial data needed to meet financial and program information 

requirements are captured at the inception of a business event;

♦ Provide a management information and decision support structure that uses 

standard data definitions, business rules, and accounting classifications;

♦ Support the integration and roll-up of financial data to meet downstream 

reporting;

♦ Integrate budget and performance by providing full cost accounting for programs, 

projects, activities, and other performance measurement criteria; and

♦ Enable internal controls that ensures fiscal integrity through accountability and 

control.

Information Architecture

The information architecture addresses financial information at the event (transaction) 

and reporting (summary) levels. Financial systems must support standard data 

classifications for recording financial events and maintaining summary level 

information. In addition, an agency’s standard data classifications must incorporate 

government-wide data and information standards to support interrelated governmentwide business processes or reporting.

Data standards may occur at either the event-level or the reporting-level of the 

information architecture. In either case, data classifications need to use consistent 

definitions throughout the financial event collection and reporting processes. Data 

element names, definitions, formats, domains, uses, and attributes should be 

specified in establishing data requirements used by financial management systems.

Event-Level Architecture

A financial event is any occurrence having financial consequences to the federal 

government related to the receipt of appropriations or other financial resources; 

acquisition of goods or services; payments or collections; recognition of guarantees, 

benefits to be provided, or other potential liabilities; or other reportable financial 

activity. Proper accounting classification of financial events is critical to the entire 

management information process. Events occur routinely as a result of the business 
Chapter 3—Financial Management Data and Information

21

activity of the government. These events are recorded in financial management 

systems as “transactions.” 

The event level architecture provides for the proper classification of data at the point 

of original entry to support all the elements of the reporting architecture. The event 

level architecture also provides for appropriate transaction identification and control, 

eliminates the need for redundant data collection processes for multiple reporting 

level architecture requirements, and supports the collection of complete transaction 

data when a financial event occurs. 

The event level architecture is used to capture and record transaction data on 

individual financial events. Transaction data provide the critical link between program 

delivery and financial event processing, and provide the basis for information 

necessary for program managers, senior agency executives, and Congress to carry 

out their responsibilities to government and to the public. Transaction data about an 

individual financial event includes transaction control data for tracking the event, 

financial data for classifying the type of financial activity, and program activity data for 

capturing related non-financial characteristics.

Figure 8. Event Level Architecture

Financial Transaction

Event Specific Data

Agency Standard Data

Financial Data Program 

Activity Data

Transaction 

Control Data

Government-wide 

Standard Data

Transaction Data

Event Level Architecture

Reporting Level Architecture

Reporting

•Financial

•Performance

Financial 

Information

Program 

Information

Management Information and Decision Support

Reporting-Level Architecture

Effective program execution requires providing information to customers about their 

interactions with the federal government, to agency managers for operating decision 

making, to senior administration officials for policy decision-making, and to the 

Congress to understand the status of government programs. The reporting-level 

architecture is the structure of data and its presentation to meet these information 
22

requirements (Figure 8). Reporting needs to be of proper scope, level of detail, 

timing, content, and presentation format to provide information of real value to users.

The reporting-level architecture is used to summarize transaction data and provide 

the financial and program information necessary for internal and external reporting.

The reporting component of the reporting-level architecture provides for the 

presentation of financial and performance information. It provides users access to 

understandable information about what the government is doing and how well it is 

doing it. Financial reporting provides information on the financial condition of the 

federal government at a point in time or over a period of time. Performance reporting 

answers the question: “How effective and efficient are operations and programs?” 

Performance reporting may use data from sources other than the financial 

management systems (e.g., economic indicators, crime rates) to measure program 

outcomes.

Figure 9. Reporting Level Architecture

Accounting

Financial 

Information

Program 

Information

Reporting

Transaction 

Processing

Summary Information Classification Structure

Performance

Measurement

t

Cost

Accounting

Transaction Control Data

Financial Data Program 

Data

Transaction Classification Structure

Financial 

Classification 

Structure

Reporting Level Architecture

Reporting

• Financial

• Performance

Financial 

Information

Program 

Information

Management Information and Decision Support

Reporting Level Architecture

Reporting

• Financial

• Performance

Financial 

Information

Program 

Infor mation

Management Information 

Structures Supporting the Information Architecture

The information architecture is supported by the data contained in the event-level 

architecture and the reporting-level architecture such that meaningful and useful 

information can be obtained. The various structures work together in a cohesive 

architecture to enable accurate, internally consistent, and meaningful data to be 

collected and reported on financial events.
Chapter 3—Financial Management Data and Information

23

The financial and related information classification structures provide the ability to 

collect and summarize information consistently and at the appropriate levels of detail 

for users at multiple levels in the government. Collectively, this information is used to 

support financial and performance reporting requirements. The reporting structure 

provides the necessary access to information captured by the financial management 

systems using the financial and related information classification structures.

Standardized and consistently defined data elements in the transaction classification 

structure linked together by appropriate encoding relationships with the summary 

information classification structure provide the bridge between the event-level data 

requirements and the summary-level information requirements. The summary 

information classification structure, supporting the summary-level information 

requirements, assembles the data into meaningful categories that can be made 

accessible for a variety of reporting purposes.

Financial and performance reporting is based on the summary information 

classification structure, but also may require data contained in data structures 

external to the financial management systems to be used to make the information 

meaningful, complete, and useful for decision making. The transaction classification 

structure of the event-level architecture and the summary information classification 

structure and reporting structure of the reporting-level architecture work together to 

provide the necessary description of financial events to ensure the integrity of 

financial and related information collected and reported.

Transaction Classification Structure

The data elements to properly track and classify a financial event are contained in the 

transaction classification structure and are categorized as financial data, program 

activity data, and transaction control data. The transaction classification structure is 

used to track individual transactions and relate them to financial events. The 

elements of financial data (e.g., fund, object class, dollar amount) and program 

activity data (e.g., activity type, program unit) within the transaction classification 

structure provide the minimum data needed to derive the full classification of 

information for financial and program information. Financial data and program activity 

data can work in concert to assess performance, and in some instances, performance 

measures can be extracted from either data type individually. Transaction control 

data within the transaction classification structure provide the audit trail for financial 

events and may also be used to assess performance. Transaction control data 

include such elements as transaction source, document/reference number, 

transaction ID or control number, transaction type, effective date, and posting date. 

This structure provides for the coding necessary to collect data to support the 

summary information classification structure.

Summary Information Classification Structure

The summary information classification structure consists of financial and program 

information. These classification structures are used to categorize summary-level 

financial and program information necessary for the users to understand the 

implications of financial decisions and to track performance of programs.
24

The financial information classification structure is used for collecting, categorizing, 

tracking, monitoring, and reporting information on the status of financial resources at 

federal agencies. It provides the structure for collecting budget and financial 

information for reporting, ensuring financial accountability, and linking budget 

formulation and budget execution.

The program information classification structure is used for collecting, categorizing, 

tracking, monitoring, and reporting cost accounting, performance metrics or other 

management information for the status of programs and activities. 

Reporting Structure

The reporting structure of the information architecture provides access to the 

information captured by the financial management systems. The reporting information 

structure supports requirements for reporting and providing information on the 

financial status of government use of financial resources (financial reporting) and the 

effectiveness and efficiency of delivery (performance reporting). The reporting 

structure facilitates analysis of financial and program performance. 
25

Chapter 4—Financial Management Applications 

and Services

This chapter provides an overview of the 

federal financial management applications 

and services16 architecture and describes 

the major applications that support federal 

financial management.

Financial applications and services refers 

to the financial management systems17

that support federal financial management 

systems requirements. 

The JFMIP requirements documents 

describe the primary financial 

applications18 currently supporting the 

federal government. The specific JFMIP requirements documents list and describe 

the functionality that provides the basis for service-level components. Examples of 

service components might be funds control, advances, billing, or other functions that 

together constitute the functionality of the particular application. 

Role of Financial Management Systems in Supporting the Vision

To support the vision, financial management systems must support a single financial 

management infrastructure with standardized applications that are supported and 

enabled by integrated financial management data and information. Getting there is 

dependent upon achieving common business processes; integrated data and 

information; and developing applications that maximize the use of software that 

standardize, integrate and share data. The critical importance of an integrated 

information and data structure as a key dependency for achieving this goal was 

discussed in Chapter 3. Equally important is that financial applications should be 

designed with this goal in mind and be based on technology and approaches that 

facilitate rather than hinder the integration of data and information from multiple 

applications across the enterprise. Future financial applications must be designed to 

be flexible and not “locked in” to specific technologies or service providers that don’t 

enable easy integration of data across multiple applications or recognize commonality 

in other applications.

 

16. The financial applications and services are a component of the Federal Enterprise Architecture 

developed by the FEA Program Management Office. The JFMIP Federal Financial Management Systems 

Requirements series informs the financial management segment of the Federal Enterprise Architecture 

(FEA) at the Applications and Services layer. 

17 Financial systems are defined in OMB Circular A-127. Includes Core Financial, Mixed Systems, 

Subsidiary and central agency systems whether Commercial Off-the-Shelf Software (COTS), custom 

developed, hosted by another government entity, or provided by a commercial application service provider.

18 Benefits, Guaranteed Loans, Direct Loans, Seized Property and Forfeited Assets, Travel, Human 

Resources and Payroll, Budget Formulation, Non-Tax Revenue, Acquisition, Property Management, 

Inventory, Grant Financial, Insurance Claims, and Core Financial.
26

Financial management relies 

on the applications systems 

and underlying technology to 

deliver the information needed 

to support analysis and 

decision making at every level.

Along the way, the outcome of the changing applications and services environment 

must still remain constant—to record the financial aspects of all financial events, 

provide internal control and accountability, and provide the basis for integrated 

financial and program management information. The delivery of agency applications 

and services will continue to evolve through consolidation and outsourcing. The 

CFOs, as owners and stakeholders of the financial business requirements, must 

implement an acquisition strategy for financial systems that fully meets requirements 

but that also moves forward in step with the larger agency and government-wide 

strategy. Identifying the applications’ services and components across the enterprise 

will help identify opportunities for shared services.

Financial Management Systems Performance Goals

Financial management systems are the link between financial management and 

program performance. Financial systems that are effective and efficient must do the 

following:

♦ Demonstrate compliance with accounting standards and requirements;

♦ Provide timely, reliable, and complete financial management information for 

decision making at all levels of government;

♦ Meet downstream information and reporting requirements with data linked to 

transaction processing systems, i.e. have the financial transactions capture all 

the information needed for reporting purposes, and have the reporting tools 

linked to the transaction data so that reports and analyses can be produced. 

♦ Provide and accept standardized data to and from other internal, governmentwide, or private-sector processing environments (interoperability);

♦ Provide for “one-time” data entry and reuse of transaction data to support 

integration, interfacing, or business and reporting requirements;

♦ Build security, internal control, and accountability into processes and provide 

adequate audit trails;

♦ Be modular in design and built with reusability as an objective;

♦ Meet the needs for greater transparency and ready sharing of information;

♦ Scale to meet internal and external operational, reporting, and information 

requirements for both small and large entities; and

♦ Evolve to meet changing business needs, policy, and technology.

Financial Applications Types

This section broadly defines the financial 

applications and services (systems) 

comprising the existing architecture as 

described by the JFMIP Financial 
Chapter 4—Financial Management Applications and Services

27

Management System Requirements. Identifying the interrelationships and 

dependencies among financial systems is critical to planning for the integration of 

financial information and services across the government enterprise.

Financial applications must integrate common data from multiple services across the 

enterprise. The primary financial applications types are core financial, 

subsidiary/feeder, mixed financial, and central agency. They are defined as follows:

♦ Core financial system. The core financial system is an integral part of an 

agency’s single integrated financial management system. It controls and 

supports the key functions of an agency’s financial management, including 

general ledger management, funds management, payment management, receipt 

management, cost management, and reporting. The core financial system 

receives data from other financial and mixed systems and from direct user input, 

and it provides data and supports processing for those systems that need it, 

including department and government-wide reporting systems. 

♦ Subsidiary/feeder applications. Subsidiaryapplications account for financial 

transactions (e.g., payroll, accounts receivable, accounts payable) externally, i.e. 

subsidiary to the core financial system. Subsidiary systems manage components 

of the core financial system functions of general ledger management, funds 

management, payment management, receipt management, cost management, 

and reporting. Subsidiary applications must “feed” related data to the core 

financial system to ensure general ledger and funds control. Integration of 

processes and data between core and subsidiary applications is a critical factor 

in producing timely and accurate financial management information and 

accountability. 

♦ Mixed financial applications. Mixed financial applications are program/business 

support applications that have a financial management component. The financial 

data in mixed systems must integrate with the agency’s general ledger, funds 

control, and financial reporting by feeding financial data to the agency’s core or 

financial reporting system. Examples of mixed financial applications are loans, 

benefits, insurance claims, seized assets, property management, inventory, 

acquisition, and grants. Strategic planning for standardizing data and ensuring 

business efficient processes is critical for the CFO, as a key stakeholder in the 

financial data generated by mixed financial systems; and

♦ Central agency applications. Central agency applications provide centralized 

support for common government-wide business transaction processes and 

consolidated reporting. Central systems are provided by “Central Agencies”, 

including the Department of the Treasury, OMB, and OPM. They support the 

central agency component of shared agency-central agency business processes.

Examples are payments, collections, and consolidated financial reporting 

provided by Treasury (central agency) on behalf of federal program agencies. 

Appendix D, Department of Treasury, Financial Management Service 

Interrelationships, further describes the central agency role. Federal Financial 

System Requirements
28

JFMIP Federal Financial Management System Requirements 

Series (FMFSR) 

The JFMIP Financial Management System Requirements documents describe the 

core, mixed program and major subsidiary financial systems requirements for 

agencies. The framework overview below provides a view of the current financial 

management applications and services architecture described by the current JFMIP 

requirements series. While the Framework illustration below represents the current 

as-is applications and services environment, the individual requirements documents 

that comprise it address both current and future needs. Each financial system 

requirements document is organized around services and financial event processing 

that support various mission and program delivery, based on laws, regulations and 

standards, and developed with the consensus of financial and program stakeholders. 

The financial system requirements documents describe the services, components, 

and functional requirements for a particular application, based on the accounting 

standards, standardized business processes, data, and information that the system 

must be designed to meet. Agencies may also identify requirements and supplement 

those compiled by JFMIP. 

 Figure 10 illustrates the Framework.

Figure 10. Framework

Acquisition

Seized Property

& Forfeited Assets

Human Resources

& Payroll

Travel

Non-financial

Direct

Loans

Benefits

Grant Financial

Insurance Claims

Guaranteed

Loans

Non-Tax 

Revenue

Budget

Formulation

Inventory

Property

Management

Core

Accounting & Reporting

Managerial Cost Accounting
Chapter 4—Financial Management Applications and Services

29

Application Types

Applications Core Financial System

Subsidiary Financial SystemMixed Financial/Program SystemDecision Support SystemTransaction Processing System

Core Financial Systems X X

Managerial Cost Accounting Systems X

Budget Formulation Systems X

Revenue Systems X X X

Acquisition Systems X X X

Property Management Systems X X X

Inventory Systems X X

Grants Systems X X

Insurance Claims Systems X X

Guaranteed Loan Systems X X

Direct Loan Systems X X

Benefits Systems X X

H/R Payroll Systems X X

Travel Systems X X

Seized and Forfeited Assets Systems X X

Financial Management Applications and Services Relationships

Financial Applications 

Types

The financial applications and 

services described by JFMIP 

Financial System Requirements 

is composed of agency core 

financial, mixed, and 

subsidiary/feeder systems. 

Some applications may be 

designed as either subsidiary or 

mixed systems. The primary 

function of each application 

might also be described as 

either for the purpose of 

transaction processing or 

decision support. Table 1 

describes these relationships. 

Key Financial Processes 

Supported by Financial 

Application Types

Table 2 displays how the 

financial applications described 

by JFMIP requirements 

documents cuts across the key 

financial management business 

processes described earlier. 

Financial applications support 

the key financial business 

processes and are the 

foundation for processing 

transactions associated with 

business events and producing 

information output. 

Financial Applications Described 

by JFMIP requirements

Key Financial Business Processes

Accounting Budget and FinancePaymentsCollectionsAssets and LiabilitiesReporting and Information

Financial Applications Described 

by JFMIP requirements

Core Financial Systems X X

Budget Formulation Systems X

Revenue Systems X

Acquisition Systems X

Property Management Systems X

Inventory Systems X

Grants Systems X

Insurance Claims Systems X X X

Guaranteed Loan Systems X X X

Direct Loan Systems X X X

Benefits Systems X X

H/R Payroll Systems X

Travel Systems

Seized and Forfeited Assets Systems X X

Table 1. Financial Application Types

Table 2. Key Financial Processes Supported by 

Applications
30

Primary Transaction19

Processing 

Accomplished by the 

Financial Applications

Table 3 depicts the 

primary financial 

transactions processed by 

the various financial 

applications depicted by 

the JFMIP Framework. 

This chart helps to identify 

where different financial 

events may result in the 

same financial transaction 

type but processed in 

different financial 

systems. The chart may 

help identify efficiencies in 

transaction processing by 

identifying common 

transactions. Managerial 

Cost Accounting and 

Budget formulation are decision support systems as opposed to transaction 

processing systems. 

Government-wide Applications Integration

Today, data often resides in unconnected, redundant, and at times incompatible 

stovepipe applications that reflect decades-old business processes. The financial 

environment of the future requires standardized data, common transaction 

processing, and consistent internal control to support data integration for 

accountability and decision support. Effective governance and leadership are needed 

to affect the magnitude of the change required to transition from the current 

environment to the future vision. 

Achieving reliable, timely and accurate financial management information requires 

integration of financial systems and data. Integration of systems traditionally means 

that financial systems and the financial portions of mixed systems (including the 

software, hardware, personnel, processes (manual and automated), procedures, 

controls and data) are planned for and managed together, operated in an integrated 

fashion, and linked together electronically. Achieving an integrated financial 

infrastructure is key and presents the greatest challenge to achieving the future vision 

for financial managements.

Financial applications must be capable of accepting data from multiple sources in 

order to meet downstream reporting requirements. Integrating financial applications 

is dependent upon standardized data. To support improved accountability and 

 

19 Transactions described in the JFMIP Core Financial system Requirements

Financial Applications

Primary Transactions

Appropriation, ApportionmentsReimbursable AuthorityFund TransfersAllotmentsAdvancesCommitment/ObligationExpenditures/ Accounts PayableDisbursement/PaymentCustomer orders Accounts ReceivableCollection

Financial Applications

Core Financial X X X X X X X X X X X

Managerial Cost Accounting 

Budget Formulation 

Revenue X X X X

Acquisition X X X

Property Management X X X X

Inventory 

Grants X X X X X X

Insurance Claims X X

Guaranteed Loan X X X X

Direct Loan X X X X X

Benefits X X

H/R Payroll X X X

Travel X X X X X X

Seized and Forfeited Assets X X

Table 3. Primary Transaction Processing 

Accomplished by Financial Applications
Chapter 4—Financial Management Applications and Services

31

performance, financial data must be pulled from a variety of feeder and mixed 

applications.

Applications and technology of the future must be designed to improve upon data 

integration capabilities. However, achieving improved integration capability presents 

tremendous challenges for the owners of financial data, the CFOs. Integrated data is 

facilitated by development of an integrated data model; an architecture that enforces 

data standards on all entities and components; clear identification of transaction data 

that must be collected and passed between entities; clear distinction in 

responsibilities and roles for various entities; and a system that governs and 

communicates changes in business processes. The system of governance must have 

the support of all the stakeholder organizations.

Central agencies are critical to integrating standardized data at the government-wide 

level. Integrated data at the government-wide level (i.e., budget, common data 

portals, etc.) requires government-wide use of standard financial and programmatic 

data definitions and formats, and efficient standard business processes and 

applications that exchange and consolidate data effectively. Common data elements 

should be used from the point of initial data entry, through transaction processing, 

storage and retrieval of financial information. This critical task is guided by 

government-wide information standards, such as the USSGL.

Common processes for processing similar kinds of transactions throughout the 

systems enable these transactions to be reported in a consistent, meaningful way. 

The internal controls used at data entry, transaction processing and reporting must be 

applied consistently. The best controls are those that are integral to the business 

processes. 

The design of systems architectures should strive to capture data one time, as close 

to the triggering transactions as possible. Updating and posting to other parts of the 

integrated system should be electronic, with cycles consistent with both business line 

and accounting requirements. 

Figure 11 provides an overview of the three primary integration points for financial 

systems.

Figure 11. Overview of Financial Systems Types

Core

Financial

System

Program 

and Subsidiary

Applications Central Agency 

Applications

Integration
32
33

Chapter 5—Financial Management Technology

This chapter describes the 

capabilities, characteristics, and 

performance outcomes for 

technology in achieving a vision for a 

future financial management and 

systems environment.

Technology Supports for the 

Vision

The technical architecture that 

supports financial management 

applications must be driven by the 

business needs and performance 

expectations. The role of technology in supporting the vision is to link financial 

applications, data, and information processes across the enterprise to make financial 

information readily available for decision support.

Role of Technology in Financial Management

The vision of the future financial management systems environment and the 

performance outcomes defined earlier are intended to provide useful guidance to 

providers of financial applications and services. The goal is not a single system, but 

to evolve from the current environment that is characterized by stove-piped and 

redundant systems to a single financial infrastructure with standardized applications 

and services that are supported and enabled by integrated financial management 

data and information. 

The role of technology in achieving this is to deliver applications and services that are 

inherently designed to facilitate better integration of business and financial activities 

through integrated services operating on common data. The emphasis therefore is on 

developing systems capabilities that enable better integration. Of particular 

importance are services and components consistent with these directions; capability 

for enterprise data sharing of all information sources; open architecture to enable a 

modular implementation approach; enhanced interfaces and mapping to legacy 

systems; and integrated tools for knowledge management, data mining, and data 

mapping.

To achieve the vision, we must be able to identify where to consolidate applications, 

services, and investments. The current policy requires relying on third-party services 

from private concerns or other agencies and maximizing the use of COTS-based 

solutions to achieve cost savings and efficiencies. Financial systems must support 

agency and government-wide goals for systems, including strategies for egovernment and consolidated systems.

Business

Data & Information

Applications & Services

Technology Financial Management

18
34

Roles of the CFO and CIO Partnership in Achieving the Vision

The broader enterprise view and business needs should drive enterprise choices. 

The CFOs, as owners of the financial business and information architecture, are 

responsible for addressing the business and information framework and ensuring that 

financial data and information is integrated consistently across the enterprise. The 

CFOs are responsible for ensuring that the financial information meets the 

requirements, regardless of where the information originates. Agencies, under CIO 

leadership and in partnership with CFOs and other senior level officials, must have in 

place an information architecture that establishes how data interrelates, and the 

security of those data.

Performance Goals

Integrated financial management systems must be secure, reliable, available, 

scalable, accessible, private, and interoperable to effectively achieve or support 

agency mission and goals:

♦ Security. The protection of information and information systems from 

unauthorized access, use, disclosure, disruption, modification, or destruction in 

order to provide:

4 Integrity, which means guarding against improper information, modification, 

or destruction, and includes ensuring information non-repudiation and 

authenticity;

4 Confidentiality, which means preserving authorized restrictions on access 

and disclosure, including means for protecting personal privacy and 

proprietary information; and

♦ Availability, which means ensuring timely and reliable access to a business 

service, data, information or system resource;

♦ Reliability. The ability to ensure the integrity and consistency of the application 

and all of its transactions;

♦ Scalability. The ability to economically support the required quality of business 

service as the system load changes;

♦ Accessibility. The application accessibility through published application program 

interfaces (APIs) at the application level; also, the physical accessibility to the 

system through web access, client-server access, File Transmission Protocol 

(FTP) access, etc. In addition, as required by the Rehabilitation Act, Section 508, 

Subpart A 1194.1, the ability of federal employees with disabilities to have 

access to and use of information and data that are comparable to the access and 

use by federal employees who are not disabled;

♦ Privacy. The preservation of authorized access and disclosure restrictions, 

including means for protecting personal and proprietary information;
Chapter 5—Financial Management Technology

35

♦ Interoperability. The ability of software and hardware on different machines from 

different vendors to share data;

Planning and Change Management

The architecture, technology and financial requirements are not an end state but are 

ever changing and staying the course is important. Improvements and investments in 

financial systems should be viewed as a continuing executive leadership 

responsibility. Communication and partnership between the CFO and CIO in planning 

for investments in both new systems and upgrades is critical in that it encompasses 

business goals and direction, not just software. The CFOs must bring changing 

business requirements into the planning process so that CIOs will know to integrate 

financial management requirements into overall enterprise architecture planning.
36
37

Appendix A—Glossary

Term Definition Source20

Accounting 

Classification

A subset of the agency financial information 

classification. The accounting classification 

structure provides a means for categorizing 

financial information along several dimensions as 

needed to support financial management and 

reporting functions. The data elements an agency 

includes in its accounting classification structure will 

depend in part on the implementation strategy for 

the USSGL, data aggregation requirements for 

preparation of financial statements under the CFO 

Act, appropriation structure, and other reporting and 

management needs of the agency.

JFMIP Financial 

System 

Requirements;

Multiple 

sources

Acquisition The acquiring by contract with appropriated funds 

of supplies or services (including construction) by 

and for the use of the Federal government through 

purchase or lease, whether the supplies or services 

are already in existence or must be created, 

developed, demonstrated, and evaluated. 

FAR 

2.101(b)(2) 

Agency The term "agency" means any executive 

department, military department, government 

corporation, government controlled corporation, or 

other establishment in the executive branch of the 

Federal government, or any independent regulatory 

agency. Within the Executive Office of the 

President, the term includes only OMB and the 

Office of Administration. 

OMB Circular 

A-130

Allotment A subdivision of an apportionment made by an 

agency.

OMB Circular 

A-11

Apportionment A distribution made by OMB of amounts available 

for obligation in an appropriation or fund account 

into amounts available for specified time periods, 

program, activities, projects, objects, or any 

combinations of these. The apportioned amount 

limits the obligations that may be incurred. An 

apportionment may be further subdivided by an 

agency into allotments, suballotments, and 

allocations.

OMB Circular 

A-11 

 

20 Sources are provided if available, otherwise the term definition was developed for clarification of 

terminology.
38

Term Definition Source20

Appropriation A provision of law (not necessarily an 

appropriations act) authorizing the expenditure of 

funds for a given purpose. Usually, but not always, 

an appropriation provides budget authority.

OMB Circular 

A-11

Borrowing Authority A type of budget authority that permits obligations 

and outlays to be financed by borrowing. Also 

known as public debt financing.

OMB Circular 

A-11

Budget The Budget of the United States Government 

setting forth the President’s comprehensive 

financial plan for allocating resources. The 

Government uses the budget system to allocate 

resources among its major functions and individual 

programs. The budget process has three main 

phases: formulation, congressional action on the 

budget, and execution. 

FASAB 

Statement of 

Federal 

Financial 

Accounting 

Standards No. 

24

Budget Authority The authority provided by law to incur financial 

obligations that will result in outlays. Specific forms 

of budget authority include appropriations, 

borrowing authority, contract authority, and 

spending authority from offsetting collections.

OMB Circular 

A-11

Budget Execution Includes funds control and provides features to 

record, distribute, and control budget authority and 

spending in accordance with the provisions of OMB 

Circular A-34, Instructions on Budget Execution. 

Budget execution provides the ability to track the 

effects of financial events on the sources and uses 

of budgetary resources authorized by the President 

and Congress. Its primary purpose is to ensure that 

spending does not exceed funds appropriated or 

authorized.

 OMB Circular 

A-11

Budget Formulation During this phase of the budget cycle, the 

Executive Branch prepares the President's budget. 

OMB and the Federal agencies begin preparing the 

next budget almost as soon as the President has 

sent the last one to Congress. OMB officially starts 

the process by sending planning guidance to 

Executive Branch agencies in the Spring. The 

President completes this phase by sending the 

budget to Congress on the first Monday in 

February, as specified in law, although occasionally 

Presidents have sent it later for various reasons. 

 OMB Circular 

A-11 
Appendix A—Glossary

39

Term Definition Source20

Capital planning 

and investment 

control (CPIC)

CPIC is the same as capital programming and is a 

decision making process for ensuring that 

information technology (IT) investments integrate 

strategic planning, budgeting, procurement, and the 

management of IT in support of agency missions 

and business needs. The term comes from the 

Clinger-Cohen Act of 1996 and generally is used in 

relationship to IT management issues.

OMB Circular 

A-11

Capital planning 

and investment 

control process

A management process for ongoing identification,

selection, control, and evaluation of investments in 

information resources. The process links budget 

formulation and execution, and is focused on 

agency missions and achieving specific program 

outcomes.

OMB Circular 

A-130 

Cash Management Practices and techniques designed to accelerate 

and control collections, ensure prompt deposit of 

receipts, improve control over disbursement 

methods, and eliminate idle cash balances.

Treasury 

Financial 

Manual, 

Volume 1, Part 

6, Section 8000

Claim A demand for money or property. Appropriations 

Law Manual, 

Chapter 12 

Collection Money collected by the Government that the budget 

records as a receipt, an offsetting collection, or an 

offsetting receipt.

OMB Circular 

A-11

Debt Claim A claim by the government against others. Appropriations 

Law Manual, 

Chapter 12
40

Term Definition Source20

Deposit Funds Established by the FMS to record moneys that do 

not belong to the Federal Government. The deposit 

fund (liability) classification is proper for any 

account that meets one of the following three 

criteria:

ÿ Moneys withheld by the Government from 

payments for goods and services received. 

Agencies may treat this transaction as a 

deposit fund liability only when they have 

charged a budget account and the 

Government is holding the funds pending 

payment (for example, payroll deductions 

for savings bonds or State income taxes); or

ÿ Deposits received from outside sources for 

which the Government is acting solely as a 

banker, fiscal agent or custodian; or

ÿ Moneys the Government is holding awaiting 

distribution based on a legal determination 

or investigation. This category includes 

moneys in dispute (between the 

Government and outside parties) where 

ownership is in doubt and there is no 

present basis for estimating ultimate 

distribution. 

TFM, Part II, 

Chapter 1500, 

Section 1535

Direct Loans Loans issued by the agency to a borrower, who 

then repays the loan to the agency.

OMB Circular 

A-11

Disbursements Amounts paid out by Federal agencies during the 

fiscal year. This term is used interchangeably with 

the term outlay.

TFM, 

Supplement to 

Volume I

Disbursing 

Authority

Authority to disburse public money to officers and 

employees of other Federal agencies in accordance 

with 31 U.S.C. § 3321(b).

TFM 4-10000

Electronic Funds 

Transfer

Any method used to transfer funds electronically, 

such as wire, Automated Clearing House (ACH), 

Credit or Debit Card, or FMS' Online Payment and 

Collection (OPAC) system. 

TFM 1- Part 6 -

Chapter 8000

E-government 

(E-gov)

E-gov is the use by the government of web-based 

Internet applications and other information 

technologies, combined with processes that 

implement these technologies.

OMB Circular 

A-11, Section 

53, Preparing, 

Executing, and 

Submitting the 

Budget
Appendix A—Glossary

41

Term Definition Source20

Enterprise 

Architecture

A strategic information asset base that defines the 

business, information necessary to operate the 

business, technologies necessary to support the 

business operations, and transitional processes for 

implementing new technologies in response to the 

changing needs of the business.

Federal 

Enterprise

Architecture 

Framework, 

V.1.1, Federal 

CIO Council, 

September 

1999

FACTS I FACTS I Application allows FMS to collect 

proprietary accounting information from the 

agencies on a Standard General Ledger basis.

Treasury FMS

FACTS II FACTS II Application allows FMS to collect 

budgetary accounting information from the 

agencies on a Standard General Ledger basis.

Treasury FMS

Federal Enterprise 

Architecture

To facilitate efforts to transform the Federal 

Government to one that is citizen-centered, resultsoriented, and market-based, the Office of 

Management and Budget (OMB) is developing the 

Federal Enterprise Architecture (FEA), a businessbased framework for Government-wide 

improvement.

The FEA is being constructed through a collection 

of interrelated “reference models” designed to 

facilitate cross-agency analysis and the 

identification of duplicative investments, gaps, and 

opportunities for collaboration within and across 

Federal Agencies. 

Federal 

Enterprise 

Architecture 

Program 

Management 

Office 

Federal Enterprise 

Architecture 

Business 

Reference Model 

(BRM)

The BRM is a function-driven framework for 

describing the Lines of Business and internal 

functions performed by the Federal Government 

independent of the agencies that perform them. 

The BRM serves as the business layer of the 

Federal Enterprise Architecture (FEA). It provides a 

foundation on which the applications, data, and 

technology layers of the FEA are developed. 

Agency Capital Asset Plans (Exhibit 300s) will be 

mapped against this framework to identify 

opportunities for cross-agency collaboration and 

potential system redundancies.

OMB Circular 

A-11 Preparing, 

Executing, and 

Submitting the 

Budget
42

Term Definition Source20

Federal Enterprise 

Architecture 

Framework

The Federal Enterprise Architecture Framework 

(FEAF) provides an organized structure and a 

collection of common terms by which Federal 

segments can integrate their respective 

architectures into the Federal Enterprise 

Architecture.

Federal 

Enterprise 

Architecture 

Framework, 

V.1.1, Federal 

CIO Council, 

September 

1999

Federal Payment Any payment made by an agency. The term 

includes, but is not limited to: (1) Federal wage, 

salary, and retirement payments; (2) vendor and 

expense reimbursement payments; (3) benefit 

payments; and (4) miscellaneous payments 

including, but not limited to, interagency payments; 

grants; loans; fees; principal, interest, and other 

payments related to United States marketable and 

nonmarketable securities, overpayment 

reimbursements; and payments under Federal 

insurance or guarantee programs for loans.

Treasury Green 

Book

Financial 

Accounting

A branch of accounting. The most noteworthy 

interpretations or classifications are those about 

which data pertain to the past and which pertain to 

the future. In other words, financial accounting is 

largely concerned with assigning the value of past 

transactions to appropriate time periods.

FASAB, SFFAS 

No. 1: 

Objectives of 

Federal

Financial 

Reporting

Financial Event Any occurrence having financial consequences to 

the Federal government related to the receipt of 

appropriations or other financial resources; 

acquisition of goods or services; payments or 

collections; recognition of guarantees, benefits to 

be provided, or other potential liabilities; or other 

reportable financial activities.

OMB Circular 

A-127, 

Financial 

Management 

Systems

Financial 

Management 

Systems

Financial systems and the financial portions of 

mixed systems necessary to support financial 

management, including manual or automated 

processes, procedures, controls, hardware, 

software and support personnel. Financial systems 

include an information system, comprised of one or 

more applications, that is used for (A) collecting, 

processing, maintaining, transmitting or reporting 

data about financial events; (B) supporting financial 

or budgeting activities; (C) accumulating and 

reporting cost information, or: (D) supporting the 

preparation of financial statements. 

Federal 

Financial 

Management 

Improvement 

Act (FFMIA),

OMB Circular 

A-127
Appendix A—Glossary

43

Term Definition Source20

Financial System An information system, comprised of one or more 

applications, that is used for any of the following:

collecting, processing, maintaining, transmitting, 

and reporting data about financial events;

supporting financial planning or budgeting activities;

accumulating and reporting cost information; or

supporting the preparation of financial statements.

A financial system supports the financial functions 

required to track financial events, or provide 

financial information significant to the financial 

management of the agency, and/or required for the

preparation of financial statements. A financial 

system encompasses automated and manual 

processes, procedures, controls, data, hardware, 

software, and support personnel dedicated to the 

operation and maintenance of system functions. A 

financial system may include multiple applications 

that are integrated through a common database or 

are electronically interfaced, as necessary, to meet 

defined data and processing requirements.

FFMIA; OMB 

Circular A-127

Financing, Means 

of

Borrowing, the change in cash balances, and 

certain other transactions that are used to finance a 

deficit or a surplus. By definition, the means of 

financing are not treated as receipts or

outlays.

OMB Circular 

A-11

Grant A form of assistance authorized by statute in which 

a federal agency (the grantor) transfers something 

of value to a party (the grantee) usually, but not 

always, outside of the federal government, for a 

purpose, undertaking, or activity of the grantee 

which the government has chosen to assist, to be 

carried out without substantial involvement on the 

part of the federal government.

Appropriations 

Law Manual 

Head of the Agency

(also called Agency 

Head)

The Secretary, Attorney General, Administrator, 

Governor, Chairperson, or other chief official of an 

executive agency, unless otherwise indicated, 

including any deputy or assistant chief official of an 

executive agency.

FAR 2.101
44

Term Definition Source20

Information 

Security

The protection of information and information 

systems from unauthorized access, use, disclosure, 

disruption, modification, or destruction in order to 

provide: (A) integrity, which means guarding 

against improper information modification or 

destruction, and includes ensuring information 

nonrepudiation and authenticity; (B) confidentiality, 

which means preserving authorized restrictions on 

access and disclosure, including means for 

protecting personal privacy and proprietary 

information; and (C) availability, which means 

ensuring timely and reliable access to and use of 

information.

Federal

Information 

Security 

Management 

Act of 2002

Information System A discrete set of information technology, data, and 

related resources, such as personnel, hardware, 

software, and associated information technology 

services organized for the collection, processing, 

maintenance, use, sharing, dissemination or 

disposition of information.

OMB Circular 

A-11

Information 

Technology

Any equipment, or interconnected system(s) or 

subsystem(s) of equipment, that is used in the 

automatic acquisition, storage, manipulation, 

management, movement, control, display, 

switching, interchange, transmission, or reception 

of data or information by the agency.

FAR 2.101

Interface

Requirements

A need for access or movement of information, 

such as data requirements, reporting needs, 

internal control, or edit requirements, required by 

the acquisition, accounting, property, financial 

assistance, travel and other finance functions as a 

result of transactions within the single integrated 

financial management system.

Internal Control A subset of management controls are the internal 

controls used to assure that there is prevention or 

timely detection of unauthorized acquisition, use, or 

disposition of the entity's assets.

OMB Circular 

A-123

Intra-governmental 

Collections

Collection of amounts from other federal entities, 

such as interest paid by Treasury on public debt 

securities held by trust funds and other government 

accounts, the employer share of federal employee 

retirement, the general fund subsidy of the 

supplementary medical insurance, and 

reimbursements paid by one federal agency to 

another.

Treasury FMS 
Appendix A—Glossary

45

Term Definition Source20

Liability A probable and measurable future outflow of 

resources arising from past transactions

FASAB SFFAS 

#1

Loan Guarantee Guaranteed loans are loans issued by a third-party 

lender to a borrower with the repayment of the loan 

guaranteed by the government. In cases where the 

borrower defaults on a guaranteed loan, the agency 

pays the lender all or a portion of the loan, 

depending on the guaranteed loan program rules.

OMB Circular 

A-11

Management 

Controls

Management controls are the organization, policies, 

and procedures used by agencies to reasonably 

ensure that (i) programs achieve their intended 

results; (ii) resources are used consistent with 

agency mission; (iii) programs and resources are 

protected from waste, fraud, and mismanagement; 

(iv) laws and regulations are followed; and (v) 

reliable and timely information is obtained, 

maintained, reported and used for decision making. 

Management controls, in the broadest sense, 

include the plan of organization, methods and 

procedures adopted by management to ensure that 

its goals are met. Management controls include 

processes for planning, organizing, directing, and 

controlling program operations. 

OMB Circular 

A-123

Managerial Cost 

Accounting

Managerial cost accounting should be a 

fundamental part of the financial management 

system and, to the extent practicable, should be 

integrated with other parts of the system. 

Managerial costing should use a basis

of accounting, recognition, and measurement 

appropriate for the intended purpose. Cost 

information developed for different purposes should 

be drawn from a common data source, and output 

reports should be reconcilable to each other.

FASAB, SFFAS 

No. 4: 

Managerial 

Cost 

Accounting 

Standards and 

Concepts

Mixed System An information system that supports both financial 

and non-financial functions of the Federal 

government or components thereof.

OMB Circular 

A-11 Preparing, 

Executing, and 

Submitting the 

Budget

Non-financial 

system

An information system that supports non-financial 

functions of the Federal government or components 

thereof and any financial data included in the 

system are insignificant to agency financial 

management and/or not required for the 

preparation of financial statements.

OMB Circular 

A-11, Section 

53, Preparing, 

Executing, and 

Submitting the 

Budget
46

Term Definition Source20

Object 

Classification

A method of classifying obligations and 

expenditures according to the nature of services or 

articles procured, e.g., personal services, supplies 

and materials, and equipment. Obligations are 

classified by the initial purpose for which they are 

incurred, rather than for the end-product or service 

provided. OMB Circular A-11 provides current 

object classifications for reporting budget estimates 

to OMB. Many agencies have defined lower levels 

of object classification for internal use.

OMB Circular 

A-11, Section 

83

Offsetting 

Collections

Collections that are credited directly to expenditure 

accounts and deducted from gross budget authority 

and outlays of the expenditure account, rather than 

added to receipts. Usually, they are authorized to 

be spent for the purposes of the account without 

further annual action by

Congress. They result from business-type or 

market-oriented activities with the public and other 

Government accounts. The authority to spend 

offsetting collections is a form of budget authority. 

(Compare to receipts and offsetting receipts.)

OMB Circular 

A-11 

Offsetting Receipts Collections that are credited to offsetting receipt 

accounts and deducted from gross budget authority 

and outlays, rather than added to receipts. The 

legislation that authorizes the offsetting receipts 

may earmark them for a specific purpose and either 

appropriate them for expenditure for that purpose or 

require them to be appropriated in annual 

appropriations acts before they can be spent. Like 

offsetting collections, they result from business-type 

or market-oriented activities with the public and 

other Government accounts. (Compare to receipts 

and offsetting collections.)

OMB Circular 

A-11

Outlay Outlay means a payment to liquidate an obligation 

(other than the repayment of debt principal). 

Outlays generally are equal to cash disbursements 

but also are recorded for cash-equivalent 

transactions, such as the subsidy cost of direct 

loans and loan guarantees, and interest accrued on 

public issues of the public debt. Outlays are the 

measure of Government spending.

OMB Circular 

A-11
Appendix A—Glossary

47

Term Definition Source20

Payment A government disbursement of monies to any 

payee, including vendors, employees, private 

citizens, state, local and foreign governments) in 

accordance with contract terms. The payment 

management function consists of the following 

processes: payee information maintenance, 

payment warehousing, payment execution, and 

payment confirmation and follow-up. 

Treasury 

Financial 

Manual

Payment Claim A claim against the United States. Appropriations 

Law Manual

Performance 

Budget

"performance budget" should include:

• A description of what you plan to accomplish, 

organized by strategic goal;

• Background on what you have accomplished;

• Performance targets for current and budget years 

and how you expect to achieve those targets; and

• What resources you are allocating in the current 

year and requesting in the budget year to achieve

the targets.

OMB Circular 

A-11, Section 

26

Program Generally defined as an organized set of activities 

directed toward a common purpose or goal, 

undertaken or proposed by an agency in order to 

carry out its responsibilities. In practice, however, 

the term has many uses and thus does not have a 

well-defined, standard meaning in the legislative 

process. It is used to describe an agency’s mission, 

programs, functions, activities, services, projects, 

and processes.

Program Income Revenue generated from the expenditure of grant, 

loan, or loan guarantee program funds.

Appropriations 

Law Manual 

Public Debt Issuance and redemption of debt securities to and 

from the public and government accounts, and the 

payment of interest thereon.

Receipts Receipts mean collections that result from the 

Government's exercise of its sovereign power to tax 

or otherwise compel payment, and gifts of money to 

the Government. They are compared to outlays in

calculating a surplus or deficit. (See section 20.7.) 

(Compare to offsetting collections and offsetting

receipts.)

OMB Circular 

A-11, 

Preparation, 

Submission and 

Execution of the 

Budget
48

Term Definition Source20

Responsibility 

Center

An organizational unit headed by a manager or a 

group of managers who are responsible for its 

activities. Responsibility centers can be measured 

as revenue centers (accountable for revenue/sales 

only), cost centers (accountable for costs/expenses 

only), profit centers (accountable for revenues and 

costs), or investment centers (accountable for 

investments, revenues, and costs). 

FASAB Original 

Pronouncements, 

Version 3 

(01/2004),

 Appendix E

Revolving Funds Established to finance a continuing cycle of specific 

operations.

TFM, 

Supplement to 

Volume I

Shared Services Shared services is a bringing together of functions 

that are frequently duplicated across component 

agencies, and delivering these services more 

efficiently and with a customer service orientation. 

It is the focus on the customer service aspect of the 

process that distinguishes the shared services 

model from the concept of consolidation. The focus 

is on the customers because they demand the best 

quality, timely, accurate and reliable product(s) 

attainable. Sharing services leads to the 

elimination of redundancies. The concurrent 

redesign of accounting processes, organizations 

and supporting systems leads to radical 

improvements in time, cost, quality and user 

satisfaction in regard to the service provided.

Single Integrated

Financial

Management 

System 

A unified set of financial systems and the financial 

portions of mixed systems (e.g., acquisition) 

encompassing the software, hardware, personnel, 

processes (manual and automated), procedures, 

controls, and data necessary to carry out financial 

management functions, manage the financial 

operations of the agency, and report on the 

agency’s financial status to central agencies, 

Congress, and the public.

OMB Circular 

A-127

Software The application and operating system programs, 

procedures, rules, and any associated 

documentation pertaining to the operation of a 

computer system.

Special Funds These funds consist of revenues earmarked by law 

for a specific purpose.

TFM, 

Supplement to 

Volume I
Appendix A—Glossary

49

Term Definition Source20

Spending Authority 

from Offsetting 

Collections

A type of budget authority that permits obligations 

and outlays to be financed by offsetting collections

OMB Circular 

A-11, 

Preparation, 

Submission and 

Execution of the 

Budget

Trading Partner A customer, contractor, other governmental entity 

or service provider (such as a bank, hospital, or 

manufacturer) that conducts business with another 

organization.

Transfer Payments Payment of social insurance benefits (such as 

social security, Medicare, supplemental security 

income, and unemployment compensation) and 

other payments to individuals that are not made in 

exchange for the provision of goods and services 

(such as food stamps).

Treasury Financial 

Manual

The manual issued by the Financial Management 

Service containing procedures to be observed by all 

agencies, Federal Reserve Banks, and financial 

institutions with respect to payments, collections, 

central accounting, financial reporting, and other 

government-wide fiscal responsibilities of the 

Treasury.

Green Book, 

Glossary

Trust funds: Established to account for resources held in trust 

for specific programs or purposes.

TFM, 

Supplement to 

Volume I, 

Glossary

Unified systems Unified systems means that the systems are 

planned for and managed together, operated in an 

integrated fashion, and linked together 

electronically in an efficient and effective manner to 

provide agency-wide financial system support 

necessary to carry out the agency's mission and 

support the agency's financial management needs.
50

Term Definition Source20

United States 

Standard General 

Ledger (USSGL)

A uniform list of accounts that support transactions 

that standardizes Federal agency accounting and 

supports the preparation of standard external 

reports. The U.S. Government Standard General 

Ledger Chart of Accounts (1) provides control over 

all financial transactions and resource balances, (2) 

satisfies basic reporting requirements of OMB and 

Treasury, and (3) integrates proprietary and 

budgetary accounting.

Treasury 

Financial 

Manual, 

Volume I

User Charges Also called user fees (or revenue generation) user 

charges based on the authority of federal agencies 

to charge for the goods and services they provide. 

The user may be another federal agency, or a 

private person or entity.

Collection of receipts and other amounts resulting 

from the powers of government other than taxation 

including the following: deposits of earnings from 

the Federal Reserve System; fees for permits, 

regulation, and judicial services; fines, penalties, 

and forfeitures; gifts and contributions; interest, 

dividends, rent and royalties; sale of products, 

services, and property; and other sources.

Appropriations 

Law Manual, 

OMB Circular 

A-25 

USSGL Account: An account, within the uniform chart of accounts 

used by Federal agencies to record budgetary and 

proprietary accounting transactions.

TFM, 

Supplement to 

Volume I

Vendor Any person, organization, or business concern 

engaged in a profession, trade, or business, and 

any not-for-profit entity operating as a contractor 

(including State and local governments and foreign 

entities and foreign governments, but excluding 

Federal entities).

5 CFR, Chapter 

III, Sec. 1315

Vendor Payment The electronic transfer of funds and paymentrelated information used by the Federal government 

for payments to businesses that provide goods and 

services to Federal agencies and other payment 

recipients, such as State/local governments and 

educational institutions.

Treasury Green 

Book 2000, 

Glossary
51

Appendix B—Laws and Regulations 

Federal Statutes

Appropriations Law

Fundamental, long-standing statutes deal with the appropriation of monies to 

agencies from Congress, including the appropriate use and control of these monies. 

These statutes deal with the purpose, amount, and time of appropriations, as well as 

the availability of the associated monies. The following summary provides specific 

citations to these statutes, their common names, and their requirements.

Federal Managers’ Financial Integrity Act of 1982

The Federal Managers’ Financial Integrity Act (FMFIA) of 1982 amended the Accounting 

and Auditing Act of 1950 to require ongoing evaluations and reports of the adequacy of 

the systems of internal accounting and administrative control of each executive agency. 

FMFIA is comprised of two parts. OMB Circular A-123 is the primary vehicle for 

implementing FMFIA in the executive branch. OMB Circular A-123 describes internal 

control requirements. Agencies are also required to report annually on whether the 

agency accounting system complies with OMB A-127.

The FMFIA requires Agency heads to establish controls that reasonably ensure:

Obligations and costs are in compliance with applicable law;

Funds, property, and other assets are safeguarded against waste, loss, unauthorized 

use or misappropriation; and

Revenues and expenditures are properly recorded and accounted for.

(OMB revised Circular A-123 in 1995 to incorporate ideas from subsequent management 

legislation, such as the Chief Financial Officers Act.) The circular provides guidance on 

improving the accountability and effectiveness of federal programs and operations by 

establishing and reporting on management controls.

Prompt Payment Act of 1982 and Amendments of 1996

The Prompt Payment Act (PPA), and related amendments, encourages government 

managers to improve their bill-paying procedures. It provides for the use of interest 

penalties against the operating budgets of programs when managers fail to pay bills 

on time. These penalties also are used to compensate businesses when payments 

are late. The PPA generally requires agencies to:

♦ Make vendor payments within 30 days from the date of submission of a properly 

prepared invoice; and

♦ Pay interest at a rate established by the Secretary of the Treasury for amounts 

that are not paid on time.

OMB provides PPA implementation guidance to agencies in the Prompt Payment 

Final Rule (formerly OMB Circular A-125), which specifies basic time frames for 

proper payment of obligations. It also requires agencies to have defined payment 
52

processes in place and to provide results data to OMB for government-wide reporting 

purposes.

Chief Financial Officers Act of 1990 and Government Management Reform 

Act of 1994

The Chief Financial Officers Act of 1990 laid the foundation for significant financial 

management reform in the federal government. The Act emphasizes strong financial 

leadership, improved systems of accounting, financial management and internal 

control, and reliable financial information. A key element of the Act is the requirement 

for federal agencies to produce audited financial statements. The Government 

Management Reform Act (GMRA) expanded financial statement audit coverage to 

include Department-wide and Government-wide audited financial statements.

The CFO Act mandates three actions:

♦ Strong financial management leadership: The CFO Act established, in OMB, the 

Deputy Director for Management and the Office of Federal Financial 

Management, and created chief financial officer positions in major agencies to 

provide financial management direction;

♦ Enhanced financial management systems: The CFO Act mandates that agency 

CFOs develop and maintain agency financial management systems that comply 

with applicable accounting principles, standards, and requirements, internal 

control standards, and requirements of OMB and Treasury; and

♦ Improved financial information: by requiring agency CFOs to maintain systems 

that report cost information, integrate accounting and budgeting, and 

systematically measure performance, the CFO Act emphasizes improved 

reliability and usefulness of agency financial information. Most importantly, the 

CFO Act requires that financial statements be prepared and audited.

Government Performance and Results Act of 1993

The Government Performance and Results Act (GPRA) of 1993 holds federal 

agencies accountable for achieving program results and requires them to identify 

missions, set goals, measure performance, and report on their accomplishments.

Under GPRA, each federal agency must develop and submit a multi-year strategic 

plan, which contains the agency’s mission statements and long-term strategic goals. 

Agencies must also submit annual performance plans, which include performance 

goals linked to the budget and indicators of how performance will be measured. 

Annual performance reports, also required under the Act, provide information on the 

extent to which the agency met its annual performance goals.

Federal Financial Management Improvement Act of 1996

The Federal Financial Management Improvement Act (FFMIA) of 1996 requires 

agencies to implement and maintain systems that substantially comply with (1) 

Federal accounting standards, (2) the Standard General Ledger (USSGL) at the 
Appendix B—Laws and Regulations 

53

transaction level, and (3) Federal financial management systems requirements. In 

addition, the FFMIA requires agencies’ auditors to report whether agency systems 

comply with FFMIA’s systems requirements. Agencies that determine their systems 

do not substantially comply must develop and submit remediation plans to OMB.

To comply with federal financial management system requirements, OMB 

implementation guidance requires that systems meet the Circular A-127 

requirements, JFMIP’s Federal Financial Management Systems Requirements, and 

Circular A-130, Appendix III.

Debt Collection Act of 1982 and Debt Collection Improvement Act of 1996

The Debt Collection Improvement Act (DCIA) is an extension of the Debt Collection 

Act. The purpose of these Acts is to require proper collection of debts, to authorize 

the compromise or suspension of some debts, and to authorize the use of certain 

collection tools that are available in the private sector. The use of electronic payment 

and offset methods is required.

Clinger-Cohen Act of 1996

The purpose of the Clinger-Cohen Act is to improve the productivity, efficiency, and 

effectiveness of federal programs though improved acquisition, use, and disposal of 

information technology resources. Among other provisions, the law:

♦ Requires agencies to base decisions about IT investments on quantitative and 

qualitative factors associated with costs, benefits, and risks and use performance 

data to demonstrate how well the IT expenditures support improvements to 

agency programs;

♦ Streamlines IT acquisition and encourages smaller, modular IT acquisition 

projects;

♦ Requires the appointment of a Chief Information Officer (CIO), reporting to the 

agency head, and assigns specific responsibilities to the CIO; and

♦ Assigns agency CIOs the responsibility of developing, maintaining, and 

facilitating implementation of a sound and integrated information technology 

architecture for the agency.

The Act defines the IT architecture as an integrated framework for evolving or 

maintaining existing (and acquiring new) information technology to achieve the 

agency’s strategic and information resource management goals. The Clinger-Cohen 

Act is implemented in part by OMB Circular A-130, which also implements other 

legislation.

Federal Information Security Management Act (FISMA) of 2002 (Public Law 

107-347, Title III) 

The FISMA reiterates security requirements contained in exisitng OMB policies and in 

Federal laws such as the Computer Security Act of 1987, the Paper Reduction Act of 

1995, and Clinger-Cohen Act of 1996. The Act mandates that federal agencies 
54

implement an information security program and designate a senior information 

security officer. FISMA also established evaluation and reporting requirements that 

requires each agency to report any significant deficiencies and an information security 

policy, procedure or practice. If relating to financial management systems as a lack of 

substantial compliance with FFMIA. 

Reports Consolidation Act of 2000

This Act gives OMB the authority to combine financial reports to the President and 

Congress that contains performance and accountability information.

E-government Act of 2002 (Public Law No: 107-347)

The E-government Act of 2002 aims to enhance the management and promotion of 

electronic government services and processes by establishing a Federal Chief 

Information Officer within the Office of Management and Budget, and by establishing 

a broad framework of measures that require using Internet-based information 

technology to enhance citizen access to government information and services, and for 

other purposes. Title III of the E-government Act is the Federal Information Security 

Management Act.

Regulatory Guidance

NIST Special Publication 800-53 

DRAFT NIST Special Publication 800-53, Recommended Security Controls for Federal 

Information Systems provides a recommended set of controls for low and moderate impact 

systems (based upon the security categorization definitions in FIPS 199, pre-publication. Special 

Publication 800-53, when completed, will stand as NIST interim guidance until 2005, which is the 

statutory deadline to publish minimum standards for all non-national security systems. The draft 

can be accessed at: http://csrc.nist.gov/publications/drafts.html

OMB Circular A-11, Preparing, Submitting, and Executing the Budget 

(Revised 7/25/2003)

OMB made major revisions to A-11 that merged the budget formulation and execution 

guidance to reinforce the requirement for agencies to integrate budget and 

performance and to improve the quality of their financial information. In addition, A-11 

contains new guidance on managing physical and financial assets.

OMB Circular A-25, User Charges

The Circular:

♦ Establishes Federal policy regarding fees assessed for Government services and 

for sale or use of Government goods or resources;

♦ Provides information on the scope and types of activities subject to user charges 

and on the basis upon which user charges are to be set; and
Appendix B—Laws and Regulations 

55

♦ Provides guidance for agency implementation of charges and the disposition of 

collections.

OMB Circular A-76, Performance of Commercial Activities

OMB Circular A-76 establishes federal policy for the competition of commercial 

activities. The longstanding policy of the federal government has been to rely on the 

private sector for needed commercial services. To ensure that the American people 

receive maximum value for their tax dollars, commercial activities should be subject to 

the forces of competition. In accordance with this circular, including Attachments A-D,

agencies shall:

♦ Identify all activities performed by government personnel as either commercial or 

inherently governmental;

♦ Perform inherently governmental activities with government personnel;

♦ Use a streamlined or standard competition to determine if government personnel 

should perform a commercial activity;

♦ Apply the Federal Acquisition Regulation (FAR), 48 C.F.R. Chapter 1, in 

conjunction with this circular, for streamlined and standard competitions;

♦ Develop government cost estimates for standard and streamlined competitions in 

accordance with Attachment C using the COMPARE costing software. Agencies 

shall not use agency budgetary estimates to develop government cost estimates 

in a streamlined or standard competition; 

OMB Circular A-123, Management Accountability and Control (or 

Successor Documents) (6/21/1995)

This circular, which is the primary OMB guidance for FMFIA, is described in the 

section that relates to that act.

Prompt Payment Final Rule (Formerly OMB Circular A-125, Prompt 

Payment) (9/29/1999)

The Final Rule, the primary OMB guidance for PPA, is described in the section 

related to the specific act.

OMB Circular A-127, Financial Management Systems (or Successor 

Documents) (7/23/1993)

This circular augments FFMIA by specifically mandating that federal agencies 

implement integrated core accounting and financial management systems. To be fully 

integrated, the system must address:

♦ Standard data classification (both data and format);

♦ Common processes for handling similar accounting events;
56

♦ Consistent internal control mechanisms; and

♦ Elimination of duplicate transaction entry.

Circular A-127 also prescribes policies and standards for agencies to follow in 

developing, operating, evaluating, and reporting on financial management systems 

generally. It incorporates, by reference, Circulars A-123 and A-130, as well as all 

federal financial management systems requirements published by JFMIP.

OMB Circular A-129, Managing Federal Credit Programs (11/2000) 

This Circular prescribes policies and procedures for justifying, designing, and 

managing Federal credit programs, and for collecting non-tax receivables. It sets 

principles for designing credit programs, including: 

♦ Preparation and review of legislation and regulations; 

♦ Budgeting for the costs of credit programs and minimizing unintended costs to 

the Government; and 

♦ Improving the efficiency and effectiveness of Federal credit programs. 

Circular A-129 also sets standards for extending credit, managing lenders 

participating in Government guaranteed loan programs, servicing credit and non-tax 

receivables, and collecting delinquent debt.

OMB Circular A-130, Management of Federal Information Resources

(11/28/2000)

OMB re-issued Circular A-130 in revised form in December 2000 as Transmittal 

Memorandum No. 4. The expanded version of A-130 provides guidance on the 

Paperwork Reduction Act, the Clinger-Cohen Act, the CFO Act, and others. This 

includes the requirement for all electronic systems, including financial management 

systems, to have a defined association with the agency’s enterprise architecture.

The circular provides specific guidance on collecting and managing information and 

records management, including:

♦ Electronic information collection;

♦ Provision of information to the public;

♦ Information dissemination systems; and

♦ Information safeguards.

It further mandates agencies to establish a capital planning and investment control 

process (CPIC) that links information technology investments to improved mission 

performance. The CPIC also establishes the links among agency processes including 

strategic planning, IT planning, enterprise architecture integration, performance 

planning, financial management planning pursuant to the Chief Financial Officers Act 

of 1990, and budget formulation and execution. Specifically, sections of A-130 cover 

these four areas:
Appendix B—Laws and Regulations 

57

♦ Capital planning and investment control processes must be followed and 

documented by all agencies. These processes, stemming from Clinger-Cohen, 

must integrate IRM strategic and performance plans, financial management 

plans, the agency’s IT enterprise architecture, and its budget. The agency’s 

process for capital planning and investment control should include an IRM 

strategic plan, an IT capital plan, and an IT investment portfolio as described in 

OMB Circular A-11, the annual budget circular;

♦ Enterprise architecture framework and planning processes require an agency to 

document (and submit to OMB) its current and target IT architecture and related 

support strategies, transition roadmaps, and IT and security standards, as well as 

a summary of the information services used throughout the agency. The 

enterprise architecture framework anticipated by A-130 is driven by the business 

needs of the agency and is composed of layers complying with the Federal 

Enterprise Architecture Framework (FEAF) developed by the CIO Council;21

♦ Ensuring security in information systems is accomplished by explicitly 

incorporating security into the enterprise architecture and life-cycle planning for 

systems, and ensuring that security supports the agency’s business operations. 

The agency’s security plan must comply with the procedures and policies 

outlined in Appendix III to A-130, Security of Federal Automated Information 

Resources, the Federal Information Security Management Act (Public Law 107-

347, Title III, and guidance provided by the National Institute of Standards and 

Technology (NIST). Independent advice and comment on the security plan must 

be solicited prior to the plan’s implementation; and

♦ Information technology acquisition requires the use of adequate competition in 

contracting, allocating risk between the government and the contractor, and 

maximizing the return on investment. Major information systems should be 

structured into useful segments with narrow scope and brief duration. Off-theshelf software should be used unless analysis clearly documents other 

approaches are more effective.

Statements of Federal Financial Accounting Standards

The FASAB was created in 1990 to develop and recommend Statements of Federal 

Financial Accounting Standards (SFFASs) for use by the federal government. The 

growing body of SFFAS issued by FASAB is considered to be Generally Accepted 

Accounting Principles for Federal governmental entities.

The accounting standards that have resulted from FASAB’s work are central to 

effectively meeting financial management improvement goals of the CFO Act and 

other legislation. In particular, FASAB’s standards for managerial cost accounting, as 

described in SFFAS 4, are a primary source of guidance. This and other FASAB 

standards foster financial information and reporting that is understandable, relevant, 

and reliable concerning the financial position, activities, and results of operations for 

the federal government and its departments and agencies. Furthermore, the 

 

21 The FEAF layers describe and link business processes, information flows, applications, data descriptions 

and relationships, and technology infrastructure. 
58

standards prescribe accounting systems and internal control that help demonstrate 

that federal programs are conducted in compliance with laws and regulations.
Appendix B—Laws and Regulations 

59
60

Appendix C—Department of the Treasury, Financial 

Management Service Inter-relationships 

This section describes the central agency view of the Federal financial management 

business. An important prerequisite to developing the financial management business 

“segment” of the Federal Enterprise Architecture is articulating the primary 

interdependent agency to central agency business processes that support agency 

program execution and operations. Those processes include Government-wide 

Accounting, Debt Collection, Collections, and Payments.

Government-wide Accounting

GWA provides accurate, accessible and timely government-wide financial information 

and reports which contribute to improved quality of the nation’s financial decision 

making. The Constitution requires the Secretary of the Treasury to report to the 

President, the Congress, and the people on the financial condition of the Federal 

Government. GWA encompasses four sub-processes: Management of the federal 

government’s cash; Accounting and funds control for receipts, outlays, appropriations, 

transfers and other internal activities; Preparation of Consolidated Financial 

statements of the U.S. Government; and Issuance of detailed accounting guidance for 

agency use through the U. S. Standard General Ledger. There are many interdependent relationships among these four areas.

Management of the Federal government’s cash

The U.S. is like any other financial entity in that it must manage its cash flows to 

ensure that it remains solvent. The potentially catastrophic impact of failure; however, 

makes the job critically important. GWA works closely with the Office of the Fiscal 

Assistant Secretary and the Federal Reserve Bank to manage the cash of the Federal 

Government in the most efficient manner. The amount of cash at the end of the last 

three fiscal years averaged $110 billion. “CashTrack” is the primary system involved 

and The Daily Treasury Statement is the primary output.

Accounting and funds control for receipts, outlays, appropriations, 

transfers and other internal activities

In addition to helping to manage the Federal Government’s cash, GWA must also 

track financial activity at a much lower level of detail. In the Federal system of checks 

and balances, the Congressional “Power of the Purse” is the most important check on 

presidential power. The Congress determines for what the executive branch will 

obligate funds, when the funds may be obligated, and how much is available. GWA’s 

central accounting function helps to manage cash as discussed above, and also 

classifies financial activity into a system of detailed accounts against which agencies 

must report. The reports based on these detailed classifications allow the Congress to 

exercise its power of the purse, and provide useful information for financial managers 

and the public. It is this system, for example, that provides reports on the Federal 

surplus or deficit. The Monthly Treasury Statement, and the Combined Statement of 

Receipts, Outlays, and Balances of the United States Government are the major 

outputs from the central accounting function, and there is a constant flow of data 
Appendix C—Central Agency Processes

61

between program agencies and the central accounting system. “GOALS”, “IPAC”, and 

“FACTS II” are some of the systems used for data communication.

Preparation of Consolidated Financial Statements of the U.S. Government

The Government Management Reform Act of 1994 dramatically increased attention 

on the third area of GWA activity, the preparation of business-type financial 

statements for the U. S. Government on the accrual basis. The law requires Treasury 

to prepare and the General Accounting Office (GAO) to audit consolidated financial 

statements of the executive branch beginning with Fiscal Year 1997 reporting. In 

1990, Congress passed the Chief Financial Officers Act and created the Federal 

Accounting Standards Advisory Board. The decade of the 1990s saw a revolution in 

Federal accounting as agencies implemented the FASAB standards and worked 

toward clean audit opinions.

Issuance of detailed accounting guidance for agency use through the U. S. 

Standard General Ledger

GWA is responsible for maintaining the United States Standard General Ledger 

(USSGL). GWA has built two major data collection systems, FACTS I and FACTS II, 

which are able to accept direct feeds from the accounting systems of agencies that 

use the USSGL.

Stakeholders

Stakeholders for Government-wide accounting include:

♦ Congress, the President, and the Public;

♦ All Federal agencies use GWA to monitor their fund balance, collections and 

receipts; and

♦ The Federal Reserve System and many financial institutions partner with GWA in 

operating systems and in using GWA information.

Figure 12 illustrates FMS’s Government-wide Accounting “Business”. 
62

Figure 11. Financial Management Service Government-wide Accounting

Treasury/FMS

Financial Report 

of U.S. Government

• Monthly Treasury Statement 

• Combined Statement of 

Receipts, Outlays and Balances

of the U.S. Government

Monthly Reporting 

(1218, 1219, 1220, 224)

Fund Balance

and Other Cash

Federal Program

Agency 

Agency Reporting

Process

• Daily Cash Position 

• Daily Treasury Statement 

Banking System

President, Congress, Public, Federal Program Agencies

Bank Reporting/

Accounting Data

Central Accounting System

(STAR)

Financial Reporting

Process

FACTS II

FACTS I

Debt Collection

The Debt Collection process supports the provisions of the Debt Collection 

Improvement Act of 1996 to maximize collection on government delinquent debt by 

providing efficient and effective centralized debt collection services. The key business 

processes for the Debt Collection Business Line are the Treasury Offset Program and 

the Cross-Servicing Program. 

Treasury Offset Program

The Treasury Offset Program (TOP) matches outgoing federal payments against 

delinquent debts maintained in the TOP system. A variety of debts from a number of 

different organizations are referred to the TOP system including federal non-tax 

debts, federal tax debts, state income tax debts, and Child Support debts. Currently 

there are a number of federal payments that can be offset including tax refund 

payments, federal retirement payments, federal salary payments, vendor payments 

and some benefit payments.

If a payee’s name and his/her Taxpayer Identification Number (TIN) match a debtor’s 

name and TIN, the TOP system offsets some or all of the payment to pay down the 

debt. The payee is then mailed a notice indicating that their payment has been offset 

to pay their delinquent debt. If the total payment was not offset, the remaining amount 

will be sent to the payee. The TOP system updates the debtor’s balance, and then 

sends the amount of the offset to the creditor agency that is owed the debt.

Cross-Servicing Program

The Cross-Servicing Program is the federal government’s centralized debt collection 

program. Federal non-tax debts are referred to Cross-Servicing and based on the 
Appendix C—Central Agency Processes

63

types of debts received, the Cross-Servicing program administers a variety of debt 

collection tools to collect or resolve the debts. These tools may include sending 

demand letters requesting payment, establishing repayment agreements, referring 

debts to the Treasury Offset Program, reporting debts to Credit Bureaus, referring 

debts to Private Collection Agencies on contract with FMS, referring debts to the 

Department of Justice for enforced collection, garnishing debtors private sector wages 

through Administrative Wage Garnishment, and sending the discharged debt 

information via a 1099c to IRS if all collection efforts fail.

Stakeholders

Stakeholders and customers for debt collection include:

♦ Congress—Established the Debt Collection Improvement Act of 1996 and 

continues to have oversight into the improvement of federal debt collection;

♦ General Public—Individuals and businesses can owe delinquent debts and/or 

receive federal payments;

♦ Federal Agencies—Key customers because they refer the delinquent debts that 

are to be collected, and they provide the payment information needed to offset 

the debts in TOP;

♦ States—States refer delinquent state income tax debts to the TOP system, and 

manage the collection of child support debts;

♦ Internal Revenue Service—IRS is a key federal agency because delinquent tax 

debts are levied through TOP, and because most of the payments offset through 

TOP are against IRS tax refund payments;

♦ The Federal Reserve Banks—The Federal Reserve is involved because 

electronic payments flow through the Federal Reserve and Treasury checks are 

settled through the Federal Reserve;

♦ Financial Institutions—Banks are involved because partial payments made 

electronically are sent to bank accounts. Treasury checks are cleared through 

financial institutions. In the case of Cross-Servicing, lock boxes are established 

with financial institutions to process payments sent in by debtors to pay off debts;

♦ Credit Bureaus—In Cross-Servicing, regular updates on federal non-tax 

delinquent debts are sent to Credit Bureaus; and

♦ Private Collection Agencies—PCAs bid on contracts to provide debt collection 

services for delinquent non-tax debts managed by the Cross-Servicing program.

Figure 13 below illustrates FMS’ Debt Collection Process.
64

Figure 12. Financial Management Service Debt Collection Business Line

Treasury Offset 

Program

Cross-Servicing Public

Debtor Payments

Debits

Offset Information

Debtor Inquiries

Delinquent Debts

Payment Files

States Delinquent Debts

Federal Program

Agency/IRS

Public

States

Private 

Collection 

Agencies

Credit

Bureaus

IRS

Offset Information

Partial Payments

Offset Notices

Demand Letters

Phone Calls

Collection Information

Resolved Debts

Delinquent Debts

Federal Debt 

Information

1099c

Mechanisms

Payment Process

Federal Reserve Banks

Financial Institutions

Call Tracking System

Debt Mgmt. Accounting System

Treasury Report on Receivables

Mechanisms

Payment Process

Federal Reserve Banks

Financial Institutions

Call Tracking System

Debt Mgmt. Accounting System

Treasury Report on Receivables

Debt Collection Improvement Act (1996)

Debt Policies

Debt Regulations

Guidance

Collections

In FY 2002, the Federal government collected nearly $2.3 trillion through 10,000 

financial agents, with nearly $1.8 trillion collected electronically. “Managing 

Collections” includes cash management activities, establishing/authorizing bank 

accounts on behalf of program agencies to receive deposits from the public, and 

ensuring proper compensation to financial institutions for the performance of 

collection services. The purpose of these activities is to assure the timely and efficient 

collection and deposit of funds into the Treasury, on behalf of Federal program 

agencies. This revenue stream provides the basis for funding government operations 

and disbursements.

Processing Collections

All of the collection information is filtered through the CashLink system. This system 

receives all agency deposit information, initiates funds transfers, and concentrates 

daily deposits made through multiple collection mechanisms in the Treasury’s account 

at the Federal Reserve Bank of New York. This system provides Federal agencies 

with information to verify deposits, Automated Clearing House (ACH) and Fedwire 

transfers, as well as adjustment information used to reconcile agency accounts. It 

also assists Treasury in managing deposits serviced by financial institutions and 

monitors the cash position of the U.S. government. The variety of mechanisms 

through which these collections are processed include:

♦ Electronic Federal Tax Payment System (EFTPS)—Primarily used by 

corporations in remitting tax withholdings;

♦ Plastic Card Network (PCN)—Used by the public to pay via credit and debit card 

for goods and services, fees, fines, and debts;
Appendix C—Central Agency Processes

65

♦ Automated Clearing House (ACH)—Used by businesses and individuals to pay 

primarily for recurring amounts due to the government;

♦ Fedwire—Used primarily by large corporations to remit large deposits due to the 

government;

♦ Pay.gov—Used by corporations and individuals to remit funds due via a webbased collections application;

♦ Federal Tax Deposit (FTD) system—Used by smaller corporations to remit 

withholding taxes via over-the-counter presentment of a payment coupon and 

amounts due at financial institutions;

♦ Lockbox—High-volume operation in which forms from individuals and 

businesses, such as tax returns, accompany remittances in the form of paper 

check or money order; and

♦ Treasury General Accounts—A means for program agencies to deposit revenue 

over the counter at a locally designated financial institution in the form of cash, 

checks, and money orders received within their program offices.

Stakeholders

Stakeholders and customers for collections include:

♦ Taxpayers;

♦ Central agencies such as the Treasury and Office of Management and Budget;

♦ Program agencies and their customers;

♦ Financial institutions; and

♦ Federal Reserve.

Figure 14 below illustrates FMS’ Collections Business Line.
66

Figure 13. Financial Management Service Collections Business Line

Federal Reserve

Banks

Individuals/Corporations Treasury

Federal Program

Agencies

Report on Collections 

Deposits of Receipts

Report on Collections 

Transferred Funds,

Government Receipts

Deposit Tickets, 

Receipts ACH Details

Receipts Financial 

Institutions

Fedwire

Lockbox

Plastic Card

Network

REX

TGA Domestic/

Int’l

Commodity

Credit

Collections

FED TAX II

Pay.Gov

EFTPS

Payments

The central payments process provides banking services including disbursing, claims, 

reconciliation, and accounting for payments made on behalf of Federal agencies. In 

addition, the payments business encourages and sponsors the use of modern 

electronic technology in payment methods in order to reduce cost of the government’s 

cash flow.

The function of the Payments Process is to implement Federal payment policy and 

procedures, issue and distribute payments, promote the use of electronics in the 

payment process, and assist agencies in converting payment from paper checks to 

Electronic Funds Transfer (EFT). The control and financial integrity of the payments 

and collections process includes reconciliation, accounting, and claims activities. The 

claims activity settles claims against the United States resulting from Government 

checks which have been forged, lost, stolen, or destroyed, and collects monies from 

those parties liable for fraudulent or otherwise improper negotiation of Government 

checks.

The key payments sub-processes are to Process Payment Request From Federal 

Program Agencies, Issue Payments, Perform Check Reconciliation, Handle 

Exceptions, and Perform Accounting/Reporting.

Process Payment Request from Federal Agencies

The goals of the payments process are to strengthen Federal financial management 

through effective, timely, and accurate disbursement of payments and to provide 

agencies with easy and secure access to systems and information. Federal Program 

agencies determine eligibility, prepare payment files, certify to regional disbursement 
Appendix C—Central Agency Processes

67

centers by paper voucher or electronic certification, and transmit payment data via 

Electronic Certification System (ECS) or magnetic tape.

Issue Payments

The function of this sub-process is to provide timely and accurate Federal payments. 

Treasury FMS assigns trace numbers, pre-sorts for postal discounts, and releases 

payment via the Federal Reserve or USPS. Permanent records are maintained for 

payments issued.

Perform Check Reconciliation

The function of this sub-process is to compare the issue data with the payment data. 

If the data matches, it is archived. If the data does not match, an exception report is 

produced. The purpose of this process is to maintain optimum levels of efficiency, 

integrity, and quality in all payment related functions.

Handle Exceptions

The function of this sub-process is to receive, process, and resolve claims, holds, and 

reconciliation exceptions. The purpose is to ensure accuracy of payment and proper 

reconciliation, including the process of receiving, processing, and resolving claims, 

holds, and reconciliation exceptions.

Perform Accounting/Reporting

The function of this sub-process is to produce all accounting actions and 

documentation associated with the payment process and the collection process to 

make sure the government account is balanced. The purpose is to increase program 

efficiencies and reduce barriers for stakeholders to take action in support of improved 

accounting and reporting.

Stakeholders

Stakeholders and customers for payments include:

♦ Federal Program agencies;

♦ Recipients of Federal payments;

♦ Consumer and community-based organizations;

♦ Government vendors;

♦ Federal Reserve System;

♦ Financial institutions;

♦ Congress; 

♦ Office of Management and Budget; and
68

♦ Regional Financial Centers.

Figure 15 below illustrates FMS’ Payments Business Line

Figure 14. Financial Management Service Payments Business Line

Federal Reserve Bank

Federal Program

Agency

Payee’s Financial 

Institution 

FMS 

Regional Financial Center

U.S. Postal Service EFT (EFT and Checks)

Certified Payment

• Amount

• Recipient

Checks

Paid Check and EFT Info.,

Accounting Info.

Payment Summary 

and Appropriation Info.

Detailed Check Issue Info.,

Check & EFT Accounting Info.

Checks

EFT

Central Accounting System

• Check Reconciliation

• STAR

Treasury/FMS

Start Here

Individuals

Organizations
69

Appendix D—Summary of JFMIP Federal Financial 

Management System Requirements 

Service Function Overview

Core Financial 

System 

Requirements

Identifies the accounting and reporting requirements for the 

agency’s accounting system of record that supports budget 

execution, funds control and reporting. The primary components 

of the core financial system are:

Core Financial Systems Management. Administration of the 

accounting classification and coding structures designed to 

capture data at the transaction entry level needed for 

downstream information and reporting;

Funds Management. Process funds control transactions in 

support of the execution of programs and appropriations;

Standard General Ledger Management. Maintenance of general 

ledger posting rules associated with funds management, 

payments and collections transactions;

Cost Management. Measuring the total cost of performing 

activities;

Payments Management. Providing appropriate control over 

payments made on behalf of an agency;

Receipts Management. Supports activities associated with 

collecting receipts and receivables; and

Reporting. Providing timely and useful financial information for 

reporting, budget formulation and execution, fiscal management 

of program delivery, and internal and external reporting.

Budget 

Formulation 

System 

Requirements

Budget formulation systems requirements for maintaining and 

processing information and schedules associated with the 

management of the Federal Budget Process. Includes planning, 

forecasting, pricing, associated with developing budgets; 

developing schedules and exhibits dictated by the budget cycle; 

allocation of funding for Federal programs and operation; and 

performance measurement such as unit costs, marginal costs, 

outputs and outcomes.

Travel System 

Requirements

Financial system requirements for processing accounting, 

payment and collection transactions associated with Federal 

civilian Travel Management. Includes: accounting for travel 

allotments, authorizations, advances, and claims, associated 

with travel, local travel and change of station (Functions); 

managing payments and payment processes to travelers and 

service providers; and managing collections of any 

overpayments or unused advances.

Acquisition/ 

Financial Systems 

Interface 

Requirements

Financial System requirements for interfacing between core 

accounting and acquisition systems that process funds control, 

invoicing, receiving and payment collection transactions 

associated with managing Federal acquisition and contracting 

for goods and services. Includes: accounting and funds control 
70

Service Function Overview

for goods and services. Includes: accounting and funds control 

for purchases, contracts, leases and intra-governmental

transactions: maintenance of payment records and 

specifications for individuals, vendors, Federal and other 

governments providing goods or services through contractual 

agreements; managing payments and payment processes to 

Federal and non-Federal service providers and associated cash 

management and prompt payment activities; and managing 

collections of any overpayments.

Property 

Management 

Systems 

Requirements

Financial System requirements for processing accounting 

transactions associated with the acquiring, managing and 

disposing of Federally owned property assets. Includes: 

accounting and funds control for the acquisition of land, 

buildings, equipment, technology, and other tangible property 

assets acquired through purchase, lease, construction, transfer, 

grant or donation; accounting for the capitalization, usage and 

valuation of assets through utilization, maintenance and 

improvement overhaul, retirement or disposal of property; cost 

accounting in support of property management.

Inventory System 

Requirements

Financial systems requirements for accounting for inventory and 

property held for resale in support of numerous Federal 

programs that provide goods for sale; Accounting for inventory 

assets, valuation, gain and loss associated with maintaining 

inventory of goods for sale; Supporting the acquisition, 

procurement or manufacturing of inventory. Accounting and 

funds control for inventory assets and sales.

Revenue System 

Requirements

Financial System requirements for processing non-income tax 

revenue (exchange and non-exchange) transactions associated 

with the mission of government and program delivery 

throughout the Federal government, that collect revenues. 

Includes: accounting for the collection of taxes, insurance, 

donations, fees, fines, penalties, and forfeitures from individuals, 

the private sector, Federal, state, local and national 

governments; managing collection operations and processes; 

associated cash management; forecasting revenues and 

developing pricing and user fee structures; and managing debt 

collection activities.

Grant Financial 

System 

Requirements

Financial System requirements for processing funds control, 

payment and collection transactions associated with Federal 

grants management. Includes: accounting for funding and 

drawdowns associated with the distribution of Federal grants to 

recipients; managing payment processes, payment information 

and payments to grant recipients; fund transfers, and managing 

collections of any overpayments or unused advances.

Insurance Claims 

Systems 

Requirement

Financial systems requirements for processing funds control, 

payment and collection transactions associated with Federal 

insurance programs.
Appendix D—Summary of Financial Systems Requirements Documents

71

Service Function Overview

Benefit System 

Requirements

Financial systems requirements for processing financial 

transactions associated with administering Federal benefits 

programs. Reflects financial system requirements associated 

with Federal benefit systems used in administering programs 

that do not involve a health care component (i.e., non-health 

care benefit programs). Managing and administration of 

benefits claims and entitlements. Processing payments to 

individuals for Federal assistance, old age, disability, retirement, 

death and other Federal benefits in support of social security, 

veterans, retirement and other Federal programs. Accounting 

for benefit transactions. Managing Collection for overpayments.

Guaranteed Loan 

System 

Requirements

Financial system requirements for processing accounting, 

payment and collection transactions associated with 

management of Federal credit programs. Includes: manage 

working capital, cash management and Treasury financing; 

processing and servicing guaranteed loans and claims; 

accounting and funds control for assets, liabilities, and 

resources; analysis and decision support for managing 

guaranteed loan programs; and managing the collection of 

delinquent debts.

Direct Loan 

System 

Requirements

Financial system requirements for processing accounting, 

payment and collection transactions associated with 

management of Federal credit programs. Includes: processing 

and servicing direct loans to individuals, businesses, and 

governments to carry out Federal credit programs for 

agricultural, small business, housing, education, mortgage etc.; 

accounting and funds control; managing loan portfolios; and 

managing the collection of delinquent debts.

Seized Property 

and Forfeited 

Assets Systems 

Requirements

Financial system requirements for processing accounting, 

collection and payment transactions associated with the custody 

and administration of property and assets acquired through 

criminal, civil and administrative law enforcement (tax collection; 

confiscations by police agencies from criminal activity; customs 

seizures, property seized for evidence; mortgage foreclosures; 

abandoned property, etc.). Includes: accounting for property and 

assets and for revenues and costs associated with the 

inventory, appropriation or sales of seized or forfeited assets 

and deposits to the Treasury general fund; processing revenue 

and collection transactions for disposals; administration of debt 

collection activities; managing valuation and inventory of seized 

or forfeited assets and property; valuation and accounting for 

liabilities resulting from mortgage foreclosures and claims.

Managerial Cost 

Accounting 

System 

Requirements

Financial systems requirements for the re-allocation of costs 

classified at the initial recording of the business transaction to 

additional cost pools needed to support further downstream 

resource management decisions. Managerial cost accounting 

systems are one component of managerial cost accounting in 
72

Service Function Overview

addition to information provided by the core financial system 

and other mixed financial systems. The success of cost 

accounting systems is dependent upon the discipline of 

establishing an effective and efficient accounting classification 

and coding structure that supports current and downstream 

information requirements. 

Human Resources 

and Payroll 

System 

Requirements
73

Appendix E—Contributors

JFMIP Steering Committee

Jeffrey C. Steinhoff, General Accounting 

Office

Clarence C. Crawford, Office of 

Personnel Management

Karen Cleary Alderman, JFMIP

Joseph L. Kull, Office of Management 

and Budget

Robert N. Reid, Department of the 

Treasury

Kathleen M. Turco, General Services 

Administration

Joint Financial Management 

Improvement Program

Karen Cleary Alderman, Executive 

Director

Bruce Turner, Project Leader

Peggy Alston, Executive Potential 

Program on Detail from Immigration and 

Customs Enforcement 

Office of Management and Budget

Bob Haycock

Jean Holcombe

Jerry Williams

Air Force

John Gilligan, Framework Co-Chair

Department of Commerce

John Sansing

Department of Defense

David Alekson

Ron Brooks

Department of Education

Steve Sirk

Department of Energy

Mike Tieman

Department of Interior

R. Schuyler Lesher, Framework CoChair

Department of Labor

Russell Moritz

Laura Callahan

Department of State

Gregory S. Linden

Department of the Treasury

Melinda Pope

George Ratte

Larry Rosenberg

Susan Beakes

Environmental Protection Agency

Martin Poch

General Accounting Office

Kay Daly (Technical Advisor)

General Services Administration

Nora Rice

Jolene Romanyshyn

Lew Sanford

Ron Taylor

Kathleen Turco, Framework Co-Chair

Vic Winnard

National Aeronautics and Space 

Administration

Bob Benedect

Lee Holcomb
74

Office of Thrift Supervision

Jim Wilson

Social Security Administration

Thomas Bianco

Karen Palm

United States Agency for 

International development

Patrick Mullen

Veterans Administration

Katherine Galos

CIO Council Architecture and 

Infrastructure Committee

Lee Holcomb, Chair

Lew Sanford, Co-chair

Mike Tieman, Co-chair

Industry Participants

Thomas Arnsperger, MITRE

Ben Chadwick, Booz Allen Hamilton

Ken Hoffman, MITRE

Ann Reedy, MITRE

Ron Rhodes, LMI

Cindy Samuelson, LMI

Jonathan H. Smith, Booz Allen Hamilton