# Table of Contents

iiTable of Contents

Table of Figuresiv

Listed Abbreviationsv

Forewordvii

Introduction8

1.1.Background8

1.2.Purpose and Scope of This Document9

1.3.FMLoB Business Process within Context of Core Requirements10

Funds Control Processes11

2.2Funds Control Allotment11

2.3Funds Control Sub-Allotment11

2.4Funds Control Commitment11

2.5Funds Control Obligation11

2.6Funds Control Expenditures11

2.7Funds Control Disbursements11

2.8Funds Control Payroll Expense11

2.9Funds Control Monitoring Controls11

Payment Management Processes12

3.0.Payment Management Processes12

3.1Ordering of Goods and Services14

3.2Funds Check Prior to Obligation22

3.3Receipt and Acceptance of Goods26

3.4Receipt and Acceptance of Services35

3.5Accounts Payable and Invoicing Processes41

3.6Disbursements – Bulk Files (ACH/EFT, PPD, CCD+, CTX, and Checks)53

3.7Disbursements – Small Volume and Same or Next Day Payments61

3.8Data Objects and Data Elements67

3.9Summary Data Objects and Data Elements92

Receivables Management Processes99

Reports Management Processes100

Appendix A - Approach101

Appendix B - Contributors102

Appendix C – Business Process Flowcharts, Symbols, and Definitions103

Glossary111

Laws and Regulations120

# Table of Figures

# Listed Abbreviations

ACHAutomated Clearing House

ALCAgency Location Code

BETCBusiness Type Event Code

BRMBusiness Reference Model

BFELoBBudget Formulation and Execution Line of Business

CCDCash Concentration Disbursement

CCD+Cash Concentration Disbursement Plus Addendum

CCRCentral Contractor Registry

CFO Chief Financial Officer

CFRCode of Federal Regulations

CIO Chief Information Officer

COCertifying Officer

CFSCore Financial System

CFSRCore Financial System Requirements

CPIC Capital Planning and Investment Control

CTXCorporate Trade Exchange

DEOData Entry Operator

DUNSDun and Bradstreet Number

EDIElectronic Data Interchange

EFTElectronic Funds Transfer

FARFederal Acquisition Regulation

FASABFederal Accounting Standards Advisory Board

FBWTFund Balance With Treasury

FEAFederal Enterprise Architecture

FEAFFederal Enterprise Architecture Framework 

FFMIAFederal Financial Management Improvement Act of 1996

FFMSR Financial Management Systems Requirements

FISMAFederal Information Security Management Act of 2002

FMLoBFinancial Management Line of Business

FMSFinancial Management Service

FOMFFinancial Organization Master File

FSIOFinancial Systems Integration Office

GAOGovernment Accountability Office

GPRAGovernment Performance and Results Act of 1993

IDIdentification

IDDInternational Direct Deposit

IPACIntra-Governmental Payment and Collection

IPPInternet Payment Platform

IRMInformation Resource Management

ITInformation Technology

JFMIP Joint Financial Management Improvement Program

NACHANational Automated Clearing House Association

NISTNational Institute of Standards and Technology

OCROptical Character Recognition

OFFMOffice of Federal Financial Management (OMB)

OMBOffice of Management and Budget

PMAPresident’s Management Agenda

PMDPayment Management Disbursing

POPurchase Order

PPAPrompt Payment Act

PPDPrearranged Payment and Deposit

PPD+Prearranged Payment and Deposit Plus Addendum

RTNRouting Transit Number

SFFASStatement of Federal Financial Accounting Standards

SPSSecure Payment System

TAFSTreasury Appropriation Fund Symbol

TASTreasury Account Symbol

TPATrading Partner Agreement

TFMTreasury Financial Manual

USSGLU.S. Standard General Ledger

# Foreword

Under Review with the Funds Control Chapter currently released as an Exposure Draft 

# Introduction

## 1.1. Background

Under Review with the Funds Control Chapter currently released as an Exposure Draft 

## 1.2. Purpose and Scope of This Document

Under Review with the Funds Control Chapter currently released as an Exposure Draft 

## 1.3. FMLoB Business Process within Context of Core Requirements

Under Review with the Funds Control Chapter currently released as an Exposure Draft 

# Funds Control Processes

## 2.2Funds Control Allotment

## 2.3Funds Control Sub-Allotment

## 2.4Funds Control Commitment

## 2.5Funds Control Obligation

## 2.6Funds Control Expenditures

## 2.7Funds Control Disbursements

## 2.8Funds Control Payroll Expense

## 2.9Funds Control Monitoring Controls

Under Review with the Funds Control Chapter currently released as an Exposure Draft 

# Payment Management Processes

## 3.0. Payment Management Processes

The Payment Management processes detailed in this chapter are:

· PM 3.1 – Ordering of Goods and Services

· PM 3.2 – Funds Check Prior to Obligation

· PM 3.3 – Receipt and Acceptance of Goods

· PM 3.4 – Receipt and Acceptance of Services

· PM 3.5 – Accounts Payable and Invoicing Processes

· PM 3.6 – Disbursements – Bulk Files (ACH/EFT, PPD, CCD+, CTX, and Checks)

· PM 3.7 – Disbursements – Small Volume and Same or Next Day Payments

· PM 3.8 – Data Objects and Data Elements

· PM 3.9 – Summary Data Objects and Data Elements

Included are key steps in the processes from requisition to payment for commercial contracts and small acquisitions disbursed by Treasury. The steps are depicted in flowcharts. Following each flowchart are descriptions of the steps and related business rules. These steps reflect best practices in an electronic environment, sound internal controls, and compliance with Office of Federal Financial Management (OFFM) Core Financial System Requirements (CFSR). 

Excluded from the scope of this chapter are the following:

· Payment management processes for payments not disbursed by Treasury

· Policies, procedures, and requirements detailed in authoritative guidance are not repeated in this document

· Acquisition processes

· Processes for maintenance of the Central Contractor Registry

· Intra-Governmental Payment and Collection (IPAC) transactions

· Reimbursable activity

· Travel

· Payroll

· Employee awards

· Credit card payments

· Grants

· Loans

· Cooperative agreements

· Canceled funds

· Foreign currency

· Internal offsets between Accounts Payable and Accounts Receivable.

## 3.1 Ordering of Goods and Services 

This section presents key steps for ordering goods and services that result in outputs to the Accounts Payable and Invoicing processes.  Acquisition processes, procedures, and related laws and regulations by which vendors are solicited and selected are excluded from the scope of this chapter. 

# PM 3.1 – Ordering Goods and Services Flowchart 

See Appendix C – Business Process Flowcharts, Symbols, and Definitions for an enlarged version of the flowchart.  

The Payment Management Ordering of Goods and Services process steps are described as follows:

## 3.2 Funds Check Prior to Obligation

The following flowchart provides the steps taken to perform a funds check prior to obligation of funds. Section PM 3.2 applies to contractual acquisitions for which commitments and obligations are required. Included are steps to compare an obligation request to an underlying commitment, assess availability of funds, and liquidate commitments at the time of obligation.

# PM 3.2 – Funds Check Prior to Obligation Flowchart

# 

# See Appendix C – Business Process Flowcharts, Symbols, and Definitions for an enlarged version of the flowchart.  

The Payment Management Funds Check Prior to Obligation process steps are described as follows:

## 3.3 Receipt and Acceptance of Goods

The following flowchart provides the steps related to the processes for receipt and acceptance of goods. The steps contained in flowchart PM 3.3 describe procedures necessary for the inspection, acceptance, and recording of receipt and return of goods.

# PM 3.3 – Receipt and Acceptance of Goods Flowchart

See Appendix C – Business Process Flowcharts, Symbols, and Definitions for an enlarged version of the flowchart.  

The Payment Management Receipt and Acceptance of Goods process steps are described as follows:

## 3.4 Receipt and Acceptance of Services

The following flowchart depicts the steps for the Payment Management process for the receipt and acceptance of services. Steps include receipt and acceptance of services and related actions in the Business Unit and Finance functional areas.

# PM 3.4 – Receipt and Acceptance of Services Flowchart

See Appendix C – Business Process Flowcharts, Symbols, and Definitions for an enlarged version of the flowchart.  

The Payment Management Acceptance of Services process steps are described as follows:

## 3.5 Accounts Payable and Invoicing Processes

The following flowchart provides the steps related to the accounts payable and invoicing processes. The steps contained in flowchart PM 3.5 describe procedures necessary to prepare an invoice and match supporting documentation with an award document. Further, related accounting entries and the steps to ensure proper approval and verification of an invoice are contained within this chapter.

This section is based on the assumption that under best business practices, invoices should be submitted electronically. Agencies should implement procedures to automate the invoice submission process. Treasury’s Internet Payment Platform (IPP) is an example of a system that enables electronic submission of invoices.

In cases where an agency must continue to accept paper invoices, electronic tools can be used to improve the efficiency of invoice processing. Examples include digital imaging and Optical Character Recognition (OCR). 

# PM 3.5 – Accounts Payable and Invoicing Process Flowchart

See Appendix C – Business Process Flowcharts, Symbols, and Definitions for an enlarged version of the flowchart.  

The Payment Management Accounts Payable and Invoicing Processes steps are described as follows:

## 3.6 Disbursements – Bulk Files (ACH/EFT, PPD, CCD+, CTX, and Checks)

The following flowchart includes the steps for the disbursement of Bulk Files within the Payment Management Function. These steps depict the actions performed from the point at which a Bulk File payment is warehoused through payment to a vendor. Key steps include submitting a bulk file to Treasury, certification of payments to be disbursed, and disbursement. 

# PM 3.6 – Disbursements – Bulk Files (ACH/EFT, PPD, CCD+, CTX and Checks) Flowchart

See Appendix C – Business Process Flowcharts, Symbols, and Definitions for an enlarged version of the flowchart.  

The Payment Management Disbursement – Bulk Files (ACH/EFT, PPD, CCD+, CTX, and Checks) process steps are described as follows:

## 3.7 Disbursements – Small Volume and Same or Next Day Payments

The following flowchart provides the steps performed for Payment Management Disbursement – Small Volume and Next or Same Day Payments relating to the submission of the small volume payments file to Treasury, certification of payment, release of payment and the confirmation of disbursement.

***PM 3.7 Disbursements – Small Volume and Same or Next Day Payments Flowchart***

See Appendix C – Business Process Flowcharts, Symbols, and Definitions for an enlarged version of the flowchart.  

The Payment Management Disbursements – Small Volume and Same or Next Day Payments process steps are described as follows:

## 3.8 Data Objects and Data Elements

The data elements contained in sections 3.8 and 3.9 are considered to be a draft collection of business elements that will be, at a minimum, required in all payment processing systems. This information will continue to be refined and structured over the next several months. Additional documentation, developed according to consensus procedures and industry standards, encompassing rules, guidelines, and data characteristics will be provided. This effort will include, but is not limited to, UML model representations, a data dictionary/registry of data elements, and an XML Schema model for the exchange of data. Supporting documentation to assist in the implementation and understanding of the normative artifacts will also be developed and distributed. This effort will be closely coordinated with Treasury’s Financial Management Service to ensure consistency and interoperability with the payment and government-wide accounting systems.

Six key data objects and related data elements for the Payment Management Processes are identified and documented in the six tables in this section. The data objects are Requisition Document, Obligation Document, Receiving Document, Acceptance Document, Invoice Document, and Disbursed Payment. Each applicable data element is identified as Required, Display, or Optional. A “Required” data element is a field that must be included in the data object record. A “Display” data element should be made available from another data source for viewing by a user. An “Optional” data element may be made available to Agency users as needed. 

# Requisition Data Objects and Data Elements - The requisition data object includes: PM 3.1.1 – Prepare Requisition, PM 3.1.2 – Authorized Requisition, PM 3.1.4 – Rejected Requisition, and PM 3.1.7 – Funded Requisition.

# Obligation Data Objects and Data Elements – The obligation data object includes: PM 3.1.11 – Initiate and Authorize Obligation, PM 3.1.12 – Initiate Obligation Not Requiring Commitment, PM 3.1.13 – Authorize Obligation, PM 3.1.15 – Reject Obligation, and PM 3.2 – Funds Check Prior to Obligation.

**Receiving Data Objects and Data Elements –** The receiving data object includes: PM 3.3.3 – Inspection for Damage, PM 3.3.5 – Reject Goods and Resolve Inspection Issues, PM 3.3.7 – Return Goods, PM 3.3.14 – Final Receipt of Goods on Award Document?, PM 3.3.15 – Goods Receipt Process, PM 3.3.16 – Record Receipt of Goods as Final, and PM 3.3.17 – Receiving Document 

# Acceptance Data Objects and Data Elements – The acceptance data object includes: PM 3.3.20 – Acceptance Procedures for Goods Received, PM 3.3.21 – Accept Goods?, PM 3.3.22 – Issue with Goods Resolved?, PM 3.3.23 – Acceptance Recorded, PM 3.3.28 – Reject Goods, PM 3.3.29 – Return Goods, PM 3.4.2 – Services Accepted?, PM 3.4.3 – Receipt and Acceptance Documents, PM 3.4.5 – Accept Partial Quantity of Services?, and PM 3.4.6 – Do Not Accept Services.

# Invoice Data Objects and Data Elements – The invoice data object includes: PM 3.5.1 – Prepare Invoice, PM 3.5.2 – Electronic Invoice, PM 3.5.3 – Invoice, PM 3.5.4 – Review Invoice for Required Information, PM 3.5.5 – Proper Invoice Under Prompt Pay Act?, PM 3.5.7 – Reject Vendor Invoice, PM 3.5.9 – Invoice Matches Award Document?, PM 3.5.12 – Valid Invoice, PM 3.5.21 – Approved Invoice, PM 3.5.26 – Invoice Verified?, and PM 3.5.28 – Verified Invoice.

**Disbursed Payment Data Objects and Data Elements –** The disbursed payment data object includes: PM 3.6.6 – Schedule is Created, PM 3.6.8 – Submit Payment Bulk File Treasury, PM 3.6.9 – Submitted Payment File, PM 3.6.10 – Perform Edit Check, PM 3.6.11 – Send Acknowledgement, PM 3.6.12 – Receipt of Acknowledgement, PM 3.6.17 – Certified Payment, and PM 3.6.18 – Verification of Certification.  In addition, PM 3.6.20 – Release Payment, PM 3.6.22 – Payee Receives Payment, PM 3.6.23 – Agency Records Confirmation, PM 3.7.7 – Certified Payment Schedule, PM 3.7.9 – Transmit Payment File to Treasury, PM 3.7.11 – Release Payment, PM 3.7.13 – Agency Records the Confirmation, PM 3.7.14 – Mark Invoice Paid, and PM 3.7.16 – Payee Receives Payment.

## 3.9 Summary Data Objects and Data Elements

The following table displays all of the data objects and elements for Payment Management. Each row contains the disposition of the data element for that data object column as “D” for Display, “R” for Required and “O” for Optional.

# Receivables Management Processes

To Be Provided for Insert at a Future Date

# Reports Management Processes

To Be Provided for Insert at a Future Date

# Appendix A - Approach

Under Review with the Funds Control Chapter current released as an Exposure Draft 

# Appendix B - Contributors

Under Review with the Funds Control Chapter currently released for Exposure Draft and to be updated with each subsequent release****

# Appendix C – Business Process Flowcharts, Symbols, and Definitions

**Flowchart Symbols Defined:**

Process – This symbol represents a process or action step. 

Decision – This symbol indicates a question or branch in the process flow.

Data – This symbol represents electronic input to and/or outputs from a process. 

Connector – This symbol indicates a jump from one point to another in a process flow.

Terminator – This symbol indicates that the current process flow is ending at this point and is part of a separate process flow.

# Glossary

# Laws and Regulations

**Federal Statutes:**

*Appropriations Law*

Fundamental, long-standing statutes deal with the appropriation of monies to agencies from Congress, including the appropriate use and control of these monies. These statutes deal with the purpose, amount, and time of appropriations, as well as the availability of the associated monies. The following summary provides specific citations to these statutes, their common names, and their requirements.

*Federal Managers’ Financial Integrity Act of 1982*

The Federal Managers’ Financial Integrity Act (FMFIA) of 1982 amended the Accounting and Auditing Act of 1950 to require ongoing evaluations and reports of the adequacy of the systems of internal accounting and administrative control of each executive Agency. FMFIA is comprised of two parts. OMB Circular A-123, *Management’s Responsibility for Internal Control*(Effective beginning with Fiscal Year 2006) (Revised 12/21/2004), is the primary vehicle for implementing FMFIA in the executive branch and describes internal control requirements. Agencies are also required to report annually on whether the Agency accounting system complies with OMB A-127.

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

· Obligations and costs are in compliance with applicable law

· Funds, property, and other assets are safeguarded against waste, loss, unauthorized use or misappropriation

· Revenues and expenditures are properly recorded and accounted for.

(OMB revised Circular A-123 in 1995 to incorporate ideas from subsequent management legislation, such as the Chief Financial Officers Act.) The circular provides guidance on improving the accountability and effectiveness of federal programs and operations by establishing and reporting on management controls.

*Chief Financial Officers Act of 1990 and Government Management Reform Act of 1994*

The Chief Financial Officers Act of 1990 laid the foundation for significant financial management reform in the Federal Government. The Act emphasizes strong financial leadership, improved systems of accounting, financial management and internal control, and reliable financial information. A key element of the Act is the requirement for Federal agencies to produce audited financial statements. The Government Management Reform Act (GMRA) expanded financial statement audit coverage to include Department-wide and Government-wide audited financial statements.

The CFO Act mandates three actions:

· Strong financial management leadership: The CFO Act established, in OMB, the Deputy Director for Management and the Office of Federal Financial Management, and created chief financial officer positions in major agencies to provide financial management direction.

· Enhanced financial management systems: The CFO Act mandates that Agency CFOs develop and maintain Agency financial management systems that comply with applicable accounting principles, standards, and requirements; internal control standards; and requirements of OMB and Treasury; and

· Improved financial information: By requiring Agency CFOs to maintain systems that report cost information, integrate accounting and budgeting, and systematically measure performance, the CFO Act emphasizes improved reliability and usefulness of Agency financial information. Most importantly, the CFO Act requires that financial statements be prepared and audited.

*Government Performance and Results Act of 1993*

The Government Performance and Results Act (GPRA) of 1993 holds Federal agencies accountable for achieving program results and requires them to identify missions, set goals, measure performance, and report on their accomplishments.

Under GPRA, each federal Agency must develop and submit a multiyear strategic plan, which contains the Agency’s mission statements and long-term strategic goals. Agencies must also submit annual performance plans, which include performance goals linked to the budget and indicators of how performance will be measured. Annual performance reports, also required under the Act, provide information on the extent to which the Agency met its annual performance goals.

*Federal Financial Management Improvement Act of 1996*

The Federal Financial Management Improvement Act (FFMIA) of 1996 requires agencies to implement and maintain systems that substantially comply with (1) Federal accounting standards, (2) the United States Government Standard General Ledger (USSGL) at the transaction level, and (3) Federal financial management systems requirements. In addition, the FFMIA requires agencies’ auditors to report whether Agency systems comply with FFMIA’s systems requirements. Agencies that determine their systems do not substantially comply must develop and submit remediation plans to OMB.

To comply with Federal financial management system requirements, OMB implementation guidance requires that systems meet the Circular A-127 requirements, JFMIP’s Federal Financial Management Systems Requirements, and Circular A-130, Appendix III.

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

The Debt Collection Improvement Act (DCIA) is an extension of the Debt Collection Act. The purpose of these Acts is to require proper collection of debts, to authorize the compromise or suspension of some debts, and to authorize the use of certain collection tools that are available in the private sector. The use of electronic payment and offset methods is required.

*Federal Information Security Management Act (FISMA) of 2002 (**Public Law 107-347, Title III)*

The FISMA reiterates security requirements contained in existing OMB policies and in Federal laws such as the Computer Security Act of 1987, the Paper Reduction Act of 1995, and Clinger-Cohen Act of 1996. The Act mandates that Federal agencies implement an information security program and designate a senior information security officer. FISMA also established evaluation and reporting requirements that requires each Agency to report any significant deficiencies and an information security policy, procedure, or practice. If relating to financial management systems as a lack of substantial compliance with FFMIA. 

*Reports Consolidation Act of 2000*

This Act gives OMB the authority to combine financial reports to the President and Congress that contains performance and accountability information.

*Clinger-Cohen Act (CCA) –- The Information Technology Management Reform Act of 1996*

This Act provides that the Government information technology shop be operated exactly as an efficient and profitable business would be operated. Acquisition, planning, and management of technology must be treated as a “capital investment.” While the law is complex, all consumers of hardware and software in the Department should be aware of the Chief Information Officer’s leadership in implementing this statute.

**Regulatory Guidance:**

*OMB Circular A-11, Preparation, Submission and Execution of the Budget (6/30/06), Preparation, Submission and Execution of the Budget (6/30/06), Preparing, Submitting, and Executing the Budget (Revised 7/25/2003)*

OMB made major revisions to A-11 that merged the budget formulation and execution guidance to reinforce the requirement for agencies to integrate budget and performance and to improve the quality of their financial information. In addition, A-11 contains new guidance on managing physical and financial assets.

*OMB Circular A-25, User Charges*

The Circular:

· Establishes Federal policy regarding fees assessed for Government services and for sale or use of Government goods or resources

· Provides information on the scope and types of activities subject to user charges and on the basis upon which user charges are to be set

· Provides guidance for Agency implementation of charges and the disposition of collections.

*OMB Circular A-123, Management’s Responsibility for Internal Control (Effective beginning with Fiscal Year 2006) (Revised 12/21/2004), Management Accountability and Control (or Successor Documents) (6/21/1995)*

This Circular, which is the primary OMB guidance for FMFIA, is described in the section that relates to that act.

*Prompt Payment Final Rule (Formerly OMB Circular A-125, Prompt Payment) (9/29/1999)*

The Final Rule, the primary OMB guidance for PPA, is described in the section related to the specific act.

*OMB Circular A-127, Financial Management Systems (07/23/1993), Financial Management Systems (or Successor Documents) (7/23/1993)*

This circular augments FFMIA by specifically mandating that Federal agencies implement integrated core accounting and financial management systems. To be fully integrated, the system must address:

· Standard data classification (both data and format)

· Common processes for handling similar accounting events

· Consistent internal control mechanisms

· Elimination of duplicate transaction entry.

Circular A-127 also prescribes policies and standards for agencies to follow in developing, operating, evaluating, and reporting on financial management systems generally. It incorporates, by reference, Circulars A-123 and A-130, as well as all federal financial management systems requirements published by JFMIP.

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

This Circular prescribes policies and procedures for justifying, designing, and managing Federal credit programs, and for collecting non-tax receivables. It sets principles for designing credit programs, including: 

· Preparation and review of legislation and regulations

· Budgeting for the costs of credit programs and minimizing unintended costs to the Government

· Improving the efficiency and effectiveness of Federal credit programs. 

Circular A-129 also sets standards for extending credit, managing lenders participating in Government guaranteed loan programs, servicing credit and non-tax receivables, and collecting delinquent debt.

*OMB Circular A-130, Management of Federal Information Resources (11/28/2000)*

OMB re-issued Circular A-130 in revised form in December 2000 as Transmittal Memorandum No. 4. The expanded version of A-130 provides guidance on the Paperwork Reduction Act, the Clinger-Cohen Act, the CFO Act, and others. This includes the requirement for all electronic systems, including financial management systems, to have a defined association with the Agency’s enterprise architecture.

The Circular provides specific guidance on collecting and managing information and records management, including:

· Electronic information collection

· Provision of information to the public

· Information dissemination systems

· Information safeguards.

It further mandates agencies to establish a capital planning and investment control process (CPIC) that links information technology investments to improved mission performance. The CPIC also establishes the links among Agency processes including strategic planning, IT planning, enterprise architecture integration, performance planning, financial management planning pursuant to the Chief Financial Officers Act of 1990, and budget formulation and execution. Specifically, sections of A-130 cover these four areas:

· ***Capital planning and investment control*** processes must be followed and documented by all agencies. These processes, stemming from Clinger-Cohen, must integrate IRM strategic and performance plans, financial management plans, the Agency’s IT enterprise architecture, and its budget. The Agency’s process for capital planning and investment control should include an IRM strategic plan, an IT capital plan, and an IT investment portfolio as described in OMB Circular A-11, *Preparation, Submission and Execution of the Budget* (6/30/06), *Preparation, Submission and Execution of the Budget* (6/30/06), the annual budget circular.

· ***Enterprise architecture*** framework and planning processes require an Agency to document (and submit to OMB its current and target IT architecture and related support strategies, transition roadmaps, and IT and security standards, as well as a summary of the information services used throughout the Agency. The enterprise architecture framework anticipated by A-130 is driven by the business needs of the Agency and is composed of layers complying with the Federal Enterprise Architecture Framework (FEAF) developed by the CIO Council.

· ***Ensuring security in information systems*** is accomplished by explicitly incorporating security into the enterprise architecture and life-cycle planning for systems, and ensuring that security supports the Agency’s business operations. The Agency’s security plan must comply with the procedures and policies outlined in Appendix III to A-130, *Security of Federal Automated Information Resources*; the Federal Information Security Management Act (Public Law 107-347); Title III;**and guidance provided by the National Institute of Standards and Technology (NIST). Independent advice and comment on the security plan must be solicited prior to the plan’s implementation.

· ***Information technology acquisition*** requires the use of adequate competition in contracting, allocating risk between the government and the contractor, and maximizing the return on investment. Major information systems should be structured into useful segments with narrow scope and brief duration. Off-the-shelf software should be used unless analysis clearly documents other approaches are more effective.

*Statements of Federal Financial Accounting Standards*

The FASAB was created in 1990 to develop and recommend Statements of Federal Financial Accounting Standards (SFFASs) for use by the Federal Government. The growing body of SFFAS issued by FASAB is considered to be Generally Accepted Accounting Principles for Federal Government entities.

The accounting standards that have resulted from FASAB’s work are central to effectively meeting financial management improvement goals of the CFO Act and other legislation. In particular, FASAB’s standards for managerial cost accounting, as described in SFFAS 4, are a primary source of guidance. This and other FASAB standards foster financial information and reporting that is understandable, relevant, and reliable concerning the financial position, activities, and results of operations for the Federal Government and its departments and agencies. Furthermore, the standards prescribe accounting systems and internal control that help demonstrate that federal programs are conducted in compliance with laws and regulations.

� Sources are provided if available, otherwise the term definition was developed for clarification of terminology.

� The FEAF layers describe and link business processes, information flows, applications, data descriptions and relationships, and technology infrastructure. 

                DRAFT - 5/17/2007                                                 13                          

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