,,, ..“,, 

” _/ 

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

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

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

cooperation with each other and other agencies to improve financial management practices in 

the Federal Government. The Program was given statutory authorization in the Budget and 

Accounting Procedures Act of 1950 (31 USC 65 as amended). Leadership and program 

guidance are provided by the four Principals of the JFMIP, who are the: Comptroller General of 

the United States, Secretary of the Treasury, Director of the 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 also responsible for day-to-day 

operations of JFMIP. Additionally, a representative from the Federal community serves on the 

Committee for a 2-year term. 

The Program 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. 

The JFMIP has managed interagency projects that developed a financial systems framework 

and financial systems requirements. JFMIP has also revised the Federal Government’s 

requirements definition, testing, and acquisition processes. JFMIP’s objectives are to develop 

systems requirements, communicate and explain Federal and agency needs, provide agencies 

and vendors with information to improve financial systems and ensure that products meet 

relevant system requirements. 

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

http://www.JFMIP.gov. 
Foreword 

This document represents the latest update to the Core Financial System Requirements 

document first issued in January 1988. This update reflects recent changes in laws and 

regulations and in governmentwide reporting systems, such as the Department of Treasury’s 

Federal Agencies Centralized Trial Balance System (FACTS) II system. The update also 

includes the following types of changes to Core financial system requirements: 

l Some existing requirements have been clarified 

l Redundant or outdated requirements have been deleted 

l Value-added requirements arei now incorporated into this document 

l The priority (mandatory or value-added) of certain requirements has been changed, and 

l New requirements have been added to reflect the current needs of Federal agencies. 

This document addresses the goal of the Chief Financial Officers (CFO) Council and the JFMIP 

to improve the efficiency and quality of financial management in the Federal Government. It 

also addresses the CFO Act of 1990, the Government Management Reform Act (GMRA) of 

1994, and the Federal Financial Management Improvement Act (FFMIA) of 1996 that strongly 

reaffirmed the need for the Federal Government to provide financial systems that facilitate the 

effective management of Government programs and services and the proper stewardship of 

public resources. In addition, it supports the Government Performance and Results Act (GPRA) 

of 1993, which was enacted to improve Federal program effectiveness and public accountability 

by promoting a new focus on results, service, quality, and customer satisfaction. The GPRA 

requires agencies to establish performance goals to define the level of performance to be 

achieved by a program activity, and to provide a basis for comparing actual program results with 

the established performance goals. 

The provisions in this document constitute Federal requirements for Core financial systems. 

They are stated as either mandatory (required) or value-added (optional) system requirements. 

Agencies must use the mandatory functional and technical requirements in planning their Core 

financial system improvement projects. Value-added requirements should be used as needed 

by the agency. It is the responsibility of each Agency to be knowledgeable, of the legal 

requirements governing its Core’financial operation; therefore, agencies may develop additional 

technical and functional system requirements as needed to support unique mission 

responsibilities. Further, the provisions of this document supplement existing statutes, 

regulations and Federal policy concerning financial management systems. In the event that a 

requirement conflicts with existing agency specjfic statutes or regulations, the law, statute or 

regulation takes precedence. Agencies must also develop strategies for interfacing or 

integrating other systems with the Core financial system. As stated in the document, the.use of 

the term “Core financial system” is not intended to imply that a single system component 

(module) must independently perform all of the functions herein required of a Core financial 

system. Rather agencies are encouraged to maximize data exchange and share functionality 

among system components of an integrated financial system. 
Foreword 

These requirements also remain the basis for the Federal Government to test compliance of 

commercially available Core financial software. In fiscal year (FY) 1999, JFMIP developed a 

new testing and qualification process, directly linking tests to these requirements. Also, the 

testing/qualification process was separated from the acquisition phase of the software selection 

process governed by the General Services Administration (GSA). 

This document should be used in conjunction with JFMIP’s electronic repository, called the 

Knowledgebase, which can be reached through the JFMIP website at http://www.JFMIP.gov. 

The CFO Act of 1990 places specific responsibility for developing and maintaining effective 

financial systems with the CFOs in Federal agencies. This update to the Core Financial System 

Requirements, along with the other system requirements published by JFMIP and the 

information provided in its Knowledgebase, demonstrate the commitment of the CFO 

community to continually improve Federal financial systems. 

We appreciate their support, and thank the CFO Council Financial Systems Committee, OMB, 

the GAO, Treasury, OPM and the GSA, and other agencies that participated in improving this 

document. 

Karen Cleat-y Alderman 

Executive Director 

.i 

; ., 

,t 

_ -’ 

. 

,, 

‘. : 
Acronyms 

ACH 

ALC 

API 

AT9 

ccl3 

CCD+ 

CFO 

CFR 

CMIA 

CCR 

COTS 

CTX 

DCIA 

DMA 

DOJ 

DUNS 

ECS 

EDI 

EFT 

FACTS 

FASAB 

FFMIA 

FFMSR 

FMS 

GAO 

GMRA 

GOALS 

GPRA 

GSA 

IPAC 

IRS 

IT 

JFMIP 

MAPI-WF 

MVS 

NACHA 

ODA/ODIF 

ODMA 

OMB 

OPAC 

OS 

Automated Clearing House 

Agency Location Code 

Application Program Interface 

Adjusted Trial Balance 

Cash Concentration or Disbursement 

Cash Concentration or Disbursement Plus Addendum 

Chief Financial Officer 

Code of Federal Regulations 

Cash Management Improvement Act 

Central Contractor Registration 

Commercial Off-the-Shelf 

Corporate Trade Exchange 

Debt Collection Improvement Act of 1996 

Document Management Alliance 

Department of Justice 

Data Universal Numbering System 

Electronic Certification System 

Electronic Data Interchange 

Electronic Funds Transfer 

Federal Agencies’Centralized Trial Balance System 

Federal Accounting Standards Advisory Board 

Federal Financial, ,Management Improvement Act of 1996 

Federal Financial Management System Requirements 

Department of the Treasury Financial Management Service 

General Accounting Office 

Government Management Reform Act of 1994 

Government Online Accounting Link System 

Government Performance and Results Act of 1993 

General Services Administration 

Intra-governmental Payment and Collection System 

Internal Revenue Service 

Information Technology 

Joint Financial Management Improvement Program 

Messaging API-Workflow 

Multiple Virtual System 

National Automated Clearing House Association 

Open Document Architecture/Open Document Interface Format 

Open Document Management Architecture 

Office of Management and Budget 

On-line Payment and Collection System 

Operating System 
Acronyms 

-1 

-_ 

-- I 

PPD 

PPD+ 

RTN 

SFFAS 

SGML 

TAS 

TAFS 

TFM 

TIN 

U.S.C. 

U.S. SGL 

VIM 

WFMC 

XML 

Prearranged Payment and Deposit 

Prearranged Payment and Deposit Plus Addendum 

Routing Transit Number 

Statements of Federal Financial Accounting Standards 

Standard Generalized Markup Language 

Treasury Account Symbol 

Treasury Account Fund Symbol 

Treasury Financial Manual 

Taxpayer Identification Number 

United States Code 

United States Standard General Ledger 

Vendor Independent Messaging 

Workflow Management Coalition 

Extensible Markup Language 

Illustrations 

1. Financial System Improvement Projects .............................................................................. 5 

2. Integrated Model for Federal Information Systems ............................................................ .7 

3. Agency Systems Architecture‘ ............................................................................................... 8 

4. Core Financial System ................................... . .................................................................... 11 
Table of Contents 

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

Federal Financial Management Framework .............................................................................. 3 

Integrated Financial Management Systems ........................................................................ 6 

Agency Financial Management Systems Architecture.. ..................................................... .7 

Core Financial System Overview ............................................................................................... 9 

Background ......................................................................................................................... 9 

General Information ....................................................................................................... 9 

Policy .............................................................................................................................. 9 

Management Controls .................................................................................................. IO 

Summary of Functional Requirements.. ............................................................................ 10 

Core Financial System Management ........................................................................... 11 

General Ledger Management ...................................................................................... 12 

Funds Management ..................................................................................................... 12 

Payment Management ................................................................................................. 13 

Receivable Management ............................................................................................. 13 

Cost Management ........................................................................................................ 13 

Reporting ...................................................................................................................... 14 

Summary of Technical Requirements ............................................................................... 15 

Functional Requirements .................................................................................................. 16 

Core Financial System Management Function ................................................................. 17 

Accounting Classification Management Process ......................................................... 17 

Transaction Control Process ........................................................................................ 20 

General Ledger Management Function ............................................................................ 24 

General Ledger Account Definition Process ................................................................ 24 

Accruals, Closing and Consolidation Process .............................................................. 25 

General Ledger Analysis and Reconciliation Process ................................................. 26 

Funds Management Function ........................................................................................... 28 

Budget Preparation Process ........................................................................................ 28 

Budget Formulation Process ........................................................................................ 29 

Funds Allocation Process ............................................................................................. 30 

Budget Execution Process .......................................................................................... .31 

Funds Control Process ..... ............................................................................................ 32 

Payment Management Function ....................................................................................... 38 

Payee Information Maintenance Process .................................................................... 38 

Payment Warehousing Process.. ................................................................................. 40 

Payment Execution Process ........................................................................................ 42 

Payment Confirmation and Follow-up Process ........................................................... .46 

Receivable Management Function ................................................................................... 48 

Customer Information Maintenance Process ............................................................... 48 

Receivable Establishment Process .............................................................................. 50 

Debt Management Process .......................................................................................... 51 

Collection Process ....................................................................................................... 53 

Cost Management Function .............................................................................................. 55 
Table of Contents 

Cost Setup and Accumulation Process.. ..................................................................... .55 

Cost Recognition Process ............................................................................................ 57 

Cost Distribution Process ............................................................................................. 57 

Working Capital and Revolving Fund Process.. .......................................................... .58 

Reporting Function ............................................................................................................ 60 

General Reporting Process .......................................................................................... 60 

External Reporting ....................................................................................................... 61 

Internal Reporting ......................................................................................................... 61 

Ad Hoc Query ............................................................................................................... 64 

Technical Requirements .......................................................................................................... 66 

General Design/Architecture.. ................................................................................... .:. .... .66 

Infrastructure ..................................................................................................................... 68 

User Interfaces .................................................................................................................. 69 

Interoperability .................................................................................................................. 70 

WorkflowlMessaging ......................................................................................................... 71 

Document Management.. ................................................................................................. .72 

Internet Access .................. . ...... ..l ..................................................................................... 72 

Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 73 

Operations and Computing ,Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 

Appendix A: References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 

Appendix B: Glossary .............................................................................................................. 79 

Appendix C: Summary of Standard External Reports from Core Financial Systems ............... 89 

Appendix D: Contributors.. ...................................................................................................... .91 
Introduction 

-The citizens of the United States entrust the stewardship of Federal Government financial 

resources ‘and assets to the legislative and executive branches of Government. Financial and 

program managers are accountable for program results and fiscally responsible for the 

resources entrusted to them. Managers must understand that their daily actions have financial 

implications for taxpayers and affect the amount of public debt the Federal Government must 

assume to support Government initiatives. Furthermore, managers must be able to provide 

information essential to monitor budgets, operations, and program performance. 

The Federal Government recognizes the importance of having high quality financial systems to 

support improvement of Government operations and to provide financial and related information 

to program and financial managers. The CFO Act of 1990, the GPRA, the Government 

Management Reform Act (GMRA) of 1994, and FFMIA of 1996 mandate improved financial 

management, assign clearer responsibility for leadership to senior officials, and require new, 

financial organizations, enhanced financial systems, and audited financial reporting. 

Improving Federal financial management systems is critical to increasing the accountability of 

financial and program managers, providing better information for decision-making, and 

increasing the efficiency and effectiveness of services provided by the Federal Government. 

Proper and reliablefinancial management systems must provide for: 

&countability Inform taxpayers, Congress, and agency personnel in terms they can 

readily understand, on how the,Nation’s tax dollars are spent, and how Federal assets 

are’protected. 

Efficiency and Effectiveness. Provide efficient and effective service to the Federal 

agency’s internal and external customers (e.g., individuals, contractors, partnerships, 

state and lbcal governments, other Federal agencies/organizations, the military, and 

foreign governments). 

Better Decision-Making. Provide to Congress, agency heads and program managers, 

timely reports linking financial results and program data so that financial and program 

results of policy and program decisions can be identified, tracked, and forecasted more 

accurately. 

The OMB Circular No. A-127, Financial Management systems, sets forth general policies for 

Federal financial management systems. Each agency is required to establish and maintain a 

single, integrated financial management system. To support this requirement, each agency 

must have an ongoing financial systems improvement planning process and perform periodic 

reviews of financial system capabilities: In addition, each agency must maintain financial 

management systems that comply’with uniform Federal accounting concepts and standards 

promulgated by the Federal Accounting Standards Advisory Board (FASAB) in its Statements of 

Federal Financial Accounting Standards (SFFAS), which constitute generally accepted 

accounting principles for the Federal Government. 

System requirements for common systems have been prepared under JFMIP direction as a 

series of publications entitled Federal Financial Management System Requirements (FFMSR). 

The FFMIA statute codified the FFMSR as key requirements that agency systems must meet to 

be substantially in compliance with system requirements provisions under FFMIA. The Core 

Financial System Requirements document has been prepared as a continuation of the FFMSR 

Core Financial System Requirements 1 
Introduction 

series that began with the Core Financial Systems Requirements document first published in 

January 1988. 

This document is intended for financial system analysts, systems accountants, systems 

developers, program managers, and others who design, develop, implement, operate or 

maintain financial management systems. It is also intended as guidance for reviews of system 

compliance with FMFIA requirements. 

Information that applies to all financial management systems, such as internal controls, system 

security, training, documentation, and support are discussed in the JFMIP Framework for 

Federal Financial Management Systems document. The Framework document, published in 

January 1995, provides guidance in the design, implementation, and operation of financial 

management’systems to support the increased emphasis being placed on improving 

Government operations. However, the internal controls and security considerations for Core 

financial systems are interspersed throughout this document. 

This document is the basis for evaluating Core financial system,software for compliance with 

JFMIP requirements, through a testing process that links test scenarios to the requirements 

presented in this document. JFMIP tests commercial software functionality against these 

requirements ahd qualifies the software as meeting mandatory requirements. JFMIP also uses 

this process to test Governmentagency software compliance for those agencies that provide 

accounting systems to other Gove.rnment agencies on a cross-service arrangement. For crossservicing agencies, this testing is vdluntary. For further information on the JFMIP testing 

process and for, the results of compteted software qualification tests please see the JFMIP web 

site at http://www.JFMIP.gov. Please note that the JFMIP web site also includes all JFMIP 

requirements documents, such as HOman Resources & Pairoll System, Travel Sysfem, etc. 

The next chapters in this document set forth the framework for the establishment and 

maintenance of an integrated Federal financial management system. An overview of. the Core 

financial, system, including a summary of functions and technical requirements’is provided in the 

System Overview chapter. Specific requirements are presented in detail in the functional and 

technical requirements chapters. Appendices provide References, a Glossary, a Summary of 

External Reporting Requirements, and a list of Contributors. 

2 Core Financiil System Requirements 
Federal Financial Management Framework 

The Core Financial System Requirements document provides functional requirements for 

financial managers, program managers and others to control and account for Federal programs 

as defined in governmentwide statutes, regulations, guidelines. This document is one 

component of a broad program to improve Federal financial management. That program 

involves establishing uniform requirements for financial information, financial systems, reporting, 

and financial organizations. 

As shown in Illustration 1, Financial Systems hnprovemenf Projects (page 5) establishing 

uniform requirements is only part of the process of improving financial management systems 

and information. Improvements can be achieved through the selection, development, or 

purchase of applications that meet approved functional requirements and technical and data 

management specifications. Agencies must continue to improve their financial systems and 

implement new requirements as they are issued so that continuing efforts to standardize and 

upgrade data and reporting requirements, in accordance with OMB’s governmentwide 5-year 

financial management plan, will be successful. A financial management system, as with most 

other systems, may require periodic maintenance, enhancement, or modification. Each agency 

should establish standards and procedures for testing, implementing and installing 

enhancements, fixes and other modifications in the financial management system. 

, 

Well-defined and effective governmentwide functional requirements assist agencies in 

developing strong systems and information by eliminating duplicate work among agencies and 

providing a common framework so that outside vendors can more economically provide!- 

systems software. Development of governmentwide functional requirements for each 

application is a critical effort that will affect internally developed systems and the evaluation and 

selection of commercially available systems. 

Each agency should integrate its unique requirements with these governmentwide standard 

requirements to provide a uniform basis for the standardization of financial management 

systems as required by the CFO Act of 1990, FFMIA of 1996, and other statutes. 

Financial management systems in the Federal Government must be designed to support the 

vision articulated by the Government’s financial management community. This vision requires 

financial management systems to support the partnership between program and financial 

managers and to assure the integrity of information for decision-making and measuring of 

performance. This includes the ability to: 

l Collect accurate, timely, complete, reliable, and consistent information; 

l Provide for adequate agency management reporting; 

l Support governmentwide and agency level policy decisions; 

l Support the preparation and execution of agency budgets; 

l Facilitate the preparationof financial statements, and other financial reports in 

accordance with Federal accounting and reporting standards; 

l Provide information to central agencies for budgeting, analysis, and governmentwide 

reporting, including consolidated financial statements; and 

Core Financial System Requirements 3 
Federal Financial Management Framework 

. Provide a complete audit.trail to facilitate audits. 

In support of this vision, the Federal Government must establish and maintain 

governmentwide financial management systems and compatible agency systems, with 

standard information and electronic data exchange, to support program delivery, safeguard 

assets, and manage taxpayer dollars. 

,, .! 

,:,‘! 

4 Core, Financial System Requirements 
Standards/ 

Requirements 

Standard Reporting 

Requirements 

U.S. Government Standard 

General Ledger 

--------------------, 

Core Financial System , 

Requirements I -----------------...-J 

Human Resources 8 

Payroll Systems 

Requirements 

Travel System 

Requirements 

Seized eroperty and 

Forfeited Assets Systems 

Requirements 

Direct Loan System 

Requirements 

Guaranteed Loan System 

Requirements 

Inventory System 

Requirements 

System Requirements for 

Managerial Cost 

Accounting 

Property Management 

Systiin Req‘uire’ments 

,_‘. 

Senefii System 

Reauirements 

..” . . 

Other Standards 

./..,I ,. 

. :_ 

r 

* 

Agency Implement&ion 

Federal Financial Management Framework 

Financial System Improvement Projects 

Additional 

Agen.cy. 

Functional 

Requirements 

Additional 

Agency 

Technical 

Requirements 

Integration 

Strategy 

Software/ 

Ha&ware 

Evaluation 

l 

Software 

Selection 

Adaptation 

Procedures 

Training 

Documentation 

Conversion 

Maintenance 

b. 

-. 

./ . . 

Illustration 1 

Core Financial System Requirements 5 
Federal Financial Management Framework 

it is critical that financial management system plans support the-agency?? mission and 

programs, including planned changes to them, and that the financial management systems 

plans are incorporated into the agency’s plans for information technology (IT) infrastructure and 

information systems as a whole. Further, system design efforts should include an analysis of 

how system improvements, new technology supporting financial management systems, and 

modifications to existing work processes can together enhance agency operations and improve 

program and financial management. Reassessing information and processing needs and 

redesigning processes, procedures, and policies are essential steps to meeting user needs. 

Integrated Financial Management S,ystems 

Financial management systems must be designed witli effective and efficient interrelationships 

between software, hardware, pe’rsonnel, procedures, controls, and data contained within the 

systems. To be integrated, financial management systems must have, as a minimum, the 

following four characteristics: ,’ 

(1) Standard data classifications (definition and formats) established and used for 

recording financial events; 

,. 

(2) Common processes used for processing similar kinds of transactions; 

,:, 

(3) Internal controls.over’data entry, transaction processing, and repor$ng’applied 

consistently; and 

(4) A design that eliminates unnecessary duplication of transaction entry. 

:. 

The CFO Act of 1990 and financial management systems policy described in OMB Circular No. 

A-l 27 Firm&a/ Management Systems require ttiat each agency establish and maintain a 

single, integrated financial management system. Without a single, integrated financial 

management system to ensure timely and accurate fina’ncial data, poor policy decisions are 

more likely to occur due to inaccurate or untimely information. Managers are also less likely to 

be able to report accurately to the President, the Congress, and the public on Government 

operations in a timely manner. Scarce resources would more likely be directed toward the 

collection of information rather than to delivery of the.inten,ded programs. Also,, ,upgrades to 

financial management systems that are necessary to keep pace with rapidly changing user 

requirements cannot be coordinated and managed properly. The basic requirementsfor a 

single, integrated financial management system are outlin,ed in OMB Circular No. A-127. I 

Having a single, integrated financial management system does not necessarily mean thatreadh’ 

agency must have only one software application covering. all frnancial’management~systerh 

needs. ~~t~.ec, 3 .$.~gle, intes:rate~..~nsnc~a~, ~~,a~~~~~men~,::system is a unified set of fhancial 

systems and the firian’c/af pot$.ons,,,of m,ixed:systems encompassing the software, hardware, 

personnel, pro&sses (manuat~and’automated), protiedures, controls, and data necessary to 

carry out financial management functions, manage financial operations of the agency, and 

report on the agency’s financial status to central agencies, Congress, and the publ‘ic. However, 

it does not mean that all information is physically located in the same database %‘,. -,,. : 

Unified means that the systems are planned and managed together and linked, together 

electronically in an efficient and effective manner to provide agency-wide financial-‘system 

support necessary to support the agency’s financial management needs. 

’ A mixed system is an information system that supports both financial and non-financial functions of the 

Federal Government or components thereof. See OMB Circular No. A-l 27. 

6 Core Financial System Reqtiirements 

J 
Federal Financial Management Framework 

Interfaces where one system feeds data to another system following normal business and 

I transaction cycles (such as recording payroll data in general ledger control accounts at specific 

1 

time intervals) may be acceptable as long as the supporting detail is maintained and accessible 

to managers. Additionally, for determining compliance with FFMIA, the implementation i 

guidance issued by OMB requires that the posting rules in the feeder system must not be 

contrary to the United States Standard General Ledger (US. SGL) posting rules. Interfaces 

must be automated unless the number of transactions is so small that it is not cost-beneficial to 

automate the interface. Reconciliation between systems, where interfaces are appropriate, 

I 1, must be maintained to ensure data accuracy. 

To develop any unified information system, it is critical that the senior systems analysts and 

systems accountants identify: 

l Scope of the functions to be supported (processes), 

l How data quality will be assured (data stewardship), 

l Information to be processed (management information), 

l How systems fit together to support the functions (systems architecture), and 

l Safeguards needed to ensure the integrity of operations and data (internal control). 

1 

1 

All of these pieces, as shown in Illustration 2, must work together to form an efficient integrated 

information system. A change to any part of the model will require determining the impact on 

other parts of the model. For example, a new reporting requirement may require changes 

throughout the entire model. 

1 

Integrated Model for Federal Information Systems 

Information Architecture 

I Illustration 2 

~ 

Agency Financial Management Systems Architecture 

Agency financial management systems are information systems that track financial events and 

summarize information to support the mission of an agency, provide for adequate management 

Core Financial System Requirements 7 
Federal Financial Management Framework 

reporting, support agency level policy decisions necessary to carry out fiduciary responsibilities, 

and support the preparation of auditable financial statements. 

Agency financial management systems fall into four categories: 

(1) Core financial systems, 

(2) Other financial and mixed systems (such as inventory systems), 

(3) Shared systems, and 

(4) Departmental executive information systems (systems to provide information to all 

levels of management). 

These systems must be linked together electronically to be effective and efficient. Summary 

data transfers must be provided from agency systems to central systems to permit summaries 

of management information and agency financial performance information on a governmentwide 

basis. 

Subject to governmentwide policies, the physical configuration .of financial management 

systems, including issues of centralized or decentralized activities, processing routines, data, 

and organizations, is a determinati,on that is best left to individual agencies. Agencies can 

determine the optimal manner in which to support their own mission. When determining the 

physical design of the system, agencies should consider their organizational philosophy, the 

technical capabilities available, and the most appropriate manner to achieve the necessary 

single integrated financial management system. 

The agency financial management systems architecture depicted in Illustration 3 shows the 

typical components of an integrated Federal financial management system. Although this does 

not necessarily represent the physical design of the system, it does identify the system types 

needed to support program deliv,ery/financing and financial event processing for effective and 

efficient prog ram execution. 

Ageqcy Systems Architecture 

/, / Benefit System 

/ I I Insurance Claim . 

Iljustration 3 

8 Core Financial System Requirements 
Core Financial System Overview 

This chapter provides an overview of a Core financial system in the follbwing sections: 

Background, Management Controls, Summary of Core Financial System Functions and 

Summary of Technical Requirements. 

Background 

General Information 

The U.S. Government is the world’s largest and most complex enterprise. Each year Federal 

agencies control and disburse almost two trillion dollars that are ultimately controlled by Core 

financial systems. This document is intended to specify the baseline functional capabilities that 

Core financial systems must have to support agency missions and comply with laws and 

regulations. 

Establishing governmentwide Core system requirements promotes a common understanding 

among private and public sector financial managers and agency program managers regarding 

Core system functional capabilities. They provide criteria for agency compliance under FFMtA 

and serve as a tool for oversight agencies to evaluate such systems. They help justify agency 

system improvements or replacements. They also help organize the’private sector market by 

communicating mandatory functionality that commercial software must be able to provide to 

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

Policy 

Government Core financial systems,.as an integral component of the Federal ,Agency Systems 1 

Arghifecture,:(see Illustration 3) are relied on to control and support the key financial 

management functions of an agency. In addition to reporting on results of .operations, these : 

functionsinclude managing: the,general ledger, funding, payments, receivables and costs. The : 

Core-financial system receives data from other financial and mixed systems and from direct .’ 1 

user input, and provides data an.d supports processing for other systems. Federal Core 

financial systems must provide consistent and standardized information for program managers,’ : 

Rnanci.al.managers, agency executives:and oversight:organizations. Furthermore, all Core 

financial sysjems; whether.,being designed:and imp1emecte.d or are.currently in use, must : 

op~ta&;in::acco@a.nce with$laws: regulations, .andJudici,al decisions.. ; ‘. :.. ., 

‘. : ,,,I,?,. ., L; , 

Financial management system developkent and implem&tation efforts shall seek cost effective 

and efficient solutions as required by O,&lB Circular No. A-130, ManagemenLolFFederal . 

Information Resources. Agencies are reitiired 6 use .tidmmerciailoff-the-shelf (COTS) software 

. 

to reduce costs, .improve the efficiency and effectivepegs of financial system improvement 

projects, and reduce the iisks inherent in developing and implenienting a new system. 

However, as stated previously, the agency has the ultimate responSibility for imple’menting ’ -. 

sound financial management practices and systems, and cannot depend on a vendor or 

contractor to do this for them. 

To promote effectiveness in COTS software, JFMIP is responsible for three major functions: 

Updating and communicating financial management system requirements so that COTS 

software vendors and agencies can better understand the Federal market requirements; testing 

and qualifying COTS software; and maintaining a web site (www.jfmip.gov) with information 

Core Financial System Requirements 9 
Core Financial System Overview 

i 

available on the certified Core financial management systems software. This information should 

reduce agency acquisition cost and risk when implementing COTS products because they will 

have already been tested and certified as meeting JFMIP requirements. 

The document identifies mandatory and value-added financial functional requirements for 

Federal Core financial system. Definitions for these two categories are: 

Mandatory-Mandatory requirements describe what the system must do and consist of 

the minimum acceptable functionality necessary to establish a system, or are based on 

Federal laws and regulations. Mandatory requirements are those against which agency 

heads evaluate their systems to determine substantial compliance with systems under 

the FFMIA. These requirements apply to existing systems and new systems that are 

planned or under development. 

Value-added-Value-added requirements describe features or characteristics and may 

consist of any combination of the following: using state-of-the-art technology; employing 

preferred or best business practices; or meeting the special management needs of an 

individual agency. Value-added, optional, and other similar terminology may be used to 

describe this category of requirements. Agencies should considervalue-added features 

when judging.system options. The need for these value-added features in agency 

systems is left to the discretion of each agency head. 

Within this document,. mandatory Core financial system requirements are indicated by the word 

“must” and value-added system requirements are identified by use of the words “may” or 

“should.” . . 

Management Controls 

Core financial systems must-incorporate appropriate controls to ensure the-accuracy.of data 

entry, completeness and .consistency of. transaction processing and reporting, as stated inOMB 

Circular No. ,A-1 27. Certain controls are typically incorporated into software applications; such 

as input, controls. Other controls such as proper segregation of duties may be’ implemented as 

a feature of software functionality, as a manual process, or both. 7his document contains some 

specific requirements for implementing basic management controls wittiin the appropriate 

functional,area. Additionally, this document incorporates.global security requirements. 

Specifically,:TH-1 through.,TH-8 require- systemchanges only by ‘tauthorized users.” ‘These 

requirements precludethe~need to qualify,:other. functiohal requirements with references to 

authorized users. Ultimately, .each agency is responsible for-implementing adequate controls to 

ensure the Core financial system is operating as intended. 

Summaiy%f PUnotidnal Requirements ,I. .,,’ : ..?{’ ..,;“. . ., 

The following, is’a brief description of the major functions of a Core financial system. The 

Functional Requirements chapter provides a detailed description of each function, including the 

requirements within each function. Illustration 4 depicts the major functions within the Core 

financial system. ’ 

:. 

k .; 

. . 

10 Core Financial System Requirements 
Core Financial System Overview 

Core Financial System 

Illustration 4 

A single financial event will require processing by more than one function within the Core 

financial system. The Core Financial System Management function affects all financial event 

transaction processing because it maintains reference tables used for editing and classifying 

data, controls transactions, and maintains security. Like’wise, the.General Ledger Management 

function is invotved either directly or indirectly with financial events since transactions to record 

financial even&must be posted to the general ledger either individualiy orin summary. Any 

transactions involved in budget execution will use the Funds Management function. 

An example of a financial event affecting multiple functions is a payment including additional 

charges not previously recorded, such as interest costs due to late payment or additional 

shipping charges allowed by the contract. This transaction would: (1) originate in the Payment 

Management function, (2) be edited for funds availability and update balances in the Funds 

Management function for the excess costs and to move the undelivered order amount to an 

expenditure status, (3) update cost amounts controlled by the Cost Management function, 

(4) update the general ledger balances in the General Ledger Management function, and (5) be 

edited against reference data and update audit trails in the Core Financial System Management 

function. 

Core Financial System Management 

The ‘Core Pi,nancial System Management function consists of all the processes necessary to 

maintain the~financial system in a.manner that is consistent with established financial 

management la%, regulations and policy. This function sets the framework for all other Core 

financial system functions. The ‘Core Financial System Management function consists of the 

following processes: 

l Accounting Classification Management 

l Transaction Control 

Core Financial System Management requirements can be found starting on page 17. 

Core Financial System Requirements 11 
Core Financial System Overview 

General Ledger Management 

General Ledger Management is the central function of the Core financial system. The general 

ledger is the highest level of summarization and must maintain account balances by the 

accounting classification elements established in the Core Financial System Management 

function. For example, account balances must be maintained at the internal fund and 

organization level. Depending on the agency’s reporting requirements, some or all of the 

general ledger accounts may have balances broken out by additional elements of the 

accounting classification. All transactions to record financial events must post, either 

individually or in summary, to the general ledger, regardless of the origin of the transaction. 

The General Ledger Management function consists of the following processes: 

l General Ledger Account Definition 

l Accruals, Closing, and Consolidation 

l General Ledger Analysis and Reconciliation. 

General Ledger Management requirements can be found starting on page 24. 

Funds Management 

Each agency of the Federal Government is responsible for establishing a system for ensuring 

that it does not obligate or disburse funds in excess of those appropriated or authorized. The 

Funds Management function of the Core financial system is an agency’s primary tool for 

carrying out this responsibility. 

The Funds, Management function consists of the following processes: 

: Budget Preparation .- 

0, Budget Formulation I 

l Funds Allocation 

l Budget Execution 

l Funds Control. 

Note., that Budget Formulation functionality is covered by this Core requirements document and 

is also,li’&d as’s separate requirements document on Illustration; 3, Fede:ral Agency Systems 

Architecture: “There has never been a formal development of.the separate Budget Formulation 

System requirements‘document. Hovvever, agencies have processes that require Budget 

Formulation system actions. Until a formal Budget Formul’ation Requirements System 

document is developed, JFMIP presents a number of suggested budget formulation 

requirements as value-added requirements within the Core Financial System Requirements 

document. 

Funds Management requirements can be found starting on page 28. 

: 

12 Core Financial System Requirements 
Core Financial System Overview 

Payment Management 

The Payment Management function should provide appropriate control over all payments made 

by or on behalf of an agency. Agencies initiate payments to: vendors in accordance with 

contracts, purchase orders and other obligating documents; state governments under a,variety 

of programs: employees for salaries and expense reimbursements; other Federal agencies for 

reimbursable work performed; individual citizens receiving Federal benefits; recipients of 

Federal loans; and make payments for other.reasons. Designated payment organizations 

(specified agency or Treasury organizations) accomplish payments. Certain agencies that are 

authorized to make their own disbursements must comply with the Provisions pertaining to 

“delegated disbursing authority” contained in I Treasury Financial Manual (TFM) - 4, and 

applicable requirements below. 

The Payment Management function consists of the following processes: 

l Payee Information Maintenance 

l Payment Warehousing 

l Payment Execution 

l Payment Confirmation and -Follow-up. 

Payment Management requirements can be found starting on page 38. 

ReceivableManagement ,. : 

,. 

The Receivable Management function supports activities. associated recognizing and recording 

debts due to the Government, performing follow-up actions to collect on these. debts, and ,’ 

recording agency,cash. receipts; A receivable is recognized when an agency establishes a, 

claim to cash or other assets against other entities: This section also addresses ,accounting for 

miscellaneous cash receipts. 

The Receivable Management function consists of the following processes: 

l Customer Information Maintenance 

l Receivable Establishment 1. 

l Debt Management 

l Collections and Offsets. 

‘. 

Receivable Management requirements can be found starting on page 48; 

Cost Management 

The Cost Management function of the Core financial system attempts to measure the total cost 

and revenue of Federal programs, and their various elements, activities and outputs. Cost 

Management is essential for providing accurate program measurement information, 

performance measures, and financial statements with verifiable reporting of the cost of 

activities. The term “cost” refers to the monetary value of resources used or sacrificed or 

Core Financial System Requirements 13 
Core Financial System Overview 

liabilities incurred to achieve an objective, such as to acquire or produce a good or to perform 

an activity or service. A “cost object” is any activity, output or item whose cost and revenue are 

to be measured. 

The level of sophistication of the Cost Management function needed by an agency depends on 

the requirements of the agency and the operational nature of the programs involved. For 

example, if an agency’s primary mission is to produce a product or service for sale, the costing 

function typically will be accomplished in the Managerial Cost Accounting System that is 

integrated with the Core Financial System. However, in any Core system, certain basic 

functions must be present. 

The Cost Management function consists of the following processes: 

l Cost Setup and Accumulation 

l Cost Recognition 

l Cost Distribution 

l Working Capital and Revolving Fund. 

Cost Management requirements can be found starting on page 55. 

Reporting 

The Core financial system must be able to provide timely and useful financial information to 

support: managements fiduciary role; budget formulation and execution functions; fiscal 

management of program delivery and program decision making; and internal and external 

reporting requirements. External reporting requirements include the. requirements for financial 

statements prepared in accordance with the form and content prescribed by OMB, reporting 

requirements prescribed by Treasury, and legal, regulatory and other special management 

requirements of the agency. 

The reporting function consists of the following processes: 

l General Reporting 

l External Reporting 

l Internal Reporting 

l Ad hoc Query. 

Reporting requirements can be found starting on page 60. 

14 Core Financial System Requirements 
Core Financial System Overview 

Summary of Technical Requirements 

Technical requirements have been established to help ensure that a Core financial system: is 

capable of meeting a wide variety of workload processing demands; provides transaction 

processing integrity and general operating reliability; incorporates standard installation, 

configuration and operating procedures; and does not conflict with other administrative/program 

systems or other agency established IT standards. 

Core financial systems subject to JFMIP testing must meet the mandatory technical 

requirements specified in this section. Additionally they should strive to include the functionality 

listed as value-added requirements. The requirements are listed in the following subcategories: 

General Design/Architecture 

Infrastructure 

User Interfaces 

Interoperability 

Workflow/Messaging 

Document Management 

Internet Access 

Security 

Operations and Computing Performance 

Most technical requirements are-stated in general terms to allow vendors maximum flexibility in 

designing compliant financial systems. Individual agencies are encouraged to add specific 

workload and interoperability requirements considered unique to their respective IT 

environments when evaluating packages for acquisition. 

Technical requirements can be found starting on page 66. 

Core Financial System Requirements 15 
Functional Requirements 

This chapter identifies the governmentwide requirements for a Core financial system to support 

the fundamental financial functions of a Federal agency. The major functions supported by a 

Core financial system are as follows:, 

l Core Financial System Management 

l General Ledger Management 

l Funds Management 

l Payment Management 

l Receivable Management 

l Cost Management 

l Reporting 

Together, these functions provide the basic information and control needed to carry out financial 

management functions, manage the financial operations of an agency, and report on the 

agency’s financial status to central agencies, Congress, and the public. This includes data 

needed to prepare the principal financial statements for Federal agencies in accordance with 

the current OMB Bulletin that addresses the form and content (i.e., OMB Bulletin No. 01-09 

Form and Content ofAgency Financi?/ Statements, as of the publication of this document). 

The numbering series assigned to the requirements in each, process section are noted in 

parentheses. The numbering scheme describes the related function, section and requirement 

number. ‘For example, the first requirement in the Core Financial System Management function 

section A is “CFA-01”. CF represents “Core Financial”, A is the section, and 01 is the 

requirement number. 

The foliowing abbreviations are used: 

CF - Core Financial 

GL - General Ledger 

FM - Funds Management, 

PM - Payment Management 

RM - Receivable Management 

,. ,I 8. 

CM -. Cost Management 

,. 

R - Reporting 

T - Technical 

16 Core Financial System Requirements 
Core Financial System Management FuncGon 

The Core Financial System Management function ensures that the capability exists for 

capturing, classifying, processing, storing and retrieving the financial data Federal agencies use 

in their daily operations. The Core Financial System Management function establishes the 

reporting entity and framework for ensuring that data is shared among components of an 

agency’s single integrated financial management system. This function also -ensures that 

transactions are processed in a uniform and consistent manner. The Core Financial System 

Management function consists of the following processes. 

l Accounting Classification Management (CFA) 

l Transaction Control (CFB) 

Accounting Classification Management Process 

Within each department or agency, the accounting classification elements and definitions must 

be standardized to ensure consistency, uniformity, and efficiency in accounting’ treatment, 

classification, and reporting. The Accounting Classification Management process provides a 

consistent basis for: 

l Consoljdating governmentwide financial ,information, 

l -Integrating planning, budgeting, and accounting, 

l Capturing data at the lowest level-of detail at the point of data entry-throughout the 

agency in a manner that ensures that when data is rolled up to the level that is 

standardized, it is consistent at the standardized level, and 

l Comparing and combining sim,il.ar programs across agencies and calculating overall 

program results. 

. ;. 

The OM&,Circular.No. OM&,Circular.No. A-l27,.Financia/,Management A-l27,.Financia/,Management Systems, Systems, requires requires financial financial management management 

systems systems to, refje.4 refje.4 a,n age,ncy$jde age,ncy$jde fjnanc[aJ fjnanc[aJ inform&on inform&on c!assification c!assification structure structure that is consistent consistent 

with the U.S. SGL, provides provides for tracking tracking of specific specific program program expenditures, expenditures, an,d covers fi,nancially fi,nancially 

related information. Additionally, it states: 

:l ,. 

,,: . ..i .:‘, 

: .,’ ” 

“:. “Financibimana$ement “Financibimana$ement system de&s shall subpcrt subpcrt age&y budget; budget; accounting, accounting, .and. 

fihancial‘ fihancial‘ f?iana&$nt f?iana&$nt reporting’ reporting’ processes. processes. by providing providing consistent consistent financial: financial: iiifciii-ration iiifciii-ration 

-’ ‘. for budget forinulatidn~ forinulatidn~ budget execution, execution, -programmatic -programmatic and fin8ncial”‘~.?ah~Ej~ment,. financial’.‘~.~n~~ument,. 

performance performance measurement, measurement, and financial financial statement statement preparation:” preparation:” 

The accounting classification is a,subset of the agency financial information classification 

structure, which also includes financially related personnel information,, performance 

measurement information, and other financial information needed by the agency. It provides the 

means for categorizing financial information along several dimensions as needed to support 

financial management and reporting functions. The data elements a barticular agency includes 

in its accounting classification will depend on data aggregation requirements for preparation of 

financial statements under the CFO Act, the appropriation structure, and other reporting and 

, -. ,., ,,’ :,. 

management nee;ds of the agency. “, .I 

Core Financial System Requirements. 17 

. ! 
Core Financial System Management Function 

Mandatory Requirements 

To support the Accounting Classification Management process, the Core financial system must 

provide the capability to: 

l Classify accounting transactions by: 

o Treasury Account Symbol/Treasury Account Fund Symbol (TAWTAFS), 

o Internal fund code (see CFA-04 below), 

o Budget fiscal year, 

o Accounting quarter and month, 

0 Program, 

0 Organization, 

0 Project, 

o Activity, 

0 Cost center, 

o Object class, 

o Budget function (and sub function code), and 

o Remaining U.S. SGL attributes not specified above. (CFA-01) 

l Define additional accounting classification elements. Classify and report accounting 

transactions by each type of element. (CFA-02) 

l Achieve consistency in budget and accounting classifications and synchronization 

between those classifications and the organizational structure. Consistency will include 

maintaining data relationships between: -. 

o Budget formulationclassifications (budget function -and sub function classification 

codes, per OfviB Circular No. A-l 1) ,’ ’ ” 

o Budget execution and accounting classifications (eg.; TASITAFS, internal fund, 

program, project, activity), and 

‘o The agency’s organizational structure. (CFA-03) 

l Provide a fund structure that identifies TAWTAFS established by OMB and Treasury. 

,Accommodate :additional detail beloti the TASlevel, such as an internal fund code to 

:’ support fiscal’year accounting, and appropriation sub-accounts used for reporting to Tfea&,rji.‘(CFAm04): : -.‘. ‘2,; -:?I ‘. ,,: ,, ,;’ _:: -,,, ,.. ,- 

: :‘,, . 

;’ ‘_, ‘;;.’ ‘- 

l Differentiate among the type of budgeting, accounting, and reporting treatments to be 

us~d,rj~~~d~on,va~i~~~ TAWTAFS’characteristics. At a minimum;the’foltov$g,fund ;. : “.,’ .,‘:!‘,:;.i .&:‘. 

ch~,~~,~~~r!gt~cs?~u~~ be supported in’accordance ,with Treasury ‘and OfvlB reporting and 

budgetexecution requirements: .: , 

o Fund type (e.g.,, general fund, deposit fund, trust fund, special fund, revolving fund, 

receipt account); 

o .Fu’nding source ‘(e.g., borrowing authority,, contract authority,. direct appropriation, 

-spending authority from offsetting collections);’ and 

o Budget .status (e.g., on budget, off budget, or financing account); and TAS/TAFS 

status .(e.g,, annual, multiyear, and no-year). (CFA:05) -. 

l ’ 

; ,,,. 

Provide a program structuktiith suffjcient levels of detail to.aliow reporting for all 

categories on which budgetary decisions are made, whether legaliy binding, as in 

18 Core Financial System Requirements 
Core Financial System Management Function’ 

appropriation limitations, or in the nature of policy guidance, as in Presidential passbacks and congressional markup tables. (CFA-06) 

Establish an organizational structure based .on responsibility segments, such as 

bureaus, divisions, and branches. Provide for the ability to tie respqnsible organizational 

units to programs, projects and activities. (CFA-07) 

Support the management of multiple Agency Location Codes (ALC) and associate the 

appropriate ALC with each transaction involving Fund balance with Treasury to facilitate 

external reporting (e.g., Financial Management Service (FMS)-224) and reconciliation 

with Treasury. (CFA-08) 

Provide a project structure that is independent of the other accounting classification 

elements to allow multiple organizations, programs, and funding sources to be 

associated with a project. (CFA-09) 

Provide an object class structure. consistent with the standard object class codes 

contained in OM,B Circular No. A-l 1. Provide flexibility to accommodate additional levels 

(lower) in the object .class structure. (CFA-1 0) 

i’ ., 

Process additions, changes and deletions to elements of the accounting classification 

design, and related valid .domain.values within accounting classifications, without 

extensive program or system changes (e.g.,,through on-line table updat,es). (CFA-1 1) 

Allow the user to enter, edit, and store accounting classification table changes so that 

the changes automatically become effective at any future date determined by the user. 

(CFA-12) : 

Reject or suspend interfaced transactions that contain accounting,classifi&ion elements 

or domain values that: have been deactivated or discontjnued. (CFA-13): : 

., 

. . .L . Value-added Requirements . 

To support the Accounti,ng Classification fvla,na,gement process, the Core financial system 

should provide the capability to: ) 1 

l Provide a revenue, source code ,structure to identify and classify,Rypes .of revenue.and 

receipts as defined by the user. For example, categories could be rental income, sales 

by product type, jncome by type@ service~~petformedand others (CFA-14) :,* ., 

‘. . . 

l Validate,iall%ansactions involvingTreasury and other .d&bui&g’centers for valid 

combinations of ‘ALC and TAShAFS, as defined by the user. (CFA-15) 

,.A .^ ;,, ;- 

.- 

l Derive the full accounting.classific&ions from abbreviated user input so -that user input is 

minimized, data.entry is made easier, and errors are controlled and reduced. Examples 

of methods include entering “shorthand codes,” using a keyboard, function to look up 

additional elements, “clicking” on a “pop-up menu,” and scanning a bar code. (CFA-16) 

: : 

l Provide for,,an automated method to reclassify accounting data at the’ document level 

when a restructuring of the existing valuespertainin~g to the ,mandatory accounting 

classification elements is needed. Maintain an audit trail from the original postings to the 

final posting. (CFA-17) 

Core .Fina+al System Requirements 19 
Core Financial System Management Function 

Transaction Control Process 

The Transaction Control Process defines, maintains and executes the posting and editing rules 

for transactions that are processed in the Core financial system. In addition to recording 

transactions originally entered into the Core financial system, the Core financial system must be 

able to process and record transactions originating in other systems. In order to provide the 

basis for central financial control, the,Core system must track such transactions and related 

information. 

’ The Transaction Control Process is further categorized as Transaction Definition and 

Processing activities, and Audit Trail activities. 

; Transaction Definition and Processing. OMB Circular No. A-l 27 requires common processes 

i to be used for processing similar kinds of transactions throughout an integrated financial 

management system to enable transactions to be reported in a consistent manner. It also 

j requires financial events to be recorded by applying the requirements of the U.S. SGL at the 

transaction level. This is accomplished by defining a standard transaction(s) for each 

accounting event. U.S. SGL accounting transactions typically update multiple budgetary and 

proprietary accounts based on a single accounting event. The Core financial system must 

ensure that all transactions are handled consistently, regardless of their point of origin. It also 

must ensure that transactions are controlled properly to provide reasonable assurance that the 

recording, processing, and reporting of financial data are properly performed and that the 

completeness and accuracy of authorized transactions are ensured. 

Mandatorv Reauirements 

To support the Transaction Definition and Processing activity, the Core financial system must 

provide the capability to: 

l Use standard transactions when recording accounting events. The standard 

transactions must specify the postings to the general ledger accounts, and update 

.document balances and any related tables (e.g., available funding). (CFB-01) 

l Allow the user to include proprietary, budgetary and memorandum accounts in the 

definition of a standard transaction. (CFB-02) 

l Record transactions consistent with U.S. SGL posting rules. (CFB-03) 

. 

l Reject a transaction or provide a warning message when attempting to post a~ 

transaction that woufd cause general ledger debits and credits to be out-of-balance at a 

level below the TAWTAFS (e.g., interna!-fund, organization level). (CFB-04) ‘.. 

l Allow users to define and maintain standard rules that control general ledger account 

postings for all accounting events. ‘The process of defining posting rules can be 

accomplished in a variety of ways, including (but not limited to) using: transaction codes, 

screen “templates,‘! derivation rules, and-others. (CFB-05) 

l Enable users to selectively require, omit, or set a default value for individual accounting 

classification elements. For example, a budget object class code -value is not 

necessarily needed .when recording pdepreciation expense. (CFB-06) 

20 Core Financial System Requirements 
Core Financial System Management Function 

Update all applicable general ledger account balances (i.e., budgetary, proprietary and 

memorandum accounts) based on a single input transaction. (CFB-07) 

Define, generate and post compound general ledger debit and credit entries for a single 

transaction. Accommodate at least 10 debit and credit pairs or 20 accounts when 

defining and processing a single transaction. (CFB-08) 

Allow users to define and process system-generated transactions, such as automated 

accruals (e.g., payroll accrual entries), pre-closing’and closing entries, cost assignment 

transactions, recurring payments, and transactions that generate other transactions in 

those cases where a single transaction is not sufficient. (CFB-09) 

Automatically liquidate, partially or in full, the balance of ope,n documents by line item. 

This capability will be used in the liquidation of various documents such as 

commitments, obligations, undelivered orders, payables, receivables, and advances, 

upon the processing of subsequent related transactions (e.g., liquidate an obligation 

upon entry of the related receiving report). (CFB-10) 

Automatically determine and record the amount of upward or downward adjustments to 

existing obligations upon liquidation, cancellation or other adjustment. This is to include 

‘transactions entered directly to the Core system and those received from interfaced 

modules or systems. (CFB-11) 

When adjustments are made to existing obligations or previously recorded expenditures, 

automatically distinguish betweenupward and downward adjustments to unexpired and 

expired budget authority, and generate the appropriate general ledger postings, without 

user intervention. (CFB-12) 

Relative to expired funds, provide an overrideable error message when attempting to 

post (previously unrecorded) obligations to current year general ledger obligation 

accounts (e.g., U.S. SGL accounts 4801,4802). (CFB-13) 

When recording adjustments to prior year obligations (including previously expended 

authority), automatically classify upward and downward adjustments as paid and or 

unpaid according to the status of the related obligation or expenditure. This is to include 

transactions entered directly to the Core system and those received from interfaced 

modules or systems. (CFB-14) 

Control thecorrection and reprocessing of all erroneous transactions through the use of 

error/suspense files. Erroneous transactions must be maintained until either corrected 

and posted or deleted at the specific request of a user. (CFB-15) 

Provide immediate, on-line notification to the user of,erroneous transactions. Advise 

reason for error and provide the ability to enter corrections on-line. (CFB-16) 

Provide controls to prevent the creation of duplicate transactions. For example, prevent 

the use of the same unique transaction identification number (e.g., document number). 

(CFB-17) 

Provide a warning message when the user attempts to input an external vendor invoice 

number that has already been recorded for the related vendor. (CFB-18) 

Core Financial System Requirements 21 
Cove Financial System Management Function 

l Validate the fields for all accounting classification elements required to process the 

transaction prior to posting., For example, fields pertaining to TAWTAFS, object class, 

vendor code, organization, and others. (CFB-19) 

Enter, edit, and store transactions in the current accounting period for automatic 

processing in a future accounting period. (CFB-20) 

Put transactions in a hold status (saved, but not processed or posted) within the Core 

system (i.e., importing transactions from a spreadsheet or database application is not 

acceptable). Allow users to select held transactions and continue processing at a later 

date. (CFB-21) 

l Capture the six-digit trading partner code (as specified by Treasury) when processing all 

transactions that directly involve another Federal entity (i.e., both parties to a transaction 

are Federal entities). (CFB-22) + , 

l For all transactions, capture transaction dates (effective date of the transaction) and 

posting dates (date transaction posted to general ledger). (CFB-23) I : 

l Automatically determine the postirig date from the system date for al! transactions. 

Automatically associate a default accounting.period for each transaction, but allow user 

to override. (CFB-24) 

l Automatically reverse entries by the following parameters: transaction or document type, 

date range, schedule numbers, transaction identification number (i.e., document 

number) range, and trading partner. (CFB-25) 

l Post to the current and prior months concurrently until the prior month closing is 

complete. (CFB-26) 

l Provide and maintain on-line queries and reports on balances separately for the current 

and prior months. At a minimum, balances must be maintained on-line for both the 

current and prior months until the prior month closing is complete. (CFBr27) 

: I 1 

l Post to the current fiscal year and prior fiscal year ,concurrentty until prior yearend 

closing iscomplete. (CFB-28) : ” .’ ;-. 

.*,, 

l Provide and maintain on-line queries and reports on balances separately for the current 

and prior fiscal years. -At a minimum; balances must bemaintained.,on-line.for both the 

,current and,prior fiscal years until the.prior..fiscal year closing is-complete, (CFB-29) 

/ 

Value-added Reauirements ‘- 

_’ ., 

To support the Transaction Definition and Processing activity, the Core financial system should 

provide the capability to: 

l Perform validation checks for use ofcertain’ general ledger accounts associated with 

specific Record Type 7 authority (e.g., lmprest fund, borrowing authority) prior to posting 

a transaction. (CFB30) 

22 

,. 

Core Financial System Requirements 
Core Financial System Management Function 

l Have all functions of the system, including budgeting, spending, accounts payable, and 

accounts receivable, process and track transactions in both foreign currency and U.S. 

dollars. (CFB31) 

l Calculate progress payments to foreign vendors based on current exchange rates. 

(CFB-32) 

Audit Trails. Adequate audit trails are critical to providing support for transactions and 

balances maintained by the Core financial system. While audit trails are essentiat to auditors 

an-d system evaluators, they are also necessary for day-to-day operation of the system. For 

example, they allow for the detection and systematic correction of errors. 

Mandatory Requirements 

To support the Audit Trail activity, the Core financial system must provide the capability to: 

l Provide audit trails to trace transactions from their initial source’through all stages of 

related system processing. ,The initial source may be source documents, transactions 

originating from other systems (e.g., feeder systems), or internal system-generated 

transactions. (CFB-33) 

l Select itemsfor review based on user-defined criteria by type of transacti‘on,(e,g., by 

obligation transactions, vendor, date range). Examples of reasons to select items are 

payment certification and financial statement audits,. (CFB-34) 

i 

l Provide audit trails-that identify document input, change, approval, and deletions by 

user. (CFB-35). 

Value-added Rebtiiremerits 

. . 

There are no, value-added requirements for this activity. 

Core Financial System Requirements 23 
General Ledger Management Function 

Depending on the agency’s reporting requirements, some or all general ledger accounts may 

use sub accounts to provide additional detail about elements of the accounting classification 

and about US. SGL attributes required to meet FACTS I and FACTS II reporting requirements. 

The General Ledger Account Definition process establishes the general ledger account 

structure for the agency consistent with the U.S. SGL, and establishes the transaction edit and 

posting rules to record financial events. The basis for Federal agency accounting as required 

by the FASAB in its SFFAC and SFFAS, by the TFM, and described in 31 United States Code 

(U.S.C.) 3512(e) is the accrual basis. The U.S. SGL account and transaction definitions and the 

form and content requirements for financial statements were developed consistent with this 

concept. 

Subsidiary ledgers support the general ledger at various levels of detail. These subsidiary 

ledgers may be totally integrated as part of the Core financial system or interfaced from other 

systems. For example, detailed property records supporting the equipment account in the 

general ledger might be maintained in a system devoted to controlling and maintaining 

equipment. The payroll system might contain detailed employee pay records.that support 

records of,expenditure by object class, organization, program, project, or actrvrty that are 

passed to and recorded .in the Core financial system. 

All transactions to record financial events must post, either individually or in summary, to the 

general ledger, regardless of the origin of the transaction., Posting of transactions whose initial 

point of entry is the Core financial system normally would be expected to occur for each 

transaction individually. Posting of transactions originating in other systems may occur within 

the general ledger either for individual transactions, or for summarized transactions, depending 

on an agency’s overall financial management system design and needs. However, summary 

transactions are acceptable only if an audit trail is maintained and the transactions from feeder 

systems are summarized at a level that supports Central agency reporting requirements (e.g., 

the U.S. SGL attribute level at a minimum). Agencies are not required to maintain duplicates of 

individual transactions posted in other feeder systems within the Core financial system. For 

example, rather than posting every payroll transaction for each employee in both the payroll and 

Core system general ledger, similar transactions (same accounting classification) may be 

summarized for posting to the general ledger. 

The General Ledger Management function consists of the following processes. 

l General Ledger Account Definition (GLA) 

l Accruals, Closing, and Consolidation (GLB) 

l General Ledger Analysis and Reconciliation (GLC) 

General Ledger Account Definition Process 

OMB Circular No. A-127, Financial Management Systems, requires implementation of the U.S. 

SGL at the transaction level. The U.S. SGL is defined in the latest supplement to the U.S. 

Department of the Treasury’s TFM which includes the chart of accounts, account descriptions 

and postings, accounting transactions, U.S. SGL Attributes, and crosswalks to standard external 

24 , Core Financial System Requirements 
General Ledger Management Function 

reports. Each agency must implement a chart of accounts that is consistent with the U.S. SGL 

and meets the agency’s information needs. 

Mandator Requirements 

To support the General Ledger Account Definition process, the Core financial system must 

provide the capability to: 

Allow users to define and maintain a chart of accounts consistent with the US. SGL, 

including account titles and the basic numbering structure. (GLA-01) 

Incorporate proprietary, budgetary, and memorandum (credit reform) accounts in the 

system, and maintain the relationships between U.S. SGL accounts as described in the 

current TFM Supplement. (GLA-02) 

Provide U.S. SGL control accounts for detailed subsidiary accounts in the Core or 

external systems. (GLA-03) 

Create additional sub-accounts to the US. SGL for agency specific tracking and control. 

These sub-accounts will summarize to the appropriate U.S. SGL accounts. (GLA-04) 

Capture U.S. SGL attribute information required for both FACTS I and FACTS II 

reporting as specified by the current supplement(s) to the TFM. (GLA-05) 

Provide flexibility so that the system can adapt to changes in FACTS I and FACTS II 

reporting requirements. For example, the user should be able to add or modify valid 

values within an existing attribute domain. (GLA-06) 

Process additions, deletions, and changes to the chart of accounts without extensive 

program or system changes; (e.g., through on-line table updates). (GLA-07) 

Prohibit new transactions from posting to general ledger accounts that have been deactivated. (GLA-08) 

. . 

Value-added Requirements 

There are no value-added requirements for this process. 

Accruals, Closing and Consolidation Process 

This process creates accrual transactions (adjusting) and closing entries needed at the end of a 

period (month or year) forreporting purposes. It also controls and executes period-end system ’ 

processes needed by the system to open a new reporting period, such as rolling.forward ‘. ; 

account balances or reversing certain yearend entries. This process supports the preparation of ‘.’ 

consolidated financial statements by identifying information needed in that process. : 

Mandatory Requirements 

To support the Accruals, Closing, and Consolidation process, the Core financial system must 

provide the capability to: 

l Allow for accruals relating to contracts or other items that cross fiscal years. (GLB-01) 

Core Financial System Requirements 25 
General Ledger Management Function 

Automatically generate selected recurring accruat entries and reversals in subsequent 

accounting periods (e.g., payroll accrual). (GLB-02) 

Close an accounting period and prohibit subsequent postings to the closed period. 

(GLB-03) 

Automatically determine an accounting period’s opening balances based on the prior 

accounting period’s closing balances, without user intervention or adjustment. The 

rollover of general ledger balances must be accomplished in a detailed manner to 

maintain the U.S. SGL attribute information required to satisfy FACTS I and FACTS II 

reporting requirements. (GLB-04) 

Perform multiple preliminary yearend closings, while maintaining the capability to post 

current and prior period data. (GLB-05) 

Automatically generate fiscal yearend pre-closing and closing entries as. they relate to 

fund types. (GLB-06) 

Provide,for an automated yearend rollover of appropriate system tables into the new 

fiscal year. (GLB-07) 

.., 

Value-added Requirements 

There are no value-added requirements for this process. 

,, I 

General Ledger Analysis and Rhonciliation Process 

This process supports the control functions of the.General Ledger. The Core financial system 

must provide information to use in determining that balances in the general ledger control 

accounts agree with more detailed subsidiary accounts and for reconciling system balances with 

financial informationcontained in reports from,Treasury and other’agencies. As internal 

controls improve and system integration increases, the likelihood of out-of-balance conditions 

decreases; however, the possibility of such conditions will always exist as a result of system 

failures, incorrect transaction definitions, etc. 

Mandatorv Requirements .‘. /. 

To support the General Ledger Analysis and Reconciliation process, the Core financial system 

must provide the capability to: 

.’ ,., ‘: ,’ 

l Compare amountsin the general Jedgeraccounts v&h the amounts in, the related 

subsidiary records and create reportsfor those accounts that are out of balance. This : 

capability must be available for all open accounting period balances and at frequencies 

defined by the user, such as daily, weekly and monthly. (GLC-01) 

l Perform on-line “drill downs” from general ledger summary balances to.detail 

transactions and referenced documents (e.g., purchase orders, receiving reports, etc.). 

: (GLC-02) 

;I 

l Record subsequent activity related to a closed document under a unique document ID 

and provide an audit1 trail that associates the. new activity with the transaction history of 

the original document. (GLC-03) 

26 Core Financial System Requirements 
General Ledger Management Function 

Value-added Reauirements 

There are no value-added requirements for this process. 

i 

.f 

., 

., : ’ 

Core Financial System’Requirements 27 
Funds Management Function 

Federal appropriations law, U.S. Comptroller General Decisions, OMB Circular No. A-34, 

/nsfrucfions on Budget Execution, and (to a lesser extent), OMB Circular No. A-l 1, Preparation 

and Submission of Budget Estimates, comprise authoritative guidance and set governmentwide 

policy for funds management, which the Core financial system must support. In addition to 

supporting the governmentwide policies, the Funds Management function must support agency 

policies on internal funds allocation methods and controls. 

An agency will likely have many other systems in addition to the Core financial system that 

effect funds management. For example, procurement and travel systems’generate documents 

that commit and obligate funds. These and other systems that affect funds availability should 

access data and use processes of the Core financial system to verify that funds are available 

and to update balances. These systems typically access the funds availability editing activity 

before allowing an obligation to be incurred, such as when entering into a contract. However, in 

some cases, such as payroll, this may not be practical. 

The Funds Management function consists of the following processes. 

l Budget Preparation (FMA) 

l Budget Formulation (FMB) 

l Funds Allocation (FMC) 

l Budget Execution (FMD) 

l Funds Control (FME) 

Budget Preparation Process 

Budget preparation is the process of establishing initial agency operating/financial plans and 

updating them as necessary throughout the fiscal year. An operating/financial plan is a 

blueprint for using financial resources during any given fiscal period or series of periods. The 

function includes reporting on the use of resources against these plans throughout the year. 

Mandatorv Reauirernents 

To support the Budget Preparation process, the Core financial system must provide the 

capability to: 

l Establish and maintain operating/financial plans at or below the level of funds control. 

(FMA-01) 

l Establish operating/financial plans by month and quarter at any level of the 

organizational structure specified by the user. (FMA-02) 

l Track and re.port on the use of funds against operating/financial plans. (FMA-03) 

28 Core Einancial System Requirements 
Funds Management Function 

Value-added Reauirements 

To support the Budget Preparation process, the Core financial system should provide the 

capability to: 

Prepare operating/financial plans based on multiple measures, including obligations, 

costs, labor hours, and full-time equivalents. (FMA-04) 

Modify/revise an existing operating/financial plan by line item. (FMA-05) 

Maintain original and modified operating/financial plans. (FMA-06) 

Identify legal and administrative limitations on funds in operating/financial plans. 

(FMA-07) 

Generate allotments and sub-allotments (including limitations based on approved 

changes to operating/financial plans). (FMA-08) 

Enter operating/financial plans for future operating periods. (FMA-09) 

Roll future plans into active budget plans based on future date or retrieval function. 

(FMA-10) 

Budget Formulation Process 

Budget formulation is the process of assembling ,estimates for the upcoming fiscal year for 

transmittal to OMB and the congressional appropriations committees, preparing justification 

materials to support those estimates, and defending those estimates formally (at OMB and 

congressional hearings) and informally (through staff contacts with these entities). 

Mandatorv Reauirements 

There are no mandatory requirements for this process. 

Value-added. Reauirements 

” 

To support the Budget Formulation process, the Core financial system should provide the 

capability to: ‘. c 

. 

l Report information for all categories on which budgetary decisions are .made, whether 

legally binding (e.g., appropriation limitations) or in the nature of policy guidance and 

decision&making (e.g., Presidential/OMB pass-backs, congressional markup. documents, 

or internal agency decisions). (FMB-01) 

l . Populate the budget formulation system with prior-year budgeted and actual amounts. 

(FMB-02) 

l Perform projections of obligations, income, and expenditures at any level of the 

organizational structure (e.g;, projecting obligations based on prior periods and applying 

these to a future period). (FMB-03) 

Core Financial System Requirements 29, 
Funds Management Function 

Adjust projection rates (e.g., 90 percent, 100 percent, and 110 percent) and exclude 

specified obligations from projection. (FMB-04) 

Create, store, and modify payroll forecasts, including anticipated monthly compensation 

and benefits, at the individual employee level. (FMB-05) 

Incorporate overhead distribution as part of budget formulation. (FMB-06) 

Develop budgets on-line and via upload from spreadsheets. (FMB-07) 

Prepare budget submission guidance, budget narratives, and budget briefing packages 

on-line and via upload from desktop software applications. (FMB-08) 

Distribute budget submission guidance to subordinate organizations electronically. 

(FMB-09) 

Establish and maintain multiple budget cycles. (FMB-10) 

Tie budget formulation to the agency’s stated goals and objectives required by GPRA. 

(FMB-11) 

Funds Allocation Process 

This process records an agency’s budgetary resources and supports the establishment of 

budgetary limitations at each of the levels required within the agency (e.g., apportionments and 

allocations). The higher levels, such as appropriation, apportionment and allotment,. have the 

weight of legal authority behind the limitations. Lower levels of control are generally used for 

internal management purposes. 

Mandatory Requirements 

To support the Funds Allocation process, the Core financial system must provide the capability 

to: .” 

l Record funding and related budget execution documents (e.g,, vat-rants, 

apportionments, allotments) and limitations. (FMC-01) 

,.,l ,.!.L ,,_ ,: j .A., ~ j .,,’ ,’ : .,‘i .; ‘I’.,: ‘./ ..: c .._. /, 

l Control the use of funds against Iknitationsconsistent with appropriation and 

authorization language (including congressional intent and continuing resolutions) and 

.” ,administrativetimitations:establi$hed by!agency management. (FMC02) , . 

?,., ‘\ :_‘. -* _‘8 .‘.y _.’ . 

., ::s.., : ‘.- : 

l : Distribute; track,- and control, funds at various levels,’ based on the elements of the 

accounting classification and project structure: (EM%-03) ., 

l Verify that funds,distributed do not exceed the amount of funds available for allotment or 

sub-allotment at each distribution level. (FMC-04) 

l Support Public Law 101-510 (M-year legislation) by assuring that amounts paid out of 

current, year funds to cover obligations made against aclosed,account do not exceed 1 

percent of the current year appropriation. (FMC-05) 

30 Core Financial System Requirements 
Funds Management Function 

Record and control all types of budgetary authority, including appropriations, spending 

authority from offsetting collections, borrowing authority and contract authority. Identify 

the type of authority and track obligations by funding source (FMC-06) 

Record the expiration and cancellation’ of appropriation authority in accordance with 

OMB Circular No. A-34 and the U.S. SGL. (FMC-07) 

Account for spending transactions at a lower level in the accounting classification than 

they are budgeted. (FMC-08) 

Account for budgetary resources at a lower level in the accounting classification than 

they are budgeted and controlled. (FMC-09) 

Prepare and electronically transmit SF-1 32s (Apportionment and Reapportionment 

Schedules and associated financial information) to OMB. Store,prepared requests as 

submitted for future use. (FMC-10) 

Value-added Requirements 

To support the Funds Allocation process, the Core financial system should provide the 

capability to: 

l Generate budgetary data in format required by OMB’s MAX system. (FMC-l-l) . 

l Automatically prepare the formal allotment and sub-allotment documents and 

electronically distribute them to subordinate organizations. (FMC-12) 

l Create continuing’resolution funding levels based on a percentage of prior-yeasfunding. 

(FMC-13) 

Budget Execution Process ‘, ,, ,-- 

The Budget Execution processis~the most detailed level of’an Agency’s funds control and ’ 

consists of’processes needed’to ensure that the agency’s funds control systems are fully 

supported by its accounting systems. It also consists of processes needed to track an agency’s 

budget authority and manage prior-year funds in the current year. Allotment systems should be 

designed so that responsibility for budget control is placed at the-highest practical organizational 

level consistent with effective and efficient management and control. 

, 

Mandatorv Requirements 

ii 

To support the Budget Execution process, the Core financial system must provide the capability 

to: 

l Record budget authority at multiple levels of distribution (at least five). (FMD-01) 

., 

l Track and record all changes to budget authority - including rescissions, supplementals, 

transfers between TAS/TAFS, reprogramming, limitations and changes to continuing 

resolutions prior to appropriation enactment - at multiple levels of distribution (at least 

five). (FMD-02) 

Core Financial System Requirements 31 
Funds Management ,Function 

l Track actual amounts and verify commitments and obligations against the budget as 

revised, consistent with each budget distribution level. (FMD-03) 

l Modify funding distribution (including apportionments and allotments) at multiple 

organizational levels (at least five). (FMD-04) 

l Manage and control prior-year funds in the current year. (FMD-05) 

l Establish and maintain user-defined variance tolerances by document type, percentage, 

and a “not-to-exceed” dollar threshold. (FMD-06) 

l Automatically withdraw (or cancel) uncommitted and unobligated allotments and suballotments for all or selected TAWTAFS at the end of a specific fiscal period. (FMD-07) 

l Automatically withdraw (or cancel) uncommitted and unobligated allotments and suballotments for selected organizations at the end of a specific fiscal period. (FMD-08) 

l Distribute the annual budget in accordance with the latest SF-132 Apportionment and 

Reapportionment Schedule approved by OMB. (FMD-09) 

Value-added Requirements 

To support the Budget Execution process, the Core financial system should provide the 

capability to: 

l Request approval for reprogramming and request additional funds outside the periodic 

budget review process.. Allow such requests to be submitted, reviewed, revised, and 

approved. Approval would update current operating budgets. (FMD-10) 

Funds Control Process 

This process records transactions affecting the resources and status accounts in the budgetary 

section of the U.S. SGL. It also provides appropriate warnings and controls to ensure that 

budgetary limitations are not exceeded. The FundsControl process consists of the following 

activities: 

6 Funds Availability Editing ‘: 

‘, 

l Commitments 

l Obligations 

l Analysis. 

Funds Availability Editing. This activity verifies that sufficient funds are available at the 

various control levels specified in the Funds Allocation process for each processed transaction 

that may affect,available fund balances. If sufficient funds are not available, notification is 

provided so that appropriate action may be taken. 

32 Core Financial System Requirements 
Funds Management Function 

Mandatorv Requirements 

To support the Funds Availability Editing activity, the Core financial system must provide the 

capability to: 

l 

l 

l 

l 

l 

l 

l 

l 

l 

l 

l 

l 

‘. 

Establish and modify multiple levels of funds control using elements of defined 

accounting classifications, including object class, program, organization, project, and 

fund. (FME-01) 

Establish and modify the system’s response (either reject transaction or provide 

warning) to the failure of funds availability edits for each transaction type. (FME-02) 

Perform on-line inquiry of funds availability prior to the processing of spending 

transactions (commitments, obligations, and expenditures). (FME-03) 

Determine funds availability based on whether funds cited are current, expired, or 

canceled and record appropriate accounting entries when de-obligation of expired 

funding occurs. Do not allow the use of de-obligated prior-year funds for current year 

expenditures. (FME-04) 

, 

Record transactions that affect the availability of funds, includingcommitments, 

obligations, and expenditures.,(FME-05) 

Provide for modification to spending documents (commitments, obligations and 

expenditures), including ones that change the dollar amount or the accounting 

classification cited. Check for funds availability when changes are made. (FME-06) 

:: 

Provide on-line notification to users of transactions failing funds availability edits, and 

make the rejected transactions available for corrective action. This is to include 

transactions entered directly to the Core system and those received from external 

modules or systems. (FME-07) 

Override funds availability edits, including automatically releasing and processing 

transactions previously rejected for exceeding user-defined tolerances. ,Produce’ a 

report or otherwise notify management of the over obligation of funds. (FME-08) _. . . ‘. 

.’ 

Automatically update all appropriate budgetary accounts and or tables to ensure that the 

system always maintains and reports the current status of funds. (FME-09) ._ .-’ ‘. : 

Check forfunds availability when the obligation exceeds the commitment document or 

when the expenditure (upon receipt ‘or disbursement) exceeds the ‘obligating document . I 

due to quantity or price variances, additional shipping charges, etc., within tolerances. .I. 

Provide on-line notification ,when’tolerances are exceeded. When, variances are within 

tolerances, process and adjust the ‘obligation accordingly. (FME-10) 

Allow for available fund balances to be based on reimbursable customer orders : ’ 

accepted. In the case of reimbursable orders from the public, ensure that an advance 

must also be received before additionaffunding authority is .recorded. (FME-1 1) 

Track all activity related to an individual reimbursable agreement. When recording 

commitments, obligations, and expenditures incurred in support of reimbursable 

Core Financial ,,System Requirements 33 
Funds Management Function 

agreements, check for funds availability against the amount authorized by the 

agreement and the corresponding start and end dates. (FME-12) 

l Record and maintain reimbursable agreements, (e.g., inter-agency agreements,) so that 

monthly, quarterly, and fiscal year-to-date as well as inception-to-date information can 

be presented. (FME-13) 

Value-added Requirements 

To support the Funds Availability Editing activity, the Core financial system should provide the 

capability to: 

l Automatically notify userswhen funds availability is reduced by transactions from 

external systems (e.g., credit card payments, and payroll). (FME-14) 

Commitments. Commitments are an optional stage of fund reservations prior to the 

establishment of an obligation. This activity records commitment documents, such as 

requisitions. Commitments can be a useful tool in funds management by helping users to 

anticipate future procurements. They should be used when helpful to an agency’s management 

process, but are not necessary, or even appropriate, for all situations. 

However, the Core financial management system.must provide the capability to use this stage 

of funds control, and therefore must meet the mandatory requirements below. 

Mandatotv Requirements 

To support the Commitment activity, the Core financial system must provide the capability to: 

l Maintain information related to each commitment document, including amendments. 

The Core financial system- must capture: 

o Requisition number, 

o Appropriate accounting classification values, and 

o Estimated amounts, (FME-15) 

l Input line item detail for commitment documents, including item description, unit price, 

quant.ity of goods and services,,,accounting information,,,and amounts. ,(FM.E-16) 

:-.: .: .., : 

l Futureidate, store, and automatically Lost commitment documents at the approdriate 

date.. Subjectthese documents to edit and validation procedures prior to oostino 

(1) 

Provide.;notificagon when transactions are posted. (PIvIE-17) . .:’ ,.. ’ - 

/.. 

l Close,commitments by document and line item under the.following circumstances: 

automatically by the .system upon issuance.of:an obligating document, (2) by an 

authorized user, and (3) automatically as part of the yearend pre-closing process. 

(FME-18) 

Valie-added Requirements 

There are no value-added requirements for this activity. 

34 Core Financial System Requirements 
Funds Management Function 

Obligation+ OMB Circular No. A-34 defines obligations as a binding agreement that will result 

in outlays, immediately or in the future. Budgetary resources must be available before 

obligations can be incurred legally. Examples are amounts of orders placed, contracts 

awarded, services received, and similar transactions that will require payments during the same 

or a future period. Such amounts include outlays for which obligations had not been previously 

recorded and reflect adjustments for differences between obligations previously recorded and 

actual outlays to liquidate those obligations. 

Mandatorv Requirements 

To support the Obligation activity, the Core financial system must provide the capability to: 

<Record. obligations for which there is no related commitme,nt. (FME-19) ,. ,. 

Maintain information related to obligation documents and related amendments, jncluding 

obligati,ng document number and type; vendor information, accounting classification 

.elements,referenced commitment (if applicable); and dollar amounts. (FME-20) 

,’ 

Future-date, store,‘and automatically post obligation documents at the appropriate date. 

Subject these documents to edit and,validation procedures prior to posting. Provide 

notification when transactions are posted. (FME-21) 

Enter recurring obligation transactions that will’be automatically posted at various time’ 

intervals such as montlily, quarterly or a specific number of days determined by the user. 

(FME-22) ‘. ’ ’ ::., 

Allow multiple commitments to be combined into one obligating document. (FME-23) 

Allow one commitment document to be split between m&ple,obligating documents. 

(FME-24) ,-’ 

Reference multiple funding sources on a single commitment or obligation. (FME-25) 

Allow authorized modifications and cancellations of posted obligating.documents.- 

(FME-26) .’ 

Provide on-line access to all obligations by selection criteria-(e<g., document number, 

vendor number, accounting classification elements). (FME-27) I ,. ? * ,. ., 

,. it,’ ., 

., /% __...: ;,, ., ,. , : . . . / 

’ l ~ ‘1 :M.aintain. an on-line history fk of closed-out ‘documents for a user-defined period of,time. 

(FfvlE-28) i I .-’ ‘.) ‘. :i ‘. : : 

” 

l Allow the vendor used on an obligation to be different from suggested vendor recorded 

on the related commitment document. (FME-29) -. 

l Close obligation documents under the following circumstances: (1) automatically by the 

system upon final payment for goods or services, or (2) by an authorized user. Upon the ’ 

9 closing of an obligation,Zautomatically~classify any de-obligation- of excess funds to the 

appropriate budgetary .status. (Le., expired, unexpired, available for obligation or 

unavailable). (FME30) 

.I ,;: .” 

.” j ‘~: ,. ; : ; 

Core Fingntiial System Requirements 35 
Funds Management Function 

l Record and maintain contracts and grants and related financial activity so that fiscal 

year-to-date and inception-to-date information can be presented. (FME31) 

.o Record blanket purchase agreements, and record, control, and track records of call. 

(FME-32) 

l Record, control, and track delivery orders against a contract limitation. (FME-33) 

l Record advance payments made, such as travel advances, contract advances, and 

grants. Ensure that an obligation exists prior to recording an advance. (FME-34) 

l Record expenditures claimed against advance payments made, and automatically 

liquidate the advance either partially or fully, as appropriate. Allow the recording of 

advance refunds. (FME-35) 

l Automatically link transactions in the spending chain, and bring forward accounting and 

non-financial information from one document to another, when the previously accepted 

document is referenced (e.g., commitment to obligation, obligation to receiving report). 

(FME36) 

Value-added Requirements 

To support the Obligation activity, the Core financial system should provide the capability to: 

l Maintain the following additional data fields for each obligating document 

o Requester’s name 

o Telephone number of requester 

o Contract number/GSA schedule number 

o Deliver to location (e.g., room number, division) 

o Comment field 

0 Contact name 

o COTR name 

o COTR telephone number 

o Prompt Pay indicator 

o Approval:date, and 

o Discountpayment terms. (FME-37) 

Analysis. The Analysis activity provides information necessary to support analysis of the 

Funds Management function. It provides information on funds availability at the levels defined 

and compares data in the Funds Management function to data in other functions to ensure 

consistency. 

,Mandatorv Reaujrements 

To support the Analysis activity, the Core financial system must provide the capability to: 

l Maintain current information on commitments and obligations according to the required 

accounting classification elements (see CFA-01). (FME-38) 

l .Produce detailed listings and summary reports of commitments, obligations and 

expenditures by the elements of the defined accounting classifications. (FME-39) 

36 Core F&uncial Sydem Reqtiii-ements 
Funds Management Function 

l Provide control features that ensure that the amounts reflected in the fund control 

structure agree with the related general ledger account balances at the end of each’ 

update cycle. (FME-40) 

l Maintain historical data on all commitment, obligation, payment and collection 

transactions. (FME-41) 

l Maintain open-documents to show the status of commitments, obligations, accruals, and 

disbursements by document line item. (FME-42) 

l Provide the ability to perform document cross-referencing in which a user can query on 

any document and identify the document numbers of associated transactions in the 

processing “chain” (e.g., querying on a purchase order would provide any amendments 

to purchase orders, receiving reports, requisitions, and invoices; querying on a 

receivable would provide any associated cash receipts). (FME-43) 

Value-added Requirements 

There are no value-added requirements for this,activity. 

Core Financial Systeq Requirements 37 
Payment Management Function 

Federal payment regulations are documented in several different sources. Title 5, Part 1345 of 

the code of Federal Regulations (CFR) (codification of OMB Circular No. A-125, Prompt 

Payment specifies Government policy for payments made to vendors against contracts. It 

states, in part, that agencies must make payments on time, pay interest when payments are 

late, and take discounts only when payments are made on or before the discount date and 

when it is advantageous to the Government. The Cash Management Improvement Act (CMIA) 

specifies requirements for payments made to states. Regulations implementing CMIA are 

specified in 31 CFR 205. The Debt Collection Improvement Act (DCIA) of 1996 provides for 

access. to taxpayer identification numbers (TINS) and enhanced administrative offset ,and salaryoffset authorities. Other regulations govern payments made for travel, payroll, benefits, and 

other purposes. ~. 

Depending on an agency’s system architecture, specific activities performed relating to 

payments may be supported by other systems that provide transaction data to th-e Core financial 

system for control and management purposes. For example, payroll.,systems usually trigger the 

actual disbursement process to pay employees through direct deposit or by check, and send 

only the expense and disbursement information to the Core financial system for recording by the 

general ledger, funds control, and cost management processes. Likewise, large loan and grant 

programs might be supported by systems that maintain their own detailed information on 

payees and payments and send transaction data to the Core financial system. If the supporting 

systems are covered by one or more other JFMIP FFMSR documents, agencies should refer to 

those documents for specific payment management requirements. If the supporting systems 

use payment management functionality of the Core system, then payments initiated from other 

systems are subject to the applicable requirements listed here for payment management. In 

other words, these requirements apply to all payments processed through the Core system. 

For example, another system may support activities that lead up to the payment stage, such as 

recording obligations and expenditures and establishing payables, but depend on the Core 

financial system to manage the actual payment process itself. A travel system might calculate 

the amount to be paid on a travel voucher and send transactions to the Core financial system to 

record the expenses and a payable to the traveler. The Core financial system would then 

schedule the payment for disbursement and confirm that the disbursement has been made. 

The Payment Management function consists of the following processes. 

l Payee Information Maintenance (PMA) 

l Payment Warehousing (PMB) 

l Payment Execution (PMC) 

l Payment Confirmation and Follow-up (PMD) 

Payee Information Maintenance Process 

The term “payee” is used here to include any entity to which disbursement may be made, for 

example, individuals and organizations providing goods and services, employees, grant 

recipients, loan recipients, and other Government agencies. In an integrated system, payee 

information needed to make payments should be coordinated with information needed for other 

purposes and in other systems. For example, a company that provides goods and services to 

38 Core Financial System Requirements 
Payment Management Function 

an agency should have a common identifier, such as a TIN; associated with it that is shared by 

the procurement and payment processes. With this common identifier, contract information and 

payment information can be linked, even if the addresses for ordering and paying are different. 

Furthermore, such information should also be availab!e to the procurement and payment 

processes. 

Mandatorv Requirements 

To support the Payee Information Maintenance process, the Core financial system must 

provide the capability to: 

l Maintain payee-(vendor) information to support obligation, accounts payable; and 

disbursement processes, including: 

o Vendor name 

o Vendor ID number 

o Vendor type (e.g., Federal agency; state/local government, commercial entity, 

individual, employee) 

o TIN 

o Three or more payment addresses 

o Three or more separate instances of banking information (i.e., account and routing 

numbers) for issuing payments 

o Bank account type (check or savings) 

o Three or more contact names 

o Three or more contact telephone numbers 

0,; Federal ,vs. Non-federal indicator 

o Six-digit Trading Partner codes 

o Entity type .(e.g., small business, 8A, women owned business) : 

o Multiple vendor payment methods (e.g., Electronic Funds Transfer (EFT), check) 

o Third-party information (e.g., payee TIN for notice of assignment) 

o Data Universal Numbering System (DUNS) number 

o ALC number (for Federal vendors) 

o Subject to Prompt Pay. indicator . . ,. 

o Internal Revenue Service (IRS) -1099 indicator 

o W-2 indicator 

o Comment, field < ‘. 

-0 .Date of last update, and-.‘. 

o User ID of last update. (PMA-01) ’ 

l Suppo,rt payments made to third parties (payees) that act as an,agentfor the payee 

(vendor). Maintain information needed to produce IRS -1099s for the principal party 

rather than the agent. (PMA-02) 

l Prevent the-duplicate entry of vendor records (e.g., by editing vendor ID numbers or 

vendor names.) Provide an on-line warning message to the user when duplication is 

identified. (PMA-03) 

l Track and maintain a history of changes to the vendor file, including vendor additions 

and purges, and changes to vendor specific information such as payment address, bank 

account a,nd routing information, and payment type. Maintain an audit trail of payments 

made to historical vendor information. (PMA-04) 

Core Financial System Requirements ’ 39 
PaQment Managemerit Function 

l Query and report on payee information by user-defined criteria, such as payee name, 

payee number, and IRS -1099 reporting status. (PMA-05) 

l Activate and deactivate vendors that meet user selected criteria (e.g., such as length of 

time with no activity.) (PMA-06) 

Value-added Requirements 

To support the Payee Information Maintenance process, the Core financial system should 

provide the capability to: 

l Capture vendor information required when registering with the Central Contractor 

Registration (CCR) and track activity by CCR identifier. (PMA-07) 

Payment Warehousing Process 

This process recognizes and records payments due to another entity in the near term. These 

payments may be due for any of several reasons; for example, as a result of receiving goods 

and services in accordance with contract terms, under a loan or grant agreement, as an 

advance payment for goods or services to be provided in the future, or as a progress payment 

under a construction contract. 

Title 5, Part 1315 of the CFR requires documentation to support payment of invoices and 

interest, including information from contracts, purchase orders, invoices, and receiving reports. 

These documents should be matched through a process, which may be automated, manual, or 

a combination, that ensures payments are made in accordance with contract terms and 

applicable regulations. Adequate internal controls should be in place to verify that goods and 

services paid for were actually ordered and received and’ are paid for only once and at the 

agreed-upon price. ‘, 

Mandatorv Requirements 

To support the Payment Warehousing process, the Core financial system must provide the 

capability to:. 

l Record an accrued liability upon receipt and acceptance of goods and services and 

properly identify them as capital asset, expense, prepaid expense, or construction. 

(PMB-01) : 

l Record ‘:full” or “partial” receipt and acceptance of goods and services by line item. 

; ‘(P,rgB-02) ‘-- ,,, 

,), 

l Automatically update the funds control and budget execution balances to reflect changes 

in the status of obligations and expended appropriations, as well as changes in amounts. 

(PMB-03) .’ / 

l ’ Warehouse payment vouchers for future scheduii,ng.,(PMB-04) 

,, , .:,, .I ’ ’ 

i Allow a warehoused. payment to be modified, cancelled, and put on hold. (PMB-05) 

40 Core Financial System Requirements 
Payment Management Function 

l 

l 

l 

l 

l 

l 

l 

l 

l 

Automatically match invoices to obligations and receiving reports by document and line 

item. Provide for two-way matching (obligation and invoice) and three-way matching 

(obligation, receiving report, and receipt of invoice). (PMB-06) 

Process “obligate and pay” transactions where payment scheduling and obligation 

occurs simultaneously. (PMB-07) 

Reference multiple obligations on a single invoice document. (PMB-08) 

Set up recurring payments in the system and automatically schedule items (e.g., 

contracts, leases, etc.) for payment on an interval determined by the user (i.e., weekly, 

bi-weekly, monthly, quarterly or other specified number of days). (PMB-09) 

Modify recurring payment information for changes in agreement terms, amounts, 

frequency, etc. (PMB-10) 

Capture, store and process the followinginformation for each vendor invoice, for audit 

trail, research,and query purposes: 

o Invoice number 

o Invoice date 

o Invoice receipt date 

o Invoice due date 

0 Invoice amount 

o Unit price.and quantity 

o Description 

o Discount terms, as applicable 

o Obligating document reference(s) 

o Vendor identification number and address code. (PMB-1 i) 

Edit the TIN field to ensure that it is a nine digit numeric field, does not include dashes, 

and is not all zeroes. Allow for override for agency specific requirements. (PMB-12) 

Accommodate an invoice number field of up to 30 characters or the current requirement 

of I TFM-6-5000. (PMB-13) 

Determine the due date and amount of vendor payments in accordance with Title 5, Part 

1315 of the CFR which states, in part, that for agencies subject to prompt payment 

requirements, payment is due, on-either: (1) 30 days after the receipt of a proper invoice 

for services and non-dairy products; (2) 10 days after the receipt of a proper invoice for 

dairy products; (3) the date specified in the contract; (4) in accordance wifh~discount 

terms when discounts are offered and taken; or (5) in accordance with Accelerated 

Payments Methods, (PMB-14) 

Manually override a’ system-calculated payment due date. (PMB-15)’ 

Split an invoice into multiple payments on the appropriate due dates when items on the 

invoice have different due dates ordiscount terms.“(PMB-16) 

Record discount terms and automatically determine whether taking the discount is 

economically justified as defined in I TFM-6-8040. (PMB-17) 

, 

Cqre Financial System Requirements 41 
-Payment Management Function 

Record additional shipping and other charges to adjust the payment amount, if they are 

authorized and within variance tolerances. (PMB-18) 

Record obligations, expenses, assets, etc., associated with payments made through use 

of lmprest funds, third-party drafts, and Government credit cards. Establish payables to 

‘replenish the lmprest fund. (PMB-19) 

Record detailed transactions associated with credit card purchases. Allow users to 

change ,accounting classification information by line item for specific transactions. 

(PMB-20) 

Schedule payments of advances, prepaid expenses, loans, and grants, with the 

appropriate accounting entries for each. (PMB-21) 

Establish payables and make payments on behalf of another agency, citing the other 

agency’s funding information. For each disbursement made on behalf of another 

agency, provide the information required (eg., purchase order number or reimbursable 

agreement number and the ALC) by Central agency systems (e.g., On-line Payment and 

Collection System (OPAC)/Intra-governmental Payment and Collection System (IPAC)) 

to the appropriate Central agency system. (PMB-22) 

Record expense or assets when goods have been received, ‘or services performed, for 

items that were funded by advances, prepaid expenses, and grants and make the 

appropriate liquidations. Verify funds availability and automatically update funds control 

account and or table balances to reflect obligation changes. (PMB-23) 

Indicate if a payment is “partial” or “final.” If “final;” automatically de-obligate any 

unliquidated balances. (PMB-24) L. 

Value-added Requirements 7 

To support the Payment Warehousing process, the Core financial system should provide the 

capability to: 

l Automatically generate a payment voucher if the purchase ,order matches the receiver 

Xormation. Provide this option as a function of the matching process. (PMB-25) 

.: . 

., ,,, 

l .’ ., Use the Fast Payment clause indicator on the obligating document ,to determine whether 

or not an accelerated payment is to’be made. (PMB-26)” . ’ ‘. ,. ; 

l Compare discount terms on the invoice with discount terms on the,related obligating 

document. Notify the user when differences ar&d,entified. ‘(PMB-27)’ *. 

l Provide a system-generated letter or e-mail to the vendor stating the reason for rejection 

or “notice of intent to disallow” an invoice within 7 days of receipt of invoice. (PMB-28) 

Payment Executioli Process, .. 

This process supports activities required to make a payment that was warehoused or to record 

a payment made by another system. The system should provide ttie capabiljty to capture, *store 

and process information needed to create EFT payments for agencies for Which’Treasury does 

the actual disbursing and prepare requests for disbursements that are transmitted to Treasury. 

42 Core Financial System Requirei’nents 
Payment Management Function 

Some agencies have delegated disbursing authority and can print checks or initiate electronic 

transfers themselves. Agencies with delegated disbursing authority must comply with the 

requirements contained in I TFM Part 4 and all applicable requirements below. 

Mandator-v Requirements 

To support the Payment Execution process, the Core financial system must provide the 

capability to: 

l Automatically identify and select payments to be disbursed in a particular payment cycle 

based on their due dates. Provide for on-line review and certification by an authorized 

certifying officer. (PMC-01). 

l Automaticalty compute amounts to be disbursed, including discounts, interest, and 

penalties, in accordance with Title 5, Part 1315 of the CFR. Generate the appropriate 

transactions to reflect the payment deductions and additions. (PMC-02) 

l Automatically apply interest and discount across multiple accounting lines on an invoice 

in the same rule used to apply the original payment. (PMC-03) 

l ,Appiy the appropriate Treasury interest rate tables (e.g., Prompt Pay rate and Current 

Value of Funds rate). (PMC-04) 

l Capture prompt payment information required by Title 5, Part 1315 of the CFR, including 

discounts taken, discounts lost, and interest paid. (PMC-05) 

l Automatically include relevant identification information on each remittance, including: 

vendor invoice number(s); obligating document number or other reference number; and 

discount, interest and offset amounts, as applicable. (PMC-06) 

l Record user comments for each voucher/invoice. (PMC-07) 

l Provide for up to 9,999 line items per invoice. (PMC-08) 

l Record reason codes for returned and adjusted invoices, lost discounts, and late 

payments. (PMC-09) 

l Track the status of invoices in the payment process, including those that were not 

accepted and returned to the vendor and those that are awaiting administrative approval. 

“Maintain the time and aging of approvals in relation to payments. (PMC-10) 

l Provide for various forms of payment to be used (i.e., check or EFT (e.g., Automated 

Clearing House (ACH) and wire)). Capture, store and process information needed to 

create EFT payments in accordance with Treasury standards, including American 

Bankers Association Routing Transit Number (RTN), recipient bank account number, ; 

and bank account type (checking or savings). ‘This includes the ability to identify : 

employees versus companies to ensure use of correct ACH formats. (PMC-1 1) 

l Generate ACH payments in Corporate Trade Exchange (CTX) (820 or Flat File), Cash 

Concentration or Disbursement (CCD), Cash Concentration or Disbursement Plus 

Addendum (CCD+), Prearranged Payment and Deposit (PPD), and Prearranged 

Payment and Deposit Plus Addendum (PPD+) formats. (PMC-12) 

Core Financial System Requirements 43 
Payment Management Function 

Ensure that employee ACH payments are generated only as PPD or PPD+ payments. 

(PMC-I 3) 

Ensure that vendor ACH payments are generated only as CCD, CCD+ or CTX formats. 

(PMC-14) 

Prohibit the creation of an ACH payment in any format (PPD, PPD+, CCD+, or CTX) that 

does not contain a RTN and an account number. (PMC-15) 

Consolidate multiple payments to a single payee in accordance with TFM prescribed 

limitations (currently up to 14 lines of 55 characters each for check payments, up to 

9,999 lines of 80 characters each for CTX payments). Itemize all paymentscovered by 

the one check or EFT (CTX only). However, allow for separate checks to a payee. 

(PMC-16) 

Create check files and EFT payment files in all formats (CTX (820 or Flat File), CCD, 

CCD+, PPD, and PPD+) using different media (telecommunications, tape, direct entry to 

Electronic Certification System (ECS), and third party upload through ECS). (PMC-17) 

Provide an edit on the RTN field. The field is a nine-digit numeric-only field. Prohibit 

fewer or more than nine characters, allow for only numeric characters, and prohibit the 

entry of all zeroes in this field. Edit RTN’s against the data supplied in the Financial 

Organization Master File (or other verified update file) to ensure the validity of the check 

digit (Modulus 10 check). (PMC-18) 

Edit the invoice number field to ensure it is populated. Prohibit the generation of a 

‘(vendor) payment that’does not contain properly structured remittance information on the 

addendum. (PMC-19) 

Generate multiple payments using the same invoice number, to accommodate utility and 

telecommunication companies’ use of an account’number as a recurring invoice number. 

(PMC-20) 

Edit the ALC field to ensure it is an eight digit numeric field. Allow for override (e.g., by 

agencies that have.their own disbursing authority.) (PMC-21) 

Create one check file regardless of payee type (employee or vendor). (PMC-22), 

:,. : 

‘Combine payment files from multiple,ALCs into a single file,for transmission to,Treasury. 

Provide summary totals (items and dollars) by ALC and for the entire file for certification 

purposes. (PMC-23) 

. : ” .’ ,” 

Make CTX payments using a separate file. The transactions need to be balanced (sum 

of all the remittance records must equal the transaction total). The file must include a 

valid settlement date (next business day or later). The file must be able to 

accommodate the inclusion of Credit Memos. (PMC-24) 

Schedule and disburse U.S. dollar payments (SF-l 166) through the Treasury’s ECS, 

containing up to the limit of 60 payments per schedule and 100 schedules for each ECS 

terminal per day. (PMC-25) ’ 

,r ‘: 

._ 

44 Core Financial System Requirements 
Payment Management Function 

l 

l 

l 

0 

l 

l 

l 

l 

l 

l 

Process payment transactions from other systems, such as payroll and travel. Identify 

whether or not disbursement has already been made, and record the appropriate 

accounting entries. Schedule those disbursements not already made for payment 

through the Core financial system. (PMC-26) 

Automatically generate transactions to reflect disbursement activitv initiated by other 

agencies and recorded in Central agency electronic systems (such as OPAC/IPAC). 

Capture related information required by the Central agency system for each transaction 

(e.g., purchase order number, reimbursable agreement number, ALC). (PMC-27). 

Flag vouchers selected for payment that will disburse a fund into a negative cash 

position. (Reimbursable work can result in this type of transaction with appropriate 

authority.) (PMC-28) 

Process credit memoranda for returned goods or other adjustments. Apply the credit to 

the specific obligation that resulted in the credit, reducing the expenditure attributed to 

that obligation. If a credit is not fully liquidated by one payment, maintain the balance of 

the credit (e.g., as an account receivable) for application against a future payment. 

Create the appropriate notice to the vendor that a credit has been applied to the affected 

payment. (PMC-29) 

Apply credits,against subsequent disbursements to the same vendor regardless of the 

funding source. (PMC30) 

Allow for the exclusion of payments from agency offset based on user-defined criteria 

including funding source, object class, vendor type and vendor n,umber. (PMC31) 

Provide, generate, and maintain a sequential numbering system for scheduling 

payments to the disbursing office. Assign different schedule number ranges for different 

payment types, such as travel schedules, transportation schedules, payroll schedules, 

vendor schedules, etc. Require each,schedulenumber to be unique. (PMG32) 

On each payment schedule/file, report totals by TAS/TAFS. (PMC-33) 

Cancel an entire payment schedule or a single payment within a payment schedule, 

prior to transmission to Treasury. Allow for reversal of an entire schedule in a single, 

interactive action. Perform the appropriate accounting reversals. (PMC-34). 

. 

Cancel an entire payment schedule prior to actuafdisbursement,by or upon rejection by 

Treasury. Allow for reversal of an entire schedule, in a single,-interactive action. Perform 

the appropriate accounting reversals. (PMC-35) .” 

Value-added Requirements 

To support the Payment Execution process, the Core financial system should.provide the 

capability to: 

l When consolidating multiple payments-to a single payee, include the TASITAFS 

associated with each payment in the payment file.; (PMC-36) 

; 

l When combining payment files for multiple ALCs into a single file for transmission to 

Treasury, provide summary totals by TAS/TAFS. (PMC-37) 

Core Financial System Requirements 45 
Payment Management Function 

0 Provide National Automated Clearing House Association (NACHA) payment formats for 

Non-Treasury Disbursing Offices. (PMC-38) 

l Split a single payment into separate bank accounts (e.g., benefit payments to 

recipients). (PMC-39) 

0 Provide statistical sampling capabilities to support agency payment certification. 

(PMC-40) 

l Identify and report payment and deposit amounts at a detail suitable for reporting large 

dollar notifications as described in I TFM-6-8500, Cash Forecasting Requirements. 

(PMC-41) 

Payment Confirmation and Follow-up Process 

This process confirms that disbursements were made as anticipated and supports inquiries from 

vendors regarding payments and reporting requirements relating to the Payment Management 

function. 

Mandatorv Requirements 

To support the Payment Confirmation and Follow-up process, the Core financial system must 

provide the capability to: 

l Provide information about each payment to reflect the stage of the scheduling process 

: P lir 

that the payment has reached and the date each step was reached for the following “; 

processing steps: 

o Payment scheduled 

o Schedule sent to appropriate disbursing office 

o Payment issued by appropriate disbursing ofice. (PMD-01) 

l For each payment made by the Core financial system, maintain a history of the following 

information: 

o Vendor Invoice number 

0 Invoice amount : 

o Vendor identification number 

0.. Vendor names .> 

o Payment address or banking information. 

0 Payment amount .’ 

o Interest paid, when applicable 

o Discount taken, when applicable 

o Offset made, when applicable 

‘. o Payment method (e.g., check, EFT) 

o Referenced obligation number, and 

o Appropriation charged. (PMD-02) 

l Automatically update theIpayment information when confirmation is received from the 

disbursing office, including the paid schedule number, payment date and check number 

or trace number. (PMD-03) - 

46 Core Financial System Requirements 
Payment Management Function 

l Automatically liquidate the in-transit amount and reclassify budgetary accounts from 

unpaid to paid when the payment confirmation updates the system. (PMD-04) 

l Record more than one check range for a payment schedule, along with a break in check 

numbers. (PMD-05) 

l Provide on-line access to vendor and payment information. (PMD-06) 

l Provide on-line access to open documents based on agency selection criteria, including 

the accounting classification elements, document number, and vendor number. 

(PMD-07) 

l Reverse disbursement transactions for voided checks or for other payments that have 

not been negotiated. (PMD-08) 

l Produce IRS-1099s (such as 1099-INT, 1099-MISC, 1099-C and 1099-G) in accordance 

with IRS regulations and current IRS acceptable format, including hard copy and 

electronic form. For example, when payment to a sole proprietor for services performed 

(not including cost of merchandise) exceeds a specified dollar amount (e.g., $600) 

produce a 1099-M. (PMD-09) 

l Electronically download monthly “Fund Balance with Treasury” and activity recorded by 

Treasury (and related warrant information) for comparison to cash activity in the 

agency’s general ledger. Produce a report of differences. (PMD-IO) 

Value-added Requirements 

To support the Payment Confirmation and Follow-up process, the Core financial system should 

provide the capability to: 

l Include the TAWTAFS charged and the associated amount(s) in the history of each 

payment made by the Core financial system. (PMD-1 1) 

l Provide an automated interface to the Department of Treasury syste’m containing paid 

schedule data (i.e., Government On-line Accounting Link System (GOALS) Regional 

Finance Center’Agency Link, or its successor). (PMD-12) 

l Provide written notification to payees (vendors, travelers, etc.) of payments made by 

disbursing offices. Allow for agency flexibility in defining the contents of the notifications. 

(PMD-13) 

l Provide e-mail notification to employees of travel payments made by disbursing-offices. 

(PMD-14) 

l Track and report on aged, unmatched vendor invoices. (PMD-15) 

l Track and report on spending agency-wide by state and congressional district. (PMD-16) 

Core Financial System Requirements 47 
Receivab,le Management Function 

Receivables are established to account for amounts due from others as the result of 

performance of services by the agency, delivery of goods sold, the passage of time (e.g., 

interest earned), loans made to others that must be repaid, or other actions. Receivables are 

accounted for as assets until funds are collected, or determined to be uncollectible in whole or in 

part. Additionally, some receipts may be collected without the prior establishment of a 

receivable, as in the case of goods sold for cash. 

Federal debt management regulations are documented in several different sources. The Debt 

Collection Act of 1982 authorized agencies to charge interest, penalties and administrative costs 

against delinquent non-Federal debtors, and on debts due from State and local governments. 

OMB Circular No. A-129, Policies for Federal Credit Programs and Non-fax Receivables, 

prescribes policies and procedures for collecting non-tax receivables and sets standards for 

servicing these receivables and for collecting delinquent debt. The DCIA of 1996 provides that 

any non-tax debt owed to the United States that has been delinquent for a period of 180 days 

shall be turned over to the Secretary of the Treasury for appropriate action to collect or 

terminate collection actions on the debt or claim, with certain exceptions. The DCIA provides for 

access to taxpayer identification numbers (TIN) and enhanced administrative offset and salary 

offset authorities. 

‘Depending on an agency’s system architecture, servicing and collection activities for some 

receivables may be supported by other systems that provide data to the Core financial system. 

This would be particularly appropriate for receivables resulting from large programs with 

complex supporting data requirements, such as loan programs, grant programs, or fee-forservice programs. Servicing and collection for receivables with simpler requirements for 

supporting data, such .as those resulting from erroneous payments, may be supported directly 

by the Core financial system with no support by other systems. 

The Receivable Management function includes recording, billing, monitoring, and collecting 

amounts due the Government whether. previously established as a receivable or not. These 

activities must be supported by aging schedules, exception reports, and reports used to monitor 

due diligence efforts. 

The Receivable Management function consists of the following processes. 

l Customer Information Maintenance (RMA), 

_.. 

l Receivable Establishment (RMB) 

l Debt Management, (RMC) 

l Collections and Offsets (RMD) 

Customer Information Maintenance Process 

The word “customer” is used here to include any entity that owes a debt to the agency, including 

contractors, employees, grantees, loan recipients and other Government agencies. Agency 

payees, or vendors, as defined in the preceding Payment Management Function section, may 

become customers of the agency, in the event that duplicate or overpayments occur. 

48 Core Financial System Requirements 
Receivable Management Function 

The Customer Information Maintenance process involves the maintenance of customer 

information (name, address, etc.), identification of the type of customer from which collection is 

due, and the recording of trading partner codes used in the elimination of intra-governmental 

activity from financial statements. The process ensures that customer TINS are captured in 

order to report overdue receivables for potential offset and to provide for IRS 1099 reporting of 

debts written off. 

The Customer Information Maintenance process also supports billing, reporting and research 

activities through the association of customer information with individual accounts receivable. 

Mandators Requirements 

To support the Customer Information Maintenance process the Core financial system must 

provide the capability to: 

l Maintain customer information to support receivable management processes, including, 

at a minimum: 

0 Customer name 

o Customer ID number 

o Customer type (federal agency, state/local government, commercial entity, individual, 

employee) 

o Taxpayer Identification Number (TIN) 

o Customer address 

0 Contact names 

o Contact telephone number 

o Federal vs. Non-Federal indicator 

o Six-digit Trading Partner codes 

::o ALC number (for Federal customers) 

o Internal Revenue Service (IRS) 1099 indicator 

o Comment field 

o Date of last,update 

,. o User ID of last update 

o DUNS number (RMA-01) 

l Maintain customer account information for audit trail purposes and to support billing, 

reporting and research activities, including: 

-o Account number 

o Account balance 

o Associated Customer ID number 

o Date due and age of accounts receivable 

j o Reimbursable order number, travel order.number, etc., where applicable. (RMA-02) 

Value-added Reuuiremenfs ‘. 

There are no value-added requirements for this process. 

Core Financial System’Requirements 49 
Receivable Management Function 

Receivable Establishment Process 

The Receivable Establishment process supports activities to record receivables in the system 

as they are recognized and to produce bills for amounts due to the agency. 

Mandatorv Requirements 

To support the Receivable Establishment process, the Core financial system must provide the 

capability to: 

l Record the establishment of receivables along with the corresponding revenues, 

expense reductions, or other offsets. (RMB-01) 

l Accept transactions that generate receivables from other systems in a standard format 

for entry into the Core financial system. (RMB-02) 

l Support the calculation and establishment of accounts receivable based upon billing 

source, event and time period, and type of claim. Automatically generate related bills to 

customers. Bases used for billing may include: 

o Percentage of reimbursable obligations, accrued expenditures, or costs, using data 

recorded by the cost accumulation function; 

l 

o Fee schedules for goods or services provided; and 

o Payment schedules or other agreements with other entities., (RMB-03) 

Establish receivables and credit memos from vendors to whom the agency has made 

duplicate or erroneous payments. (RMB-04) 

l Uniquely identify multiple types of bills (e.g., overpayments, user fee based) and the 

supporting data used to verify the specific charges. (RMB-05) 

l Automatically establish receivables to be paid under installment plans, including plans 

for which payments have been rescheduled. Generate flexible repayment schedules for 

delinquent indebtedness. (RMB-06) 

l Record billings and collections by line item in order to identify unique accounting 

classification codes. (RMB-07) 

l Support bills and collections between Federal agencies through the use of,electronic 

systems such as IPAC. Provide supporting data to agencies billed whichcan be used to 

verify the charges. (RMB-08) 

l Print bills, accommodating the ‘generation of standard, forms, such as SF-1 080s or SF1081s, and turnaround documents to be used as a remittance advice. Allow for 

customized text in generated billing documents. (RMB-09) 

l Date the bills with the system-generated date or with the date supplied by the user. 

(RMB-10) 

l Consolidate multiple accounts receivable for a customer onto one bill. (RMB-1 1) 

50 Core Financial System Requirements 
Receivable Management Function 

l Allow transactions related to manually prepared bills to be entered by authorized 

.personnel. (RMB-12) 

l Record adjustments to bills and post to customer accounts. (RMB-13) 

l Generate monthly statements to customers showing account activity. (RMB-14) 

Value-added Requirements 

There are no value-added requirements for this process. 

Debt Management Process 

The Debt Management process involves the maintenance of account information on individual 

accounts receivable. The process supports activities to: age receivables; calculate interest and 

record penalties and adminktrative charges on overdue debt; pursue collection of amounts due; 

liquidate receivables; record adjustments to receivables; maintain a proper allowance for 

uncollectible amounts; and record write-offs. 

Mandatoti Re&.hments 

To support the Debt Management process, the Core financial syste’m must provide the 

capability to: 

l Maintain data on individual receivables and referenced transactions supportihg the 

receivable. (RMC-01) 

l Maintain accounts for reimbursable orders and identify Government and nongovernment accounts that are designated as advance funding. (RMC-02). / ; 

l Update each customer adcount when: billing documents are generated; collections are 

received; interest, penalty or administrative fees are applied, and when amounts are 

written-off or offset. (RMC-03) 

l Automatically calculate interest charges using the appropriate Treasury Late Payment 

Charge rate and user-defined criteria (e.g., customer,‘kustomer type).” Automatically 

generate a separate line item for interest charges on th’e’&rstomer bill. (RMC-04) 

l Allow, the user to specify administrative and penalty amounts and record these amounts 

to different accounting classification elements for which the principle ‘amount, is recorded. 

Automatically apply these charges to customer accounts and.generate separate line 

items for the charges on the customer bills. (RMC-05)’ 

l Automatically generate dunning (collection) letters for overdue receivables when 

accounts become delinquent, and incorporate, as appropriate, due process notices for 

referring delinquent accounts. (RMC-06) 

: 

l Customize the dunning process parameters and dunning letter teict. (RMC-07) 

./,- 

l i ,Pro~de’information on the age ofreceivables’to all&for management and prioritization 

“of &@&on activities. This is. to itklude aging information on individual receivables and T ‘, ; 

Core Financial Sptem,Requirem&ts 51 
Receivable Management Function 

on a summary basis, such as by customer, type of customer, fund, and general ledger 

account. (RMC-08) 

a Identify and report receivables that meet predetermined criteria.for write-off, or referral 

and generate the appropriate entries. (RMC-09) 

0 Automatically calculate (as a percentage of gross receivables or related revenues) and 

record the allowance for loss on accounts receivable. (RMC-10) 

l Provide information to allow for the automated reporting of delinquent accounts to 

commercial credit bureaus. (RMC-1 1) 

l Automatically create files of delinquent accounts for electronic submission to collection 

agencies and appropriate governmental organizations. (RMC-12) 

a Maintain data for receivables referred to other Federal agencies and outside 

organizations for collections. (RMC-13) 

a Record the waiver and write-off of receivables, including interest, penalties, and 

administrative charges, Maintain data to monitor closed accounts. (RMC-14) 

l Track and report on the date and nature of a change in the status of an accounts 

receivable, including the following: 

o In Forbearance or in Formal Appeals Process, 

o In Foreclosure, 

o In Wage Garnishment, 

o Rescheduled, 

o Waived/unwaived, 

o Eligible for Referral to Treasury for Offset, 

o Referred to Treasury for Offset, 

o Eligible for Internal Offset, 

o Eligible for Referral to Treasury or a Designated Debt Collection Center for Crossservicing, 

o Referred to Treasury for cross-servicing, 

o Referred to private collection, agency, 

o Referred to Department of Justice, 

0 Offset, 

o Suspended, 

o Compromised, 

0 Written-off, 

o Closed Out. (RMC-15) 

l Perform on-line queries of account activity (billing, collection, and adjustment) by 

customer and receivable. (RMC-16) 

l Perform on-line queries of miscellaneous cash receipts (applied to any Treasury fund 

symbol) by customer, when identified, and by accounting period. (RMC-17) 

l Uniquely record, classify, and report on reimbursable funds including: billing limit, 

amount obligated, amount expended, amount billed, advanced amount (unearned 

revenue), and earnings and collections received, based on customer and customer 

52 * Core Financial System Requirements 
Receivable Management Function 

agreement number. Support the ability to query and report on these items by any of the 

accounting classification elements (e.g., fund or object class). (RMC-18) 

l Automatically produce IRS-1 099-C’s in the amounts of debts forgiven which meet or 

exceed a user-defined dollar threshold (e.g., $600 or more). (RMC-19) 

Value-added Requirements 

There are no value-added requirements for this process. 

Collection Process 

The Collections process supports activities to record the receipt of funds either by currency 

(e.g., cash, EFT) or check, and the deposit of such funds in accordance with Treasury and 

agency regulations. The process also provides for the receipt of payment offset information 

from Treasury and its application to the appropriate accounts receivable. 

Mandatorv Requirements 

To support the Collections process, the Core financial system must provide the capability to: 

Automatically record the application of complete and partial payments made by the 

debtor on a delinquent debt to administrative fees, penalties, interest, and then to 

principal, unless otherwise stated in program statute. (RMD-01) 

Record revenues, expenditure reductions, or other appropriate offsets associated with 

collections for which no receivable was previously established. (RMD-02) 

Apply collections back to the specific contract or purchase order award to reduce 

cumulative payments and expenditures (e.g., upon the refund of erroneous payments.) 

(RMD-03) 

Record the receipt of an advance repayment and an advance from others with a 

reference to the related reimbursable agreement (RA) obligation, whether or not an 

account receivable was previously established. (RMD-04) 

Process cash or credit card collections. Match collections to the appropriate receivables 

and update related bills and customer accounts. (RMD-05) 

Record information associated with a collection at the time funds are applied to an open 

receivable document , including the deposit ticket number and date, and ALC code. 

(RMD-06) 

Support the receipt of collection files from banks for application to open receivables. 

(RMD-07) 

Record collections received! against advance payments’made. (RMD-08) 

Apply collections to more than one receivable. (RMD-09) 

Re-open closed accounts to record collections after a waiver or write-off of a receivable 

has been recorded. (RMD-10) 

Core Financial System Requirements 53 
Receivable Management Function 

l Electronically download monthly deposit and debit voucher confirmation information from 

Treasury and the banking system for comparison to activity in the agency’s general 

ledger. Produce a report of differences. (RMD-1 1) 

l Support the receipt of payment offset information from Treasury. Apply offset collections 

to open receivables and generate the appropriate accounting entries to record the 

collections. (RMD-12) 

l Automatically offset payments to vendors for amounts due to the agency (e.g., 

outstanding accounts receivable, credit memo, and open advances.) When an entire 

payment is offset, create the appropriate notice to the vendor that the offset has been 

made. (RMD-13) 

Value-added Requirements 

To support the Collections process, the Core financial system should provide the capability to: 

l Record TAS/TAFS(s) associated with collections received on deposit tickets and debit 

vouchers. (RMD-14) 

l When downloading monthly deposit and debit voucher confirmation information from the 

Treasury and the banking system for comparison to the agency general ledger, include 

both the TAS/TAFS(s) and the associated amount(s). (RMD-15) 

l Interface with CA$HLINK, in order to reconcile Treasury recorded collections to the 

collections recorded in the Core financial system and generate exception reports. 

(RMD-16) 

54 Core Financial System Requirements 
Cost Management Function 

SFFAS No. 4, Managerial Cost Accounting Concepts and Standards for the Federal 

Government, promulgated by FASAB, prescribes the managerial cost accounting concepts and 

standards for the Federal Government. The managers and executives who have the need for 

cost information should drive Cost Management in agencies. SFFAS No. 4 states: 

‘I... based on sound cost accounting concepts and are broad enough to allow maximum 

flexibility for agency managers to develop costing methods that are best suited to their 

operational environments.” 

The term “cost” refers to monetary value of resources used or sacrificed or liabilities incurred to 

achieve an objective, such as to acquire or produce a good or to perform an activity or service. 

The level of sophistication of the Cost Management function needed by an agency is dependent 

on the requirements of the agency, and the operational nature of the programs involved. For 

exarhple, if an agency’s primary mission is to produce a product or service for sale, the costing 

function typically will be accomplishedin the Managerial Cost Accounting Systemthat is 

integrated with, the Core Financial System. Programs with less crucial cost information heeds 

might perform cost management functions by analytical or sampling methods. However, in any 

Core system, certain basic functions must be present. For example, SFFAS 4 requires that cost 

information developed for different purposes should be drawn from common data sources, and 

that cost reports should be reconcilable to each other. 

The Cost Management function consists ofthe following processes. 

._ 

l Cost Setup and Accumulation (CMA) 

..- ‘. 

i Cost Recognition(CMB) 

,: 

l Cost Distribution (CMC) 

.~ 

l Working Capital and Revolving Fund (CMD) 

Once management has identified the cost objects it needs and the corresponding structure has 

been set up in the accounting system, the system accumulates costdata accordingly. Finally, 

cost information is prepared and distributed to managers. A “cost object” is any activity, output, 

outcome, or‘ item whose cost.andsrevenue are to be measured, such as, organizational units, 

programs, projedts; targeted ‘outputs, specific contracts; specific customers, work orders,, and 

GPRA program/activities, etc. I 1 I,, c. 

Cost Setup and Accumulation Process 

The Cost Setup and Accumulation process identifies and tracks cost data associated with the 

specific cost objects required by management. This process provides for the establishment of 

identifiers for the desired cost objects in the processes, systems and applications that make up 

the accounting system, and for the subsequent collection of cost data. An agency’s financial 

management system must allow the establishment of cost object identifiers consistent with the 

stated needs of its financial and operational managers. Ideally, the financial system will allow 

this to be done in a straightforward manner, without undue complexity. The Cost Setup and 

Accumulation process provides the data needed for accountability over the financial execution 

Core Financid System Requirements 55 
Cost Management Function 

of public programs, meaningful comparisons to measure compliance with management policies, 

evaluation of the efficiency and economy of resources used in the various activities, and support 

for fees, services, or products. It also provides a basis for linking operational results to the 

budget and performance measures. 

Mandatorv Requirements 

To support the Cost Setup and Accumulation process, the Core financial system must provide 

the capability to: 

l Use the agency’s accounting classification elements to identify and establish unique cost 

objects (for the purpose of cost and revenue capture, accumulation and reporting). Cost 

objects might include: organizational units, programs, projects, activities, targeted 

outputs, specific contracts, specific customers, work orders, etc. (CMA-01) 

l Allocate and distribute the full cost and revenue of cost objects as defined in SFFAS 

No. 4. Full cost includes: support costs provided by other responsibility segments, both 

internal and external; identifiable support costs provided by other Government agencies 

such as pension and other retirement benefits; unfunded costs such as accrued annual 

leave that accrue in the current reporting period; depreciation expense; and, 

amortization costs. (CMA-02) 

l Allocate and distribute the full cost of goods and services provided by one Federal entity 

to another. (CMA-03) 

l Track current cost information against prior month and prior-year-to .date cost data for 

selected cost objects, and track progress against pre-determined plans. (CMA-04) 

., 

l Identify all costs incurred by the agency in support of activities of revolving funds, trust 

funds, or commercial functions, including the applicable portions of any related salaries 

and expense accounts identified with those activities. (CMA-05) 

l Accumulate non-financial data relating to cost objects such as output units to allow the 

calculation of both total and unit costs. (CMA-06) 

l Transfer (and trace) cost data directly to and from other cost systems/applications that 

produce or allocate cost information. (CMA-07) 

.(, 

l Calculate prices, fees, and user charges for reimbursable agreements and other 

purposes.using full cost, consistent with the guidance of OMB Circular No. A-25 User 

Charges. (CMA-08) 

Value-added Requirements 

There are no value-added requirements for this process. 

56 Core. Financial System Requirements 
@obt Management Function 

Cost Recognition Process 

Recognition of the effects of transactions in financial systems is fundamental to the accounting 

process. The recognition process determines when the results of an event are to be included in 

financial statements and ensures that the effects of similar events and transactions are 

accounted for consistently within the Federal Government. 

Mandatory Requirements 

To support the Cost Recognition process, the Core financial system must provide the capability 

to: 

l Use the accrual basis of accounting when recognizing costs and revenue. Recognize 

costs in the period of time when the events occurred regardless of when ordered, 

received or paid for. Recognize revenue when earned. (CMB-01) 

l Associate with the appropriate cost objects, the reductions of balances such as 

inventori’es,.prepaid expenses and advance payments as the balances are used or 

liquidated. (CMB-02) 

l Identify and record costs incurred by each cost object, including input of costs from 

feeder systems, such as inventory, travel, property management (depreciation), or 

payroll. (CMB-03) 

l Assign indirect costs on a cause-and-effect basis, or allocate costs through any 

reasonable and consistent basis such as a percentage of total cost incurred, direct labor 

hours used, square footage, or metered usage. (CMB-04) 

l Perform multi-layer overhead distributions that are user-defined (at least three levels of 

distribution) using multiple rates, fixed amount and other appropriate allocation methods. 

(CMB-05) 

Value-added Reauirements 

,. 

There are no value-added requirements for this process. 

Cost Distribution Process 

The managerial cost accounting concepts and standards contained in SFFAS 4 are’aimed.at 

providing reliable and timely information on the full cost of programs, their activities and outputs. 

The ‘inform’ation is to be used by stakeholders, executives and managers in making decisions 

about allocating resources, authorizing and modifying programs, and evaluating program 

performance; Program managers can also use the cost information for making managerial 

decisions to improve operating efficiency. Ultimately, the effectiveness of a cost management 

program lies in the way managers use the cost information asked for and reported to them. 

Cdre Financial Syste’m Requirements 57 
Cost Management Function 

To support’the Cost Distribution process, the Core financial system must provide the capability 

to: 

a 

0 

l 

l 

0 

Distribute information (such as income statements and status of funds. reports) on costs 

and revenue associated with cost objects. (CMC-01) 

Provide consistent information on financial, budget, and program matters in different 

reports. For example, bills generated for customers in the receivables system should 

match customer status reports generated by the cost management system for the same 

periods. (CMC-02) 

Use historical information to conduct variance and time-series analyses, and to 

demonstrate the fairness and appropriateness of rates and charges that are based on 

actual historical costs. (CMC-03) 

Distribute costs to other cost objects regardless of how they were originall,y assigned. 

(CMC-04) 

Provide an audit trail, that traces a transaction from its origin to the final cost object(s). 

(CMC-05) 

Mandatotv Requirements 

Value-added Reauirements 

There are no value-added requirements for this process. 

Working Capital and Revolving Fund Process 

Agencies. may elect to use revolving.funds, which include working .capital funds and.franchise 

funds, for their organizations. These funds require separate legislation and havecharters that 

focus on specific purposes. Such charters have the potential to make program management 

much more flexible by lifting apportionment controls while adding operational safeguards. If an 

agency uses revolving funds, the Core system must be able to track service level agreements, 

.: ri 

-_ ! 

‘. .: 

,,( 

verify funds availability, bill customers, and measure costs. 

Mandatorv Reauirements ’ j’ _ 

To su,pport the revolving fund function, the Core financial system must provide the capability to: - 

l Use‘cosf management in revolving fund&including working capital programs..(CUD-01) 

. . 

l Allocate working capital and revolving fund costs across organization and program lines 

and generate appropriate journal entries. (CMD-02) 

l Create and track the funding associated with cost objects (e.g., contracts, work-orders, 

projects, reimbursable agreements) and provide funding status on fiscal year-to-date 

and project inception-to-date bases. (CMD-03) 

l Support the aggregation of project cost and funding information to a higher level, for 

example linking the costs of a set of related projects for a particular customer on one 

report. (CMD-04) 

58 Core Finarkial System Requirements 
Cost Management Function 

l Verify funds availability for orders placed against a specific contract, work-order or 

agreement for a particular customer of the revolving fund operation. (CMD-05) 

l Support funding of revolving fund contracts, work-orders, and projects through the use of 

advances, prepayments or reimbursements. (CMD-06) 

Value-added Reauirements 

,. 

There are no value-added requirements for this process. 

... . 

\ 

i 

! 

Core Financial System Requirements 59 
Reporting Function 

Information maintained by the Core financial system must be provided in a variety of formats to 

users according to their needs. Methods of providing information include on-line inquiries, 

extractable data files, and hard-copy reports. These requirements could be satisfied by either; 

application software that is part of the Core financial system, generalized reporting/inquiry 

software that works with a variety of applications, or a combination of both. 

For financial information to be timely and useful, the Core financial system must provide for 

ready access to the information it contains. Information,must be accessible to personnel with 

varying levels of technical knowledge of systems. Personnel with relatively limited knowledge of 

the system or of financial accounting concepts and principles must be able to access and 

retrieve data with minimal training on the system. The system should be capable of storing 

recurring data search requirements for future use. 

The reporting function consists of the following processes. 

l General Reporting (RA) 

l External Reporting (RB) 

o Internal Reporting (RC) 

l Ad hoc Query (RD) 

General Reporting Process 

The Core financial system must provide complete, reliable, consistent, timely and useful 

financial management information on operations. Such information enables central 

management agencies, individual operating agencies, divisions, bureaus and other subunits to: 

carry out their fiduciary responsibilities; deter fraud, waste, and abuse of resources; and 

facilitate efficient and effective delivery of programs by relating financial consequences to 

program performance. 

Where reference to a “report” is made within a functional requirement, the application must be 

capable of generating a formatted, printable report file containing the specified information. 

Prescribed report formats must be followed where stated. 

Mandatorv Reauirements 

To support the Financial Reporting process, the Core financial system must provide the 

capability to: 

l Produce reports and transmittable files using data maintained by the Core financial 

management system. (RA-01) 

l Report on financial activity by any element of accounting classification (e.g., individual or 

hierarchical organization code, project code). (RA-02) 

60 Core Financial System Requirements 
Reporting Function 

Value-added Requirements 

To support the Financial Reporting process, the Core financial system should provide the 

capability to: 

l Report the financial information required for program management performance 

reporting. (RA-03) 

External Reporting 

The Core financial system must provide complete, reliable, consistent, timely and useful 

financial management information on operations to enable central management agencies to 

fulfill their responsibility of being accountable to-the public. 

Mandators Requirements 

To support the External Reporting process, the Core financial system must provide ,the 

capability to: 

l Provide data in hard copy and electronic formats required by the Department of the 

Treasury for the following reports: 

o FMS Form 224, Statement of Cash Transactions, 

o FMS Form 1219, Statement of Accountability, and 

o FMS Form 1220, Statement of Transactions According to Appropriations, Funds, and 

Receipt Accounts. (R&01) 

l Provide data in the electronic formats required by the Department of the Treasury for 

FACTS I and FACTS II reporting. (RB-02) 

l Produce a monthly SF-133, Report on Budget Execution and Budgetary Resources, in 

the hard copy and electronic formats required by OMB. (RB-03) 

l Perform the validation edits specified by Treasury to ensure the accuracy of data 

transmitted for FACTS I and FACTS II reporting (at least) on a monthly basis. See the 

FACTS II Client Bulk Users Guide for examples. (RB-04) 

l Automate the preparation of consolidated financial statements as required by the current 

OMB Bulletin on Form and Content of Agency Financial Statements. (RB-05) 

Value-added Requirements 

There are no value-added requirements for this process. 

Internal Reporting 

The Core financial system must provide complete, reliable, consistent, timely and useful 

financial management information on operations to enable individual operating compon,ents, 

divisions, bureaus and other sub units to carry out their fiduciary responsibilities; deter fraud, 

waste, and abuse of resources; and facilitate efficient and effective delivery of programs by 

relating financial consequences to program performance. The Core financial system must be 

Core Financial System Requirements 61 
Reporting Function 

designed to support agency budget, accounting, and financial. management reporting 

processes. 

Mandator-v Requirements 

To support the Internal Reporting process, the Core financial system must provide the 

capability to: 

l Produce a report of transaction level details for the TAS/TAFS totals reported on the 

FMS Form 224, Statement of Cash Transactions. (RC-01) 

l For each TAS/TAFS that is subject to FACTS II reporting requirements, produce a daily 

on-line Available Funds report(s). The report(s) must accommodate the following 

parameters: “internal fund”, budget,object class, organization, program, project, and 

activity and contain the following data elements as described below. 

At the internal fund level, report data on budget execution as follows: 

Total resources (by budget fiscal year and by authority type including warrant 

information) as follows: 

l Total authority brought forward, 

l Total appropriated for the budget fiscal year, 

l Total contract authority, 

l Total borrowing authority (realized and unrealized), and 

l Total estimated and total actual spending authority from offsetting collections. 

Funding distribution, including: 

l Total not yet apportioned, 

l Total apportioned, 

l Total ‘allotted, .and 

l Total allowances. .’ 

Spending Activity, including: ,I 

l Total amount of commitments,- 

l Total obligations (including paid and unpaid), and 

?.’ .Total,expenditures (including paid and unpaid). ,. 

; .:, ;;.: ; :;, 2 ‘. 

Balances available, such as: 

l Balance of apportionments available for allotment, 

l Balance of allowance available for cqmmitment (uncommitted), and 

l Balance of allowances available for obligation (unobligated). 

When reporting on funds availability by the remaining parameters (i.e., at the 

organization, budget object class, program, project and activity level), provide the same 

data noted above except “total resources” data are not required (all elements for funding 

d,istribution, spending and balances available are required). In addition, a summary 

inclusive of atI of the para,meters must be provided at the TASITAFS level with total 

amounts for each data element listed above. (RC-02) 

,:, -. ;’ 

62 Core Financial System Requirements 
Reporting Function 

l Provide on-line summary trial balances at the internal fund, organization, and TAWTAFS 

levels. The trial balances must provide the following minimum data elements for each 

general ledger account: 

o The balance at the beginning of the accounting period, 

o The total amount of debits for the accounting period, 

o The total amount of credits for the accounting period, and 

o The cumulative ending balance for the accounting period. 

Grand totals for TAWTAFS must be provided for beginning balance, current period 

activity and ending balance columns. The system must produce both pre-closing and 

post-closing trial balances at yearend. (RC-03) 

l Support FACTS I and FACTS II reporting and analysis by producing on-line trial 

balances at the internal fund, organization, and TAWTAFS levels. The trial balances 

must provide the data elements listed below for each general ledger account. 

o The related official US. SGL account number, 

o The following items at the U.S. SGL attribute level (i.e., separate amounts whenever 

there is more than one attribute domain value within an U.S. SGL account): 

- The balance at the beginning of the accounting period, 

- The total amount of debits for the current accounting period, 

- The total amount of credits for the accounting period, and 

- The cumulative ending balance for the accounting period. 

Grand totals for each TAWTAFS must be provided for beginning ‘balance, current period 

activity, and ending ,balance columns. The system must produce both pre-closing and 

post-closing trial balances at yearend. (RC-04) 

l Provideian on-line. transaction register at the internal fund; organization, and TAWTAFS 

level, for each accounting period, that provides the following data elements: 

o Fiscal year, 

o TAS/TAFS, 

o Internal fund, 

o Document number; 

o Document entry date, 

: o Document entry time,- 

o Document entry User ID, 

o Document transaction date, 

o’ Debit accounts number; 

.o Debit account object class, 

o Debit amount, 

:. 

‘. 

o Credit account number, 

o ,Credit account, 

o Object class, 

o U.S. SGL attribute domain headings, and 

o U.S. SGL attribute values associated with the transaction. 

The report must include all transactions that occurred within. the accounting period 

specified. (RC-05) 

Core Financial System Requirements 63 
Reporting Function 

Value-added Requirements 

There are no value-added requirements for this process. 

Ad Hoc Query 

Over time, demands for specific financial data are expected to change considerably based on 

new administrations, program missions, budget priorities, or oversight. Th,is section addresses 

data and access capabilities expected as partof the of an ad hoc query function. The 

requirements address issues such as: 

l The universe of FMS data that must be accessible, 

l Core data access methods, 

l Applied access security, and 

l Needed output formatting tools. 

While requirements associated with standard internal and external reporting are based on 

clearly defined financial management information needs, ad hoc query requirements are general 

in nature. The ability of an FMS package to provide for flexible data access is critical to 

enabling effective agency, program and financial management in the face of change. 

Mandatorv Requirements 

To effectively support ad’hoc data access, the Core financial system must: 

Provide an integrated data query facility that supports ad hoc query access to agency 

financial data sources and provides data analysis reporting tools. (RD-01) 

Allow users to create and submit parameter-based query scripts or to store them in a 

common library for future use. (RD-02) 

c 

Allow users to run queries on-line or in batch mode and to stage output for later access 

by authorized users. (RD-03) 

Allow users to automatically distribute copies of report/query-results via e-mail to multiple 

pre-identified individuals or groups. (RD-04) 

Provide run-time controls to limit “run-away” queries and large data download requests. 

(RD-05) 

Support graphical output display on the desktop. Output display should also support 

dynamic report reformatting, regrouping and drill-down to detail records from summary 

report lines. (RD-06) 

Allow authorized users to download selected financial data. This download capability 

must be able to automatically reformat downloaded information for direct access by 

common desktop applications (e.g., ASCII formatted). (RD-07) 

64 Core Financial System Requirements 
Reporting Function 

l Provide the ability to preview a report, form, or other query result before printing. 

(RD-08) 

-1 l Support access to current,year and historical financial data. (RD-09) 

Value-added Reauirements 

To provide additional ad hoc data access functionality, the Core financial system should: 

l Provide the following ad hoc query interface features: 

o Graphical display of data sources, 

o The ability to “point and ciick” on selectable table, data, and link objects for inclusion 

in a custom query, 

o An active data dictionary to provide users with object definitions, 

o The ability to share user developed query scripts with other authorized agency users, 

query optimization, and 

o On-line help. (RD-10). 

Core Financial System Requirements 65 
Technical Requirements 

Technical requirements have been established to help assure that a Core financial system is: 

capable of meeting a wide variety of workload processing demands; provides transaction 

processing integrity and general operating reliability; uses standard procedures for installation, 

configuration and operations; and does not conflict with other administrative or program systems 

or other agency established IT standards. 

Core financial systems subject to JFMIP qualification must meet the mandatory technical 

requirements specified in this section. Additionally, they should strive to include the functionality 

listed as .value-added requirements. The technical requirements are categorized below. I_ 

t General Design/Architecture (TA) 

l Infrastructure (TB) 

l User Interfaces (TC) 

l Interoperability (TD) 

l WorkflowlMessaging (TE) 

o Document Management (TF) 

l Internet Access (TG) 

l Security (TH) 

l Operations and Computing Performance (TI) 

Most technical requirements are stated in general terms to allow vendors maximum flexibility in 

designing compliant financial systems. Individual agencies are encouraged to add specific 

workload and interoperability requirements considered unique to their respective IT 

environments when evaluating packages for acquisition. 

General Design/Architecture 

This category includes technical requirements relating to an application’s design, ‘internal data 

management, and general ease of use. 

Mandatory Requirements 

To meet JFMIP application architectural requirements, the Core system must: 

l Be modular in design, utilize open-systems architecture, and be upgradeable by Core 

system module,to accommodate changes in laws, regulations, best practices and new 

technology. (TA-01) 

l Be a commercially available product, subject to regular maintenance based on vendor 

developed and scheduled software releases. (TA-02) 

66 Core Firiancial SysteM Reqketients 
Technical Requirements 

l Include internal transaction processing controls, including the capability in the event of a 

system failure to automatically: 

o Back,out incompletely processed transactions, 

o .,Restore the system to its last consistent state before the failure occurred, and 

o Re-apply all incomplete transactions previously submitted by the user. (TA-03) 

4 Enforce internal database consistency during all on-line and batch update operations, 

including distributed databases, if applicable. (TA-04) 

l Have fully documented restart capabilities for the application’s on-line and batch 

processing components. Batch jobs must be segmented to facilitate their recovery in the 

event of a system failure. (TA-05) 

l Include complete installation, operating, and system maintenance documentation 

covering: 

o Product installation and configuration steps, 

o Application access procedures, 

o User screen layout and content, 

o ,Transa,ction e,ntry procedures, 

o Batch job set-up,:pro,cessing-and recoveryIre-start procedures, 

o Error codeswith.:full descriptions and recovery steps,, 

0. Btandard report layout and content, 

0 InternaLprocessing controls, I 

o Application security, 

o Operating specifications and system flowcharts; 

o Database entity relationships; ta.ble formats and data element descriptions; and 

o Program module descriptions. (TA-06) 

l Include, revised documentation concurrent with the distribution of new software releases. 

(TA-07) 

l Employ common error-handling routines across functional modules and present error 

messages that allow the user or system operator to respond to reported problems. 

VA-043) j ,‘. ,,,, 

l ‘. Gommonerror message text must be,;custpmizab!e.by.the.age,ncy., (TA-09). ,’ ‘I , :, ,) 

l Generate output information to formats specified by functional requirements. In cases 

L where. a functio,nal requirement.does not specjfy ,an output format~i,.required information 

must be viewable using the application’s on-line user interface by default. (TA-10) 

l Be customizable to meet agency specific business/accounting needs using agency 

supplied application configuration and operating parameters. (TA-1 1). 

l Provide fault-free performance in the processing of date and date-related data 

(including, cal cu I a t ing, comparing, and sequencing) by all hardware and software 

products,included aspart of,the application both individually and in combination (i.e., 

year 2000 compliance). (TA-12) 

Core Filiancial SyStem Reqtiirements 67 
Technical Requirements 

Value-added Requirements 

To meet JFMIP application architectural requirements, the Core financial system should: 

l Include an integrated relational, Structured Query Language compliant database. 

(TA-13) 

l Simultaneously process on-line transactions and transactions submitted via.system 

interface. (.TA-14) 

Infrastructure 

This requirement category identifies computing platforms and operating system environments’, 

where a JFMIP qualified Core system could be installed by a Fede,ral agency. Individual 

packages do not need support every specified platform and operating environment. 

Mandators Requirements 

To meet JFMIP infrastructure requirements, the Core system must: 

l Identify all software and hardware products needed by.an agency to install, operate, 

access, and maintain the application. This requirement includes identification of distinct 

*products that are intended to be purchased or licensed as part of the product licensing 

agreement. The vendor is also required to identify products needed to meet any 

technical and functional requirement that must be acquired separately by the agency. 

(TB-01 ) 

l Utilize transaction Control Protocol/Internet Protocol communications protocol for 

application, database, and workstation connectivity. (TB-02) 

l At a minimum, support application client operation on a 32-bit, Microsoft Windows 

compatible operating system. (TB-03) 

Value-added, Requirements 

To meet JFMIP infrastructure requirements, the Core financial system should: 

l Operate ina mainframe ehvironment (e.g., Multiple Vittual,System (MVS), Operating 

System (OS/) 390). (TB-04) 

l Operate in a serverkcomputing environment runningunder UNIX or NT (e.g., Windows 

Server 2000). (TB-05). ’ 

l Supportapplication client operation on an Apple Macintosh Windows compatible 

operating system. (TB-06) 

. . ‘Support application client operation on a UNIX operating system. (TB-07) 

l Support automated touch-tone telephone access for standardized, commonly requested, 

inquiries (such as payment status). (TB-08) 

68 Core’Financial System Requirements 
Technical Requirements 

l Support automated fax-back access for standardized, commonly requested, documents 

(such as account statements). (TB-09) 

l Provide the capability to accept bar-coded documents, (TB-10) 

l Include a report spooling capability to enable on-line viewing, re-printing, and permanent 

archiving of requested reports. (TB-11) 

User Interfaces 

Technical user interface requirem,ents specify how agency users and operators interact with the 

Core financial system. To enable users to effectively configure the package, enter transactions, 

query processing results, or start/stop internal processes the system interfaces should meet the 

following requirements. 

Mandator-v Requirements 

There are no mandatory requirements in this category. 

Value-added Requirements 

To meet JFMIP user interface requirements, the Core financial system should: 

l Provide a consistent, Windows-compatible, on-line user interface to all modules and 

- integrated subsystems.. Interface consistency includes the use of common command 

entry syntax, dialog window styles, data entry structures, and information presentation. 

(TC-01) 

l Incorporate common Graphical User Interface characteristics: 

. .o Mouse activated icons, 

o Buttons, 

o Scroll bars, 

o Drop-down lists, 

o Check boxes, 

o Menu bars, 

)o-’ Text boxes, , 

o Tool tips, > 

o Resizable window&and .’ 

o Cut, copy, and paste functions. (TC-02) 

,’ ‘. 

l Incorporate data entry features:designed to reduce the amount of direct keying required 

to initiate transaction processing. Desired efficienci,es~include the use of default values, 

look-up tables, and automatic data recall. Other desirable features include: 

o Single, function windows (e:g., ‘one input screen per transaction), 

o The ability to bass common data from screen to screen,, 

o Highijghting of required fields, 

o Auto tabs, 

o Function keys (e.g;, retrieve ‘previ0u.s data, invoke help .facility, suspend transaction, 

clear screen, etc.), 

o Disabling of non-supported function keys, 

Core Financial System Requirements 69 
Technical Requirements 

o Menu mode and an expert mode of screen navigation, 

o The ability to retrieve suspended transactions by user, docu,ment, vendor, etc., 

o Transaction entry undo/redo, 

o Context-sensitive on-line help, and 

o The ability to select records from a list by scrolling or by typing in only part of an 

entry. (TC-03) 

l Support desktop integration with other common workstation applications used for word 

processing, spreadsheets, data management, and graphics. (TC-04) 

l The application help facility should be customizable by the agency. (TC-05) 

l Provide an application user interface that complies with the software application 

standards required by Section 508 of the Rehabilitation Act, as detailed in 36 CFR 1194, 

Subpart B. (TC-06) 

Interoperability 

Financial transactions can be originated using external; feeder applications. Typically, these 

feeders are considered legacy systems and are based on older computing technologies. 

Mandatorv Requirements 

To ensure that data can move effectively between the Core financial system and other financial 

applications operated by the agency, the Core system must: .* _,. 

Include an application program interface (API) to accept financial data generated by 

external applications (e.g., the financial portion of mixed program systems, Electronic 

Data Interchange (EDI) translators, and.modules such as travel or payroll). This 

interface must support the receipt of transactions for all Core accounting components, as 

well as, vendor information updates. (TD-01) 

Process API submitted transactions using the same business rules, program logic, and 

edit table entries as are used by the application in editing transactions submitted on-line 

(e.g., ‘via user interface). (TD-02) 

Hold API submitted transactions that do not pass required edits in suspense ,pending 

appropriate corrective action by the user. Suspense processing must include the ability 

to: 

. 

o View, update, or delete suspended transactions, 

b Automatically re-process-suspended transactions. (TD-03) ..i 

Provide internal controls with the API (e.g., control totals, record counts) to ensure the 

integrity of received and processed transactions. (TD-04) 

For the API, generate transaction editing error records in a standard format defined by 

the vendor for return to the originating feeder application (i.e., provide two-way interface 

support). (TD-05) 

70 Core Financial System Requiremerits 

I 
Technical Requirements 

Value-added Requirements 

To meet JFMIP interoperability requirements, the Core financial system should:. 

l Support direct EDI translation compliant with American National Standards Institute 

(ANSI) X-12 standards to enable electronic data exchanges with designated trading 

partners such as a bank credit card service provider, major supplier, or customer. 

l Interface with the agency electronic communications system to distribute application 

generated docu,ments and messages electronically to either intranet or Internet users. 

(TD-07) 

l Accept vendor invoices and other external originated transactions over the Internet (e.g., 

Extensible Markup Language (XML)). (TD-08) 

l Support emerging XML-based specifications for the exchange of financial data such as 

Extensible Business Reporting Language (XBRL). (TD-09) 

Wdrkflow/Messaging 

: 

Workflow/messaging includes technical requirements that collectively define how a Core 

financial system automatically manages document processing and notifies agency staff of 

pending work (e.g., review/approval of pending accounting documents). 

Mandatorv Reauirements 

To meet JFMIP workflow and messaging requirements, the Core financial system must: 

l Provide an integrated workflow management capability, including generation and routing 

of internal forms, reports, and other financial documents for on-tine approval or 

subsequent processing. (TE-01) 

Value-added Reauirements .’ 

To meet JFMIP workflow and messaging requirements, the Core financial system &Ad: ’ 

l . Enable authorized users to define workflow processes and businessrules, including 

approval levels, and to modify workflow (e.g., assigning a proxy approving authority), 

(TE-02) 

l Provide the capability to establish multiple levels of document approvals based on userdefined criteria including dollar amounts, types of items purchased; and document types. 

(TE-03) 

l Provide an internal calendar or user-defined routing tabtes to generate rule-based or 

exception reports to support the generation of work flow messages (i.e., notification of 

Accounts Payable office for invoices warehoused over 3O’days with no.matching 

receiving report). (TE-04) 

l Provide the ability to track approval events on-line by transaction, inc1udin.g the time/date 

.and approving party. (TE-05) 

Core Financial System Requirements 71 
Technical Requirements 

l Provide the capability to automatically generate electronic routing and status messages 

to individuals or groups. (TE-06) 

l Support Workflow Management Coalition (WFMC) standards. (TE-07) 

l Support Messaging API-Workflow (MAPI-WF) standards. (TE-08) 

l Support Vendor Independent Messaging (VIM) standards. (TE-09) 

Document Management 

Document management includes technical requirements that define how the Core system is to 

store and retrieve electronically formatted documents. 

Mandatorv Requirements 

There are no mandatory requirements in this category. 

Value-added Requirements 

To meet JFMIP document management requirements, the Core financial system should: 

l Support Document Management Alliance (DMA) standards. (TF-01) 

l Support Open Document Management Architecture (ODMA) standards. (TF-02) 

l Support Open Document Architecture/Open Document Interface Format (ODAIODIF) 

standards. (TF-03) ~ ’ 

l Support Portable Document Format standards. (TF-04) 

l Support Standard Generalized Markup Language (SGML) standards. (TF-05) 

l Provide the capability to electronically image, index, store, and retrieve document 

reference material (e.g., signed contracts, purchase orders and vendor invoices). 

(TF-06) 

l Notify the user of the presence of associated document images‘and allow an on-screen 

display of this material. (TF-07) 

,It$erqet Access 

Technical requirements relating to Internet access represent a specialized infrastructure subset. 

These requirements generally define user connectivity options. 

Mandatorv Reauirembnts 

There are no mandatory requirements in this category. 

72 Core Financial System Requirements 
Technical Requirements 

Value-added Requirements 

To meet JFMIP Internet Access requirements, the Core financial system should: 

l Support secure web browser access to all financial management system modules 

including workflow related features for the purpose of entering new financial 

documents/transactions and to review/approve their processing. (TG-01) 

l Support secure Internet access to the integrated ad hoc data;’ query facility. (TG-02) 

l Provide the capability to receive public payment collections via the Internet (e.g., Webbased collections via credit card). (TG-03) 

l Support the use of standard Public Key Infrastructure technology to control access to 

sensitive data over the Internet. (TG-04) 

Security 

This technical category defines internal and external access controls. A qualified Core financial 

system must be designed to protect an agency’s financial data from unauthorized access or 

alteration. Adequate data protection includes the following discrete requirements. 

Mandatory Requirements 

To meet JFMIP Security requirements, the Core system must: 

l Have integrated security features that are configurable by the system administrator to 

control access to the application, functional modules, transactions, and data. The 

application’s integrated security features should be compliant with the National Institute 

of Standards and Technology (NIST) Security Standards. (TH-01) 

l Ensure that the agency’s access policies are consistently enforced against all attempts 

made by users or other integrated system resources including software used to submit 

ad-hoc data query requests or to generate standard reports. (TH-02) 

l Require the use of unique user identifications and passwords for authentication 

purposes. Passwords must be non-printing and non-displaying. The application must 

‘. allow. th.e enforcement of password standards (e.g.,. minimum length .and use of alpha, 

numeric and special characters.) The application. must also:allow for the ,establishment 

of a specified period for password expiration and accommodate proh.ibiting the user from 

reusing recent passwords. (TH-03) 

: I’ ? 

l Enable the system administrator to define functional access rights (e.g., to modules, 

transactions, approval authorities) and data access rights (e.g., record create, read, 

update and delete) by assigned user ID, functional role (e.g., payable technician) and 

owner organization. (TH-04) 

0 Permit the system administrator to assign multiple levels of approval to a single user, but 

prevent,that u,ser from applying more than one level of approval to a given document in 

order to conform to the principle of ,separation of duties. (TH-05), 

-. 

Core Financial Systein Requirements 73 
Technical Requirements 

l Allow the system administrator to restrict access to sensitive data elements such as 

social security numbers and banking information by named user, groups of users, or 

functional role. (TH-06) 

l Maintain an audit logging capability to record access activity including: 

o All log-in/log-out attempts by user and workstation, 

o User submitted transactions, 

o Initiated processes, 

o System override events; and 

o Direct additions, changes or deletions to application maintained data. (TH-07) 

l Provide the ability to query the audit log by type of access, date and time stamp range, 

user identification, or terminal ID. (TH-08) 

Value-added Reauirements 

There are no value-added requirements for this process. 

Operations and Computing Performance 

This section covers two related areas - operating support functionality and computing 

performance criteria. The operations related requirements are considered mandatory. Those 

requirements that deal specifically with computing performance have been separately classified 

as value-added. 

_. 

JFMIP defines computing performance using general criteria rather than hard response time 

standards or transaction processing capacity. We recognize that installed package 

performance is dependent to a large par-ton the computing infrastructure and -activity levels set 

by theauser agency. To use these requirements as part of an acquisition process, an agency 

would need to add their own workload estimates (i.e., number concurrent of users, their 

geographic distribution, number of transactions and processing timeframes as well as the 

overall volume of agency information expected to be maintained on-line). 

Mandators Reauiremerits ” * 

To meet all mandatoryoperations related requirements, the Core system niust: ?’ 9. ,’ 

l Inctude a process scheduling capability that enables the operator to initiate, monitor, and 

stop scheduled processes (e.g., on-line availability, batch-jobs, and system ’ 

’ maintenance). (TI-61). ‘: p.. i, 

l Provide online status messages indicating job or transaction type and name, when 

requested processing starts, completes, and system errors. (PI-02).’ 

l Allow reports to be produced in the background while other system processing takes 

place. (TI-03) 

l Provide the system administrator the ability to control the archiving process. The system 

must include the capability to establish and maintain user-defined,archival criteria, such 

as date, accounting period:‘closed items, and-vendors inactive for a specific time period. 

The system must allow selective action on those documents that meet the criteria. 

(TI-04) 

74 Core Financial System Requirements 
Technical Requirements 

l Retain archived data and system records in accordance with Federal regulations 

established by the National Archives and Records Administration, GAO, and the 

National Institute of Standards and Technology (NIST)..(TI-05) 

l Provide the ability to selectively retrieve archived data based on user-defined criteria 

such as date, accounting period, or vendor. (TI-06) 

l Maintain and report on productivity statistics about application usage. (TI-07) 

l Provide audit trails to identify changes made to system parameters and tables that would 

affect the processing or reprocessing of any financial transactions. (TI-08) 

Value-added Requirements 

To meet value-added computing performance requirements, the Core financial system should: 

Provide computing performance metrics, for platforms and systems environments that 

the application is certified to run on. Performance metrics provided by the vendor should 

describe: 

o Transaction processing throughput capacity, 

o Expected workstation client response time by transaction type, 

o Data storage capacity, and 

o Limitations on concurrent user connectivity. (TI-09) 

Process an agency’s projected accounting activity without impacting projected on-line 

response time. (TI-10) 

Complete routine batch processing (e.g., backups, nightly interface processing, Core GL 

posting, table updates, standard reporting, and systems assurance) within an agency 

defined batch-processing window. (TI-1 1) 

Maintain the agency’s current and historical financial data (e.g., general ledger records, 

documents, transactions, lines, and vendor records) with no degradation to on-line or 

batch processing performance. (TI-12) 

Support concurrent access to functional modules by the agency’s defined user 

community. (TI-13) 

Disclose processing jobs, steps, and dependencies that are required to operate the 

system on a daily, weekly, monthly, quarterly, and annual basis. (TI-14) 

Provide the capability to process batched transactions during online hours and accept 

online transactions from interfacing systems with no on-line performance degradation. 

(TI-15) 

Core Financial System Requirements 75 
Appendix A: References 

Introduction 

The following list identifies many of the governmentwide accounting standards, laws, 

regulations, and other mandates that pertain to Core financial system requirements. The list is 

not all-inclusive and may not include citations supporting agency-specific or program specific 

requirements. In addition, it is important to note that some of the governmentwide Core 

financial system requirements are based on common need or usage, rather than regulations. 

It is every agency’s responsibility to know the appropriate regulations and to comply with them. 

It is the responsibility of agencies, system vendors and integrators to ensure system compliance 

with the most current versions of laws, regulations, and other appropriate guidance. 

The importance of financial management and control for Federal agencies is firmly rooted in the 

Constitution of the United States. Article I, Section 9, Clause 7 of the Constitution states: 

“No money shall be drawn from the Treasury, but in consequence of Appropriation made 

by Law; and a regular Statement and Account of the Receipts and Expenditures of all 

public Money shall be published from time to time.” 

Many of the laws and regulations governing the financial behavior of Federal agencies flow from 

the Constitution. 

Federal Legislation 

Accounting Standardization Act of 1995 

Budget Enforcement Act 

Cash Management Improvement Act 

Chief. Financial Qfficers Act (CFC) Act of 1.990 (Public Law 101-576) 

Clinger/Cohen Act (Information Technology Management Reform Act) (Division E of Public Law 

104-w~~ ,.,,, 3 .‘./’ 

Computer Security Act of 1987 (Public Law 100-235) I 

Debt Cotlect,ion Improvement Act (DCIA) of 1996 

Federal Financial Management Improvement Act (FFMIA) of 1996 

Federal Managers’ FinanciatIntegrityAct (FMFIA) of 1982 

. ..’ 

Federal Records Act of 1950, as amended (Records Management by Federal Agencies, 44 

U.S.C § 3101 et. seq.) 

Freedom of Information Act of 1982 (5 U.S.C § 552) 

Government Management Reform Act (GMRA) of 1994 

Government Performance and Results Act (GPRA) of 1993 (Public Law 103-62) 

Government Paperwork Elimination Act 

76 Core Financial System.Requireme@s 
Appendix A: References 

Omnibus Reconciliation Act of 1993 (Public Law 103-66) 

Paperwork Reduction Reauthorization Act of 1986 (Public Law 104-I 3). 

Prompt Payment Act of 1982 and Amendments of 1996 

Rehabilitation Act Amendments of 1998 (Workforce Investment Act) (Public Law 106-246) 

United States Codes and Regulations 

5 U.S.C. § 552 contains provisions of the Freedom of Information Act. 

31 U.S.C. § 1301(a) (the “Purpose Statute”), requires that monies be expended only for the 

purposes for which appropriations were made. 

31 U.S.C. 9s 1341, 1342, i349-51, 151 l-l 9 ijointly referred to as the“‘Anti-deficiency Act”), 

prohibits obligating more money than an agency has or before it gets the money, accepting 

voluntary services or monies not specifically allowed by law, and obligating more money than 

has been appropriated or allotted in a time period. 

31 U.S.C. § 1501 (the “Recording Statute”) requires that an obligation be recorded when, and 

only when, it is supported by written evidence of a binding agreement (an offer and its 

acceptance) for goods or services for a purpose authorized in the appropriation. 

31 USC. § 1502 (a) (the “Bona Fide Needs Statute”) requires that obligations against an 

appropriation be limited to a specific time-period ahd that obligations be charged to the 

appropriation in force when the obligation is made. 

31 U.S.C. § 3302 (b) (the “Miscellaneous Receipts (Deposit) Statute”), requires that, except for ’ 

trust funds and revolving funds, collected monies from any source must be deposited in the 

Treasury as soon as practicable without deduction for any charge or claim. 

31 U.S.C. Q 3512, requires the head of each executive agency to establish and maintain 

systems of accounting and internal control’designed to provide effective control over, and 

accountability for, all assets for which the agency is responsible. 

44.,U,.S.C. 3 3’lOl ad,dresses.records management within Fed.e,t@ agenci.es. : . 

5 C.F.R. § 1315 is the codification of former OMB Circular No. A-125, “Prompt Payment.” 

Public Law 101-510 is the M-year legislation. : .:. <,’ ’ : .. 2 ” ,,{, 

Office of Management’and ,. ,.. ,‘, ~fp&.hgidance ‘. ; “‘,. ,’ i. : 

.I.,. ‘,> ! ;, ,: ,,;. . . 9,’ ~ ,., ’ 

OMB Bulletin 01-09, Form and Content .of~\gency:Financial~Stat~mentss, I . . : 

OMB Circular N,o. A-l 1, Preparation and Submission of Budget Estimates I..; 

OMB Circular No. A-l 1, Planning, Sdgeting, and Acquisition of Capital Assets (Part 3) 

Supplement to Part 3, Capital Programming Guide 

OMB Circular No. A-25, User Charges 

OMB Circular No. A-34, lnsfructions on Budget Execution 

OMB Circular No. A-l 09, Policies for Acquiring Major Systems 

OMB Circular No. A-l 23, Managemenf Accountability and Control, 6/95 

Core Financial System Requirements ,77 
Appendix A: References 

OMB Circular No. A-l 27, Financial Management Systems, 7193 

OMB Circular No. A-l 30, Management of Federal lnformafion Resources, 12100 

OMB Circular No. A-l 34, Financial Accounting Principles and Standards 

Federal Accounting Standards 

Statements of Federal Financial Accounting Standards (SFFAS), specifically: 

SSFAS 1, Statement of Federal Financial Accounting Concepts 

SFFAS 3, Accounting for lnvenfory and Related Propetfy 

SSFAS 4, Managerial Cost Accounting Concepts and Standards 

SSFAS 5, Accounting for Liabilities of the Federal Government 

SFFAS 7, Accounting for Revenue and Other Financing Sources 

SSFAS 10, Accounting for Internal Use Software 

JFMIP System Requirements 

Framework for Federal, Financial Management Systems (FFMSR-0), l/95 

Other Applicable Standards, Guidelines, and Regulations 

Electronic and Information Technology Accessibility Standards (issued by the Architectural and 

Transportation Barriers Compliance Board) 

Federal regulations established by the National Archives and Records Administration 

Federal regulations issued by the National Institute of Standards and Technology (NIST) 

Rules related to payment formats issued by The Electronic Payments Association (also called 

NACHA) 

The Treasury Financial Manual (TFM), specifically including: 

I TFM-2-3100 Instructions for Disbursing Officers’ Reports ‘, ~“., 

I TFM-2-3300 Reports of Agencies for‘which the Treasury Disburses 

I TFM-2-4000 Federal Agencies’ Centralized Trial-Balance System 

.I TFM-2-4100 Debt Management Reports 

I TFM-6-5000 Administrative Accounting Systems Requirements 

I TFM-6-8040 Disbursements 

I TFM-6-8500 Cash Forecasting Requirements. 

78 Core Financial System Requirements 
Appendix B: Glossary 

Accomplished payments 

A term used by Treasury and agency personnel to refer to payments requested by an entity and 

made by Treasury or a non-Treasury disbursing office on the behalf of that entity. 

Activity 

A financial summary accumulator defined by an agency. 

Adjusted Trial Balance (A TB) 

A list of general ledger accounts and the corresponding balances (including adjustments) as of 

a specific date. The total debit balances must equal the total credit balances.. In reference to, 

FACTS (I and II) reporting, the adjusted trial balance includes U.S. SGL attributes and the US. 

SGL account balances should reflect pre-closing adjusting entries. 

Agency 

Any department, agency, commission, authority, administration, board, or other independent 

establishment in the executive branch of the Government, including any corporation wholly or 

partly owned by the United States that is an independent instrumentality of the United States, 

not,including the municipal government of the District of Columbia. 

Agency Location Code (ALC) 

Code assigned by Treasury to each reporting unit requiring the preparation of an FMS-224, 

Statement of Transactions. The ALC must be shown on all correspondence, forms, and other 

documentation forwarded to financial institutions, The Department of Treasury FMS, other 

Federal agencies; and to Treasury Regional Financial Centers, and particularly on all SF-21 5s: 

Deposit Tickets, and SF-551 5s: Debit Vouchers 

Allotment 

Authoritydelegated by the head or other authorized employee of an agency to agency 

employees to incur obligations within a specified amount, pursuant to OMB apportionment or 

reapportionment action or others statutory authority making funds available for obligation. 

Appliqa tion, (financial or mixed system) 

A group of interrelated components of financial or mixed systems which supports one or more 

functions and has the following characteristics: a common database, common’ data element ” 

definitions, standardized processing for similar types of transactions, common ,version control 

over software. 21 

_; ! ‘\ ‘, 

Applka tibn Pro&-am /rite&& (A PI) 

A set of routines, protocols, and tools for building software applications. 

Apportionment 

A distribution made,by OMB of amounts available for obligation in an appropriation or fund 

account into amounts available for specified time periods, activities, projects, objects, or 

combinations thereof. The amounts so apportioned limit the obligations that may be incurred. 

Appropriation 

A provision of law (not necessarily in an appropriations act) authorizing the expenditure of funds 

for a given purpose. Usually, but not always, an appropriation provides budget authority. 

Core Financial System Requirements 79 
Appendix B: Glossary 

ATB Code 

Consists of a department, bureau and Treasury appropriation/fund group. This is a unique 

identifier code for a record in the Master Appropriation File. 

Attributes 

To meet external reporting requirements, agencies need data.at a level below the four-digit U.S. 

SGL account. Agencies’ systems must capture this information at the transaction level by 

recording transactions using U.S. SGL four-digit accounts plus attributes. Attributes are like 

adjectives that further describe a U.S. SGL account in order to meet a specific reporting 

requirement. Examples include: Apportionment Category, Authority Type, Availability Time, 

Reimbursable Flag, etc. 

Attribute Domains 

Domain values are all of the possible valid choices within an attribute. For example, the’valid 

domains for the Reimbursable Flag attribute are D, for Direct, and R, for Reimbursable. 

Authority to borrow 

One of the basic forms of budget authority. Statutory authority that permits a Federal agency to 

incur obligations and make payments for specified purposes out of borrowed monies. 

Au toma tically 

Refers to the system processing of transactions, table updates and other activity without manual 

intervention or the entry of additional transactions (including journal vouchers and other 

reclassifications) by the user. In these cases, the system takes action based on specified 

conditions or relationships, for exa’mple’it: brings forward previously entered data to subsequent 

transactions in the spending chain, closes open obligations when final payments are made, 

liquidates open commitments at fiscal yearend, generates reports based on specified 

crosswalks, etc. 

Budget authority (BA) 

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. 

CA$HLINK 

A Treasury system used to manage and monitor the collection of Government revenues and 

repo,rt$e b+nces.to Federal agencies. , 

,. ” 

ce~t~~~‘i=ijint~~~t~~~~~jstratjo~ ,_ ,‘/ 

The primary vendor database for the Department of Defense (DOD), NASA, and Department of 

Transportation (DOT). The CCR collects, validates, stores and d.isseminates data in support of 

agency missions. ., .Y 

Close Out (a debt) 

An event that occurs concurrently with, or subsequent to, an agency decision to write-off a debt 

for which the agency tias determined that future additional collection attempts would’be futile. 

At closeout,~ an agency reports to the IRS the amount of the. closed out debt as income to the 

debtor on IRS Form 1099-C, in accordance with Treasury requirements. No additional 

collection action may be taken by the agency after issuing the IRS Form 1099-C. 

&mmitn;lent 

The amount of allotment or sub-allotment committed in anticipation of an obligation. 

80 Core Financial System Requirements 
Appendix 6: Glossary 

Compromise (a debt) 

Agree to settle a debt at a lower amount than initially claimed. 

Continuing Resolutions (CRs) 

Joint resolutions that provide continuing appropriations for a fiscal year. CRs are enacted when 

Congress has not yet passed new appropriations bills and a program’s appropriations are about 

to or have expired, or when the President has vetoed congressionally passed appropriations 

bills. 

Contract authority 

A type of budget authority that permits obligations to be incurred in advance of either an 

appropriation of the cash to make outlays to liquidate the obligations or offsetting collections. 

cost 

The cash value of the resources allocated to a particular program. When used in connection 

with Federal credit programs, the term means the estimated long-term cost to the Government 

of a direct loan or loan guarantee, calculated on a net present value basis, excluding. 

administrative costs and any incidental effects on governmental receipts or outlays. 

Cost Center 

A logical grouping of one or more related activities and/or organizational units into a common 

pool for the purpose of identifying the cost incurred for performing all of those activities. 

Cost Object 

Any activity, output, or item whose cost and revenue are to be measured, such as 

organizational units, programs, projects, targeted outputs, specific contracts, specific customers, 

work orders, and GPRA program/activities, etc. 

Disburs;ements 

Payments-made using cash, checks, or electronic transfers. Disbursements include advances 

to others as well a payments for goods and services receive,d and other types of payments 

made. 

Documebt ’ 

.This refers to’balances and descriptive data of individual documents, such as requisitions, 

purchase orders, contracts, vouchers, billings, advances, and the like. 

Document Management Alliance (DMA) ,. 

A standards’b~dli;~~‘ebkin~ito~pro\iide;interoperability between document management systems 

from different vendors. The DMA specification enables ,vendors to.‘build document management 

applications and systems that provide “reliable, security-controlled search and retrieval 

capabilities to documents stored throughout the enterprise”. In addition to document search -, 

and retriev&DMA-compliant products will pr0vide.a framework for other common document 

management functions; such ,as document creation, editing, version control, check-in/check-out, 

and security. 

Expended authority 

Paid and unpaid expenditures for (a) services performed by employees, contractors, vendors, 

carriers, grantees, lessors, or other Government funds; (b) goods and tangible property 

received; and (c) amounts becoming owed under programs for which no current service or 

performance’is required (i.e., annuities, insurance claims, other. benefit payments). 

Core Financial’ System Requirements 81 
I. 

Appendix 6: Glossary 

Expense 

The oufflows of assets or incurrence of liabilities during a period resulting from rendering 

services, delivering or producing goods, or carrying out other normal operating activities. 

Federal Agencies Centralized Trial-Balance System (FACTS) 

System used by agencies to electronically transmit a pre-closing adjusted trial balance(s) (ATB) 

at the TAWTAFS level (FACTS II) or fund group level (FACTS I) using U.S. Government 

Standard General Ledger account and other specified elements. FACTS I supports 

consolidated financial statement reporting. FACTS II supports centralized budget execution 

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. 

Financial management system 

The financial systems and the financial portions of mixed systems necessary to support financial 

management. 

Financial system 

An information system comprised of one or more applications used for collecting, processing, 

maintaining, transmitting, and reporting data ‘about financial events; supporting financial 

planning or budgeting activities; accumulating and reporting cost information; or supporting 

financial statement preparation. 

Financing account 

The account that collects the cost payments from a credit program account and includes all 

cash flows to-and from the Government resulting from direct loan obligations or loan guarantee 

commitments made on or after October 1, ,I 991. 

Full-time equivalent employment 

The basic measure of the levels of employment used in the budget. It is the total number of 

hours worked (or to be worked) divided by the number of compensable hours applicable to each 

fiscal year. 

Future-dated transactions 

Financial transactions that are input and warehoused in the current accounting period, 

scheduled to be posted to a later accounting period. 

GOALS 

Government On-line Accounting Link System. An electronic network that ties’agencies to 

Treasury and each other for the exchange of information. Over the network, agencies can 

transfer fundsto each other and receive notification that Treasury has accomplished 

disbursements. Also, agencies and Treasury can submit and receive reports once exchanged 

in hard copy format by mail. The GOALS network can be used with a wide variety.of terminals 

and modems. 

Graphical User Interface 

A program interface that takes advantage of a computer’s graphics capabilities to make the 

program easier to use. 

82 Core Financial System Requirements 
Appendix B: Glossary 

lmprest fund 

A fixed-cash or petty-cash fund in the form of currency, coin, or Government check, which has 

been advanced as Funds Held Outside of Treasury and charged to a specific appropriation 

account by a Government agency official to an authorized cashier for cash payment or other 

cash requirement as specifically authorized. The fund may be a revolving type, replenished to 

the fixed amount as spent or used, or may be of a stationary nature such as a change-making 

fund. 

lnforma tion sys tern 

The organized collection, processing, transmission, and dissemination of information in 

accordance with defined procedures, whether automated or manual. Information systems 

include non-financial, financial and mixed systems. 

In Forbearance/ in Formal Appeals Process 

A delinquent debt that is in a formal appeals process or forbearance program. The results of 

the appeal affect whether a debt is considered valid and legally enforceable and/or the dollar 

amount to be collected. Debts in a formal forbearance program represent debts that are still in 

negotiation. 

In Foreclosure 

A delinquent debt is in foreclosure when a notice of default has been filed. 

In Wage Garnishment 

A delinquent debt for which the agency is pursuing administrative wage garnishment (attaching 

money due to the debtor in order to satisfy a third party debt). 

Integrated sys tern 

Related sub-systems that enable a user to have one view into the components or modules in 

order to access information efficiently and effectively through electronic means. 

IPA; 

Intra-governmental Payment And Collection System. An Internet application for intragovernmental payments. IPAC was developed by the Treasury Department to replace the Online Payment and Collection System (OPAC) through the migration of the GOALS OPAC 

application from a contractor-operated platform to a Government owned and operated platform. 

Limitation 

A funding restriction, imposed by OMB, a department, or an agency, that places a ceiling for 

obligation/spending. authority. ,The limitation may exist at any level within a funding structure or 

may be imposed using an independent structure. 

Line Item 

Unless otherwise stated, line item refers to a line of accounting information, (i.e., accounting 

classification elements, on, a document.) 

Logging 

Data used for audit trail purposes to record activity in the system other than financial 

transactions, such as table changes. 

MAX Budget System (MAX) 

MAX is a computer system used to collect and process most of the information required for 

preparing the budget. MAX consists of a series of schedules that are sets of data within the 

MAX database. 

Core Financial System Requirements 83 
Appendix B: Glossary 

Mixed system 

Any information system that supports both the financial and non-financial functions of the 

Federal Government or components thereof. 

Messaging A PI- Workflow (MA PI- WF) 

A Microsoft framework originally intended to provide a standardized way for any Messaging 

Application Programming Interface (MAPI)-capable application to be workflow-enabled and to 

support work item interchange between various workflow engines. It is now expected to be 

merged with standards based on Multipurpose Internet Mail Extensions (MIME)-based 

standards. 

Module 

A component of an information system that carries out a specific function or functions and may 

be used alone or combined with other components. 

M#iple Virtual Storage (MVS) 

The operating system for older IBM mainframes. MVS was first introduced in 1974 and 

continues to be used although it has been largely superceded by IBM’s newer operating system 

OS, ow390. 

Objet t 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. 

Object classes 

Categories in a classification system that presents obligations by the items or services 

purchased by the Federal Government. The major object, classes are:, ,I 0 - Personnel 

compensation and benefits; 20 - Contractual services and supplies; 30 - Acquisition of assets; 

40 - Grants and fixed charges; 90 - Other. Many agencies have defined lower levels of object 

classes for jnternal use. ’ 

Obligated balance 

The cumulatj,ve ,amount of budget authority that has been obligated but not yet outlayed, also 

known as unpaid obligations (which is made up of accounts payable and undelivered ordersj 

net of accounts receivable and unfilled customers orders. 

, ..< ,’:;!,’ .,I I’ ;;, 

Q@ligz$iqn~ :. ‘. ,.: . . / :. 

., :’ ,, 

s L + 

A binding agreement that will result in outlays, immediately or in the future. 1 Budgetary 

resources must be available before obligations can be incurred legally. 

Withholding money payable by the Government to, or held by the Government for a person or 

entity to satisfy a debt that the person or entity owes the Government. 

On-line 

Accessible by any computer connected to a network (for example, an “on-line” database’). 

OPAC 

On-line Payment and Collection System. A component of GOALS, OPAC is an automated 

means by which billing inform,ation is transmitted between Fed,eral Agencies through a 

84 Core Financial System Requirements 
Appendix B: Glossary 

commercial time-sharing service via a telecommunications network. Intragovernmental 

payments are also made using OPAC. 

Open Document Architecture/Open Document Interface Format (ODA/ODIF) - ODA 

An international standard that enables users to exchange texts and graphics generated on 

different types of office products. ODIF - Defines the Open Document Architecture (ODA) 

format in terms of interchanged data elements. 

Open Document Management Architecture (ODMA) 

Provides standard interface between document management systems and end-user 

applications. ODMA is becoming a desktop application integration de facto standard. 

Operating/financial plan 

A financial plan is a blueprint for using financial resources during any given fiscal period or. 

series of periods. There are many variations of these plans from agency to agency (level of 

detail, reporting periods, etc.) Some agencies refer to financial plans as “operating plans”. 

Others differentiate between “operating” and “financial” plans based on different levels of detail, 

different fiscal periods covered, or other variables. Since the functionality is the same, these 

plans are all referred to,as “operating/financial plans.” 

.: 

Organization structure 

The offices, divisions, branches, etc. established within an entity based on responsibility. 

assignments, whether functional or program related. 

., 

Outlay 

A payment to liquidate an obligation(other than the repayment of debt principal). Outlays are 

the measure of Government spending. Outlays generally are equal to casti disbursements but 

also are recorded for cash-equivalenttransactions, such as the subsidy cost of direct loans and 

loan guarantees, and interest accrued on public issues of the public debt. 

Posted Transaction, 

Data from financia! transactions that have been processed, accepted and recorded in the 

system. 

Pro forma transactions 

Predetermined standard set of general ledger account postings associated with an a,ccounting 

event. yfl ., ,. 

Program .-.i’ .A. ’ .‘ 

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 program has many uses and thus does not have well-defined, standard 

meaning in the, legislative ,process. Program is used to describe an agency’s mission, 

programs, functions, activities, services, projects, and processes. 

Program structure 

The budget programs, activities, etc. on which budgetary decisions are made, whether legally 

binding, as in appropriation limitations, or in the nature of policy guidance, as in Presidential 

pass backs, Congressional markup tables, or internal agency decisions. 

Pr9jFct 

A planned undertaking of something to be accomplished, produced, or having a finite beginning 

and finite end. Examples are a construction project or a research and development project. 

Core Financial System Requirements 85 
Appendix B: Glossary 

Reappropriation 

An extension in law of the availability of unobligated balances of budget authority that have 

expired or would otherwise expire. A reappropriation counts as budget authority in the year in 

which the balance becomes newly available for obligation. 

Reimbursable order 

May also be known as Customer Orders. Orders for goods and services to be provided by the 

agency to another entity in return for payment. 

Reimbursable obligation 

An obligation financed by offsetting collections credited to an expenditure account in payment 

for goods and services provided by that account. 

Rescheduled (debt) 

Modified terms and conditions to facilitate repayment of a debt, which includes establishing new 

terms as a result of changes in authorizing legislation. 

Requirements 

JFMIP systems requirements are either mandatory or value-added. The definitions of these two 

categories are: 

l Mandafory-Mandatory requirements describe.what the system must do and consist of 

the minimum functionality necessary to establish .a system, or are based on Federal laws 

and regulations. Mandatory requirements are those against which agency heads 

evaluate their systems to determine substantial compliance with systems requirements 

under the. PFMIA. These requirements apply to existing systems in operation and new 

systems planned or under development. 

l ~a/ue~adde&Value~added requirements describe features or characteristics and may 

consist of any combination of the following: (1) using state of the art technology, (2) 

employing the preferred or best business practices, or (3) meeting the special 

management needs of an individual agency. Value-added, optional, and other similar 

terminology may be used to describe this category of requirements. Agencies should 

consider value-added features when judging systems options. The need for these 

value-added features in agency systems is left to the discretion of each agency head. 

Res&ssion 

A legislative action that cancels new budget authority or the availability of unobligated balances 

of budget authority prior to the time the authority would otherwise have expired. 

i, Single,’ in @grated fiiiancial management sjsteni’ ;_ 

A unified set of financial systems ahd the,financial portions of-mixed ,systems encompassing the 

software;hardivarei personnel, processes.(man’ual and automated), procedures;controlsand 

data necessary to carry out financial management functions, manage financial operations of the ,i 

agency and report on the agency’s financial status to central agencies, Congress and the public. 

Unified 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. 

Standard Generalized Markup Language (SGML) 

An international standard of identifying the basic structural elements of a text document. SGML 

addresses the structure of a document, not its format or presentation. 

86 Core Financial System Requirements 
Appendix B: Glossary 

Suspended (Debt) 

Collection activity on a debt is temporarily stopped because: (1) The agency cannot locate the 

debtor; (2) The debtor’s financial condition is expected to improve; or (3) The debtor has 

requested a waiver or review of the debt. 

Suspended Transactions 

Transactions that have not been completely processed and posted in the system. 

Sys tern 

Two or more individual items (equipment components) that are part of a self-contained group, 

that are joined physically, electronically, or electromechanically, programmed or designed 

specially to rely on each other, and cannot function independently if separated, and cannot be 

easily disconnected and reconfigured to function with or within another unit or “system.” 

Tolerance levels 

The percentage or dollar variance of related transaction amount that can exceed a control 

amount, such as obligation to commitment; accrual to obligation; and obligation to payment. 

Transfer 

To move budgetary resources from one budget account to another. Depending on the 

circumstances, the budget may record a transfer as an expenditure transfer, which involves an 

outlay, or as a non-expenditure transfer, which does not involve an outlay. 

Treasury Appropriation Fund Symbol (TA FS) 

A summary account established in the Treasury for each appropriation and fund showing 

transactions to such accounts. Each such account provides the framework for establishing a 

setof balanced accounts on the books of the agency concerned. As used in OMB Circular No. 

A-34, this phrase refers to general fund expenditure accounts, special fund expenditure 

accounts, public enterprise revolving funds, intragovernmental revolving funds, management 

funds, trust fund expenditure accounts, and trust revolving fund accounts. Also known as 

Treasury Appropriation Symbol (TAS). 

Treasury Appropriation Symbol (TAS) 

Synonymous with Treasury Appropriation Fund Symbol (TAFS). 

Treasury offset 

Collection of a delinquent debt by Treasury or a non-Treasury disbursing officer through offset 

of a Federal payment. Federal payments of benefits, tax refunds, salary, or vendors are subject 

to offset 

Unified system 

Systems that are planned 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. 

UNIX 

A popular multi-user, multi-tasking operating system developed at Bell labs in the early 1970s. 

Unobligated balance 

The cumulative amount of budget authority that is not obligated and that remains available for 

obligation under law. 

Core Financial System Requirements 87 
Appendix B: Glossary 

Vendor Independent Messaging (VIM) 

An application-programming interface (API) that allows the exchange of electronic mail among 

programs from different vendors. Members of the VIM Consortium are in the process of 

internally standardizing on VIM across all their networking products as they roll out their new 

product releases. VIM is designed to work across desktop platforms on Windows, Macintosh, 

DOS and OS12. 

Waiver 

A forgiveness of debt, the debtor is not held responsible and is not subject to collection efforts. 

Warehoused Payment 

A warehoused payment is a payment voucher that is stored on-line for disbursement at a future 

date. Payment vouchers are invoices and recurring payments that are typically warehoused 

when the receipt of goods or services is pending, approval is pending, or the payment due date 

has not yet arrived 

Write Off 

To remove an uncollectible amount from an entity’s receivables. Collection attempts can be 

made after receivables are removed. 

Warehoused payment 

Is a payment voucher that is stored on-line for disbursement at a future date. Payment 

vouchers are invoices and recurring payments that are typically warehoused when the receipt of 

goods or services is pending, approval is pending, or the payment due date has not yet arrived. 

Warrant 

An official,documentissued by the Secretary of the Treasury, pursuant to law, that establishes 

the amount of money:authorized to be withdrawn from the central accounts maintained by the 

Treasury. -_ 

Work&v Management Coa/&on (WFMC) 

The Workflow Management Coalition, founded in August 1993, is a non-profit, international 

organization of workflow vendors, users, analysts and university/research groups. 

.-., ,‘:, 

88 Core Financial System Requirements 
Appendix C: Summary of Standard External Reports 

from Core Financial Systems 

Title 

Report on 

Budget 

Execution 

Federal 

Agencies: 

Form Purpose Level 

SF-1 33 Status of Appropriation/ 

budgetary Fund Account 

resources 

Electronic Report data Appropriation/ 

Reporting for Fund Group 

consolidation 

from FACTS I 

into the 

Financial 

Report of the 

U.S. 

Federal 

land SF-223 IGovernment 

(Electronic IStatus of I 

.esources 

(actual data 

columns) 

Report on SF-1 33 Allows Appropriation 

Budget 

Execution and 

Budgetary 

Resources 

Ireceivables 1 1 _: 

.,., 

Itatement of 

ransactions 

Basis 

Zash/Obligatior 

Iccrual 

ccrual 

ccrual In-demand 

ccrual 

:ash 

Lash 

Vequency 

uarterly/ 

inually 

inually 

juarterly/ 

nnually 

luarterlyl 

,nnually 

lonthly 

lonthly 

‘lonthly 

Guidelines 

)MB Circula 

lo. A-34 

TFM-2-400 

iurrent TFM 

I.S. SGL 

upplement 

‘ACTSII.: 

:lient Bulk 

Iser’s Guids 

)MB Circula 

lo. A-34 

TFM-2-41 Or 

TFM-2-330( 

TFM-2-31 Or 

TFM-2-31 Or 

Core Financial System Requirements 89 
Appendix C: Summary of Standard External Reports from Core Financial Systems 

II 

I- Balance Shee 

Financing 

mt N 

Form 1 Purpose I Level land and 

collections in Appropriation 

agencies Fund Account 

which do their 

own 

disbursing (the 

counterpart to 

FMS-224) 

099-MIX, Provide Taxpayer 

099-G. etc. information to Identification 

the Internal number 

Revenue 

Service on 

payments 

made or debts 

forgiven 

Disclose Trust and 

statement of revolving 

assets, funds, 

liabilities, and accounts 

net position substantially 

commercial 

I/A Reports gross Trust and 

costs less revolving 

revenue funds, 

earned accounts 

substantially 

commercial 

I/A Reports Trust and 

financing revolving 

sources, gains funds, 

and losses accounts 

substantially 

commercial 

I/A Available Appropriation, 

budgetary Fund Group 

resources and 

I/A 

btatus I 

IReport on /Trust and 

accounts commercial 

Report of non- Trust and 

exchange revolving. 

Basis 

Iash 

>bligation/ 

kcrual 

kcrual 

>bligation/ 

kcrual 

kcrual 

kcrual 

Frequency Guidelines 

4nnually 

4nnually 

Annually 

4nnually 

Annually 

Annually 

Annually 

RS 

nstructions 

‘or forms 

1099, 1098, 

5498, and WZG 

3MB’s 

3ulletin on 

=orm and 

Content 

3MB’s 

3ulletin on 

=orm and 

Content 

3MB’s 

3ulletin on 

=orm and 

Content 

3MB’s 

3ulletin on 

=orm and 

Zontent 

DMB’s 

3ulletin on 

=orm and 

Zontent 

3MB’s 

3ulletin on 

-arm and 

Zontent 

Core Financial System Requirements 
Appendix D: Contributors 

JFMIP Steering Committee 

Jeffrey C. Steinhoff, Chair, U.S. GAO 

Donald V. Hammond, U.S. Department of the Treasury 

Karen Cleary Alderman, Executive Director, JFMIP 

Joseph L. Kull, Office of Management and Budget 

William B. Early, General Services Administration 

Kathleen M. McGettigan, Office of Personnel Management 

Joint Financial Management Improvement 

Program 

Karen Clear-y A!derman 

Stephen Balsam 

Steven Fisher 

Dennis Mitchell 

Core Financial System Requirements Project Team 

Corporation for National Service 

Wynn Cooper 

Department of Aqriculture 

Jane Bannon 

Christine C. Burgess) 

Lucille Crouch 

Richard Davis 

Department of Commerce 

Patricia Jackson 

James L. Taylor . 

Department of Defense 

Lois Douglas 

Gerald Thomas 

Mike Trout 

Department of Education 

Dan Harris 

Core Financial System Reqtiirements 91 
Appendix D: Contributors 

Department of Enersrv 

James T. Campbell 

Juanita Delair 

Warren Huffer 

Laura Kramer 

Bill Maharay 

Ike Smith 

Department of Health and Human Services 

Sandra Fry 

Norbert Juelich 

Sue Mundstuk 

Teresa Wright 

Margie Yanchuk 

Department of Housina and Urban Development 

Rhea Riso 

Department of Interior 

Don Haines 

R. Schuyler Lesher 

Clarence Smith 

Monica Taylor 

Department of Justice 

Robert Karas 

Charles R. L. Power 

Department of Labor 

Patricia Clark 

John J. Getek 

Gordon S. Heddell 

Lee Jones 

Brenda Kyle 

Michael T. McFadden 

Leroy Sandoval 

Department of State 

Tom Allwein 

Alan K. Evans 

Lauretta Pridgen 

.92 Core Fixpncial.System.Req+rements 
Appendix D: Contributors 

DeDartment of Transportation 

Terry Letko 

John L. Meche 

Tom Park 

Department of the Treasurv 

Richard Aaronson 

Carolyn Dockett-Butler 

Dan Devlin 

David Epstein 

Pamela J. Gardiner 

Denise Goss 

Betty Harvey-Tauber 

David Hesch 

Jeff Hogue 

Wally Ingram 

James Lingebach 

Robert Reid 

Ray Reinhart 

Dale Walton 

David Williams 

Department of Veterans Affairs 

Vidal Falcon 

Jesse Symlar 

Environmental Protection Aaencv 

Sue Arnold 

Ron Bachan 

Bill Cooke 

Debra Bennet 

Mark Bolyard 

Judi Brown 

Valerie Chun 

Joe Dillon 

Kathy Edwards 

Judy Lum 

Lynn Mason 

Juliette McNeil 

Terry Ouverson 

Martin Poch 

Core Financial System Requirements 93 
Appendix D: Contributors 

Federal Deoosit Insurance Corporation 

Dottie Willey 

Federal Emeroencv Management Aaencv 

Theodore Alves 

Cole Cox 

Sue Schwendiman 

Federal Enerqv Reoulatorv Commission 

Herman Dalgetty 

Janet Dubber-t 

Hilary Schubert 

General Accountina Office 

Chris Martin 

Janett Smith 

Sally Thompson 

General Services Administration 

Jerry Cochran 

William Topolewski 

Ellen Warren 

National Aeronautics and Space Administration 

Patrick ller 

Mela Jo Kubacki 

Alan Lamoreaux 

Stephen Varholy 

National Science Foundation 

Phil Ziegler 

Nuclear Reaulatorv Committee 

Barbara K. Gusack 

Amanda Flo 

Sylvia Washington 

94 Core Financial System Requirements 
Appendix D: Contributors 

Office of Management and Budaet 

Jean Holcombe 

Neil Lobron 

Jerry Williams 

Office of Personnel Manaaement 

Maurice Duckett 

Robert Loring 

Railroad Retirement Board 

Kenneth Boehne 

Social Securitv Administration 

Tom Bianco 

Jim Fornataro 

Steven L. Schaeffer 

Dale Sopper 

Peter Spencer 

Tom Staples 

Kitt Winter 

U.S. Customs 

Jim Mitch 

CFO Fellows Particbant 

David Cauthon 

Loqistics Manaaement Institute 

James Atherton 

Kathy Crampton 

Frank Duesing 

Steven Mead 

Catherine Nelson 

Loan Nguyen 

Ronald Rhodes 

Susan Smith 

Duane Whitt 

Kim Murray 

Core Financial System Requirements 95 
This Page Iiatentkwaally 

Lej3 Blank 

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