2 Joint Financial Management Improvement Program !

Current JFMIP Officials and Staff Members

Principals: Steering Committee:

David M. Walker, Chair Jeffrey C. Steinhoff, Chair

Comptroller General of the Managing Director, Financial Management

United States & Assurance

General Accounting Office

Mitchell E. Daniels, Jr. Joseph Kull

Director Deputy Controller

Office of Management and Budget Office of Management and Budget

Paul H. O’Neill Donald V. Hammond

Secretary of the Treasury Fiscal Assistant Secretary

Department of the Treasury

Kay Coles James Kathleen McGettigan

Director Chief Financial Officer

Office of Personnel Management Office of Personnel Management

William B. Early, Jr.,

Chief Financial Officer

General Services Administration

Karen Cleary Alderman

Executive Director

JFMIP

JFMIP Staff:

Stephen Balsam

Doris Chew

Daniel Costello

Gordon Dean

Steven Fisher

Janet McBride

Dennis Mitchell

Donna Tebeau

Bruce Turner
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 3 Report on Results and Future Plans for Improving Financial Management !

JFMIP Principals

Mitchell E. Daniels

Director US Office of

Management and Budget

David M. Walker

Comptroller General of the

United States, and Chair,

JFMIP Principals

Paul H. O’Neill

Secretary of the Treasury

Kay Coles James

Director U.S. Office of

Personnel Management
4 Joint Financial Management Improvement Program !

Jeffrey C. Steinhoff

Chair, Steering Committee

Managing Director

US General Accounting Office

Kathleen M. McGettigan

Chief Financial Officer

US Office of Personnel

Management

Donald V. Hammond

Fiscal Assistant Secretary

Department of the Treasury

Joseph L. Kull

Deputy Controller

US Office of Management and

Budget

William B. Early, Jr.

Chief Financial Officer

General Services Administration

Karen Cleary Alderman

JFMIP Executive Director

JFMIP Steering Committee
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 5 Report on Results and Future Plans for Improving Financial Management !

Table of Contents

A Message from the JFMIP Chair......................................................................... 6

A Message from the Chair of the Steering Committee ......................................... 7

Our Mission .......................................................................................................... 8

Our Organizational Structure ................................................................................ 9

Our Past: A Brief History of JFMIP................................................................... 10

Our Present: Accomplishments in 2001

Financial Systems .............................................................................. 12

Human Resources ............................................................................. 19

Our Future .......................................................................................................... 22

Our Financial Highlights ..................................................................................... 23

Appendices

A. JFMIP Accomplishments in 2001 ................................................. 25

B. JFMIP Future Plans....................................................................... 26
6 Joint Financial Management Improvement Program !

I

 am pleased to report on a highly successful year for the JFMIP—a year highlighted

by an unprecedented level of involvement by the JFMIP Principals, who have

demonstrated a personal commitment to providing the leadership to address

pressing governmentwide financial management issues and to help transform

the way the federal government does business.

In August 2001, the JFMIP Principals began a series of quarterly meetings that

marked the first time all four of the Principals had gathered together in over 10 years.

To date, these sessions resulted in substantive deliberations and agreements focused

on key issues such as:

• Defining success measures for financial management performance that go far

beyond an unqualified audit opinion on financial statements and include measures

such as financial management systems that routinely provide timely, reliable, and

useful financial information and no material internal control weaknesses;

• Restructuring the Federal Accounting Standards Advisory Board’s (FASAB)

composition to enhance the independence of the Board and increase public

involvement in setting standards for federal financial accounting and reporting;

• Significantly accelerating financial statement reporting so that the government’s

financial statements are timely and to discourage costly efforts designed to obtain

opinions on financial statements without addressing underlying systems challenges;

• Establishing audit committees for the major federal agencies;

• Addressing the impediments to an audit opinion on the U.S. government’s

consolidated financial statements; and

• Reporting and auditing social insurance financial information that is consistent

between the reports issued by the Social Security and Medicare trustees and the

U.S. government’s consolidated financial statements.

• Using full cost data in the budget decision-making process to enhance the planning process and the evaluation of the cost of operations, and to enhance consistency and transparency relating to presentation of this information and greater

accountability for results.

The JFMIP Principals have established an excellent working relationship, a basis for

action, and a new sense of urgency through which significant and meaningful progress

can be achieved. Future meetings will enable the Principals to reach agreements and

monitor progress on strategies critical to the full and successful implementation of

federal financial management reform and to provide greater transparency and

accountability in managing federal programs and financial resources.

David M. Walker

Comptroller General of the United States

A Message from the JFMIP Chair
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 7 Report on Results and Future Plans for Improving Financial Management !

The federal government continues to face tremendous challenges to implement

financial management reform legislation enacted by the Congress in the

1990’s. Successfully addressing these challenges is central to meeting the

President’s Management Agenda, which includes improved financial

management performance as one of five governmentwide initiatives. At the heart of

that initiative is having the capacity to routinely provide timely, accurate, and useful

information on the financial results of operations to the Congress, program managers,

other decisionmakers, and the American public.

JFMIP continues to stimulate further progress toward that goal through efforts

such as those spearheaded by the JFMIP Principals during the past year. The JFMIP

Chair’s message appearing earlier in this report highlights the Principals’ personal

involvement to reinvigorate financial management improvement across government.

Also, JFMIP continues to be a leader in:

• coordinating the development and refinement of financial systems requirements,

as exemplified in 2001 by updating the core financial systems requirements and

publishing benefit system requirements document;

• working to strengthen financial management human capital practices, as shown

last year by publishing core competencies for project managers implementing

financial systems;

• testing and certifying software products for compliance with requirements, which

now takes on the added dimension of ensuring previously certified software

products adequately meet new requirements;

• undertaking other financial management improvement projects, including recent

studies of ways to improve payroll delivery services and to address

intragovernmental transaction problems.

The JFMIP Steering Committee and the outstanding JFMIP staff, who have worked

tirelessly to promote excellence in financial management, look forward to sustaining a

long record of accomplishments and building on a proud tradition of being at the

forefront in helping to strengthen federal financial management systems, operations,

and human capital.

Jeffrey C. Steinhoff

Chair, JFMIP Steering Committee

A Message from the JFMIP Steering

Committee Chair
8 Joint Financial Management Improvement Program !

The mission of the Joint Financial Management Improvement Program

(JFMIP) is to improve financial management practices in the government

through the joint and cooperative efforts of the U.S. Department of the

Treasury (Treasury), the General Accounting Office (GAO), the Office of

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

all federal agencies. Since the passage of the Chief Financial Officers (CFO) Act in

1990, OMB, GAO, and Treasury have worked collaboratively with the CFO Council,

which represents the interests of the federal agencies. JFMIP will work on initiatives

to improve financial management as outlined in the President’s Management Agenda

for fiscal year 2002.

Financial management systems that support federal

accounting needs are one of the key pillars for achieving

the improvement in financial management envisioned by

the CFO Act. Enactment of the FFMIA created the

structure needed to crystallize this vision – the

implementation of Federal accounting standards,

compliance with uniform functional requirements for

financial systems, and compliance with data requirements

for transaction recording. JFMIP is working with our

partners to bring about the changes needed to ensure that

federal agencies have the tools for building financial systems

that can deliver the complete, consistent, reliable, and timely

financial information that is crucial to decision-making

processes.

As an agent of change, the JFMIP coordinates the development of and publishes

functional requirements for financial management systems. In addition, JFMIP is

solely responsible for the independent testing and certification of commercial off-theshelf core financial system software. Finally, the JFMIP acts as a catalyst and

clearinghouse for sharing and disseminating information about good financial

management techniques and practices.

JFMIP’s Mission JFMIP’s Mission

To improve financial management

practices in the federal government

through the cooperative efforts of

OMB, GAO, Treasury, OPM, and the

federal agencies.

Our Mission
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 9 Report on Results and Future Plans for Improving Financial Management !

Our Organizational Structure

Leadership and program guidance for the JFMIP is provided through the joint efforts

of four Principals:

• Comptroller General of the United States

• Secretary of the Treasury

• Director, Office of Management and Budget

• Director, Office of Personnel Management.

The general direction of the JFMIP is determined by the JFMIP Steering Committee,

which meets monthly to oversee projects and activities. This committee includes a

representative designated by each Principal, the Executive Director of the JFMIP, and

a representative of a program agency. The General Services Administration continued

to serve as the program agency representative.

Directly reporting to the Executive Director is a small professional staff who carries

out the operational activities of

the JFMIP. The JFMIP staff

works on testing and qualifying

commercial software products,

developing functional

requirements for financial

systems, disseminating

information on financial

management practices, and

working on human resource

issues.

The JFMIP has provided

developmental opportunities

for federal employees with an

interest in improving the

federal government’s financial

management systems and

practices. These

developmental assignments

may be as short as 30 days or

longer than a year. During the

past year, JFMIP hosted two

CFO Fellows, a developmental assignment participant from the Federal Deposit

Insurance Corporation, three Presidential Potential Program participants, and 10

participants from the Executive Leadership Program.

The success of JFMIP sponsored activities depends greatly upon our partnerships

with the federal financial management community. In fact, the project teams that

draft the JFMIP requirements documents are typically led by representatives of major

stakeholders. The quality and success of the products reflect the talent and dedication

of these agency representatives.

Figure 1 - JFMIP Organization Chart igure 1 - JFMIP Organization Chart

Stakeholders Agency Partners

Steering Committee

OMB Treasury GAO OPM GSA

Principals

OMB Treasury GAO OPM

Principals

OMB Treasury

Steering Committee

OMB Treasury GAO OPM GSA

Stakeholders Agency Partners
10 Joint Financial Management Improvement Program !

In 1948, the General Accounting Office, the Department of the Treasury, and the

Bureau of the Budget1

 began a cooperative effort with the federal agencies to increase

the effectiveness and efficiency of federal financial systems and to coordinate the

interrelated financial activities and responsibilities of the central agencies. On January

6, 1949, the three central agency heads signed a formal agreement that set forth the

policies, objectives, and work areas for this cooperative effort that was commonly

referred to as the Joint Program. The principles and objectives of the Joint Program

were embodied in statute with the passage of the Budget and Accounting Procedures

Act of 1950.

Known originally as the Joint Program for Improving Accounting in the federal

government, early efforts were concentrated on achieving improvements in accounting

operations. In the late 1940’s, significant complexity and the generation of masses of

“red tape” characterized agency financial management systems. Directions to the

federal agencies from the central oversight bodies frequently resulted in conflicting

requirements or duplication of agency efforts. When the need for better financial

management systems that generated timely and useful information became obvious,

the Joint Program played a pivotal role in resolving these basic problems and bringing

about a realignment of oversight responsibilities.

In December 1959, the Program was redesignated as the Joint Financial Management

Improvement Program. Recognizing the importance of human resources and their

role in the financial systems equation, the Civil Service Commission2 was invited to

join the JFMIP principals in 1966. The addition of the government’s top personnel

officer brought leadership and focus to personnel matters involving recruitment,

training, and classification standards related to financial management.

Throughout the years, JFMIP has been involved in many studies involving a wide

range of topics. These included: procurement, payment, and audit of common carrier

accounts for freight and transportation services; claims settlement activities;

letters of credit for financing purposes; cash management; internal controls over

payment activities; use of electronic transfer of information for interagency billings

and collections; single audit guidelines for financial reviews of federal grantees,

contractors, state and local governments; and streamlining of gvernment travel

regulations.

In January 1988, JFMIP published the first in its series of federal financial

management system requirements documents – the Core Financial System Requirements.

Subsequent to this document, other subsidiary system requirements were issued.

In addition to improved financial management systems, the importance of the human

resources was also recognized as an essential cornerstone of the management of the

federal government. The establishment of core competencies for individuals who work

in federal financial management was identified as a prerequisite to enhancing the

development of human resources. Since 1990, JFMIP, with the collaboration of agency

teams, issued core competency documents covering accountants, budget analysts,

financial managers, financial system analysts, management analysts and financial

Our Past: A Brief History of JFMIP
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 11 Report on Results and Future Plans for Improving Financial Management !

specialists, and information technology personnel implementing financial management

systems.

As part of our communication and outreach strategy, JFMIP disseminates

information on financial management policies and practices, and encourages agencies

to share their “best practices”. JFMIP has adopted the Internet as a major informationsharing platform. JFMIP has sponsored an annual financial management conference

for almost 3 decades. JFMIP also issues quarterly newsletters that highlight the latest

financial management issues, policies and practices.

1

 Currently the Office of Management and Budget

2

 Currently the Office of Personnel Management

The 1948 signing ceremony which informally established the Joint Program. Pictured left to right are John

Snyder, Secretary of the Treasury; Lindsay Warren, Comptroller General of the United States; and James Webb,

Director of the Bureau of the Budget.
12 Joint Financial Management Improvement Program !

Our Present: Accomplishments in 2001

The President’s Management Agenda identifies five governmentwide areas

to improve federal management and deliver results important to the

American people. The five governmentwide areas are strategic management

of human capital, competitive sourcing, improved financial performance,

expanded e-government, and budget and performance integration. JFMIP is working

collaboratively with federal agencies to enable the achievement of goals in these areas.

Financial Systems

Financial systems improvement has been a priority

within the financial management community for several

years. The President’s management goal to improve

financial performance requires quality financial systems,

data, and processes. Agencies must have financial systems

that routinely produce information that is timely, useful,

and reliable to improve accountability and program

management. These systems must be capable of

supporting effective decision-making and ensuring

accountability. In concert with our stakeholders and the

CFO Council’s Systems/e-government Committee, JFMIP

focused its 2001 activities in these major areas:

• functional requirements for financial systems

• software qualification testing

• intragovernmental transactions and eliminations

study

• federal payroll processing study

• information sharing and outreach.

Functional Requirements

Defining governmentwide systems requirements necessary to support statutes,

Executive Branch policies and regulations, and federal accounting standards is critical

for achieving the desired improvement in financial systems and financial information.

Such requirements provide a basis for agencies and vendors to develop, evaluate, and

implement systems that support federal agency financial management. Therefore,

these requirements have significant governmentwide impact on federal financial

management. Moreover, the implementation of the requirements that are relevant to

an agency is one of the conditions that must be met before substantial compliance with

the Federal Financial Management Improvement Act can be achieved. The issuance

of these common requirements helps ensure that commercially available software

meets these standards, that system development time and cost are reduced, and that

the market for federal financial system software is organized.

GOAL: Develop or update system

requirements documents for requirements documents for financial systems. financial systems. financial systems.

JFMIP issued the benefit system

requirements document for the first time.

It updated the Core Financial System

Requirements, and developed an

exposure draft on acquisition/financial

systems interface requirements.
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 13 Report on Results and Future Plans for Improving Financial Management !

Agency Systems Architecture - Status January 2002 Agency Systems Architecture - Status January 2002

JFMIP system requirements documents are produced through a rigorous analysis

process of federal requirements and represent governmentwide consensus of musthave functionality. They serve as a basis for gap analysis and help justify agency system

improvements or replacements. These documents also help organize the private sector

market by communicating mandatory functionality that commercial software must

address, as well as identifying value-added features desired by federal agencies.

The JFMIP Framework for Federal Financial Systems, issued in 1995, identified 15

components of a financial management system. The components included the core

financial system (inclusive of a financial reporting system), managerial cost accounting

system, and 13 subsidiary financial systems. Since 1998, JFMIP began an intensive

effort to update existing documents and to issue new system requirements documents

for the remaining subsidiary financial systems. There has been efficient and steady

progress in updating and developing system requirements documents. In 1999, JFMIP

published updated system requirements for core financial systems, human resources

and payroll, travel, and direct loans. In 2000, JFMIP updated system requirements

for seized property and forfeited assets, and guaranteed loans. In addition, grant

financial system requirements (June 2000) and property management system

requirements (October 2000) were published for the first time.

During 2001, JFMIP continued to make significant progress on the update and

issuance of new systems requirement documents. In September 2001, JFMIP published

Federal Benefit System Requirements for the first time. Many organizations with

Non-Income

Tax Revenue

System

Budget

Formulation

System

Non-financial

Systems

Travel

System

Seized Property

& Forfeited

Asset

System

Guaranteed

Loan

System

Inventory

System

Grant

System

Financial

Reporting

System

Managerial Cost Account ni g

Departmental Executive Information System

Human Resources

& Payroll

System

Property

Management

System

Direct

Loan

System

Acquisition

System

Core

Financial

System

Insurance Claim

System

Benefit System
14 Joint Financial Management Improvement Program !

federal benefit programs participated, including the Departments of Defense, Labor,

State, and the Treasury, the Office of Personnel Management, the Railroad Retirement

Board, and the Social Security Administration. Project leadership was provided by the

Department of Veterans Affairs. The published document addresses system

requirements for various federal benefit programs including retirement, disability and

other income protection programs. In FY 2001, these benefit programs disbursed

over one-half trillion dollars to individuals. Examples of related major programs

include: Old Age, Survivors and Disability Insurance, both civil service retirement

plans, military retirement, veterans’ benefits and Thrift Savings Plan distributions.

JFMIP worked collaboratively with the Procurement Executive Council to document

requirements that interface acquisition and financial systems. The project leader was

a procurement senior executive from the Department of Agriculture. A group of

senior acquisition and financial officials from many agencies contributed significantly

in the development of these requirements. In December 2001, the JFMIP issued an

exposure draft of the Acquisition/Financial Systems Interface Requirements for public

review. It is expected that the final document will be issued in late spring 2002.

JFMIP started work on the development of non-income tax revenue system

requirements document for the first time. The project sponsor is from the U.S.

Customs Service, and the project team has representatives from 23 agencies.

Preliminary work concentrated on the analysis of agency-specific revenue system

requirements. The project team is expecting to develop an exposure draft by the end

of Spring 2002.

In November 2001, JFMIP issued the updated Core Financial System Requirements,

previously issued in February 1999. The update reflected the results of a comprehensive

review including meetings with agencies that recently have implemented commercial

off-the-shelf (COTS) software for core financial management systems, the COTS

software vendors, and reviews of the work papers from prior years’ tests to determine

areas for improvement. Central agencies’ policies and requirements and agency request

for proposals were analyzed to determine any new government-wide requirements.

The updated requirements clarified the existing document particularly for Treasury

payment requirements, upward/downward adjustments for prior year recoveries, and

expanded the trading partner code to support intragovernmental transactions. New

requirements were added to capture full cost and revenue to unique cost objects, and

daily internal reports requirements were expanded and enhanced. In general, the

revisions will ensure that core software has functionality to support financial aspects

of performance reporting required by several of the President’s Management Agenda

initiatives. The final document is the basis of the redevelopment of JFMIP’s core

software qualification test.

In 2001, JFMIP began issuing white papers on various aspects of system

implementation. The first white paper developed was Parallel Operation of Software,

Is It A Desirable Software System Transition Technique? This document is intended

to assist agencies in developing appropriate risk mitigation strategies when transitioning

to new financial systems, especially to COTS software for which existing business

processes must be reengineered. This white paper updates selected information

regarding transitioning to a new system that is currently found in the JFMIP Framework

for Federal Financial Management Systems, issued in January 1995. The first white

paper was posted on the Knowledgebase at www.jfmip.gov and issued in October

2001. JFMIP will continue to develop other papers on system implementation issues.
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 15 Report on Results and Future Plans for Improving Financial Management !

Software Qualification Testing

JFMIP tests core financial system software and issues a 3-year certificate of

compliance to versions of software packages that pass 100 percent of test steps. Over

half of the existing certificates will expire at the end of

fiscal year 2002. JFMIP began the redevelopment of

our core software qualification test during fiscal year

2001. The staff met with agencies and vendors to solicit

comments on the test that was administered previously.

JFMIP also commissioned a review of the Qualification

Test to determine what improvements could be made.

Based on this formal review, JFMIP began two

significant changes to the test process. First, the Access

database, which stores the qualification test materials,

was improved. The capabilities of the database was

expanded to include more comprehensive test material,

such as the updated Federal Agencies Centralized Trial

Balance System (FACTS) II and FACTS I data. After

these changes were incorporated, the database was

designated as a new system, the JFMIP Computer

Aided Test Tool (JCATT). JCATT will significantly

improve the quality of the Qualification Test materials, including the electronic

transmission of the test data to COTS vendors and other interested parties, such as

federal agencies. Second, JFMIP adopted recommendations to improve the test. The

test will be significantly expanded with more transactions to cover Core Financial

System Requirements more fully. JFMIP will develop automated test reconciliation

tools to allow more detailed checking of test results in a shorter time period. JFMIP

worked with Treasury Financial Management Service’s Austin Regional Disbursing

Center to agree to develop a test facility whereby payment files generated by the

COTS during the test will

be processed by Treasury

to ensure accurate

processing. JFMIP plans

to complete the

redevelopment of the

Qualification Test during

fiscal year 2002, with the

first certification tests

executed during the

fourth quarter.

Qualified Vendor Software Packages Qualified Vendor Software Packages

- January 24, 2002 - January 24, 2002

GOAL: Conduct testing to ensure GOAL: Conduct testing to ensure that federal financial that federal financial that federal financial

management requirements and management requirements and

vendor software offerings are vendor software offerings are aligned. aligned. aligned.

During 2001, one COTS financial software

package received a certificate of

compliance. JFMIP is updating the test to

incorporate the revised Core financial

systems requirements.

• American Management Systems, Momentum, Version 3.7

• American Management Systems, FFS, Version 5.6

• Digital Systems Group, IFMIS, Version 5.1.6

• SAVANTAGE Financial Services, Federal Financial Assistant, Version 3.01

• SAVANTAGE Financial Services, Core Financial System, Version 2

• Oracle, U.S. Federal Financials, Release 11i

• Orion Microsystems, GLOWS, Version 5

• PeopleSoft, Financials for Education and Government, Version 7.5, SP2

• SAP, R/3 with Industry Solution Public Sector (ISPS) mySAP.com with ISPSmySAP Financials

with ISPS, Version 4.6
16 Joint Financial Management Improvement Program !

Intragovernmental Transactions Elimination Study

In 2001, the JFMIP Steering Committee tasked JFMIP staff with undertaking a

study of issues associated with the recording, reporting and elimination of

intragovernmental transactions and balances. Major issues to be addressed included

business practices and procedures, financial systems and associated technical issues,

and cultural challenges. The impetus for the study was driven by the fact that, after

several years of effort, it is still not possible to properly eliminate intragovernmental

transactions and balances in the U.S. Government’s Consolidated Financial Statements.

An inability to eliminate these amounts affects, among other issues, the government’s

ability to determine its cost of operations. Inaccurate cost information impairs the

government’s ability to control and reduce costs, assess

performance, evaluate programs, and set fees to

recover costs where required. Additionally, many

agencies are still having difficulty eliminating

intragovernmental transactions and balances within

their own agencies.

The JFMIP staff prepared a preliminary research

paper, contracted for further study of selected issues,

and, with support from the Private Sector Council

(PSC), hosted a forum to discuss practices used by large

private sector entities for eliminating inter-entity

transactions and preparing consolidated financial

statements. Topics of discussion included closing

processes, data structure, and technical tools used to

identify, accumulate, and eliminate inter-entity

transactions.

JFMIP staff considered the results of the forum and the contractor study and

presented their findings to the Steering Committee on October 10, 2001. The major

JFMIP staff findings included:

(1) the quality of the financial data throughout the federal government is

poor;

(2) agencies cannot identify their business partners and thus cannot reconcile

any differences that may exist;

(3) common standards for data, business practices, and consistent recording of

events are missing; and

(4) technology must be used to address these issues and overcome limitations

in installed financial systems and human capital.

Data quality and standardization issues directly impact the elimination of

intragovernmental transactions and balances and it will take several years to resolve

these issues. Associated recommendations were prioritized by the JFMIP Steering

Committee based upon an impact assessment. Top priority was assigned to the

following:

• development of standard identification codes for federal agencies that will function as vendor/customer codes to permit ready identification of business partners;

GOAL: Develop recommendations to

improve financial process related to

intragovernmental transactions.

Based on JFMIP staff findings, OMB plans

to improve technical tools and procedural

guidance for agencies as well as develop

functional and data architecture to

support the intragovernmental business

process.
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 17 Report on Results and Future Plans for Improving Financial Management !

• revisions to the U.S. Government’s chart of accounts, including the establishment

of self-balancing accounts for intragovernmental transactions, to improve consistency in classification;

• testing of a proof of concept for the electronic exchange of acquisition and payment information between federal business partners to improve efficiency by

automating a manual procedure; and

• determination of a standard data structure and business rules to promote increased data quality for all aspects of the business transaction.

OMB has the lead for implementing these top priority recommendations, and action

is already underway as part of the Integrated Acquisition Environment, one of the 24

initiatives under the President’s Management Agenda for e-government.

Federal Payroll Processing Study

On September 25, 2001, then OMB Deputy Director, Sean O’Keefe, signed a decision

memorandum that requested JFMIP staff to lead a study to identify actions necessary

to improve federal payroll processing. The objective was to examine federal civilian

payroll service delivery from a governmentwide perspective and develop options and

recommendations for future investment in payroll systems and services.

The JFMIP Payroll Study officially commenced October 10 with the forming of the

“Payroll Working Group”, which included stakeholder departments and agencies and

representatives from OMB (Office of Federal Financial Management, Office of Federal

Procurement Policy, Office of Information and Regulatory Affairs, and Resource

Management Offices, Personnel Branch).

 On November 9, the study concluded with a report submitted to OMB entitled

“JFMIP Staff Interagency Study for OMB to Improve Federal Payroll Processing.”

The report stated that simplifying and unifying various elements of the Human

Resources (HR)/Payroll process and consolidation and integration of HR and payroll

systems across government could provide several hundred million dollars of savings

governmentwide and significantly reduce future information technology (IT)

investments. Recommendations included that the following strategy should be pursued:

(1) establish central governance over the HR/Payroll function;

(2) standardize HR/Payroll policy and processes to the extent practicable;

(3) develop integrated governmentwide enterprise architecture for HR/Payroll

systems; and,

(4) consolidate HR/Payroll service delivery.

OMB took action on the JFMIP study through a December 21 memorandum that

integrated existing HR/Payroll initiatives; designated OPM as the “managing partner”

for HR/Payroll initiatives under the Internal Efficiency and Effectiveness (IEE) steering

group of the “e-Government” effort; and established processes to develop an integrated

HR/Payroll solution architecture and to develop the business case to support funding

capital investment and migration decisions.
18 Joint Financial Management Improvement Program !

Information Sharing and Outreach

Communication among the federal financial community, private sector partners,

the media, and other stakeholder organizations is of critical importance to JFMIP’s

success. As a representative of the federal financial community, JFMIP employs

significant efforts on outreach, including: active involvement in various committees

and councils impacting federal financial management; disseminating information about

JFMIP programs and other topics of broad interest through

various newsletters, publications and trade journals;

participation and leadership in financial conferences,

seminars, and work groups; and through providing new

JFMIP products, news and information through

www.jfmip.gov.

JFMIP relies upon www.jfmip.gov as a strategic vehicle

to deliver new products and information about its programs

to stakeholders. As part of JFMIP.gov, the JFMIP

Knowledgebase, provides the primary venue for supporting

and communicating the JFMIP Core Financial System

Qualification Test Process. The Knowledgebase continues

to be an effective vehicle to communicate information

regarding current Core Financial Systems Requirements

and the Financial Systems Software Qualification Test

Process. The Financial Systems Road Map is a resource

library to directly support agency project managers, staff

and vendors. It continues to expand as part of the JFMIP

Knowledgebase. The Road Map was co-sponsored by the Financial Systems Committee

of the U.S. Chief Financial Officers Council in response to agency needs for better

information to help successfully implement financial systems. JFMIP remains

committed to effectively communicating relevant financial systems information and

heightening the dialogue among various stakeholders.

GOAL: Leverage information GOAL: Leverage information

sharing through electronic sharing through electronic

repository for financial repository for financial repository for financial

management software and management software and

related information. related information. related information.

JFMIP maintains an electronic

Knowledgebase that contains information

on systems requirements, core financial

system testing process and financial

system planning, acquisition,

implementation and maintenance.
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 19 Report on Results and Future Plans for Improving Financial Management !

I

n February 2001, the General Accounting Office added human capital

management to the governmentwide “high risk list” of federal activities. The

President’s Management Agenda included strategic management of human

capital as one of its five cross cutting goals. The JFMIP has long recognized

human resources as important assets of the federal government. The successful

implementation of agency missions can only be accomplished with the support of a

high quality work force. JFMIP has been working closely with the Human Resources

Committee of the Chief Financial Council to assist in this important objective of

maintaining a high quality work force. We will continue to sponsor a variety of education

and outreach activities and support human capital investment.

Education and Outreach

For the past 30 years, JFMIP has been sponsoring

an annual financial management conference that

feature leading experts on current topics and

challenges facing financial managers in the public

sector. There is a diversity of topics, including human

capital investment, financial system implementation,

government auditing, computer security, and

information technology issues. The 30th Annual

Financial Management Conference was held on

March 13, 2001, with a conference theme of “New

Horizons for Financial Management.” Speakers

from both the private sector and public sectors

discussed challenges facing financial managers and

auditors. Panel session topics were on financial

systems, electronic government, information

integration, auditing and human resources. Keynote

speakers were Comptroller General David Walker

and two leading experts from the private sector—

Whitfield Diffie, Sun Microsystems on IT security;

and Gopal Kapur, Center for Project Management

on management’s deadly sins in system project implementation.

One of the highlights of the JFMIP annual conference is the presentation of the

Donald L. Scantlebury Memorial Awards. These awards were created to recognize

distinguished leaders who have made significant contributions to improving financial

management in the public sector. The financial management leadership awards were

designated as the Scantlebury Memorial Awards in 1982, in honor of the former Chief

Accountant of the U.S. General Accounting Office, who left a legacy of improved

financial management practices in the federal government, and was a member of the

JFMIP Steering Committee. Lawrence F. Alwin, State Auditor of Texas, and Kenneth

M. Bresnahan, formerly Chief Financial Officer, Department of Labor, were the

recipients of the Scantlebury Awards in 2001.

Human Resources

GOAL: Recognize and promote GOAL: Recognize and promote

excellence in financial excellence in financial excellence in financial

management. management. management.

On March 13, 2001, JFMIP hosted its

annual financial management conference.

During the conference, Scantlebury

Awards for excellence in financial

management were presented to Lawrence

F. Alwin, State Auditor of Texas; and

Kenneth M. Bresnahan,

former Chief Financial Officer, Department

of Labor.
20 Joint Financial Management Improvement Program !

JFMIP has sponsored numerous educational events, including conferences, forums,

workshops and meetings to promote better financial management policies and practices.

JFMIP has worked cooperatively with interagency councils and professional

organizations to ensure that financial management work force receives high quality

and timely training. JFMIP will continue to partner with the financial management

community to present educational and informational events that promote excellence

in financial management.

Another important element of

JFMIP’s outreach strategy is its

quarterly newsletter, that is posted on

our website and published and issued

in printed format. Regular features

in the JFMIP News are the Executive

Director’s Joint Perspective article, a

profile of a senior financial

management official, updates from

the Federal Accounting Standards

Advisory Board, and the CFO

Council.

Core Competency Documents

JFMIP has worked with the Human

Resources Committee of the CFO

Council since 1995 on the

development of core competencies

for financial management personnel. The knowledge, skills and abilities that are

identified as core competencies have been issued for accountants, budget analysts, and

financial system analysts. Core competencies in financial management have been

developed for program managers, information technology personnel implementing

financial systems, and management analysts and financial specialists.

JFMIP, working with CFO Council’s Human Resources

Committee and the Financial Systems Committee,

completed the development of core competencies in

financial management for project managers implementing

financial systems. The project team developed an exposure

draft, Building the Work Force Capacity to Successfully

Implement Financial Systems. This document

recommended ways to improve the recruitment, retention

and training of personnel working on financial system

implementation.

GOAL: Partner with federal Partner with federal Partner with federal

programs to provide programs to provide developmental opportunities for developmental opportunities for

current or future federal current or future federal current or future federal

employees. employees. employees.

During the past year, JFMIP hosted two

CFO Fellows, eight participants from the

Executive Leadership Program, two

participants from the Executive Potential

Program, and an individual on

developmental assignment from FDIC.

Each participant was given

responsibilities that were consistent with

individual developmental objectives.

At the JFMIP 30th Annual Conference, Scantlebury Awards ceremony:

Jeffrey Steinhoff, Kenneth Bresnahan, Lawrence Alwin and David Walker
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 21 Report on Results and Future Plans for Improving Financial Management !

Developmental Assignments at JFMIP during 2001 Developmental Assignments at JFMIP during 2001

CFO Council Fellow

David Cauthon Office of Personnel Management

Carla Kohler Defense Finance and Accounting Service

Executive Leadership Program

Leon Coates Department of State

Charlenea Ellis Defense Threat Reduction Agency

Marla Goodwin Farm Credit Administration

Anita Hankerson Department of Justice

LaShan Haynes Environmental Protection Agency

Veronica Jett Department of Defense

Nilda Lauterbach Department of State

Ruth Laughner National Institutes of Health

Kookie Mitchell National Park Service

Shirl Taylor-Wilson Department of Health and Human Services

Executive Potential Program

Mary Hartman Office of Personnel Management

Vincent Pizzigno Immigration and Naturalization Service

Wayne Miller Department of Energy

Other

Dottie Willey Federal Deposit Insurance Corporation

Developmental Assignments

The developmental opportunities provided by JFMIP play an important role in

expanding the competencies of current and future financial professionals. In 2001,

the JFMIP hosted two CFO Fellows, who worked on the updating and developing

functional system requirements and an individual on developmental assignment from

the Federal Deposit Insurance Corporation, who worked on updating core financial

system requirements and testing process. The JFMIP continues to support both the

Executive Leadership Program for Mid-Level Employees and the Executive Potential

Program. These developmental assignments gave each participant a broad perspective

of federal financial management and valuable experience in an area specific to individual

developmental objectives.
22 Joint Financial Management Improvement Program !

The 2002 JFMIP agenda will be driven by the active engagement of the JFMIP

Principals and the govenmentwide needs stemming from the challenge of

the President’s Management Agenda. The key areas will be systems and

human capital.

Tremendous progress has been made since 1998, and our efforts to develop and

update system requirements documents will continue. We expect to issue documents

for Acquisition/Financial Systems Interface Requirements, and Non-Income Tax

Revenue System Requirements in the upcoming year. We also plan to initiate projects

for updating the Inventory System Requirements. We will be working with the

information technology (IT) community to update the Framework for Federal Financial

Systems document. In the future, we will develop budget formulation and insurance

claims system requirements, when key stakeholders are available to lead these projects.

This will complete the development of all system requirements in the agency system

architecture.

In 2002, JFMIP resources will be heavily concentrated on the testing and qualification

process. We will be busy working on the redevelopment of the software qualification

test. Four of the current certificates of compliance will expire on September 30, 2002.

Our goals are to revise the qualification test by June 30, 2002 and to begin the

requalification testing process in July 2002.

JFMIP will continue to maintain the Knowledgebase as a cornerstone of our

information sharing activities. This electronic repository is an important tool for JFMIP

to communicate system requirements, details on test materials and results, and agency

plans to purchase new systems. JFMIP will continue to develop white papers on key

issues for financial system implementation.

A major 2002 effort will be strategic human capital for federal financial management.

This will include a comprehensive study of current federal financial management work

force demographics and future requirements, given planned changes in systems and

processes. The study will evaluate options and tools necessary to meet future human

capital requirements. We will continue to support key elements of our education and

outreach strategy with our annual conference and other communication vehicles in the

coming years. We will recognize excellence in financial management improvement in

the public sector through our awards process, and we will host participants from various

developmental programs, such as CFO Fellows, Executive Leadership Program,

Executive Potential Program, and other interns. Through these efforts, we will

contribute to the development of high quality human resources within the federal

government. We will continue to partner with committees of the CFO Council to

improve financial management.

Our Future: 2002 and Beyond
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 23 Report on Results and Future Plans for Improving Financial Management !

Our Financial Highlights

There is no direct appropriation to fund the activities of the JFMIP staff offices.

The General Services Administration provided administrative support services during

the past fiscal year. While we do not maintain our own financial management system,

we do carefully monitor the flow of resources that are

entrusted to us. The figures displayed in this report are

based upon budgetary flows, which are not audited. Since

these resources are part of the Working Capital Fund of

the GSA, they are included in the audited financial report

of GSA.

.

Sources of Funds

Resources for the activities of the Program Management

Office are funded by contributions from the 24 major

agencies and departments that are frequently referred to

as the CFO Act agencies. JFMIP received contributions

of $2,395K for fiscal year 2001 activities incurred. Funding

for other JFMIP activities are provided through a

memorandum of agreement among the four principals and

the designated program agency. The agreement for fiscal

year 2001 provided $571K in funding.

JFMIP also uses resources from two additional sources.

The first encompasses a variety of developmental

opportunities that are provided, and the associated resource flows are included in the

graphical displays. These unfunded resources totaled $223K in fiscal year 2001. The

time and effort expended by agency representatives that participate in our various

projects represent additional unfunded resources for JFMIP activities. The resource

inflows and outflows associated with these efforts are not reflected in our financial

data.

Uses of Funds

Total costs incurred for all JFMIP activities in the past year were about $3.1 million.

The major categories of spending for mission activities are consistent with our goals.

The assignment of costs to these activities is based upon management’s assessment of

input from project managers and the use of a reasonable allocation methodology.

General administrative costs have been distributed to the primary mission activities,

and the costs associated with the efforts from developmental details are based upon

comparable contractor rates.

The cost for developing and issuing requirements documents was $1,376K. These

costs include the salaries and expenses for contractors and personnel assigned to JFMIP

as well as the costs for publishing and distributing the documents. Most of the work

was done for updating the core financial system requirements. The development and

publication of requirements documents represented 43% of our total costs.

Sources of F Sources of Funds - $3.1 Million unds - $3.1 Million

$571

$2395

0 $223

500

1000

1,500

2,000

2,500

3,000

3,500
24 Joint Financial Management Improvement Program !

Software testing costs comprise approximately 10% of total costs or $301K. This

figure includes the costs incurred for the administration of the individual software

qualification and incremental tests.

The cost for outreach and information sharing activities represents $742K or 23%

of our total costs. The activities included in this category are the maintenance of the

JFMIP website and Knowledgebase, the issuance of the JFMIP newsletters and annual

report, and the hosting of our annual conference.

Approximately 9% of the funds, or $279K were directed towards projects related

to human resources, including the issuance of core competency documents and the

study on project management personnel implementing financial systems. The costs

of other miscellaneous activities, such as planning, CFO Council projects and lessons

learned represented $ 491K, or 15% of the total costs.

Uses of F Uses of Funds $3.1 M

Software Testing

10%

Requirements

Documents

43%

All Other/Planning

Lessons Learned

15%

Outreach

Knowledgebase

23%

Human 

Resources 9%
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 25 Report on Results and Future Plans for Improving Financial Management !

Update and Issue System Requirements Documents

• Update Core financial system requirements

• Issue benefit system requirements

• Develop Acquisition/Financial Systems Interface Requirements Exposure Draft

Conduct Qualification Testing Process for Core Financial Software

• Evaluate test results for a software package

Disseminate Information

• Post test matrix on website

• Update qualified software list and supplemental information

• Post agency procurement plans and other market information

• Expand Knowledgebase

Review Intragovernmental Transactions Eliminations

• Complete an analysis of issues

• Recommend an integrated set of actions to improve process

Develop Recommendations to Improve Federal Payroll Processing

Sponsor Annual JFMIP Conference

Host Staff in Developmental Assignments

Issue Core Competency Document for Project Managers

Conduct study on HR issues for project managers and personnel implementing

financial systems

Appendix A

JFMIP Accomplishments in 2001
26 Joint Financial Management Improvement Program !

Update and Issue System Requirements Documents

• Acquisition and Financial Systems Interface

• Non-Income Tax Revenue

• Inventory

• Framework for Federal Financial Systems

Conduct Qualification Testing Process for Core Financial

• Revise test with updated requirements

• Revise test policy

• Conduct test

Disseminate Information on Testing

• Post test matrix on website

• Update qualified software list and supplemental information

• Post agency procurement plans and other market information

Knowledge Management

• Maintain jfmip.gov

• Maintain Financial System Roadmap

• Develop white papers on financial system implementation issues

Sponsor Annual JFMIP Conference

Host Developmental Assignments for Staff

Undertake study on the future of financial management work force and

recommend ways for improvement

Appendix B - JFMIP Future Plans
Report on Results and Future Plans for Improving Financial Management Report on Results and Future Plans for Improving Financial Management 27 Report on Results and Future Plans for Improving Financial Management !

1990 K Street NW

Suite 430

Washington, DC 20006

Phone: (202) 219-0526

Fax: (202) 219-0549

Website: www.jfmip.gov

Contact Information

JFMIP

JFMIP documents may be accessed electronically on the JFMIP JFMIP documents may be accessed electronically on the JFMIP

Website Website

http://www.jfmip.gov http://www.jfmip.gov

The JFMIP uses the General Accounting Office’s Document Distribution Center to

fulfill publication requests which are made after mail list distribution. The first copy of

each publication requested is free. Additional copies are $2 each.Orders for100 or

more copies to be mailed to a single address ar ediscounted 25%.Orders should be

sent tothe following address accompanied by a check or money order made out to the

Superintendent of Documents, when necessary.

Orders by mail:

U.S. General Accounting Office

441 G St NW

Rm LM

Washington, DC 20548

Orders by phone:

Voice: 202/ 512-6000

Fax: 202/ 512-6061

TDD: 202/ 512-2537

Requests for JFMIP Publications
1990 K Street NW

Suite 430

Washington, DC 20006

Presorted Standard

Postage & Fees Paid

GAO

Permit number G100