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U.S. Department of Education

U.S. Department of Education

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Functional Statements > Office of Finance and Operations

The Office of Financial Management (OFM) is responsible for processing, reconciling, evaluating, and reporting all agency financial transactions; certifying financial transactions, producing internal financial management reports and analyses; preparing the Department's monthly, quarterly, and annual financial statements and related notes and schedules; and coordinating the external audit of the agency's financial statements.  OFM directs cash management activities within the agency and manages the Department's accounts payable and administrative accounts receivable portfolios.  The organization is the Department's principal liaison to the U.S. Government Accountability Office (GAO), the U.S. Department of Treasury (Treasury), the Office of Management and Budget (OMB), and other regulatory and legislative entities in matters related to the agency's financial accountability and required financial reporting; in this regard, OFM reviews and coordinates directives, other requirements, and initiatives from these organizations.

In carrying out its responsibilities, OFM:
                - Ensures the accuracy and timeliness of all agency financial data.
                - Processes core financial systems transactions.
                - Maintains all fund control systems.
                - Processes the Department's payments and ensures the integrity of those payments. 
                - Makes timely and appropriate adjustments to the financial reports and statements.
                - Establishes and maintains financial management policies and procedures.
                - Manages non-FSA improper payment risk assessments and reporting.
                - Assesses risks and identifies and evaluates financial management and payment system controls.
                - Monitors financial management systems. 
                - Ensures the Department's compliance with applicable laws and regulations.

The Deputy Assistant Secretary for OFM provides overall leadership and coordination to the following six components:
                - Cash & Business Financial Management Services Division
                - Accounts Receivable & Bank Management Division
                - General Ledger Division
                - Financial Data Integrity & Controls Division
                - Accountability & Financial Reporting Division
                - Financial Systems Transactions & Payments Division

## The OFM Immediate Office

                - Supports OFM senior staff by providing executive level support, technical advice, and expert guidance on Government-wide and Department-wide initiatives.
                - Reviews Government-wide regulations and develops policy and procedural recommendations. 
                - Coordinates the Department's response to external requests and initiatives from OMB, GAO, Congress, Treasury, and other entities.
                - Assists with business process analysis and reengineering.
                - Provides office management and administrative support.
                - Manages human capital and contract management support for OFM.
                - Coordinates OFM special projects by providing project management support.

## Cash & Business Financial Management Services Division 

The Cash & Business Financial Management Services Division is responsible for Departmental cash reporting and reconciliation of loan, grant, and administrative program activities. The Division is also responsible for the reconciliation of the Department's various payment subsystems. 

In carrying out its responsibilities, the Division: 
                - Reconciles the G5 payment system to the general ledger and documents and resolves discrepancies and submits them to OFM management. 
                - Prepares the FMS 224 Reports to Treasury that report disbursement, receipt, and collection transactions according to appropriation, fund, and receipt account. 
                - Reconciles the travel system, contracting system, and payroll system to the general ledger and documents and resolves discrepancies and submits them to OFM management.
                - Produces internal management reports and promotes improvements in financial management operational performance by all Principal Offices and Executive Officers.
                - Produces vendor and recipient payment history reports and develops metrics to highlight unusual activity for further analysis. 
                - Coordinates the Cash Management Improvement Act of 1990 within the Department and with Treasury to ensure efficiency, and equity in the exchange of funds and more timely use of funds and return of interest between the Federal Government and states. 
                - Maintains the Fund Balance with Treasury (FBWT) reconciliation and produces monitoring reports.
                - Manages the Department's administrative payment process.
                - Manages the IPAC process – ensuring accurate and timely application of interagency funds to proper funds, ensures that all unmatched transactions are classified according to trading partner code, and acts as liaison between the Department and other agency trading partners for IPAC payments.
                - Coordinates the Prompt Payment Act requirements to ensure timely payments to vendors.
                - Reconciles Accounts Payable Trial Balances (APTB sub-ledger) to the general ledger and performs analysis of payable proprietary/budgetary relationships by fund/sector; discrepancies are researched, documented, and resolved. 
                - Manages the purchase card reconciliation and payment function, ensuring accurate and timely payments to the Department's purchase card vendor and excellent customer service to the Department's cardholders. 
                - Generates Open Purchase Order reports in AP_PO system and reviews reports for missing trading partner codes, misclassified government vendors, and anomalies.

## Accounts Receivable & Bank Management Division 

The Accounts Receivable & Bank Management Division is responsible for managing administrative accounts receivables and processing recipient bank change requests consistent with sound internal controls.  The Division is also responsible for ensuring that supporting documentation is filed in a timely manner and that records management requirements and archiving protocols are observed.  In addition, the Division shall adhere to reporting, reconciliation, and discrepancy resolution due dates based on OFM management approved deadlines.

In carrying out its responsibilities, the Division:
                - Manages the Department's administrative receivable and promissory note portfolios.
                - Establishes accounts receivables and coordinates with Program Offices on proof-of-debt requirements in support thereof.
                - Applies receipts on administrative receivables and promissory notes.
                - Processes monthly allowance and other accounts receivable-related accruals. 
                - Reconciles accounts receivable trial balances (FMSS sub-ledger) and Nortridge Loan System promissory notes to the general ledger; researches, documents, and resolves discrepancies.
                - Researches and resolves miscellaneous receipt revenue/contra-revenue activity.
                - Coordinates with financial representatives from educational institutions to negotiate debt repayment terms, refers delinquent debts to private debt collection contractors/Treasury, and writes off uncollectible debts. 
                - Coordinates with Program Offices and OGC on reimbursement funding and offsetting of delinquent debts. 
                - Maintains the G5 Banking Financial Information System (BFIS) for financial institution recipient depositor account information, ensuring that all recipient payments can be processed electronically through ACH or FEDWIRE. 
                - Ensures that each request for an update in banking information is fully documented, controlled, properly stored, and accessible upon request.

## General Ledger Division

The General Ledger Division is responsible for all loan, grant, and administrative program accounting activities – including ensuring the accuracy of accounting adjustments and estimates included in the Department's financial statements. In addition, the Division assists in the preparation/coordination of all official loan program financial reports with Federal Student Aid (FSA) and Office of Budget Service to be submitted to Treasury, OMB, and other government agencies; ensures that all needed high level loan account reconciliations are being performed; assists in the production of related financial reports to Treasury, OMB, and other government agencies; and prepares budgetary/proprietary reports for all appropriations.  The Division also performs Departmental account reconciliations and ensures that proper accounting policies and procedures are established and implemented throughout the Department.

In carrying out its responsibilities, the Division:
                - Maintains official accounting records of all funds; prepares trial balances and fluctuation analyses for these funds, and researches and resolves variances; and supports preparation of all official financial reports for the Department's appropriations – including required adjustments and estimates included therein.
                - Interfaces with FSA and Office of Budget Service staff on all loan accounting matters. 
                - Collaborates on high level loan fluctuation analyses of the loan trial balances, and in conjunction with FSA and Office of Budget Service, researches and resolves variances.
                - Assists in the preparation and analysis of FMS 224 Reports to Treasury that report disbursement, receipt, and collection transactions according to appropriation, fund, and receipt account.
                - Advises operating grant and administrative program managers and their system staffs in maintaining accounting subsystem records.

## Financial Data Integrity & Controls Division 

The Financial Data Integrity & Controls Division (FDICD) is responsible for advancing the Department's financial reporting, internal control over financial reporting, and financial data analysis capabilities through use of automation and analytical tools and methods.  This includes developing robust tools and techniques which demonstrate payment integrity; supporting the prevention, detection, and recovery of improper payments; and supporting data-driven decision-making in financial management.  In addition, the Division is responsible for managing the Department's OMB Circular A-123 program; overseeing the implementation of activities in OMB Circular A-123, Appendix C (which implements Improper Payment Elimination and Recovery Act (IPERA) requirements) and Appendix A, pertaining to financial reporting and data integrity risk; developing and maintaining policies and procedures related to financial management operations; and developing and maintaining documentation of financial management business processes.  Further, the Division is responsible for managing the Department's internal (OIG and GAO) audit resolution and closure processes.

In carrying out its responsibilities, the Division:
                - Oversees Department-wide internal controls to provide assurance of efficient and effective operations, reliable reporting for internal and external use, and compliance with laws and regulations in accordance with the Federal Managers' Financial Integrity Act of 1982.
                - Develops and maintains policies, procedures, and documentation related to financial management business processes, internal controls, and data quality.
                - Conducts internal control reviews, quantitative and qualitative risk assessments, monitoring, and internal controls training, including entity-level and financial control assessments.
                - Manages the non-FSA improper payment risk assessment, estimation, corrective action planning, and reporting.
                - Manages the Department's Payment Integrity Monitoring Application (PIMA) and leverages available analytic tools (such as Treasury's Do Not Pay) to help prevent, detect, and recover improper payments.
                - Coordinates and collaborates with the Office of Enterprise Data Analytics and Risk Management to integrate financial and operational controls.
                - Identifies and develops key financial performance metrics.
                - Develops and implements data analytics processes to promote the use of best practices in collecting, organizing, and analyzing large sets of financial data.
                - Applies information-technology-based data management and analytics to solve complex financial management problems.
                - Oversees OFM data management activities.
                - Coordinates the resolution, monitoring, and closure of internal audits by the Office of Inspector General (OIG) and the Government Accountability Office (GAO).

## Accountability & Financial Reporting Division

The Accountability & Financial Reporting Division is responsible for preparing the Department's financial statements and Agency Financial Report and producing other statutory and ad-hoc financial reports. The Division is also responsible for managing the intragovernmental accounting function. In addition, the Division coordinates the annual financial statement audit, including oversight of the annual Prepared-by-Client (PBC) process. 

In carrying out its responsibilities, the Division:
                - Produces the Department's and FSA's monthly, quarterly, and annual financial statements, and footnotes – when applicable. 
                - Prepares and publishes the Department's Agency Financial Report in compliance with applicable OMB requirements. 
                - Maintains the Government wide Treasury Account Symbol Adjusted Trial Balance System (GTAS) reporting process. 
                - Prepares ad-hoc financial reports to inform stakeholder decision-making.
                - Manages intragovernmental accounting function, including submission of corresponding reports to Treasury, and coordinates with trading partners to resolve differences in amounts reported.
                - Coordinates the external audit of the Department's annual financial statements and provides related guidance, counsel, and support to the Department's senior management; manages the submission of PBC items; and serves as liaison between the Office of Inspector General (OIG), the Department's external auditor, Office of Budget Service, FSA, and other stakeholders regarding audit and assurance related issues. 
                - Coordinates tracking of financial statement audit Notices of Findings and Recommendations (NFRs) issued by Department's external auditor.
                - Manages contract supporting financial statement preparation.

## Financial Systems Transactions & Payments Division

The Financial Systems Transactions & Payments Division is responsible for the daily operation and maintenance of the core financial systems and payment processing.  The core financial systems maintain the official books of original entry for all funds authorized by the Congress and ensure the integrity of fund usage for programs managed by ED.

In carrying out its responsibilities, the Division:
                - Ensures that existing financial systems comply with the Standard General Ledger requirements and OMB/Treasury guidance as it relates to such systems. 
                - Manages all funds control systems within the current financial systems and the internal/external accounting reporting systems.
                - Processes core financial system transaction controls and configuration of system modification requests.
                - Receives administrative and program appropriation apportionments, warrants, allotments, and limitations from Fed Admin subsystem.
                - Verifies fund availability for commitment and obligation documents received from program and staff offices and records related fund transactions in the automated accounting system.
                - Processes payment requests, award updates, adjustments, and recipient expenditure data.
                - Oversees the FEDWIRE, ACH, International, and other payment processes.
                - Manages all aspects of FMSS system security – including the configuration of the financial statement year-end closing mass-allocation formulas for completing the Department's year-end closing of the accounting systems – and provides new EDCAPS FMSS users with access and responsibilities.
                - Performs the Department's quarterly and yearly disaster recovery validation testing.

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